How to make the NHL profitable again and prevent future lockouts: IPOs
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10-01-2012, 07:07 PM
Join Date: Feb 2011
Originally Posted by
If revenue in the NHL is essentially fixed, why did they grow from $2.1 billion to $3.4 billion (HRR) in seven years?
What is fixed is the number of seats. If demand is very high, the price for those seats goes up. If there is little demand, teams will have trouble selling all tickets, especially at given price points.
Broadcast revenue is very high for some teams, like Toronto and Detroit, for example. Since Jacobs of Boston has a share in the network that broadcasts the Bruins and thus can 'lowball' the team, there's a prescribed method to consider the appropriate valuation of a broadcast contract (as an aside).
The revenue growth wasn't from ticket sales or any attempt to modify the supply and demand curve. That was my definition of 'fixed'. The growth also happens on a fixed level, it's a fixed gain, and it doesn't deviate from the line. The growth from 2.1 to 3.4 was all according to the curve and did not deviate from it for even a single second.
Originally Posted by
Yep, forcing owners to sell their businesses is TOTALLY legal. Where'd you come up with that one? Also, I guarantee you the owners wouldn't agree to that as a whole. Even owners who are willing to sell shares of their team wouldn't vote to force others to do the same.
Declaring bankruptcy sure as hell makes sense. Chapter 11 bankruptcy allows a company to restructure, which essentially, in a lot of cases, means it gets to renegotiate it's debt to more favorable terms. If anything, you declare bankruptcy, restructure the debt, THEN make the IPO so the IPO is worth more. IPOs are generally for a few purposes. It's either to raise money for a newish company that wants to expand, or in the high profile cases, it's a way for existing owners of a successful company to cash out. It's NOT for a company facing bankruptcy to raise capital. Nobody would go near that turd of an IPO.
The player stock options proposal you made makes no sense at all either. Replacing salary with stock options? So essentially replacing cash with something that has cash value is supposed to be different somehow? And having stock options not count against the cap? So basically there's no cap anymore? And giving "new players a bunch of shares wouldn't hurt anything" is laughable. A bunch of shares IS CASH. Since when are stock and stock options not worth cash? So a guy like weber could be signed to a 1 million cap hit contract, and he gets 200 million worth of stock and stock options in his contract instead. Because that 100% makes sense.
If they don't agree to it, you throw them out of the NHL. I already said that. Anyone who owns stock knows that stock shares are NOT cash. Go to your local department store and try to buy something and tell them you have shares and they'll laugh at your ridiculous idea, as they should. Cash is cash and options are options.
When a CEO is signed to a company in the US, it's normal for his salary to be fixed at $20-30 million, but he/she will get hundreds of millions in stock options.
It makes plenty of sense to those of us with degrees. If you don't understand, please have a friend (with a degree) help you out. Or consider attending a business school.
The entire point is that a team like Columbus, who doesn't have the cash to sign superstar players, could potentially sign a ton of them using stock options. If teams like you mentioned (Rangers) chose not to sell shares in their team - Columbus could send front-loaded stock option offer sheets to all of their players - and essentially leverage out half their guys.
Who wouldn't want to see an underdog team walk away with some/most/all the superstars of a bigger team? The market would be opened. You can only offer players so much money - stake in a team is a separate deal.
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