How to make the NHL profitable again and prevent future lockouts: IPOs
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10-03-2012, 03:46 AM
Join Date: Feb 2011
Originally Posted by
There are no "publicly financed teams" - only some teams which play in publicly financed arenas.
No publicly financed arena that I know of was done as a loan to the team. Cities typically sold bonds for construction and serviced the debts with a combination of fixed team rent (typically only a fraction of the P&I costs), generated sales tax revenues, dedicated taxes (per ticket surcharges, hotel and car rental taxes), other revenues (casino $$$'s), and general funds in case of shortfalls.
During the Lockout, only the fixed rent payments of their Leases are fixed costs.
Now, those teams which financed their own arenas - *cough* New Jersey *cough* - well, that's a different story.
And where are all the new shares going to come from to provide new options to players a year from now, five years, ten? Either the teams will have to do significant stock buybacks - thus negating your "ending the need to give them actual revenue this year, or any year" argument - or issuing new stock, diluting the value of all existing shareholders.
And I'd love to see the players reactions when a team has operating losses - are you going to make shareholders subject to cash calls and what happens if a team files for Chapter 11, potentially making existing shares worthless.
Team owners are on the hook for those deals. Look at Glendale and the Coyotes, the most prominent example possible. The City of Glendale is the reason the Phoenix Coyotes are an NHL franchise. The Players don't owe those dues, the team owner does. THE ARENA AND THE TEAM ARE ONE AND THE SAME, FOR ALL INTENTS AND PURPOSES. Without an arena, you have no hockey team. Point blank, period.
The value of stock itself would naturally increase, which would result in stock splits. There would be more shares on the market, but they'd still be worth more than the initial valuation. Share prices naturally grow in an expanding business. The NHL's exponential revenue growth to 3.4 billion is a gospel testament to the fact that stock prices will grow as well. Furthermore, the league could use the additional profits to give us even more franchises. Quebec is getting another team in 2015. Minnesota may get a second NHL team by 2020. California has room for at least 3 more teams (in San Francisco, San Diego and Sacramento). There will be more teams created and even more revenue to go around. By 2025 there may be as many as 40 NHL franchises.
I'd subject them to cash calls in a heartbeat. You want ownership, ownership means responsibility. If the team goes under, you lose everything. That's what ownership means. There's a disturbing lack of accountability in society today, and that same accountability is the reason we have a recession, a lockout, and everything else that is wrong with the world. Accountability and responsibility must be enforced by any means necessary.
What the players want is a handout. Money which is given without the promise of additional work-related responsibility is just that - a handout. NHLPA is lucky they get anything at all, and a number of the players may wind up using that money to invest in extra security after some of the ridiculous statements they've made during this off-season.
Originally Posted by
That's another thing.. not only would owners not want to do this, players don't want to do it either. They aren't public company CEOs who's job it is to basically game wall street (One of the main jobs of a public company CEO is to make the company look good to wall street), so they have a good understanding of stocks and options.
Most players probably don't even know what a stock option is, and we're talking about giving that to them as a big chunk of their compensation? Players don't want to play some BS wall street game, they just want straight up cash.
So, basically you admit the players are acting like little spoiled children? All the more reason to side with the league and the owners.
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