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09-16-2004, 09:58 PM
  #79
Edge
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Quote:
Originally Posted by Fletch
VAN's profit was $20 million two years ago I believe and $25 million last season.

Not sure why you say owners need to get a portion of the operating profit. Like I said, unless the owner/investor has a preferred or debt position that specifically stipulates a stated dividend or interest and/or principal payment, the obligation at the end of the season is always zero. In most common stock positions, owners re-invest all funds back into the firm and keeping building franchise value as their goal is capital appreciation, not income. I don't know the status of any of the teams in this regard, but my default is that nobody's owed anything except debt holders.

As for the mediocre play comment.. .my point as always will be the motive of all this is profit over winning. It's a business. People spend real money to own these teams and players make real money to play the games, and so on down to the girl that gives you a soda. There will be good years and there will be bad years. If teams can't weather good and bad years, either they're poorly run or they're in a place where there shouldn't be hockey. If you say that the salaries will not go down, I've already stated my opinion that overall salaries will decrease and the spread between the lowest payroll and the highest payroll will significantly narrow. I'm not for a perfect world, which is the owners' dream of a highly leverageable business model where they can make even more money than they're hiding.

Never said zero taxes, but I typcially assume a 40% rate in everything financial model I do, and I was suggesting it was lower than that. Sorry I didn't clarify, but sometimes when I talk business and numbers, I go off my assumptions that not everybody knows.

Never said the current situation is working, but have suggested that I don't think
the only solution is a hard cap.

No clue what this means 'Which goes RIGHT back to what I said about keeping everyone in the same position the numbers are just higher'. If the Rangers earned less on their revenues and were taxed 50% on each dollar spent over a certain amount, do you honestly think they would've forked over $9 million, or the equivalent of more than $13.5 million? If that was the case, the Rangers may not have had a problem going over the amount they did last season. The $9 million becomes something a good deal less, perhaps $5, which is more pallatable. Salaries have already started to come down as it is.

Do I think they would have? You bet I do. James Dolan simply doesn't care how much it costs as a whole. Heck even with a labor situation he threw a guranteed 9 million over 3 years at a guy who played 16 games and has {I believe} never made it past the second round of the playoffs to boot.

In addition to that I think the ONLY thing that will stop the Dolan's and Hick's and others is a salary cap.

As for salaries coming down, not really. What we saw last year was the market drying up because of uncertainty so those second tier spenders werent as active as usual with their deal or two here and there.

I could def. agree they've plateau'd but all it's gonna take is the next young superstar getting into a contract snafu and you'd see it keep right on going.

The problem now {and the reason for the salary cap} is not just fix the situation on the surface but also to begin to fix the damade that is ALREADY done. Even if {for arguments sake} they DO get a cap in place. It's gonna take at least another 3 years to get this house in order.

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