The Lockout Thread UPD 1/6 - framework of new CBA agreed to
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11-24-2012, 01:16 PM
Join Date: Feb 2005
Location: San Jose
Originally Posted by
Before we all by into the "teams are by and large losing money" argument, please read this:
Hockey-related revenue is defined in such a way so as to maximize the appearance of losses on the hockey side.
You could plugs "Sharks" and "SVSE" in there and probably write the same story.
That's not to say that there aren't a couple of teams who could never make a profit under the current system with a salary floor so close to the cap. But why is propping up a team in Phoenix (for example) where the numbers don't pencil out the responsibility of the players?
A "couple" is just as bad as "by and large". Try the middle ground.
You can also look at the players offer which came after the PA had 76k pages from the NHL. Their rev sharing was targeted at 7 teams. That is 7 that are in real trouble.
Then you can go to the fact that the middle tier is more or less breaking even. That is all well and good, but investors are generally looking for a 5 to 7 per cent return on their investment. The teams won't exist without investors. We have also seen GB have trouble finding new owners. And some of his finds weren't so good. Some owners even managed to flaunt Bettman's advice for no more than 50% debt (which is not a good number in itself). An investment should be worthwhile at about 80%.
And yes, I agree with the recent article that some teams like Florida and the Sharks are gateways to the arena lease. Essentially loss leaders on something that is a moneymaker. IIRC, this past season with the $15mil loss likely resulted in a cash call for the Sharks. A bit more than their SVSE business could support. To truly find out on teams, it is better to follow the cash calls rather than profit and loss.
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