Can someone help me understand revenue sharing?
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12-08-2012, 07:24 PM
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Join Date: Dec 2008
Originally Posted by
In the NHL revenue sharing is where Toronto, New York, and Montreal take a bunch of the money they make because they are big markets and have fans and give it to the 10 or so teams that can't charge more than $40 for a ticket so they can almost break even.
In other leagues there are many teams that make big profits and HUGE tv deals to split up. In the NHL it's basically stealing from a couple teams to prop up a bunch of failed markets.
Revenue sharing in the NFL consists primarily of:
- Collective TV revenue being divided up among the 32 teams, AND
- 60% of the gate for the home team, 40% for the road team
The TV share goes back to 1961. The gate sharing goes back to the very beginnings of pro football. It's interesting to note the difference between the NFL and NHL ownership over time. The NFL was concerned with stabilizing after the way in which the 1920s unfolded, and sharing the gate allowed teams to better handle economic disruptions. The NHL owners were too busy contracting the league to the bare minimum, rejecting expansion at every turn, and waiting until every other league entered other major cities before finally blessing them with the league's presence.
Now, one thing that the NHL has that the NFL does not have is local TV deals. The NBA and MLB also have this. The suggestion was made by Bob Costas for MLB (but it applies for all similar leagues) that revenue derived from local TV deals needs to be split 50-50 as well. This would prevent the massive disparity between the Yankees and Royals from directly impacting the ability to compete on the field. It would work in the NHL as well.
However, your laughably oversimplistic explanation works as well. Rather than realize that there is a cyclical nature to sports and economies, you choose to believe that this is a shakedown, and that it could
stabilize anyone who it doesn't help today.
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