There will be a strike

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Re: There will be a strike

Postby Potatoe1 » Tue Sep 04, 2012 1:16 pm

ukcanuck wrote:
However if you look at Phoenix with an operating loss equal to the annual subsidy in (Virtually perpetuity) the only people losing money in the desert are the poor ass tax payers...which is most likely why (FRED) that nobody in their right mind wants to touch that hornets nest. To me that says its nothing to do with the economic viability of NHL franchises that the players need to take a roll back or limitation on their money to resolve.


The players aren't being asked to take less because Phoenix is losing money, they are being asked to take less because most teams are losing money and the cumulative league earnings are not very good.



At the end of the day it really seems about profits after expenses over all. Throughout the league the owners figure they can squeeze more profit in every market by grinding down the players share of the pie. Therefore, in every CBA negotiation from the last two till the end of time, they are going to use the hammer of a lockout to extract more and more, unless the players can stand up and say a big fuck you and change the focus from players salaries to owners profits and their refusal to entertain real (REAL) profit sharing.


Increasing revenue sharing is difficult to do with out the massive TV contracts that the other sports have.

Further and perhaps more importantly, there really isn't enough league wide profit to share. As noted the ROE (return on equity) for the entire league is quite low (about 4% vs around 10% for average S&P returns) when compared to other industries and things seem to be trending down in that regard under the current CBA.

Right now the model isn't working that well, it isn't a train wreck like it was before the last lock out but there are big problems with both revenue disparity and over all profitability.

And it's actually getting worse on both fronts.




Code: Select all
It might be that the best way for the players to do this in my opinion is to pool their money , build a war chest to pay out as strike pay and find alternative employment for at minimum two years, long enough for the owners to start panicking about losing market share in an ultra competitive industry.


Unfortunately the money the players would lose while missing 2-years of their careers would never be made up by even the most favorable CBA.

If the league were very healthy and the owners were making money hand over fist the players would have some leverage. But in an environment where profits are low the owners don't have all that much to lose by sitting out.
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Re: There will be a strike

Postby Potatoe1 » Tue Sep 04, 2012 1:32 pm

Tciso wrote:But, if there isn't anywhere for them to go, and it is a reasonable deal, then why walk away at all? Tell the league to bump it to 10 years, and sign it. I am sure Fehr has a counter offer in mind, but unless the players are truly against the new numbers, and unless the players have a proposal that really adressess revenue sharing in a meaningful way, then they are just costing themselves money.


The players position is that they will only take less if escrow is removed.

They do not believe they should give up something unless they get something in return.

The league isn't offering them anything in return for taking less so why would they agree on Sept 4th?

The second the players start negotiating a lower percentage of HRR with out getting something major in return, they have lost.

Waving the white flag before the players have even lost a paycheck is just plain stupid. Fehr is not a stupid person.
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Re: There will be a strike

Postby ukcanuck » Tue Sep 04, 2012 2:21 pm

Potatoe1 wrote:
The players aren't being asked to take less because Phoenix is losing money, they are being asked to take less because most teams are losing money and the cumulative league earnings are not very good.

It seems the players are being asked to take less on average (per player via cap space/ roll backs) precisely because profits on average are decreasing while franchise values on average are increasing...



Increasing revenue sharing is difficult to do with out the massive TV contracts that the other sports have.

no one is suggesting that revenue sharing is a fix all, but its the moral high ground. Do everything possible on all fronts, not just on the backs of the players.

Further and perhaps more importantly, there really isn't enough league wide profit to share. As noted the ROE (return on equity) for the entire league is quite low (about 4% vs around 10% for average S&P returns) when compared to other industries and things seem to be trending down in that regard under the current CBA.

if current revenues as per forbes is to be believed then total revenue and expenses are about equal (+5 Million)
That right there is a good starting point for a discussion about what the players share of HRR should be. Listening to Fehr on TSN suggests the players are willing to give back but not while MSG and MLSE and Wirtz inc. are raking it in.




Unfortunately the money the players would lose while missing 2-years of their careers would never be made up by even the most favorable CBA.

no question the players would lose money they will never see again, however, you have to balance that with the continual roll backs the owners have gotten since 1995 and will continue to seek every time a CBA expires..over time that amount is going to be a lot more...

If the league were very healthy and the owners were making money hand over fist the players would have some leverage. But in an environment where profits are low the owners don't have all that much to lose by sitting out.

That's the bullshit they want us to believe but without the games, the whole enchilada falls apart. no games, no revenue = empty buildings means no return on investment...whats the ROE on Rogers arena withtwo years of tribute bands and tractor pulls?
Sure its a hard pill to swallow but its the owners who are chiseling here, lets play real hardball and sort it once and for all
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Re: There will be a strike

Postby Tciso » Tue Sep 04, 2012 2:45 pm

ukcanuck wrote:
Tciso wrote:

Personal note. I don't see why there is a CBA at all. If I was the owners, I'd simply turn the NHL into a giant corporation, with 30 shares owned by 30 different people, and dividends paid according to performance. Since it is one company, there is no collusion, and the company makes it's own fucking rules to handle employees. Bam!!! problems regarding player salaries is solved.

Jebus look up collusion in a dictionary for god's sake, you've just described it
While you're at it, check out the meaning of anti trust and the laws written to protect against monopolies...


No. I described 30 business owners incorporating into one giant business. It is a not so subtle distinction between keeping 30 different businesses. The NHL as an entity exists because the Owners decided it exists. It has legal powers, and a commissioner. It can make contracts with other Hockey Leagues. And, it has owned hockey teams in the past. So, precedence has been set for the NHL to buy the existing teams.

There is no collusion because:
1) There is no monopoly on professional hockey.
2) There is no measurable loss to the consumer of the service.

I grant you that there would be a hell of a court case (or two, if we include Canada), but the Owners are giving up a lot of personal freedom by joining a larger corporation. And, unlike the MLB collusion of the 80's to restrict player salaries, this would be one entity, not 30 separate entities.

Personally, I don't think the legal battle would be as much of an obstacle as getting all 30 ownership groups to agree on the new corporate structure.
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Re: There will be a strike

Postby ukcanuck » Tue Sep 04, 2012 3:19 pm

Tciso wrote:No. I described 30 business owners incorporating into one giant business. It is a not so subtle distinction between keeping 30 different businesses. The NHL as an entity exists because the Owners decided it exists. It has legal powers, and a commissioner. It can make contracts with other Hockey Leagues. And, it has owned hockey teams in the past. So, precedence has been set for the NHL to buy the existing teams.

There is no collusion because:
1) There is no monopoly on professional hockey.
2) There is no measurable loss to the consumer of the service.

of course its collusion and a monopoly, it would be the only company in which one could ply his trade professionally as a player and you would be trying to deny him collective bargaining rights. Your'e going to counter that he can go play elsewhere but what other league is there in North America and if one starts up and offers more then what? ...actually that would be great a competitive marketplace where the player would prosper and the owner would sink or swim based on ability to run a franchise successfully...

I grant you that there would be a hell of a court case (or two, if we include Canada), but the Owners are giving up a lot of personal freedom by joining a larger corporation. And, unlike the MLB collusion of the 80's to restrict player salaries, this would be one entity, not 30 separate entities.

Personally, I don't think the legal battle would be as much of an obstacle as getting all 30 ownership groups to agree on the new corporate structure.

once again a solution that disregards any semblance of fair play.
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Re: There will be a strike

Postby Tciso » Tue Sep 04, 2012 3:29 pm

ukcanuck wrote:
Tciso wrote:No. I described 30 business owners incorporating into one giant business. It is a not so subtle distinction between keeping 30 different businesses. The NHL as an entity exists because the Owners decided it exists. It has legal powers, and a commissioner. It can make contracts with other Hockey Leagues. And, it has owned hockey teams in the past. So, precedence has been set for the NHL to buy the existing teams.

There is no collusion because:
1) There is no monopoly on professional hockey.
2) There is no measurable loss to the consumer of the service.

of course its collusion and a monopoly, it would be the only company in which one could ply his trade professionally as a player and you would be trying to deny him collective bargaining rights. Your'e going to counter that he can go play elsewhere but what other league is there in North America and if one starts up and offers more then what? ...actually that would be great a competitive marketplace where the player would prosper and the owner would sink or swim based on ability to run a franchise successfully...


Hmm. That sounds suspiciously like the WWE, or Dana White`s UFC. And, I haven`t seen or heard of the Anti-collusion police stepping in there. We had two leagues once too. I believe Edmonton and Winterpeg came from that league. What ever it was called....
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Re: There will be a strike

Postby ukcanuck » Tue Sep 04, 2012 4:12 pm

Tciso wrote:
Hmm. That sounds suspiciously like the WWE, or Dana White`s UFC. And, I haven`t seen or heard of the Anti-collusion police stepping in there. We had two leagues once too. I believe Edmonton and Winterpeg came from that league. What ever it was called....

Except as we all know wrestlers are entertainers and actors and there are plenty of places for them to do just that.
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Re: There will be a strike

Postby Tciso » Tue Sep 04, 2012 6:59 pm

ukcanuck wrote:
Tciso wrote:
Hmm. That sounds suspiciously like the WWE, or Dana White`s UFC. And, I haven`t seen or heard of the Anti-collusion police stepping in there. We had two leagues once too. I believe Edmonton and Winterpeg came from that league. What ever it was called....

Except as we all know wrestlers are entertainers and actors and there are plenty of places for them to do just that.


One can make that exact same argument for hockey, and I believe make an even stronger case than you can for the WWE. There are a lot of pro leagues for hockey across North America, just in smaller markets. I can't think of any other wrestling outfits.

And, for MMA, Dana White has a monopoly on that sport. They purchased World Extreme Cagefighting in late 2006, and On March 12, 2011 purchased rival MMA promotion Strikeforce. Now, if UFC and MMA were as "American" as baseball or football, those acquisitions would have been stopped by congress. But, there's no denying UFC is a defacto monopoly in MMA.
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Re: There will be a strike

Postby Potatoe1 » Tue Sep 04, 2012 7:37 pm

ukcanuck wrote:no one is suggesting that revenue sharing is a fix all, but its the moral high ground. Do everything possible on all fronts, not just on the backs of the players.


Well sure it's a nice theory....

The leafs cough up 60 of the 80 mill they made this year and that goes too the bottom 10 teams, which moves them out of the danger zone.

Nice theory, but basically zero chance of any business in any industry doing something like that.

if current revenues as per forbes is to be believed then total revenue and expenses are about equal (+5 Million)
That right there is a good starting point for a discussion about what the players share of HRR should be.


There is a prety big problem when an industry worth about 9 billion dollars, simply breaks even dont you think?

Franchise values are high because revenues are growing and there is an expectation of future profits. If the NHL does not improve their financial outlook franchise values will stop increasing and in some cases they will drop.

Listening to Fehr on TSN suggests the players are willing to give back but not while MSG and MLSE and Wirtz inc. are raking it in.


Again, this is simply a smoke screen. Donald Fehr is and has always been an absolute shark. The only thing he cares about is getting the players the best deal possible and if he cared about anything other then that he should be fired.

He doesn't give a flying shit about revenue sharing he is simply floating that crap to keep the media on his side.

Fehr cares about winning and winning for him is either maintain the 57% or removing linkage in which case he will take a (projected) smaller percentage.




no question the players would lose money they will never see again, however, you have to balance that with the continual roll backs the owners have gotten since 1995 and will continue to seek every time a CBA expires..over time that amount is going to be a lot more...


A player who makes 5 mill a year and misses 2 years, is out 10 mill. A player making 5 mill who takes a 25% roll back loses 1 mill the first year less every year following as revenues grow.

The last lockout was an absolute disaster financially for the players, sitting 2 years would be twice as bad.


That's the bullshit they want us to believe but without the games, the whole enchilada falls apart. no games, no revenue = empty buildings means no return on investment...whats the ROE on Rogers arena withtwo years of tribute bands and tractor pulls?


I'm not reading the leagues bullshit I just looking at Forbes which is an independent source.

Most teams are losing money all ready. With no player expense + TV revenue I suspect a lost season would cost most teams around 10 mill.

Here's the thing though...

A good CBA with the players taking close to 50% would bump franchise values and league profits drastically, so the loss of a season would be made up for very quickly.

Sure its a hard pill to swallow but its the owners who are chiseling here, lets play real hardball and sort it once and for all


I just don't see it.

Personally I would love the players to take the owners to the woodshed as it would most likely result in high revenue teams like the Canucks having and even bigger advantage.

The problem however is that the players have way, Way, WAY, more to lose from a prolonged work stoppage and it is far harder to keep 700 players in line then it is to keep 30 owners in line.

Looking at the thing logically I strongly suspect we will miss a few months of hockey and come back to a similar CBA with around a 50 / 50 split. I just don't think the players have the stomach this time and to be honest they probably shouldn't.
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Re: There will be a strike

Postby Strangelove » Tue Sep 04, 2012 8:50 pm

Potatoe1 wrote:Here's the thing though...

A good CBA with the players taking close to 50% would bump franchise values and league profits drastically, so the loss of a season would be made up for very quickly.


True. I've always said franchise values are where it's at for owners.

I agree that Forbes is as good a source as we'll prolly ever see, but all they can go by is estimates.

I got this from that other site (business of hockey forum):

Posted by Bobby Orr:
Straight from the (Capitals) horse's mouth...

Mr. Leonsis: The Forbes numbers are the biggest [expletive] joke I've ever seen, But we bring it upon ourselves because we don't publish our numbers. A banker who did our numbers, based on comparables, said our value would be $225 million to $250 million.

http://online.wsj.com/article/SB1207...googlenews_wsj

Posted by kdb209:
Forbes had pegged the Caps at $145M back in November - #28 in the league.

Today, the sale of the Wild to Leipold closed - giving us yet another data point to compare against the Forbes guesses:

Minnesota Wild (Offer Jan 2008, Closed April 2008)
Sales Price: $260M
Forbes (11/07): $180M

Again, Forbes has vastly underestimated the value of post-lockout franchises - although they were fairly accurate in their estimates based on pre-lockout sales - it looks like they really need to re-visit their models


Posted by kdb209:
One way to vet at least some of the Forbes numbers is to look at the actual franchise sales prices/offers and compare them to the preceding Forbes numbers:

Nashville Predators (Offer June 2007, Pending)
Sales Price: $193M
Forbes (11/06): $134M
Forbes (11/07): $143M
Other bids: Balsillie's $238M

Tampa Bay Ligtning (Offer Aug 2007, Pending)
Sales Price: $206M
Forbes (11/06): $172M
Forbes (11/07): $199M

Pittsburgh Penguins (Bids Dec 2006, Not Sold)
Bids: $150-175M
Forbes (11/06): $133MForbes (11/07): $155M
Mario finally opted not to sell, but received five bids (Balsillie, Gottesdiener, Fingold, Murstein, ???) over $150M including two at $175M

Edmonton Oilers (Unsolicited offers May-July 2007, Not Sold)
Offers: $131M - 162M ($145M CDN -$170M CDN, based on a .9028 / 0.9542 loonie on March 4 / July 18)
Forbes (11/06): $146M
Forbes (11/07): $157M
Based on Katz's reported offers of $145M CDN (May 5) and $165M CDN (July 18).

St Louis Blues (March 2006)
Sales Price: $150M
Forbes (11/06): $150M
Forbes (11/07): $144M

Anaheim Ducks (June 2005)
Sales Price: $60M-$75M (includes practice facility)
Forbes (11/04): $108M - Forbes did not do their NHL piece during the lockout
Forbes (11/06): $157M
The sale included the Ducks' practice facility, Disney Ice (now Anaheim Ice). Reports put the value of Disney Ice at $15M, giving a net Franchise value of $60M.

New Jersey Devils (March 2004)
Sales Price: ???
Forbes (11/03): $145M
Forbes (11/04): $124M
I haven't seen any reported numbers when Vanderbeek bought his controlling interest from Puck Holdings / YankeeNets.

Ottawa Senators (Aug 2003)
Sales Price: $93M
Forbes (11/02): $95M
Forbes (11/03): $117M

Buffalo Sabres (March 2003)
Sales Price: $93M
Forbes (11/02): $92M
Forbes (11/03): $95M

San Jose Sharks (Feb 2002)
Sales Price $147M
Forbes (11/01): $148M
Forbes (11/02): $158M
As far as I know, no numbers were ever reported when the sale occured.
I have never seen any numbers until I just came across the $147M number mentioned in passing in the Forbes 11/04 valuations article.

Forbes seems to have significantly undervalued the Predators, Lightning, Penguins, and Oilers, overvalued the Ducks, and been pretty close on the Blues, Senators, Sabres, and Sharks.


Must... resist... reading...these... threads.....
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Re: There will be a strike

Postby ukcanuck » Tue Sep 04, 2012 9:13 pm

Potatoe1 wrote:Well sure it's a nice theory....

The leafs cough up 60 of the 80 mill they made this year and that goes too the bottom 10 teams, which moves them out of the danger zone.

Nice theory, but basically zero chance of any business in any industry doing something like that.


yes it is a nice theory and I may be mistaken but is that not exactly what the NFL does everyone of their franchises are completely stable and even small market teams like green bay can compete on an even playing field with the big markets.
also even though Baseball doesn't completely revenue share they do I believe partner with the players to create a revenue fund to help all the smaller markets.

if current revenues as per forbes is to be believed then total revenue and expenses are about equal (+5 Million)
That right there is a good starting point for a discussion about what the players share of HRR should be.


There is a prety big problem when an industry worth about 9 billion dollars, simply breaks even dont you think?

You are absolutely right about that, but I wonder if thats just a reflection that Hockey is a niche sport and that NHL players AND NHL managers cant expect to spend the kind of money they have been, but I want to be careful to point out that it is the owners who are responsible for the contracts they sign just as much as the players.

Franchise values are high because revenues are growing and there is an expectation of future profits.

I agree with this...
If the NHL does not improve their financial outlook franchise values will stop increasing and in some cases they will drop.

I don't agree with this because while we are careful to point out HRR, as the money the players are partly entitled too, the owners are not solely relying on their share of that. for the most part the Franchises owners also own the buildings they play in (often gifted to them with tax breaks and concessions)and these buildings have many revenue streams which must contribute to overall valuations.
Listening to Fehr on TSN suggests the players are willing to give back but not while MSG and MLSE and Wirtz inc. are raking it in.


Again, this is simply a smoke screen. Donald Fehr is and has always been an absolute shark. The only thing he cares about is getting the players the best deal possible and if he cared about anything other then that he should be fired.

He doesn't give a flying shit about revenue sharing he is simply floating that crap to keep the media on his side.

Fehr cares about winning and winning for him is either maintain the 57% or removing linkage in which case he will take a (projected) smaller percentage.


we can probably agree that Fehr is by far the best agent the players have ever had and ironically enough his getting the best deal for the players by definition is wanting the best deal for the league. Its just unfortunate that the owners insist on treating the players like employees rather than partners...ultimately what's good for the players and what's good for the league and owners is not mutually exclusive

no question the players would lose money they will never see again, however, you have to balance that with the continual roll backs the owners have gotten since 1995 and will continue to seek every time a CBA expires..over time that amount is going to be a lot more...


A player who makes 5 mill a year and misses 2 years, is out 10 mill. A player making 5 mill who takes a 25% roll back loses 1 mill the first year less every year following as revenues grow.

The last lockout was an absolute disaster financially for the players, sitting 2 years would be twice as bad.
yes it would be a disaster all around, for everyone. but if it results in a vibrant and healthy league with labour peace going forward with everyone making money thats more than twice as good

That's the bullshit they want us to believe but without the games, the whole enchilada falls apart. no games, no revenue = empty buildings means no return on investment...whats the ROE on Rogers arena withtwo years of tribute bands and tractor pulls?


I'm not reading the leagues bullshit I just looking at Forbes which is an independent source.

Most teams are losing money all ready. With no player expense + TV revenue I suspect a lost season would cost most teams around 10 mill.

10 million in HRR? what about all the lost revenue in non related revenue? parking, rink board ads, royalties, and intellectual properties and copy right payments etc..with out the before expense revenue how do they pay down capital assets etc?

Here's the thing though...

A good CBA with the players taking close to 50% would bump franchise values and league profits drastically, so the loss of a season would be made up for very quickly.

if the savings the league receives from player concessions where to be rerouted directly into a pool the weaker teams could use to stay above water I would support that and withdraw support for the players if they refused...however the NHLPA has proposed that in their last proposal. take the players rollback and match it by the stronger clubs and everything comes up roses for everyone not named Wirtz...

Sure its a hard pill to swallow but its the owners who are chiseling here, lets play real hardball and sort it once and for all


I just don't see it.

Personally I would love the players to take the owners to the woodshed as it would most likely result in high revenue teams like the Canucks having and even bigger advantage.

The problem however is that the players have way, Way, WAY, more to lose from a prolonged work stoppage and it is far harder to keep 700 players in line then it is to keep 30 owners in line.

Looking at the thing logically I strongly suspect we will miss a few months of hockey and come back to a similar CBA with around a 50 / 50 split. I just don't think the players have the stomach this time and to be honest they probably shouldn't.
[/quote]
I've said before that a 50/50 split is where i think they should go. but then they should either remove the cap or include revenue sharing however so far the owners dont think they have to do that because they believe that they can get a concession this time...they got one last time and they will be looking for more next time too.
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Re: There will be a strike

Postby Potatoe1 » Tue Sep 04, 2012 9:18 pm

Strangelove wrote:
I agree that Forbes is as good a source as we'll prolly ever see, but all they can go by is estimates.


I agree that they there is probably a lot of variance in the estimates.

My guess is the profitable teams that can play at the max salary level are somewhat undervalued, while the low salary teams who are still losing money would have a tough time selling for the listed price with out some type of relocation involved in the deal.
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Here's a little diatribe on revenue sharing:

Postby wienerdog » Wed Sep 05, 2012 12:31 am

To create a competitive League that has parity and that produces good hockey for us to watch, the best one could hope for is a pool of 30 owners that all want to spend to their best capacity to be ultra-competitive with one another.

That bolded part is the key. If the costs of running any given franchise are outstripping it's ability to turn a profit, that particular owner will quickly lose interest in spending money to remain competitive; he will start to cut costs - just like any business that's in the red in any industry would. In the NHL, the first place that such cuts will happen are in player salaries.

And that's where League-wide competition slides, parity falters, and certain teams are eventually left to languish in permanent mediocrity, never getting a leg up to increase their competitiveness and thereby increase franchise value.

Enter the concept of revenue sharing to try and prevent this from happening.

The problem is that for-profit enterprises (like major pro sports teams) hate the concept of revenue sharing. It goes against every principle of capitalist ideals. It only makes business sense if it can strengthen your bottom line.

Take MLSE as an example: sharing their revenue is the worst possible case scenario from a purely competitive point of view. Here is a team that is the epitome of financial health and yet - if there was no cap - could spend every other team into oblivion and would have an utterly astounding competitive advantage. Instead, they (like everyone else) are restricted by a cap-systemm, but have the "benefit" of a more competitive League by paying out millions of dollars to less viable franchises so that they can out-compete the Leafs. And in the end, it literally robs even more potential earnings from their bottom line, because playoff appearances = more profits.

Tell me, how does that make sense to a Leafs fan, let alone to the owners of the franchise? Why the hell would these guys ever want to share one red cent, especially after year after shitty year of dreadful fucking hockey in THE hockey Mecca of the world?

(imagine for a second if ManU - while maintaining their insane financial might - were the worst team in the EPL...that should put it in perspective)

Also, it's simply faulty business logic to lump all of the franchise assets of the League together into one "ownership pool".

Clearly not all owners are in the same boat in regards to the overall health of the League - for example, would Francesco Aquilini really start to suffer if the League started to falter on overall competitveness?

Of course not - as pot pointed out, it would be to our benefit. The Islanders? Not so much.

Just because some franchises are doing extremely well in their own sub-markets doesn't have any bearing on League health as a whole. The owners of the franchises raking it in have no fiduciary responsibility to share their revenues with the weak sisters of the League at all; indeed, the fact that they have managed to institute any level of revenue sharing is pretty remarkable, from a pure free-market business standpoint.

They have done it to this point to improve the product of NHL hockey in general, but as with any industry, there will be limits to what amount of wealth the owners will be willing to share with each other. They're competitors, not philanthropists.

You can label that "greed" if you will, but it's not really about greed at all. That's an extremely simplistic - and IMO purely sensational - approach to the issue. It's really more about basic human nature...

To shift gears for a second, imagine the following scenario:

You own a house.

You worked hard to buy that house, and you paid market value for it. It happens to be a very valuable house, because it's really well built, it's at a very quiet end of the street, it's right next to a beautiful creek, and your house is built upon a small hill and you have a stunning view of the surroundings.

Contrast that to the house at the end of your street. It's built like a chicken-shack. It's next to a swamp, which also happens to be under some high-voltage powerlines. At that end of your street, it ramps up onto a busy highway, and that chicken-shack house looks straight out into that ramp, which has a ton of traffic on it at all times of every day.

That owner also worked hard to buy that house, and she also paid market value for it.

Even though you both live on the same street and you are part of the same neighbourhood, your house is naturally worth about 10 times the value of the neighbour's house.

(see where I'm going with this yet?)

Let's say, the town wants to institute a plan to make the neighbourhood a little better. After all, increasing the quality of life for everybody on the street is a noble cause, and everyone will benifit because it will improve the neighbourhood as a whole.

Seems good, right?

The thing is, life won't get any better for you in your house. In fact, it will get substantially worse, because some of your view will get blocked, and the creek will be re-routed beacuse the end of the street won't be a nice quiet cul-de-sac anymore - they want to push a connector through your backyard and the traffic flowing right by your front window will be devastating.

To make matters even worse, the City can't afford to make these improvements because they don't have enough money in their coffers, but they approcah you to pay for them because of the spectacular equity you own in your spectacular home.

How's that sound?

________

In regards to the NHL, a certain amount of revenue sharing will work to make the League somewhat more competitive, but "true" revenue balancing to make a level playing surface will never happen.

And nor should it, because in the real world, not all houses can be built on the same lot.
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Re: There will be a strike

Postby wienerdog » Wed Sep 05, 2012 1:03 am

ukcanuck wrote:
Potatoe1 wrote:if current revenues as per forbes is to be believed then total revenue and expenses are about equal (+5 Million)
That right there is a good starting point for a discussion about what the players share of HRR should be.


There is a prety big problem when an industry worth about 9 billion dollars, simply breaks even dont you think?

You are absolutely right about that, but I wonder if thats just a reflection that Hockey is a niche sport and that NHL players AND NHL managers cant expect to spend the kind of money they have been, but I want to be careful to point out that it is the owners who are responsible for the contracts they sign just as much as the players.


uk, aren't you the one speaking the harsh words about collusion?

What are competitive franchises supposed to do? Stop handing out big contracts?

If the League doesn't want to have some serious anti-trust trouble on it's hands, it can't do anything but have some franchises spend right up to what the Cap allows without entering into some form of collusion to keep the player costs down.

As far as the League is concerned, the Cap is simply too high and that's what's causing your "careful point" above.

They can't just agree to spend less on player offers! That's the whole point!

Competitive owners will always spend to what the Cap allows - the Cap is the mechanism that keeps that spending in check.

Fundamentally, the set-up of the current CBA is broken, from both the players and the owners point-of-view (if the players are sincere about parity).



ukcanuck wrote:
Potatoe1 wrote:Franchise values are high because revenues are growing and there is an expectation of future profits.

I agree with this...

ukcanuck wrote:
Potatoe1 wrote:If the NHL does not improve their financial outlook franchise values will stop increasing and in some cases they will drop.

I don't agree with this because while we are careful to point out HRR, as the money the players are partly entitled too, the owners are not solely relying on their share of that. for the most part the Franchises owners also own the buildings they play in (often gifted to them with tax breaks and concessions)and these buildings have many revenue streams which must contribute to overall valuations.


???

"Often gifted to them"?

Which facilities exactly have been "gifted"? Is it a majority?

And please explain why, if an owner owns the facility that a hockey team happens to play in, that owner should share the revenue from U2 playing to a sold out house for three nights in a row with the players of said hockey team? What does that have to do with hockey, and ergo with the valuation of an NHL franchise?

Do the players share the returns of their invested salaries in their own private business ventures with the owners? I don't believe they do, uk. And why should they?

Players and owners don't - and shouldn't - have their hands in each others affairs that have nothing to do with hockey. Buildings are a crossover point as venue only, not as business ventures.


ukcanuck wrote:
Potatoe1 wrote:
ukcanuck wrote:no question the players would lose money they will never see again, however, you have to balance that with the continual roll backs the owners have gotten since 1995 and will continue to seek every time a CBA expires..over time that amount is going to be a lot more...


A player who makes 5 mill a year and misses 2 years, is out 10 mill. A player making 5 mill who takes a 25% roll back loses 1 mill the first year less every year following as revenues grow.

The last lockout was an absolute disaster financially for the players, sitting 2 years would be twice as bad.
yes it would be a disaster all around, for everyone. but if it results in a vibrant and healthy league with labour peace going forward with everyone making money thats more than twice as good


Fundamentally, uk, you are advocating a stance that endorses a potential total shudown of the League for two (or more) years. On that point alone, I'd deem your position unsound from any angle (player, owner, fan), let alone that such a drastic scenario would result in a "vibrant and healthy league with labour peace going forward with everyone making money thats more than twice as good".

How in God's name is the death of the NHL for two bloody years going to result in a vibrant and healthy League?

You are in a different universe from the one I'm in, that's for certain.
wienerdog
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Re: There will be a strike

Postby dbr » Wed Sep 05, 2012 8:34 am

There was an interesting post at On the Forecheck yesterday about the NHL's claim that it lost $240m over the last couple years.

Comparing the figures in the Levitt Report before the last lockout to the figures we have today it would seem player costs have escalated about 30% over the last eight years, and to make up the other costs that would have to exist for the league as a whole to be losing money, non-player expenses would have to have nearly doubled (from $770m in the Levitt report to over $1.3b for the league to lose money in a year where there was $3.2b in revenue and $1.9b in player costs).

Seems a bit odd that this would be the case, but I guess anything is possible...
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