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09-24-2004, 05:57 PM
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Originally Posted by LastoftheBrunnenG
If there's rampant hanky panky with the numbers, where is the IRS and the canadian equivalent?
The problem isn't really illegal activity, it's that there are no generally accepted accounting practices for determining what is and is not considered hockey income.

This is complicated for a number of reasons. Most teams are owned by people or companies that have a significant number of other, often related, assets. Consider Cablevision, owner of MSG and the Rangers. Cablevision the TV company pays some small token amount to the Rangers for their TV rights, because the money all ends up in the same place anyway. But because their TV deal provides so little income, the Rangers can actually say they are losing money overall.

Seemingly insignificant accounting discrepancies like this add up to hundreds of millions of dollars league-wide. This is the reason why the league can say they lost $270 million last year while the NHLPA can insist that the owners are under-reporting their revenue. IMO this is the big stumbling block to a deal.

The league genuinely needs some kind of relationship between costs and revenues, but the players suspect (rightly so) that any deal linking salaries to revenues will simply cause the owners to do whatever they can to give the appearance of small revenues. As soon as the players are satisfied that there are mechanisms in place to ensure that the owners will accurately report their revenue streams, I think there will be a deal in place within two weeks.

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