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11-30-2012, 04:20 PM
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Originally Posted by redbull View Post
Isn't this only about profits though? Isn't revenues, less expenses (largely player salaries) what makes for a sustainable business? That most NHL teams seem to struggle with?
Indeed. The idea of fixing labor as a percentage of revenue is to make labor a variable expense based on revenues. The more your business depends on variable rather than fixed expenses, the more your revenue can vary without harming your profits as a percentage of revenues (i.e. net margin). The issue is that the NHL wants to change their business model, after forcing one previously down the player's throats.

Why didn't the model work? Simple: vast differences in revenues between franchises, salaries linked to overall revenues. This is a fact, clear as day.

The NHL wants the players to be responsible for fixing the problem with their model, and the players want the NHL to be responsible for fixing their model. The solution is to compromise. So far the players have compromised, and the owners have not. That is the state of affairs.

Shifting equity would at least allow both parties to see the other's side. Rather than whining or holding their breath until the other caves.
Completely agree. But, like I said, the owners would never do this. The best way to get to the bottom of this is to ask, "Why won't they?" The answer is pretty simple: rhetoric aside, they're a bunch of greedy ********. Of course they don't have the vision to try something so radical. It's so radical, in fact, that it's a common practice among manufacturers in the United States, a practice that has done them no end of good.

Big business, particularly finance, has lost all contact with ordinary business. Ordinary business people care about the morale and incentives of their employees. NHL owners are a bunch of fat cats who don't seem to have any clue.

This is really simple. The owners cannot operate a league where they don't have a sustainable business model, of which expenses are out of control (at least in terms of player salaries)
Here's a business model: share revenues. Now compromise. This isn't that hard to get. The NHL says "no" in every significant way. And so on we go.

The players refuse to accept diminished rights that were previously agreed to, AS WELL AS give back the money (share of HRR), even though they have led to franchises that are unsustainable, unprofitable and many owners looking to sell.

I truly don't understand your point. What part of this is inaccurate?
The business model, enacted by the owners was unsustainable from the start. Perhaps the smaller market franchises would've done better with no cap and no floor. But, no, the owner's wanted a cap linked to revenue, and the appearance of parity. Well, they got what they wanted: Carolina can compete and lose a lot of money. Beauty.

The point you fail to understand, as usual, is that this is not an ordinary business. Ownership in a franchises is membership in a protected trust, a cartel of sorts. Its obligations exceed that of an ordinary business. Moreover, ownership of sports franchises has all sorts of other benefits. This is reflected in the fact that sports franchises are FAR more valuable as businesses than they would be if their valuations were based on their operating incomes, like normal businesses.

Still, you think that sports franchises should be run independent entities, not members of an exclusive organization with high entry fees and a common labor deal. Basically you're emphasizing the NHL's role as collective body when it comes to power, and disregarding that role when it comes to responsibilities.

In short your position is: Eat Cake. Have Cake.



P.S. I wrote this reply before you edited yours. I'm out of time, though.

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