STL Post Dispatch: Blues [players] get economics lesson
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11-14-2003, 10:22 AM
Join Date: Sep 2003
Originally Posted by
BTW, a luxury tax and revenue sharing are two very distinct items, and shouldn't be used interchangeably.
What happens to the tax money that is collected? It has to be shared, doesn't it? Or does it go to charity? LOL.
I think you are all being far too optimistic about a settlement. There is a fundamental philosophical disagreement that is not going to go away. The players made what appears to be a generous opening offer but they are not budging one inch on the philosophical issue.
The owners immediately rejected the offer because all it does is temporarily turn back the salary clock. Since the problem is not really salaries, nothing changes. That was the point of the offer - to smoke the owners out, to get them to admit that the issues are not about salary.
What is the issue on the owner side? It is revenues. After an incredible boom brought on by expansion and new arenas with their new revenue streams drove franchise valuations sky high, teams have to find more revenue. Growth has stalled. Prices are as high as they dare push them. Most of the new revenue streams have been tapped (although Vancouver is showing that PPV will work in Canada anyway).
The only way to increase revenues is to sell more tickets. This, the owners say, is impossible because the league is perceived to be unfair. (I thought that was one of the more interesting Daly quotes about competitive balance. "We may have parity but we also need the perception of fairness.")
This is why the owners want "cost certainty". They want to eliminate elite teams. That is the restructuring they want to see. There are lots of ways to increase the owner share of the pie if that is what is required. The easiest way is to agree to a global revenue pool to be divided and agree to a player share. Then hold back 10% of all player salaries during the season and adjust once the final revenues are in.
There are lots of ways to adjust the split between players and owners but
there is only one way to eliminate elite teams.
We make tickets easier to sell in Nashville if Colorado is not nearly as good as they are. It is fine if Ottawa is good for the next decade, but it is not fine for the league if they dominate like Detroit has dominated for the past decade. It is not fine if Detroit dominates for the next ten years like they have dominated for the past ten years.
Only a salary cap will work to prevent that.
Players are signalling that they are willing to adjust the split, but they are also signalling they are not prepared to alter the fundamental structure with a cap. For them the cap is the issue, not whether elite teams exist or not. If it sold more tickets, the NHLPA would probably go along with a system that prevented elite teams as long as it doesn't involve a cap.
How do we get rid of elite teams without a cap? That's the compromise, but I can't see where it can be found. Do we want that compromise anyway? Me, I think it is terrible. I don't care what the owners or players make. I do like to see great hockey teams even if they are based in the wrong city.
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