If Revenue Sharing Is Important, Why Isn't There Linkage?
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12-10-2012, 05:18 PM
Business of Hockey
Join Date: Jul 2006
Location: South Mountain
Originally Posted by
It still sounds like there's plenty of fudge factor there. In other words, a team can only get money to get it from the floor to the midpoint. That portion is guaranteed by the CBA. If that isn't what was happening-- then it's not linked if the amount needed to have that happen was capped at 4.5%. If indeed, it was exceeding that figure to 6% or higher, then the league did have to come up with enough money to bridge that gap.
As such, there isn't direct linkage regardless, because not only did they have a formula to bridge the gap, but then had to consider if teams met the growth metrics. Hence the portion of the CBA that had the 100%, or 75% but never below 50% of the full share absent the growth targets.
Not completely sure what you're arguing here? The total amount of league-wide revenue sharing is linked, but it has banding on it for minimum and maximum payouts. Even if a team only got 50% of their share due to not meeting growth figures that 50% amount is still linked to HRR.
High level synopsis of how the revenue sharing amounts were banded under the last CBA:
: tally up all the eligible team revenue sharing amounts that would be needed to lift the revenue sharing recipient team revenues up to $4m over the cap floor (halfway between the floor and midpoint).
: tally up all the eligible team revenue sharing amounts that would be needed to lift the team revenues up to $8m over the cap floor (the midpoint).
The league sets a target Revenue Sharing Pool amount of 4.5% of HRR. If that 4.5% is less than the Minimum Guarantee amount the league increases the size of the Revenue Sharing Pool to make it large enough to meet the Minimum Guarantee. This is where I suspect some years like 2008-2009 may have exceeded the 4.5%.
If 4.5% is larger than the Minimum Guarantee but less then the Maximum Guarantee then the eligible revenue sharing recipient teams receive an amount lifting them to somewhere between $4m and $8m over the floor so that the whole 4.5% pool is distributed.
If the Maximum Guarantee amount is less than 4.5% then the revenue sharing pool is capped at the Maximum Guarantee amount. I suspect this didn't happen during the past CBA, or if it did that the gap between the Max and 4.5% was pretty small.
p.s. Yes, kdb I left out some details to keep it simple.
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