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10-26-2012, 08:13 PM
  #953
Drydenwasthebest
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Quote:
Originally Posted by idk View Post
The situation's a bit more complex than that. The cost certainty values established by the last CBA have done wonders for league revenues but not every team has seen the same kind of increases. Right now hockey profits come in at somewhere about 127 million. However if you remove the big three teams (Toronto, Montreal and the Rangers) league revenues drop to -44 million (yes, 44 million in the hole). Expand the big three to the big five (add Vancouver and Edmonton) and that number drops to a loss of 86 million. Only eight teams make more than 5 million a season (the above, plus Detroit, Chicago and Colorado) and only twelve actually turn a profit (those eight plus the Flyers, Ottawa, Calgary and Boston).

That's less than half the teams turning a profit. Is some of the reason for it owners who spend foolishly? Of course. The Wild, who have the second highest payroll in the league finished last season about six million in the red. But of the five teams with the lowest revenue in the league (the Coyotes, Columbus, Tampa Bay, Anaheim and the Islanders) two are below the salary floor (Phoenix and the Islanders) and two are
very close (Anaheim (within two million) and Columbus (within four million)).

The problem is that some teams are very rich and some teams are not. Montreal, Toronto and the Rangers account for 130% of the league's total revenue. And that skews the numbers very badly. This is a problem, but there are three solutions:
  • Reduce the cap and floor by seven percent. This will probably not save Phoenix from being a "have not" team, but it would bring Columbus and Anaheim very close.
  • Increase cost sharing. Not palatable to the owners of the profitable teams. Molson bought the Canadiens for 500 million dollars and Bell probably paid a similar amount for the Leafs (although it's harder to figure out, as MLSE owns several sports investments). True North bought the Thrashers/Jets $170 million. Why should Geoff and Bell sacrifice their ROI to finance the ROI for True North, who paid much less to get in the game?
  • Contract. Kill off the teams that are weak.

Of these three options the league wants the first, the players want the second and no one wants the third. Which one is more fair to us? Probably the compromise that gets us back to hockey soonest. But it's not as simple as "everything was fixed last time, why are we here again".
Brilliant post!

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