2012-2013 Lockout Discussion Thread (Part II)
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09-06-2012, 02:55 PM
Join Date: Sep 2007
Originally Posted by
Can someone explain to me what revenue sharing is?
I mean, I know for example, if it's 50% owners and players, the revenue is split evenly.
A few questions I have, how does it work? Does each player receive a % based on their contract or is it split evenly?
e.g. Arron Asham 1 mil/year vs. Gaboriks 7.5 Mil a year. Does that mean Gabby receives 7.5 times of the revenue share of Asham or is it equal player to player?
Maybe I'm not even close to understanding so help me out
Revenue sharing has nothing to do with the players. It's the owners agreeing to share revenue with other owners. Some teams, like the Rangers, maple leafs, etc. bring in huge amounts of revenue because they are in very large markets and have a huge fanbase. Smaller market teams don't bring in as much revenue.
The problem in the NHL is that the big market teams are driving the growth of the league at such a rate that the smaller markets can't keep up. Just this past season, total league revenue went from 3 billion to 3.3 billion. That's a 10% increase. The revenue growth for a lot of the smaller market teams individually was less than that. Player salaries are tied to revenue. So if league revenues go up by 10%, then the cap goes up by 10% (and it did...it went from 64.3 to 70.2 mil, which is roughly 10%).
I'm sure there's more math involved than I've described here, but that is the basic gist of it. If a team like Phoenix only saw 5% revenue growth, how are they going to keep up when the cap is increasing by 10% each year? The only way is for the big market owners to share revenue, so that everyone is close to 10%, rather than having some teams at 20% and some at 5%.
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