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-   -   Are the owners hiding something?? (http://hfboards.hockeysfuture.com/showthread.php?t=104267)

kurt 09-17-2004 02:38 PM

Are the owners hiding something??
 
One thing I have never understood, is why the NHL and NHLPA did not mutually agree on a 3rd party auditor to come in and take a look at the books, and determine what kind of profits/losses these teams were experiencing. Is the NHL mis-stating their income?

The NHL did make a half-assed effort of getting a third party review, but they did NOT select a 3rd party that the players could agree was impartial.

If both parties seriously wanted to get this settled, and had nothing to hide, they would have had no problem agreeing on this sort of process.

It seems the dispute really has nothing to do with losses, the NHL is simply muscle-flexing, and trying to get the media and fans on their side to try to impose a salary cap, and they're prepared to wait until the bitter end to get it. They're not focused on profits or losses at all, their main goal is a secure position, with a ceiling on expenses.

Stickaboo 09-17-2004 03:13 PM

Quote:

Originally Posted by kurt
One thing I have never understood, is why the NHL and NHLPA did not mutually agree on a 3rd party auditor to come in and take a look at the books, and determine what kind of profits/losses these teams were experiencing. Is the NHL mis-stating their income?

The NHL did make a half-assed effort of getting a third party review, but they did NOT select a 3rd party that the players could agree was impartial.

If both parties seriously wanted to get this settled, and had nothing to hide, they would have had no problem agreeing on this sort of process.

It seems the dispute really has nothing to do with losses, the NHL is simply muscle-flexing, and trying to get the media and fans on their side to try to impose a salary cap, and they're prepared to wait until the bitter end to get it. They're not focused on profits or losses at all, their main goal is a secure position, with a ceiling on expenses.

I AGREE
;)

thinkwild 09-17-2004 06:08 PM

Even if the Union had a complete grasp of the books, and were voting partners on the NHL board, I still wonder if they would want a cap. What does it matter what the books say. They are worth what the owners think they are worth. Maybe to the owners, they are actually worth more than their business can afford. I'd hope not.

H/H 09-17-2004 09:33 PM

The player's salaries are open for everyone to see and the owners are using it as one of their points why they need a cap. So why shouldn't they show their books?

SuperUnknown 09-17-2004 09:42 PM

Quote:

Originally Posted by H/H
The player's salaries are open for everyone to see and the owners are using it as one of their points why they need a cap. So why shouldn't they show their books?

The player's salaries are open for everyone to see because that's what the union wants. The owners would prefer the salaries not to be disclosed.

SuperUnknown 09-17-2004 09:43 PM

Quote:

Originally Posted by thinkwild
Even if the Union had a complete grasp of the books, and were voting partners on the NHL board, I still wonder if they would want a cap. What does it matter what the books say. They are worth what the owners think they are worth. Maybe to the owners, they are actually worth more than their business can afford. I'd hope not.

Even in the American economy it is that way. Recessions are usually caused because companies overall are paying too much to their employees

ceber 09-17-2004 10:57 PM

The problem, from what I understand, doesn't have to do with hiding anything, the real problem is the NHLPA reps and the owner reps refuse to agree on what excatly makes up hockey-related revenues. The big problem comes in because all these ownership groups don't just run the NHL team, they run the NHL team, an AHL team, the arena, concerts, concessions, etc. The NHLPA wants a broad definition of hockey-related revenues, the Owners want a strict definition. I don't think anyone would need to open up any books to solve the problem, they just need to agree if the 6 bucks I spend on a beer at a game or a concert gets counted as revenue.

kurt 09-18-2004 12:46 AM

Even if teams are losing money, does it matter?
 
Another thing I don't get about this whole idea of owners losing money is this: if so many teams are losing so much money, how come the league expanded to 30 teams? How come somebody always seems to be out there to purchase a team that's for sale? Are all the rich folk out there suckers for punishment or what?

I think another aspect often overlooked is the fact that many owners are in the ownership of hockey teams for a recreational benefit. Think of it this way. If I buy a snowboard, I'm not expecting to earn a return on my investment. I'm using it to have fun. In a sense, the same can be true with hockey teams. Obvoiously, they don't come out to lose a pile of money, but they don't expect to make a pile of money either.

One other thing is, sometimes a business that loses money can be appealing, and beneficial to an owner. I know, I know, crazy talk. However, a business that generates a lot of CASH flow (up-front season ticket sales, game/concert tickets, alcohol, food, parking, etc are all cash transactions) makes cash available for other ventures. And, in the right situation, the losses may lower the parent company's tax bracket, resulting in a gain in income at the end of the day.

hockeytown9321 09-18-2004 08:13 AM

Quote:

Originally Posted by kurt
Another thing I don't get about this whole idea of owners losing money is this: if so many teams are losing so much money, how come the league expanded to 30 teams? How come somebody always seems to be out there to purchase a team that's for sale? Are all the rich folk out there suckers for punishment or what?

I think another aspect often overlooked is the fact that many owners are in the ownership of hockey teams for a recreational benefit. Think of it this way. If I buy a snowboard, I'm not expecting to earn a return on my investment. I'm using it to have fun. In a sense, the same can be true with hockey teams. Obvoiously, they don't come out to lose a pile of money, but they don't expect to make a pile of money either.

One other thing is, sometimes a business that loses money can be appealing, and beneficial to an owner. I know, I know, crazy talk. However, a business that generates a lot of CASH flow (up-front season ticket sales, game/concert tickets, alcohol, food, parking, etc are all cash transactions) makes cash available for other ventures. And, in the right situation, the losses may lower the parent company's tax bracket, resulting in a gain in income at the end of the day.

And those reasons are among the many that will cause some owners to dissent and compromise with the players.

degroat* 09-18-2004 08:22 AM

Quote:

Originally Posted by kurt
Another thing I don't get about this whole idea of owners losing money is this: if so many teams are losing so much money, how come the league expanded to 30 teams? How come somebody always seems to be out there to purchase a team that's for sale? Are all the rich folk out there suckers for punishment or what?

Tell that to Disney.

mr gib 09-18-2004 11:45 PM

because the union is right - since the 50's the owners are private biz people and they do not have to disclose anything - the rangers , philly , and about 5 others are major media conglomorates -
billions in earnings they will never be honest about earnings

mr gib 09-18-2004 11:47 PM

Quote:

Originally Posted by Stickaboo
I AGREE
;)

if you lost your company 300 mil would you still have a job

Winger98 09-19-2004 01:40 AM

Quote:

Originally Posted by ceber
The problem, from what I understand, doesn't have to do with hiding anything, the real problem is the NHLPA reps and the owner reps refuse to agree on what excatly makes up hockey-related revenues. The big problem comes in because all these ownership groups don't just run the NHL team, they run the NHL team, an AHL team, the arena, concerts, concessions, etc. The NHLPA wants a broad definition of hockey-related revenues, the Owners want a strict definition. I don't think anyone would need to open up any books to solve the problem, they just need to agree if the 6 bucks I spend on a beer at a game or a concert gets counted as revenue.


That's what I've taken from what I've read, too. The horrible thing is that this should be something that could be sorted out in a day and then had the numbers all re-worked by the end of the week but won't be looked at seriously for another three months. Goodenow and Bettman just seem too intractable in their positions to deal with eachother in any sort of open, honest manner.

I have to think the owners/players would be better off if both Bettman and Goodenow were canned and a group of independent arbitrators could be agreed upon and brought in to sort out the mess.

HFNHL PIT GM 09-19-2004 09:21 AM

Quote:

Originally Posted by kurt
It seems the dispute really has nothing to do with losses, the NHL is simply muscle-flexing, and trying to get the media and fans on their side to try to impose a salary cap, and they're prepared to wait until the bitter end to get it. They're not focused on profits or losses at all, their main goal is a secure position, with a ceiling on expenses.

BINGO ! thats a great way to articulate the owners true position.

DR

HFNHL PIT GM 09-19-2004 09:27 AM

Quote:

Originally Posted by kurt
Think of it this way. If I buy a snowboard, I'm not expecting to earn a return on my investment. .

i think a great example is that of a speed boat. they cost a fortune to maintain and use. i know of a guy who spends over $15,000 in the summer on gas and other stowage charges just to run his high performance speed boat.

he bought it for the fun and sucks up the costs as part of the process. now dont get me wrong, the owners in the NHL have a right to earn money, but for most of them its part of a larger business strategy (hello PHI, NYR, STL, DAL, PHX, OTT as a few examples)

dr

victor 09-19-2004 09:52 AM

Good idea - however -

Who picks the auditors? Where do they provide their reports? Do they audit just the team corporation's, or team and building corporation's, or the team, building, parking corporations (etc)?

Finally, what is the expected outcome of the audit?

kurt 09-19-2004 01:13 PM

expectations
 
This is what I would suggest. In a perfect world, Bettman and Goodenow would both agree on an independent firm to deduce what constitutes hockey-related revenue, and they hire the group to audit the financials of all relevant businesses, under the mutual agreement that they will unconditionally accept the 3rd party panel's definition of revenues. Then, they will use this framework to evaluate the financial health of the NHL.

This way, the NHLPA still has no access to documentation that the NHL would like to keep private, but they have an accurate picture of the state of the league, that they can trust. Then, these goofballs can stop blowing smoke, and start working out a deal.

kurt 09-19-2004 01:14 PM

Quote:

Originally Posted by DementedReality
BINGO ! thats a great way to articulate the owners true position.

Thanks! :)

Cawz 09-19-2004 04:42 PM

Quote:

Originally Posted by kurt
It seems the dispute really has nothing to do with losses, the NHL is simply muscle-flexing, and trying to get the media and fans on their side to try to impose a salary cap, and they're prepared to wait until the bitter end to get it. They're not focused on profits or losses at all, their main goal is a secure position, with a ceiling on expenses.

So youre saying expenses have nothing to do with profits and losses? Youre saying having a ceiling on expenses (ie, having some predictabilty wrt expenses, which are 50 to 100 million per team) has nothing to do with how much money they might lose?

The NHL's position is cost certainty. The NHLPA's position is trust - they dont trust the owners. The NHL stands to continue losing money if a bad agreement is reached. There's no chance the PA will lose money with a bad agreement. They just wouldnt make as much. It seems to me the PA is muscle-flexing more than the NHL.

hockeytown9321 09-19-2004 04:56 PM

Quote:

Originally Posted by Cawz
So youre saying expenses have nothing to do with profits and losses? Youre saying having a ceiling on expenses (ie, having some predictabilty wrt expenses, which are 50 to 100 million per team) has nothing to do with how much money they might lose?

The NHL's position is cost certainty. The NHLPA's position is trust - they dont trust the owners. The NHL stands to continue losing money if a bad agreement is reached. There's no chance the PA will lose money with a bad agreement. They just wouldnt make as much. It seems to me the PA is muscle-flexing more than the NHL.

The NHl won't lose any money if they get a cap because so much damage wil have been done to the game that there will virtually no money coming in. You can't lose any if you don't have any.

Cawz 09-19-2004 05:32 PM

Quote:

Originally Posted by hockeytown9321
The NHl won't lose any money if they get a cap because so much damage wil have been done to the game that there will virtually no money coming in. You can't lose any if you don't have any.

I'm not sure what youre saying.

As for the damage to the game, as an Oiler fan, I dont worry too much about that. As far as damage goes, Edmonton will be one of the cities affected less than others. When this ends, people will come back in Edmonton. Most of the damage will be in the places where the fan base was just starting to catch on. Like Calgary.
(just kidding).

hockeytown9321 09-19-2004 07:03 PM

Quote:

Originally Posted by Cawz
I'm not sure what youre saying.

As for the damage to the game, as an Oiler fan, I dont worry too much about that. As far as damage goes, Edmonton will be one of the cities affected less than others. When this ends, people will come back in Edmonton. Most of the damage will be in the places where the fan base was just starting to catch on. Like Calgary.
(just kidding).

I'm saying the only way they get a cap is if the season is canceled. If that happnes, they might as well fold the league because they will have zero fan base left, except in Canada and a few American cities. Its kinda like cutting their nose off depsite their face. They'd be much wiser to compromise on a restictive luxury tax and not destroy the game.

kurt 09-19-2004 07:21 PM

Quote:

Originally Posted by Cawz
The NHL's position is cost certainty. The NHLPA's position is trust - they dont trust the owners.

I would argue that the players' position is not simply trust, but rather the ability to earn their market value, and have the opportunity to gain whatever people are willing to offer.

I get a kick out of the NHL's "cost certainty" jargon. If you think about it, every single team in the league has cost certainty, with regard to salaries. They're the ones that sign all the contracts, they have absolute control over the payroll of their team. The only thing that is not certain is the amount players will earn in incentive bonuses. What the NHL really wants is a salary cap, not "cost certainty." They want to protect themselves from their own idiocy.

Cawz 09-19-2004 09:36 PM

Quote:

Originally Posted by kurt
I would argue that the players' position is not simply trust, but rather the ability to earn their market value, and have the opportunity to gain whatever people are willing to offer.

Ya but the season is cancelled because of some people against losing money and some people against earning less than their market value.

Does anyone know how long an agreement has to be signed for? I wonder if a 10 year agreement is too long. The 2 sides have drifted so far apart, and so much has changed since 94 (Canadian dollar, # of teams, the defensive systems...).

I wonder if a shorter length of agreement would cause the sides to give in a little, knowing that, at least they arent stuck with the agreement for a whole decade like last time.


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