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09-16-2012, 09:54 PM
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Solution To Labor Problems: Move Teams and Relax the Hard Cap

The NHL owners keep talking about how their revenues are not enough. They desire the players to take less due to this reason, largely. I point out two no brainers:

1) The problem is this, the NHL wants to act like a business.
Well in a business, like McDonald's or Starbucks, franchises which lose money fire management or get closed.

The NHL has strong revenue generating markets (Rangers, Leafs) followed by some perpetual ne'er-do-wellers (Islanders, Devils, Panthers, Coyotes). The Coyotes offer the most extreme example, they are a market with a good team and good arena which bleeds money.

If the NHL is serious about their good business model they could start by moving Phoenix instead of underwritting them.
A good business model has franchises doing their fair share to contribute.
Phoenix is not profitable.
The Devils are another example. Good team, beautiful arena, and yet they still earn such poor revenues they can't afford the mortgage.

I just don't understand why the players, media, or any other parties do not express this point:

The NHL's problem is largely they have a lot of failing franchises.
They need to both improve revenue sharing, have a luxury tax, and relocate.

If you make the cup finals and cannot earn a profit in a new building then you are shouldn't be in the league. That make sense.

You could have three teams in Toronto and they'd make a profit. Heck try it in Quebec or Seattle.
You move the Devils, Islanders, and Coyotes to those markets and suddenly the league has three profitable franchises.

The stubborn refusal of the NHL to recognize and correct by relocation poor, poor "starbuck" locations is what is causing revenues issues both on a micro and macro level.

2) Relax the Hard Cap.
-The NHL's cap artificially raises revenue for some like the Rangers and Leafs who likely would spend another $30 million or so on players.
-This causes revenues to artificially raise leaving teams like the Islanders with a higher cap floor that they cannot meet without losing money.

Instead, do what MLB does and have a luxury tax that will be stiff enough to encourage teams to comply yet at the same time, should a team be over it will be penalized enough to provide small markets with a lot of extra revenue.

Last edited by rkhum: 09-16-2012 at 10:01 PM.
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