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08-10-2012, 08:40 PM
  #951
piston
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Quote:
Originally Posted by Herby View Post
I think K17 brought up a couple of points that have been overlooked.

1. The strength of the dollar. The dollar will eventually gain strength, it may not be for a few years, but when it does you are going to see the same thing that happened in the late 90's with the exodus of teams out of Canada. No way can Winnipeg or Edmonton survive if the dollar gets back to it's levels of the 90's. Remember these teams are taking in gates, merchandise and local TV deals in Canadian dollars and paying out salaries in American dollars. If the cap were to stay in the same ballpark it's at right now with what the exchange rate was in say 1997, not only would those teams struggle, you would also possibly lose Calgary and Ottawa.

2. The salaries for bottom line role players. Like I mentioned earlier with my post about Bill Veeck and his great quote. And as we saw with the other thread about Zach Parise and jersey sales, it's not the star players salaries that are awful, it's the lesser players.



Anze Kopitar will recoup that money in on ice performance combined with ticket and merchandise sales because people want to see him play. If Anze Kopitar were to leave the Kings his loss would be felt not only on the ice but on the Kings bottom line. If Fraser or Stoll left no one would really care, some people love Stoll, some people love Fraser but they are replaceable on the ice and make little to no impact on the bottom line. How many people are saying "hey the Kings are in town, Jarret Stoll is worth the price of admission" or how many Colin Fraser jerseys do you see at Staples?

If anything the star players are underpaid.

If Stoll is worth $3.5 million, what is Kopitar's true value, I would argue in the neighborhood of 9 million.
If Jiri Hudler is worth 4, what is Iginla worth, probably around 8-9.

There are examples like this on every team, as the salaries of role players go through the roof.
Herby,

Thanks for the note. I agree that the recent strength of the Canadian dollar is responsible for at least 50% of the rise in league revenues and subsequent lifting of the cap to where it is,today. The total revenue number is denominated in U.S. dollars. Even if Canadian team revenues don't budge on an absolute basis, they go up relatively if the Canadian dollar rises relative to its U.S. counterpart. I don't believe the U.S. dollar will rise because Canada has far better fiscal and monetary policies than we do, and because the Canadians are not a bunch of idiots and actually exploit their oil and gas resources, but that is for another discussion...

Fehr's strategy has always been to stretch salaries on the top end because he knows that will lift those in the middle and bottom eventually thanks to salary arbitration. Hence, he wants to have a few high revenue team that will spend wildly on the stars. Revenue sharing impinges on those teams' ability to spend at will. Put another way, Nashville is stuck paying Weber far more than they had planned because the Flyers don't have the same fiscal constraints. If the Flyers had to pay a penalty for spending, they would have been more rational in how much they offered Weber. As you correctly surmise, there will now be a host of second tier d-men who will see their pay pulled up by the height of the Weber ceiling.

The question I have is how much power will the players cede Fehr. Fehr could not care less about the long term health of the business. he only wants to extract the maximum that he can in the short term. That was his MO in Baseball. The problem is that Hockey is stil not as well established and lacks a monster TV deal. Do the players really want to go through another lost season? We shall see.

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