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Guest aziz

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"Stop me, before I spend again!" Right? Do you really think that stopping the Pens from paying Crosby $9 million a year (and other similar contracts) is gong to save hockey in Phoenix or Columbus? Doesn't the question of whether or not those struggling franchises should even be where they are come into play? The league should be able to blithely go ahead and put franchises wherever it pleases, and then expect the players to pay for their bad decisions?

Ding ding ding!!!! We have a winner. Johnny, tell him what he has won.

Johnny: He has won a BRAND NEW sheep.

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@aziz - it seems we do agree on a lot of things, just not how to come to an agreement. I certainly agree that the players are going to have to agree to reduce their share of the revenue, which they have done (I think to 52%? Not sure). I don't think 48% is any more realistic than contraction. If the league is bringing record revenues, yet 18 teams are losing money, I'd say there is a serious problem with the way the league is structured. Player salaries are only part of the equation, there is also the revenue side- from ticket sales and local broadcast contracts.

If the league really wants to keep teams in these struggling markets then I really don't think cutting player salaries is a long term solution. My guess is that the only solution would be more revenue sharing, take from the rich and give to the poor. I remember a quote from an NFL owner many years ago, "we're (x number of) capitalists who once a year get together and vote socialist". Are NHL owners willing to do that? I doubt it. If not, then those struggling franchises are doomed, regardless of whether the players get 57% or 52% or 48%.

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Good article (imo, anyway) that presents the argument that I make, the current situation is more an owner vs owner problem than an owner vs players problem:

http://www.theglobeandmail.com/sports/hockey/globe-on-hockey/why-nhl-teams-cry-poor-despite-the-leagues-record-growth/article4429817/

So in terms of our roughed out numbers here that leaves about $280-million as our “profit” estimate.

The NHL as a whole, in other words, now makes money – and if revenues were 100 per cent shared among owners, they’d all be profitable.

(That’s looking at only hockey-related revenues, by the way. Getting into non-HRR sources such as increases in franchise values and the like is a whole new topic.)

The major issue, however, is that the $280-million profit margin (or whatever the precise figure is) is going almost entirely to the league’s top teams.

The Leafs, for one, likely make up $100-million or more a season of that figure, even after giving up the league’s largest revenue sharing donation to the less fortunate teams.

Add in the Rangers, Habs, Canucks, Red Wings, Bruins, Blackhawks and Flyers – all healthy franchises – and there’s another $240-million or so.

So there’s eight franchises and we’re already well over the $280-million profit figure we’ve estimated for 2010-11.

...

“Under the current CBA, NHL teams have received over $3-billion in revenue that would have previously gone towards player salaries,” one such source said this week. “The issue is not whether the players should now give up more revenue, it’s what did the owners do with this $3-billion?

“We know what they didn’t do. NHL clubs did not meaningfully revenue share between the big and small markets. After accepting a salary cap, a 24 per cent rollback and making other significant concessions last time, with revenues up over 50 per cent since 2005, why look to the players again?”

The answer is easy: Bettman and Co. believe they will have far more luck prying $200- or $300-million out of the players than the big moneyed teams, the owners of which feel they’ve given up enough of their advantage by agreeing to a cap, some limited revenue sharing and greater parity.

But even under the league’s recent proposal, which would cut the players’ share to 46 per cent, many teams on the low end would continue to lose money.

You simply can’t turn a profit while bringing in $80-million or less unless we’re talking about a cap of $45-million or less, which at current revenue levels would require giving players only a 37 per cent share.

To make a team like Phoenix profitable, they’d have to take closer to 25 per cent.

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More important than ALL of this posting I've just read and burned my eyes with... where the hell am I going to get my Ho-Ho's, Zingers... and cherry pies?!?! I'm still made at Hostess for doing away with my blueberry pies... but this... THIS is an OUTRAGE!

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A large part of that comes from being one of those money grubbing Union guys that went on strike for 3 months to try and maintain retirement and medical benefits for new hires. Stupid huh? We didn't go on strike for more money or raises or more benefits for the current employees but for the benefits of workers not even hired yet and after 91 days on strike, we managed to get new hires a flat amount of 1400 dollars(taxable) paid each year for them to invest as they see fit. They have no 401k or IRA or ANY other retirement. Was going on strike for that stupid?

this puts you and your company's new hires in an entirely different situation than a bunch of guys who average $2.4mil/yr, with a minimum salary of $500k/yr. the fact that you both have unions is the ONLY similarity between the two situations. these are not guys collectively bargaining for a living wage or vital benefits, these are guys collectively bargaining to avoid thier average salary being reduced to $2mil/yr. exactly how much brotherhood can you feel for them?

i won't get into my anti-union thing, because it isn't the point. you have one, you like it, great. you also aren't a bunch of multi-millionaires.

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i won't get into my anti-union thing, because it isn't the point. you have one, you like it, great. you also aren't a bunch of multi-millionaires.

FYI aziz, I might be a union guy but I am a registered independent. I WILL NOT vote just party line because the union told me to. I do the research on the candidates and vote according to which ones I share my beliefs in or the ones that have my country's best interests at heart. The two party system has created a grid lock that is eating away at the nation's core and it needs to change. Since it is illegal to shoot criminal politicians, voting is the only way to get them gone.

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All I can say is that this must the stupidest work stoppage in the history of the professional sports.

And please someone, shoot that worthless piece of dogcrap Gary Betman now. He has not contributed anything constructive since he became a commishioner of the league.

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@JackStraw "The answer is easy: Bettman and Co. believe they will have far more luck prying $200- or $300-million out of the players than the big moneyed teams, the owners of which feel they’ve given up enough of their advantage by agreeing to a cap, some limited revenue sharing and greater parity."

I've been saying that all along...it *is* an owners problem, that they are trying to solve on the backs of the players.

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It's a players problem when the owners decide it aint worth it anymore and pack up and take their money elsewhere. EVERYONE should really think about who is supplying the jobs here. If the players are that great then let them open a new franchise and let them risk their money and let them be told how to run their business by their employees... I'll be ok with it when they decide to do that... Between now and doomesday, because that's when the players will post up their own money in these affairs, the current contracts should be honored as signed and everything else rolled back to a 50/50 split.... w/ severe new contract limits so this crap doesn't happen again.

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@JackStraw "The answer is easy: Bettman and Co. believe they will have far more luck prying $200- or $300-million out of the players than the big moneyed teams, the owners of which feel they’ve given up enough of their advantage by agreeing to a cap, some limited revenue sharing and greater parity."

I've been saying that all along...it *is* an owners problem, that they are trying to solve on the backs of the players.

Even if they were to "win" this dispute with the players, eventually they'll have to face reality. Either get rid of (or move) these struggling franchises or go the route of the NFL and get real revenue sharing.

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Even if they were to "win" this dispute with the players, eventually they'll have to face reality. Either get rid of (or move) these struggling franchises or go the route of the NFL and get real revenue sharing.

I just worry they will "solve" Phoenix and Columbus by moving them to Vegas and Kansas City.

These jokers have to get off the idea that they are 30 individual companies. They are 30 franchisees of the National Hockey League.

Fair rules. Level playing field.

Reward good management. Expose bad management.

This is not hard.

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These jokers have to get off the idea that they are 30 individual companies. They are 30 franchisees of the National Hockey League.

Or maybe they are 30 seperate corps and the problem is they are not treating each other or themselves that way. The NHL exists at the will of the owners, not the other way around. And so long as the strong corps keep propping up the weak then it isn't fair. Go belly up or move the team... Thats why the PA needs to recognize their place. And the teams surviving need to recognize they need to honor the contracts they signed. The ones who can afford it will be OK, the other oh well. Guess they shouldnt have been hoping the others would save their ass...

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Or maybe they are 30 seperate corps and the problem is they are not treating each other or themselves that way. The NHL exists at the will of the owners, not the other way around. And so long as the strong corps keep propping up the weak then it isn't fair. Go belly up or move the team... Thats why the PA needs to recognize their place. And the teams surviving need to recognize they need to honor the contracts they signed. The ones who can afford it will be OK, the other oh well. Guess they shouldnt have been hoping the others would save their ass...

Again, the "fairness" issue - the NFL is the most successful league on the planet. It is because they do "support" teams in areas that aren't major markets. That makes it a truly national sport. One could point to the EPL's relegation policy as a way of "propping up" the lesser teams (giving them a chance to earn their way into the Premiership).

If the League wants to be a dog-eat-dog, 30-individual-team League, they will wind up losing franchises and shrinking.

We may not mind that as fans, but I don't believe the owners really want to see reduced overall revenue as a result of this lockout.

Despite the fact that that's what they will get.

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So, let me see if I understand this. The salaries are the SAME as 1998. The revenue is quadrupled since 1998. The ticket prices since 1998 have increased nearly 90%. I know it is about corporate sponsorship and tv contracts and the peon season ticket holder gets pissed on.

Aside from that, you want to cite the players for the expansion (or include them in any part of that)? Really? I never heard of ANY union in ANY sector have the ability to veto where their employers should or should not expand their business to. A stretch does not even begin to describe that concept.

Maybe I went about making my point wrong. The expansion into these 'unsustainable' markets is often cited here as a big reason why the league is in the shape it's in. Too many teams in the south where there are too many fairweather fan bases, etc, etc, etc. No - the NHLPA had no say so in that happening, not happening, locations, etc. But...if that is part of the "problem" I sure do not see the NHLPA (or the league of course) brining up contraction as part of the "solution". Just took issue with the premise that the expansion over the last 2 decades is a large part of the problem.

The NHLPA and the players are not stupid...usually. Expansion increases the supply of players that are needed (more jobs) without really increasing the pool of truly talented players that demand "big" money. Expansion means more bidders for players services. Crosby and OV aren't making $9 million to $10 million in a 12 team league.

If expanion into these 'unsustainable' markets is such an evil that it's ruining the league then I have to call out the NHLPA never publicly having an issue with it (and I'm guessing they didn't have one privately).

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I just don't necessarily agree with the general mindset that hockey as a sport cannot survive or compete in the South or that expansion in and of itself has been "the" major problem.

I do think Tampa has a pretty solid fanbase. Perhaps not a huge penetration into the market, but a sustainable one. Nashville, given an owner/ship group with a long term vision for the club has developed a pretty solid fanbase. I do think Dallas would have more of a fanbase if the ownership situation was solved. One can make an overall argument that the expansion of the league has been successful even in Carolina.

There are exceptions - Atlanta (again), Phoenix (Glendale), Anaheim (no there there), Columbus (pathetic management).

The Coney Islanders would even have a chance if they were in any other division but with the Flyers, Pens, Devils and Rangers.

I'd go for Columbus to Quebec (unless they can put together a competent management structure, in which case - Anaheim) and Phoenix to Seattle. Or some effective permutation (The Katz franchise moves to Seattle, Phoenix becomes the Oilers, Winnipeg gets their records back and Seattle is officially the Thrasher franchise).

The NHLPA has no reason to advocate for contraction as opposed to relocation. Putting teams in traditional hockey markets. Seattle was the first American team to win the Cup, after all...

It also increases the salary of the top players, as you note. And also dramatically increases the overall revenues of the league.

So, if the top players in the league have agreed to around $8.5M as an acceptable salary - given the cap hit - through 2025, let's set the cap ceiling for each player at $8.5M and have this CBA go through 2025.

And each player's contract will be honored in full - with the provisio that those players MUST honor the contracts on their end. They have to play the full term of the deal or repay the up front monies they accepted above their cap hits. Or some reasonably similar provision.

A contract is a contract, after all. They simply must be honored in full. :D

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Maybe I went about making my point wrong.

Okay, I see your point much better now.

Here is an interesting article (I think @jammer2 might have posted excerpts from it before). What is compelling to me is the estimated revenue graph based on Forbes annual "The Business of Hockey" expose. http://www.theglobeandmail.com/sports/hockey/globe-on-hockey/why-nhl-teams-cry-poor-despite-the-leagues-record-growth/article4429817/

Here are the bottom 15 teams with estimated revenue earnings for 2011 along with average home attendance:

1) Phoenix- 52M revenue, 12,420 attendance (last)

2) Atlanta / Winnipeg- 57M revenue, 15,004 attendance (25th)

3) NYI- 63M revenue, 13,191 attendance (29th)

4) STL- 68M revenue, 18,809 attendance (9th)

5) CBJ- 70M revenue, 14,660 attendance (27th)

6) Car- 72M revenue, 16,042 attendance (22nd)

8) Fla- 72M revenue, 16,628 attendance (21st)

9) NSH- 72M revenue, 16,690 attendance (20th)

10) COL- 76M revenue, 15,498 attendance (23rd)

11) Ana- 78M revenue, 14,760 attendance (26th)

12) Buf- 87M revenue, 18,850 attendance (11th)

13) TB- 87M revenue, 18,468 attendance (13th)

14) Dal- 90M revenue, 14,226 attendance (28th)

There are some usual suspects on here, but some surprises too (notably Colorado and St Louis). The other surprises are to see where Tampa and Dallas are (middle of the back). So, in a way, I am piggy backing Radorans subsequent post that it is not all about the expansion regions. 17 of the 30 teams in the league are operating at 100% capacity. Another four are operating at near capacity (96.4%). So, 21 teams are operating at or near full capacity.

In just looking at the above, you have to ask yourself how does Dallas sit at #14 in revenue, but 28th in attendance while St Louis sits at 27th in revenue, but 9th in attendance. How does Dallas generate 30% more revenue than CBJ when their attendance is nearly identical? The simplest answer is two fold:

1) Operations- some teams operate their business end much better (front office, etc.).

2) Additional revenue- some teams do better at making more money outside of ticket sales alone (ie. better corporate sponsorship / sales, merchandising etc.).

So, back to your point, geography (and particularly into the "southern regions" is not a stand alone reason of the have's vs. the have nots.

Source for attendance: http://espn.go.com/nhl/attendance/_/year/2012/sort/homePct

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1) Operations- some teams operate their business end much better (front office, etc.).

2) Additional revenue- some teams do better at making more money outside of ticket sales alone (ie. better corporate sponsorship / sales, merchandising etc.).

So, back to your point, geography (and particularly into the "southern regions" is not a stand alone reason of the have's vs. the have nots.

There was an article by Stu Hackel the other day that cited Florida Panthers as reporting to Forbes a loss of 7 million but someone checked the tax record filed with Broward County Florida and they actually made 10 million.....Just how much of this creative book keeping is going on with other teams? How skewed are Gary's numbers and what he has to have to be "financially solvent"? I hope that Fehr has been smart enough to look into this deeper than just using Forbes Numbers.

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There was an article by Stu Hackel the other day that cited Florida Panthers as reporting to Forbes a loss of 7 million but someone checked the tax record filed with Broward County Florida and they actually made 10 million.....Just how much of this creative book keeping is going on with other teams? How skewed are Gary's numbers and what he has to have to be "financially solvent"? I hope that Fehr has been smart enough to look into this deeper than just using Forbes Numbers.

I saw that on another thread as well and does make one raise an eyebrow. The question comes down to what are forbes numbers based on and what are the tax filing numbers based on. Some organizations umbrella corps and underneath, they separate the gate revenue / merchandising from facilities (parking / concessions- etc.). So, it would be interesting in Florida's case how they are structured as a company. How is Toronto the richest organization in the league revenue (nearly double the Flyers)? Corporate sponsors? Different tv deals (regional, not national)? Larger merchandising / concession sales?

Whatever it is, it begs the question on how do the lower revenue teams use the same kind of blue print model for success as the richer teams have. Particular for those teams that are above the 90% attendance line. That shows that there is fan support for the team.

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How skewed are Gary's numbers and what he has to have to be "financially solvent"?

Your post made me do some additional research (in the spirit of @aziz statistical research). What I did was look at the forbes list and then combined it with some other statistics from other sites. I took the top 11 valued teams and the bottom 12 valued teams. I am not a corporate financial guru / controller nor accountant, so what I say should not be taken as fact, but my perception of how to read the data.

1) Valuation Appreciation / Depreciation- From a appreciation perspective, most teams are very healthy in the sense that many teams that have been acquired / purchased from 1994 onward have at least doubled their investment (valuation).

Highlights:

- Carolina has nearly quadrupled their value (purchased in 1994).

- TB has nearly doubled their value (purchased in 2010).

- Anaheim has nearly tripled their value (purchased in 2005).

- Dallas has nearly tripled their value (purchased in 1995).

- Columbus has nearly doubled their value (purchased in 1997).

Lowlights:

- Montreal has lost nearly 23% of their value (purchased in 2009).

- Florida has lost nearly 20% of their value (purchased in 2009).

- Nashville has lost nearly 8% of their value (purchased in 2007).

- Winnipeg has lost nearly 4% of their value in their first year back there.

I am using this as a geographical display on value of a team and viability as an initial point. Everyone of those teams are a post 1980's expansion team except one: Montreal- Winnipeg is arguable, but it more into that later. Yet Montreal has depreciated the most.

The reason I bring up the appreciation / depreciation is that it is an important ingredient to the stability and value of a league. The owners can post marginal losses and say "We are not making money!!", yet the value of their teams keep on increasing. There of course is a line where the valuation and annual loses even out to net and perhaps one or two as overall losses.

2) Revenue to Player Salary Percentage- How much of a teams revenue is eaten by players salary expense

Highlights:

- Toronto while having one of the larger payrolls in the league, absorbs only 30% of their revenue in player cost.

- Montreal while having a mammoth depreciation since the recent ownership, absorbs only 40% of their revenue in player cost.

Lowlights:

- Columbus, NYI and Phoenix all operate at about 70% of their revenue is absorbed in player costs.

I listed 5 of the 23 teams as highlights / lowlights. The remaining 18 teams all operate between a range of 50% to 60% of revenue is absorbed in salary costs.

3) Operating Income- This category baffles me a bit, but their is a direct correlation to this, gate receipts and attendance. I am not sure where it falls with the revenue category, but they do not seem to be connected (not immediate to my simpleton mind at least- which is baffling).

Highlights :

1) Toronto, NYR and Montreal, and Vancouver led the way. Head an shoulders above the rest of the league. Toronto was doubled as compared to NYR and Montreal. (+81.8m, 41.7M, 47.7M and 23M respectively for each team).

2) Three other teams: Chicago, Boston and Philly posted in the positive for Operational income.

Lowlights:

1) The rest of the league posted a negative in this category (between a -1M to a -8M).

2) Phoenix, under the NHL ownership posted an astonishing -24.4M in this category (closest other team was Columbus at -13.7m and NYI at 8.1M each).

4) Gate Receipts / Attendance: This one shows how much revenue was generated from the gate and the attendance.Tickets prices differ drastically by geography.

Highlights:

1) Two teams AVERAGE over $100 usd for a tix: Toronto ($116) and Vancouver ($105).

2) Two teams AVERAGE over $90 usd for a tix: NYR ($93) and Montreal ($95).

3) One team AVERAGES over $70 usd for a tix: Boston ($79).

4) Pitts, Detroit and Philly are the teams in the $60 range for average.

Lowlights:

1) The rest of the league (22 teams) averages between $35 to $50 per tix.

The Lowlights should probably be reversed with the Highlights.

I need to write a semblance of a conclusion, but I am tired of writing and probably need to abridge this later. For now, I feel this:

1) The owners are still making money (valuation).

2) Some teams do not know how to manage revenue / operational expense.

3) Some teams have extraneous revenue that makes them more profitable (for example, Torontos numbers do not line up).

4) Ticket prices are not uniform in the league, thus fueling the fire that it is a league of separate owners (not even franchise, because even as a franchise, the corporate headquarters gonvern prices.

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@Vanflyer

THANK YOU!!! Awesome job running the numbers to ground and giving them some real definition. I can't believe someone like Hackel has not done the same and published it. I am so sick and tired of the Bettman outright lies. I hope this info gets some read time on the innerwebs. People need to understand exactly where Gary Bettman is coming from............

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