2012 CBA Discussion Part IV (Lockout talk here)
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11-17-2012, 03:28 AM
Dom - OHL
Join Date: Sep 2009
Location: Stratford, Ontario
Originally Posted by
For the owner's salary I meant in there as an expense. You said yes which based on the way I meant the question the owners aren't losing what they (Forbes) show. I'm not sure that is what you meant. Let me ask a little different to clarify. Team A shows a $3M loss. In that $3M is an expense for $5M in owners salary through the year. So it looks like the team lost $3M but the owner made $5M. The team actually made $2M.
First off, yes some owners draw a salary, and why wouldn't they? In most cases they are CEO's or presidents of their teams and are entitled to draw a salary. But your question is dealing in an IF for example, IF they draw a $5 million salary and show a loss of $3 million..... I can't put it any other way then : trying to draw a conclusion without all the facts. I think you are trying to paint a picture that isn't entirely true. No NHL owner (CEO) is drawing a salary that is any different than any CEO of any major North American Corporation. There is no attempt to hide expenses that the NHLPA isn't aware of. Remember, they sign off on it. Now, whether we agree on whether an owner (CEO) is entitled to draw a salary, well that's a different argument.
I'm not sure I get the ~$250M going mostly to the rich owners. If they cut back to 50% wouldn't each teams salary be cut back based on what they are paying out? I actually have a spreadsheet of that someplace. While that will save the ones who spend more the most money initially, won't the increased revenue sharing come out of those teams so the poor teams end up benefiting the most?
The only reason I brought this up is because earlier you said somewhere the savings projected in your proposal divided by 30 owners: its not equally divided 30 ways, that's my whole point. And this is the nitty gritty of the CBA negotiations. It has to work for all 30 teams not as a whole. It'll take a lot of work to figure out what each team would get and how that effects their bottom line. Something I don't have time for, but one thing is certain, it's not equal
I just finished some write up I have to do and got an early rise before I hit the road again, but just wanted to throw one more thing out there and its franchise values, which seems to come up a lot.
FV are just an arbitrary number, a paper number if you will. The owners gain nothing from it until they sell. The problem is, trying to find a potential owner that is willing to pay the said value. In 2005 the NHL was lined up with potential owners wanting an existing franchise or expansion. Why? Because they had cost certainty with the CBA. While the CBA did a lot of what it was intended to do, it failed on that part which is why the league is having a hard time finding owners now. So the Bruins value of $325 million is only true if I'm willing to pay that. If I bought them at $300 million, isn't that their actual value because that's all JJ could get for it? Isn't that the new value of the franchise?
Let me use a personal example: The last house I owned before this one i purchased for $169,900. It was appraised at $209,900 when I put it on the market. For various reasons, the best offer I got was $176,900. And for various reasons sold it at that price. So is the value now $176,900 or $209,900 ? The new owners wouldn't be able to get that $209,900 if they tried to sell either so the actual value is what you get for it when it's sold. Works the same way for an NHL franchise.
And as for the owners actual out of pocket expense to purchase a team: These owners don't usually come in and pay out of pocket. Its stupid to do so. They finance it to protect their own personal property. The team has to be self sustaining, without constantly putting in personal wealth. Obviously as fans we want them to. But it's not how business works.
Again with a personal example: Several years ago I purchased 3 businesses with total annual sales of $10 million. Under the advice of lawyers and accountants, I formed two legal corporations (separate entities under the law from myself). My own personal investment was $8000.00 and under the law, if those business failed, none of my personal cash, property, my wife, son, parents - you name it, couldn't have legal action brought up against them in a civil suit. NHL owners operate the same way - the team has to sustain itself without personal wealth/property being effected.
Could Rogers/Bell Media have afforded to pay $1.1 Billion in cash to buy MLSE and the Leafs? Darn right they could have. 10 times. Did they? No, because if the disastrous happened, they'd be out their personal wealth. Sometimes they'll pay a little more interest (actually - all the time ) in order to protect themselves, but it still boils down to one thing, MLSE has to make enough money to cover all the expenses.
Doug McLean talked today about when he was in the front office of the Red Wings. he mentioned that Paul Coffey used 18 pair of skates - IN ONE GAME - and remembers Mike Illitch calling him questioning the bill he just got. While on air, he got a text from a former counterpart now with the Oilers saying it was 27 pair of skates - again, in one game.
See, not all players get lucrative endorsement deals in which, skates, sticks, etc are provided to them. Seriously, take the time to read the expenses the owners are responsible for in the CBA, you'll be shocked.
And finally, speaking of endorsements, some players make a ton of money because the NHL exists. Would Crosby get a Gatorade endorsement if he was playing in the KHL instead of the NHL ? probably, but nowhere near the value it is now because the NHL gives him the exposure he couldn't get any place else.
Okay, so Crosby is a big name, but not exclusive to him. See the thread with the Lucic commercial? Would Lucic be a part of that commercial if not for the NHL? How about Shawn Thornton? The list goes on and on. The NHL not only allows them to make money from playing hockey, but allows them to make money from other ventures, not because they play hockey, but because they play NHL hockey - NHL hockey made possible by NHL owners.
And this next part isn't directed at you:
So forgive me for not giving a rats ass if the NHL as a whole makes a profit - and forgive me for wanting all 30 NHL owners to turn a profit - it is their right to want to and to do so.
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