The Lockout Thread Part I
View Single Post
09-11-2012, 12:49 PM
Join Date: Nov 2005
Originally Posted by
It has everything to do with it. Do you think the players wanted a salary cap last time around? I do agree the players need to give up the idea of getting 57% of HRR but the owners aren't going to get there by proposing a 20% reduction in salaries. How would you feel if the company you worked for had revenue increase 50% over 8 years and offered you 20% less in salary?
I am going to apologize in advance for the disjointed post. There are a lot of things I threw in there and the formatting is off, not to mention some thoughts are repeated or out of order.
I don't remember seeing a 20% decrease, but hey exaggeration is great. Actually you are misreading that completely anyway, it's a reduction in the percentage of the pie. That doesn't mean that salaries will decline. Now if you are talking about the 20% decrease across the board like they did in the 2003, I agree I wouldn't agree with that. I don't remember that being the case this time around. What we have been talking about is the 10% or 15% decrease in revenue as applied to the Cap. With a large Cap decrease there is going to be some displacement of players (buy outs and such). A concern to be sure.
Now, let's put something in perspective. Had my company increased revenue by 30% and decided to decrease my share of the pool I have by let's say 10%, I may not care. Now if the company had decreased in revenue and they wanted to reduce my stake that might be a different story, but I would need to look at the financials. Let's do some quick math. Let's say the pie is 200 million, a 30% increase would raise that to 260 million. 57% is $114 million (the fact that you got $114 million is moronic to begin with). 47% of 260 million is $122 million. What that states is that the owners would have given 8 million and kept 52 million (if the labor pool is the same, which it is, there is no decrease in salary). I'm sure most of you would consider that "unfair". But they again you aren't the ones that deal with day to day expenses of running the franchises either. You have a guaranteed contract, living large, with almost no risk. Your biggest fear might be a large drop in league-wide revenue, in which case you are going to have to deal like the rest of humanity (something big would have to come down for a noticeable decrease in league wide revenue).
Salaries and the salary cap are increasing far, far, far greater than the cost of living. The average player salary has increased by 69% since 2003.
To give you an idea, revenue in Columbus has increased from 64 million in 2002 to 80 million in 2012. Player salaries have increased from 26 million to 56 million in that time frame. That is over a 100% increase in players costs versus a 25% increase in revenue. The valuation of the team has remained relatively flat, now at around 152 million. That 2002 number had a 6 million dollar profit, versus a 13.7 million loss in 2012.
Now what the player do have an grievance about is the larger market teams. Some of these teams have actually had reduced payrolls that have just not started to come back to pre-lockout levels while operating income has shot up dramatically. This points to an issue with how revenues are distributed. For example, the Red Wings were spending more pre-lock out than they are now. Of course they were also losing money before. Nashville follows a very similar line as we do.
Then again the average ticket price in Montreal is $90, Columbus $49. Montreal has no issues with an operating income at $50 million while charging almost double for the cost of a ticket.
What this comes down to is that the player want the income from Toronto and NY distributed down to the teams like Columbus, Nashville, Phx, etc despite the fact that the average salary has already increased by 69% in the last decade (as if they were underpaid before). The larger market teams wouldn't mind spending that cash if it gives them a larger competitive advantage. Why would they want Columbus or Nashville more competitive? They would rather attempt to buy Cups with $100 million+ in team salaries and let the other teams struggle to put a $50 million team on the ice. All the while few of them care what ticket prices are.
Last edited by blahblah: 09-11-2012 at
View Public Profile
Find More Posts by blahblah