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Yet Even More Sobering News In The Dvorak For 20 Goal Campaign

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04-29-2004, 09:56 AM
  #1
Matts
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Yet Even More Sobering News In The Dvorak For 20 Goal Campaign

No comments yet from the PA or Goodenow re the revised 72 game sked but Daly doesn't seem to think there will be a whole lot of opposition.

So I guess this means 10-12 goals next year for Toddek Marchantak?



Associated Press

TORONTO - Reducing the NHL schedule by 10 games is among topics being discussed by the league and its players' association in attempting to negotiate a new collective bargaining agreement.

"Shortening the season is what we've said all along is what we're prepared to discuss along with any number of other issues," NHL vice president Bill Daly said yesterday. "To say we've had any serious negotiations or any tentative agreement on it would be an overstatement. But certainly it's something that will probably come up in the course of these negotiations."

Daly's comments come as the NHL is preparing to meet with union officials in Toronto today in an effort to spur stalled negotiations. The meeting will be the first formal negotiation session since Oct. 1.

Daly has already had "casual discussions" with players' association representatives regarding the schedule.

The NHL has operated with an 82-game regular season since 1995-96. A 72-game schedule would be the shortest since teams last played 70 games in 1966-67, the final year before the NHL expanded from six to 12 teams.

The league's collective bargaining agreement expires Sept. 15, and negotiations are expected to be stormy. The potential is there for a lockout next season.

Daly, NHL commissioner Gary Bettman and union head Bob Goodenow together attended last night's playoff game in Toronto between the Maple Leafs and the Flyers.

Both sides see potential benefits to a shortened season, Daly said. The union believes fewer games would lead to less fatigue among players and provide for a better product, he said.

The benefit to the NHL would allow more flexibility in scheduling games on attractive nights, such as weekends, which generally attract more fans. The Buffalo Sabres, for example, sold out 13 games last season, nine of which came on either a weekend night or holiday.

Daly said today's talks provide an opportunity to re-establish ties between the sides and lay the groundwork for future negotiations.

"It's good to restart the dialogue and get talking about the issues and get creative in trying to resolve them," Daly said. "Obviously, we need to pick up the pace of the meetings to kind of move forward."

The talks could last through tomorrow, but Daly expects them to go for only one day.

The main issue of contention is salaries.

Citing about $273 million in losses during the 2002-03 season, owners are seeking what they refer to as "cost certainty" to reign in player salaries.

The players have questioned how the league accounts for its revenues, and refer to the owners' proposal as a "salary cap," something they call unacceptable.

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04-29-2004, 11:42 AM
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Mr Sakich
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so if I understand things correctly, we have a league that is losing money and is heavily dependant on gate reciepts . Their solution to losing money is reduce the number of games???


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04-29-2004, 12:19 PM
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It's actually a very good idea. Even a season of 76 games would make a big difference imo - back-to-back games would probably be eliminated.

In terms of CBA negotiations it is a good idea if it is a straight trade off on variable revenues and costs.

Using some very simple math:

Revenue = $1 /game over 82 games = $82
Costs = $2 /game over 82 games = -$164
Loss = -$82

Revenue = $1 /game over 76 games = $76
Costs = $2 /game over 76 games = -$152
Loss = -$76

While it looks like the teams aren't any further ahead (still at 50%) the fact is that they DID lose LESS money overall than they did the year before. Which is a gain of some kind... kind of.

The real trick would be for the teams to disassociate their other revenue streams from games played thus factoring in, ultimately, a greater savings for themselves. Don't think that will happen though as standard economic modelling/business practice for sports is now based almost solely on games played.


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04-29-2004, 02:12 PM
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Quote:
Originally Posted by Matts
No comments yet from the PA or Goodenow re the revised 72 game sked but Daly doesn't seem to think there will be a whole lot of opposition.
I'd like to hear more opinions here about the likelihood of it going through. I've been recently thinking that the forces conspire to make this a very good likelihood.

The owners see closer rivalries and reduced travel expenses as ways of increasing the bottom line because they expect the building to be more efficient (no half-empty buildings when the Blue Jackets come to town) and they probably feel they can charge a premium because of the rivalry and because they see OPEC and think artificial scarcity should be able drive up per-unit prices. I guess the only owners unhappy with it would be arena owners who can't book more lucrative concerts, etc. in the empty slots.

The players would probably like the reduced travel and since the total money available should be the same they'd be playing fewer games while still standing to make the same amount of dough. "Work less and get paid the same" might be hard to say no to.

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04-29-2004, 02:42 PM
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Revenue = $1 /game over 0 games = $0
Costs = $2 /game over 0 games = -$0
Loss = -$ break even

Eureka, we have found the solution.



I remember something in my University Accounting classes about fixed costs and variable costs. It seems to me that the vast majority of costs assoiciated with the NHl are fixed costs (salaries are 60% plus of total costs) and it makes absolutley zero sense to reduce the number of games.

If the NHLPA accepts salary reductions of about 12% ( 10 / 82), then the league is in no better shape. The cba has to be fixed but this idea puts the players 12% back before they even start to negotiate a different salary structure.

This idea could work in a league where they are not dependant on gate revenues, like the NFL or the NBA. A league like hockey or lacrosse would be committing suicide if they did this.

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04-29-2004, 02:45 PM
  #6
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Quote:
Originally Posted by oilswell
The players would probably like the reduced travel and since the total money available should be the same they'd be playing fewer games while still standing to make the same amount of dough. "Work less and get paid the same" might be hard to say no to.
This begs another question: Will player salaries in turn be pro-rated for the supposed "decrease" in workload? Somehow, I don't see this happening.

I'd hate to be a player from 1970 right now. Players went through 78 games and averaged $18,000. With the 72 game schedule, players are now averaging $1.8M. (and please, inflation hasn't gone up 100x, or 10,000% since 1970, has it?) Sure, they work harder these days to stay in shape, conditioning, have more media responsibilities, etc., but I would think the gradual increase in perks offsets that somewhat (charter flights, marketing spinoffs, etc.)

and YKOil, the example makes sense, but is too simple, if you know what I mean

bear with me: another example, considering static and variable costs/revenues:

the break even team, 82 games
gate revenue @ $6/game = 492
misc revenue @ static = 246
gate costs @ $3/game = (246)
misc costs @ static = (164)
salary costs @ static = (328)

net profit: 0

the same team, 76 games
gate revenue @ $6/game = 380
misc revenue @ static = 246
gate costs @ $3/game = (228)
misc costs @ half of previous year = (82)
salary costs @ static = (328)

net profit: (30)

note: misc costs arbitrarily halved as a result of less travel, etc.

Here, we can see that less gates actually lose out in the long run, with the biggest costs being salary costs. My reasoning here is that the largest revenues are from the gates (i know, media deals can be bigger - but not in edmonton!) vs. the largest expenses from the salaries. If the salaries stay static, then it's all fairly pointless, economically.

anyhow, just some more ramblings.............


Last edited by xerburt: 04-29-2004 at 03:05 PM.
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04-29-2004, 03:36 PM
  #7
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OW, some good points

I think the 72 game sked is a slam dunk. Daly's talking about it in confident tones and there aren't any players bleating about it so I'd say that's a done deal as far as being one of the new conditions of the new CBA.

The Owners are giving up an extra five home gates a year but maybe the salaries paid out don't have to change because they'll be saving so much money from travel and the like. I'm sure this has been discussed.

I don't like back to back games and I don't like WC teams being at a disadvantage because of travel. I also don't like the prospect of playing 33% of our sked against the combined likes of Cgy-Van-Col either but I'll take the tradeoff and those divisonal games should be nasty and there should be some home and home's in there.

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04-29-2004, 04:14 PM
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Don't let the owners fool you - the costs of putting together a national hockey league does not exceed the revenue in almost every city. The question is - what do they count as revenue? Most books out there only count revenue at the gate, in which case for sure, things don't look good. But don't forget, there are other revenues that aren't factored in here - TV contracts for once. If you put Gate + TV Contracts and spaced it out over 82 games, the owners are making money in every NHL city. Then if the owner/s own the building - hot diggity.

Not saying the owners are crying wolf, but it's also not quite as bad as they're saying either.

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04-29-2004, 04:23 PM
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Quote:
Originally Posted by Matts
The Owners are giving up an extra five home gates a year but maybe the salaries paid out don't have to change because they'll be saving so much money from travel and the like. I'm sure this has been discussed.
I would think they've worked it out extensively.

Quote:
I don't like back to back games and I don't like WC teams being at a disadvantage because of travel.
That's a good point as well. Though a young team generally has a bit of an advantage re: travel and back2back, so maybe for the Oilers its not as big a overall gain as it would be for others.

Quote:
I also don't like the prospect of playing 33% of our sked against the combined likes of Cgy-Van-Col either but I'll take the tradeoff and those divisonal games should be nasty and there should be some home and home's in there.
I don't like the idea of isolating the competition. Records will really much more reflect the relative difficulties of the teams' divisions. It will exacerbate the problem where good teams miss the playoffs in one conference while a weak team in a pathetic division gets 3rd seed in the other.

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04-29-2004, 04:45 PM
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Quote:
Originally Posted by Mizral
Don't let the owners fool you - the costs of putting together a national hockey league does not exceed the revenue in almost every city. The question is - what do they count as revenue? Most books out there only count revenue at the gate, in which case for sure, things don't look good. But don't forget, there are other revenues that aren't factored in here - TV contracts for once. If you put Gate + TV Contracts and spaced it out over 82 games, the owners are making money in every NHL city. Then if the owner/s own the building - hot diggity.

Not saying the owners are crying wolf, but it's also not quite as bad as they're saying either.
Huh, are you out of it. Not every team is making money. Tv contracts and gate receipts are factored into every team's revenue. Yes, some teams make it seem worse than it is but that mostly done on the expense side of things. The revenue side is pretty straight forward.

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04-29-2004, 04:52 PM
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Quote:
Originally Posted by Matts
I think the 72 game sked is a slam dunk. Daly's talking about it in confident tones and there aren't any players bleating about it so I'd say that's a done deal as far as being one of the new conditions of the new CBA.

The Owners are giving up an extra five home gates a year but maybe the salaries paid out don't have to change because they'll be saving so much money from travel and the like. I'm sure this has been discussed.

I don't like back to back games and I don't like WC teams being at a disadvantage because of travel. I also don't like the prospect of playing 33% of our sked against the combined likes of Cgy-Van-Col either but I'll take the tradeoff and those divisonal games should be nasty and there should be some home and home's in there.
When you consider that 5 home gates equals lets say 3miilion in gross revenues I can't see how travel costs saved would make up the difference.

This is a trial balloon the owners are floating. Agree to a more confined salary arrangement and you'll have to play less games. The league will be able to schedule less games during the week and this will help the gates of some clubs but in no way do the owners give away that much in revenues without getting something substatial from the players.

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04-29-2004, 05:33 PM
  #12
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I have a question; when was the last year (besides this year) that the Oilers actually profited? How much do you think they made this year?

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04-29-2004, 07:14 PM
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the break even team, 82 games
gate revenue @ $6/game = 492
misc revenue @ static = 246
variable costs = (246)
misc costs @ static = (164)
salary costs @ static = (328)

net profit: 0

the same team, 76 games
gate revenue @ $6/game = 380
misc revenue @ static = 246
variable costs = (228)
misc costs @ half of previous year = (82)
salary costs @ static = (328)

net profit = 30 mill


good idea, poor numbers. According to the latest and substantiated numbers (that apparently Mizral has never heard of), salaries are over 70% of total revenue. That is a static cost. Assuming that other fixed costs are 20% of the balance of costs, then fixed csts represent at least 76% of the total revenue. Lets run those numbers again. Assuming your revenue numbers are correct and that the league is currently breaking even which is very false

the break even team, 82 games
gate revenue @ $6/game = 492
misc revenue @ static = 246
variable costs = (178)
misc costs @ static = (44)
salary costs @ static = (516)

net profit: 0

the same team, 76 games
gate revenue @ $6/game = 380
misc revenue @ static = 246
variable costs = (228)
misc costs @ static = (44)
salary costs @ static = (516)

net loss 162 million

again, in a league where the vast majotrity of costs are fixed costs and the vast majority of revenues are variable, it makes absolutely zero financial sense to reduce the number of games.


Last edited by Mr Sakich: 04-29-2004 at 07:18 PM.
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04-29-2004, 07:39 PM
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oops........thanks sakich. i made a mistake there..........should be "net profit/loss". in my case there was a net loss of 30........ [ i'm used to accounting terms of () for negative! ]

I didn't factor in actual proportion of salaries to anything, but your example just compounds things. End result, the team is still in a worse position in a smaller schedule.

In all fairness to Mizral, I'd say both sides are hiding things, and of course will manipulate details, numbers, to suit their own position. I doubt either is very objective about the whole thing. Who knows what the real situations are for each of the teams?

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04-30-2004, 12:48 PM
  #15
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Quote:
Originally Posted by Mr Sakich
so if I understand things correctly, we have a league that is losing money and is heavily dependant on gate reciepts . Their solution to losing money is reduce the number of games???

I would think that the reduction of games would be also tied in with a reduction of players salaries since they are playing 10 less games.

Otherwise this would make no sense and will not happen.

I know at the Season tickets holders breakfast this point was brought up and Patrick Laforge didn't think it would work.

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04-30-2004, 01:02 PM
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I hope they don't reduce the schedule.

My friend and I went to Philly this season to watch the Flyers Oilers game and it was awesome, so we've decided to make this an annual event (whether the game is in philly or Edmonton).

These are the kinds of things NHL fans won't get. I mean Detroit is a pain in the butt to get a ticket for, so I'd have to drive to Chicago to watch an Oilers game live... and that sucks because I don't know anyone who would drive 8 hours to watch a Hawks game.

Oh well, just the NHL doing one more thing to alienate fans.

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05-02-2004, 08:58 AM
  #17
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If Philly and Chicago are in driving distance for you, what about either NY or NJ or Buffalo?

(I've considered going to Buffalo to see an Oilers game, because I don't know if seeing the Oilers would be compensation enough to have to a) drive to Toronto, and b) watch the Leafs, and I know it can be tough to get Wings tickets.)

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