If Revenue Sharing had been 100% Last Year...
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11-19-2012, 09:01 PM
Join Date: Dec 2010
Originally Posted by
I understand your argument but it's not rooted in economic theory. The differences in ticket prices would be smaller if there was 100% RS but they would NOT be the same everywhere, just like a Big Mac doesn't cost the same thing everywhere, and just like in general everything costs a bit more here in Canada than in the US. Entertainment pricing is market-specific.
Put differently, the fact that your theory did not happen since the cap was implemented does NOT mean you should be amazed. It simply means it's wrong.
It's not that it would make everything the same price. It is that the incentive for taking risks, making investments, and generally improving or maintaining the product is not there. You place the burden of 100% of the cost of any action on the individual, but they only receive 1/30th of the profit.
Let's say you have a player come to you, and says you can sign me for the next 15 years for 100 million. Now let's say you know this player is going to make you 200 million. In a normal case, you would sign him.
Under a system where all profits are shared among 30 teams, the owner is paying out 100 million, but only getting 6.6 million back. So you don't do it.
This mentality applies for a range of situations in hockey.
There is also the "well, I'm getting the same profit as everybody else anyway, so I don't have to make the playoffs or try to be good or sign good management or coaches or trainers, etc." mentality, which is a big problem.
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