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Roster Thoughts and Offseason Speculation for the 2012-2013 Season II

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Old
08-10-2012, 01:36 AM
  #926
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It's not a reach to assume that Phoenix has come up in the talks.
The players did get a little more control of the game after the last lockout with the competition commitees. I wonder if they ask for more this time. Hopefully, they get in to marketing. The NHL can't market itself any worse

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08-10-2012, 07:37 AM
  #927
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I basically agree with what Herby has said. The owners have honored the CBA and are under no obligation to continue to operate under what is for them a bad deal.

I would be fine with contracting 2-4 teams and it may come to that eventually if the owners of the larger market teams will not agree to more revenue sharing that will sustain the teams that would go under on their own.

Unlike some, I still believe that the small market Canadian teams are vulnerable. All it will take is a return of the U.S. dollar to its former position of strength and teams like Edmonton and Winnipeg could be right back in the boat they were in 15-20 years ago. So to me just moving a team to Quebec is not the answer. I do think Southern Ontario can support another team. Perhaps one of the one too many teams the reside in the greater NYC area should move there.

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08-10-2012, 07:48 AM
  #928
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I don't agree with the sentiment that it's a bad deal for owners. At all.

It's a bad deal for some small market owners, but I would argue it benefits over 2/3rds of the owners. The biggest owners win the most. The salary cap essentially means they can't do what the Yankees do in baseball, and buy a superstar team. Yet their revenue remains the same, hence they profited the most. The middle third of owners benefit because there's more parity. They have don't have higher costs in terms of player salaries, but do benefit from parity driven by the salary cap making their team more competitive. The bottom third struggles because they do not enjoy higher revenues yet must meet the cap floor. It's the bottom third that needs to be supported.

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08-10-2012, 08:15 AM
  #929
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I don't agree with the sentiment that it's a bad deal for owners. At all.

It's a bad deal for some small market owners, but I would argue it benefits over 2/3rds of the owners. The biggest owners win the most. The salary cap essentially means they can't do what the Yankees do in baseball, and buy a superstar team. Yet their revenue remains the same, hence they profited the most. The middle third of owners benefit because there's more parity. They have don't have higher costs in terms of player salaries, but do benefit from parity driven by the salary cap making their team more competitive. The bottom third struggles because they do not enjoy higher revenues yet must meet the cap floor. It's the bottom third that needs to be supported.
I think your numbers are way off though. In regards to how many teams are losing money. According to Forbes it was 18 of the 30 teams. And that was before the increase in both the cap ceiling and floor and the wacky contracts being handed out this summer to very average players.

The NHL would not risk another work stoppage (which is going to be a PR disaster) to nickle and dime the players, and they would not risk one if this system benefited 2/3 of owners like you suggest.

This system is horribly flawed and they aren't close on the numbers. With Fehr in charge of the NHLPA this could be really ugly.

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08-10-2012, 08:56 AM
  #930
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I think your numbers are way off though. In regards to how many teams are losing money. According to Forbes it was 18 of the 30 teams. And that was before the increase in both the cap ceiling and floor and the wacky contracts being handed out this summer to very average players.

The NHL would not risk another work stoppage (which is going to be a PR disaster) to nickle and dime the players, and they would not risk one if this system benefited 2/3 of owners like you suggest.

This system is horribly flawed and they aren't close on the numbers. With Fehr in charge of the NHLPA this could be really ugly.
Agreed, the majority of teams are not doing well financially under the current CBA.

I expect Fehr to propose a fairly aggressive revenue sharing plan. I also expect him to bridle at the thought of salary rollbacks, but give in on that point somewhat in the end.

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08-10-2012, 09:26 AM
  #931
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Quote:
Originally Posted by Herby View Post
I think your numbers are way off though. In regards to how many teams are losing money. According to Forbes it was 18 of the 30 teams. And that was before the increase in both the cap ceiling and floor and the wacky contracts being handed out this summer to very average players.

The NHL would not risk another work stoppage (which is going to be a PR disaster) to nickle and dime the players, and they would not risk one if this system benefited 2/3 of owners like you suggest.

This system is horribly flawed and they aren't close on the numbers. With Fehr in charge of the NHLPA this could be really ugly.
Sports teams all over the world lose money though.

Usually owners are guys that have made a fortune in business, and buy a pro sports team as a toy. I can't think of anyone whose actually gotten rich soley from owning pro sports teams. Even big time European soccer teams are losing money.

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08-10-2012, 09:59 AM
  #932
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Sports teams all over the world lose money though.

Usually owners are guys that have made a fortune in business, and buy a pro sports team as a toy. I can't think of anyone whose actually gotten rich soley from owning pro sports teams. Even big time European soccer teams are losing money.
You think in this economy that even extremely wealthy people are okay with losing > $10M a year in one of their business concerns?

Those people didn't get rich doing that, and it's not fair for fans to expect them to treat their franchises as toys with no expectation of making a profit. In any business the first thing that an owner will look to do to turn a profit is control costs. The players' salaries are the lion's share of the cost to run an NHL franchise. I don't begrudge the players their money, but is a 3rd line center really worth $3.5M a season? Is a 4th line center really worth close to $1M a season?

We all know that these guys have short careers. My advice to them is either save your money and control your expenses (i.e. you don't need to live on the beach, and yes you can drive a Toyota), or prepare yourself for some type of work when your playing days are over.

Would not most of us be set up quite nicely if we made $1M a year for a period of 3 or 4 years?

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08-10-2012, 10:14 AM
  #933
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Originally Posted by KINGS17 View Post
You think in this economy that even extremely wealthy people are okay with losing > $10M a year in one of their business concerns?

Those people didn't get rich doing that, and it's not fair for fans to expect them to treat their franchises as toys with no expectation of making a profit. In any business the first thing that an owner will look to do to turn a profit is control costs. The players' salaries are the lion's share of the cost to run an NHL franchise. I don't begrudge the players their money, but is a 3rd line center really worth $3.5M a season? Is a 4th line center really worth close to $1M a season?

We all know that these guys have short careers. My advice to them is either save your money and control your expenses (i.e. you don't need to live on the beach, and yes you can drive a Toyota), or prepare yourself for some type of work when your playing days are over.

Would not most of us be set up quite nicely if we made $1M a year for a period of 3 or 4 years?
I don't expect them to not make a profit, and if they want to lock the players out, then that's their right.

I'm just pointing out that losing money isn't unusual in this business, and in any type of legal dispute both sides are going to exaggerate their cases. Forbes doesn't have access to the internal documents of NHL franchises.

As for individual player salaries, I don't see how anyone can say what's fair or not, but a 3rd line center a 3.5M seems more reasonable than a 1st line winger at 12M.

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08-10-2012, 10:59 AM
  #934
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Originally Posted by johnjm22 View Post
I don't expect them to not make a profit, and if they want to lock the players out, then that's their right.

I'm just pointing out that losing money isn't unusual in this business, and in any type of legal dispute both sides are going to exaggerate their cases. Forbes doesn't have access to the internal documents of NHL franchises.

As for individual player salaries, I don't see how anyone can say what's fair or not, but a 3rd line center a 3.5M seems more reasonable than a 1st line winger at 12M.
I think the owners of most NFL and MLB franchises make money. Is there any reason that owners of NBA and NHL franchises should not have the same expectation? So yes, I can determine what is fair or not.

Regarding your comment on player salaries, when you buy a ticket are you paying to see Kopitar, or Stoll and Fraser? And I would argue that most players as individuals don't put butts in the seats by themselves, so a winger at $12M is beyond ridiculous.

You think AEG would have operated the Kings at a loss for this long if they weren't the anchor tennant in a building they own surrounded by restaurants and other entertainment venues that are located on land that AEG owns and developed? Most NHL owners/teams don't have that luxury. We are very fortunate as Kings fans that the team is a very small piece of a much bigger puzzle. That isn't the case for most franchises.

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08-10-2012, 11:50 AM
  #935
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Originally Posted by KINGS17 View Post
I think the owners of most NFL and MLB franchises make money. Is there any reason that owners of NBA and NHL franchises should not have the same expectation? So yes, I can determine what is fair or not.

Regarding your comment on player salaries, when you buy a ticket are you paying to see Kopitar, or Stoll and Fraser? And I would argue that most players as individuals don't put butts in the seats by themselves, so a winger at $12M is beyond ridiculous.

You think AEG would have operated the Kings at a loss for this long if they weren't the anchor tennant in a building they own surrounded by restaurants and other entertainment venues that are located on land that AEG owns and developed? Most NHL owners/teams don't have that luxury. We are very fortunate as Kings fans that the team is a very small piece of a much bigger puzzle. That isn't the case for most franchises.
Do you think the owners are at fault at all in this situation? These guys knowingly spend themselves into the red.

I'm fine with CBA getting reconstructed, it looks necessarily at this point, but it's annoying that we can't expect owners to make financially responsible decisions.

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08-10-2012, 12:34 PM
  #936
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Originally Posted by johnjm22 View Post
Sports teams all over the world lose money though.

Usually owners are guys that have made a fortune in business, and buy a pro sports team as a toy. I can't think of anyone whose actually gotten rich soley from owning pro sports teams. Even big time European soccer teams are losing money.
I don't really think that most pro teams are loosing money it is creative accounting trying to show that they are. We NEVER get the full picture on anything financially coming from a sports team. They are privately held. These owners might have bought them as a status symbol but they didn't make all their money by not making good investments and something loosing money every year is not a good investment.
Sadly Forbes is the best info we have avail and it is all estimates even if it is an educated one.

Here is one of the biggest examples of how teams fudge the books. Philly only gets 10M a year for their local TV contract. Just think about that we get 12M before the new deal of 21M and get 20% the viewers. And this is just one way that is known that a single owner hides income within it's ownership partners.

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08-10-2012, 01:11 PM
  #937
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Again. I don't understand this thinking at all, they are the business owners. They signed a seven year deal, they honored the deal and many of them were massacred.

What obligation do they have to keep this current CBA when it is literally bankrupting certain franchises and causing even larger markets like LA and Dallas to be in red ink?

The players were compensated extraordinarily well in this CBA.
that's what i meant with my previous post.

It seems like the players have more of a chance to walk away smelling like roses in a lot of these CBA negotiations. They get money regardless...it always just comes down to how much. So they hold out, and end up getting what they want. They walk away getting paid and feeling good...maybe the fans are mad, but hey they are getting what they want.

A lock out is really THE ONLY threat owners have against players.

It seems that people are more willig to say "stuff it GMS/Owners" this time around because they got the deal they wanted last time.

Well the deal they wanted had lots of loopholes that were exploited, and guess what? The players still got paid. A bad deal for the NHLPA = players getting paid. A good deal for the NHLPA = the players getting paid.

it's extremely different and the main reason I think the owners should have a big say in CBA..because

a bad deal for the owners = bankrupt teams, inflated market, unsustainable market.
a good deal for the owners = NHL thrives

Yea the owners had a huge say last time and dictated, and they made a mistake. Okay. Everyone sees that, and now they are trying to correct it. I am okay with that. Trial and error, learn and move on. But who is standing in the way? The NHLPA.

It's why i seriously hate unions. They can strong arm their way to things they want basically and still get paid regardless. None of these guys are going to go hungry walking away from a CBA deal, however owners and GMS, like those in Phoenix and New Jersey are going to struggle.

I think when it comes to monetary negotiations the players should have little to no say, but obviously when it comes to the game...like health and safety, and rules....quality of travel...things pertaining TO THE GAME...players should have more say then general manager and owners NO DOUBT.

But these days it just seems like every player in these NHLPA/NHL negotiation is trying to play owner and accountant. When honestly, all they should be worrying about is the game.

After all, they don't have to worry about the books and the bottom line during the season, all they have to worry about is the game. So why make the books and the bottom line part of the off-season ********?

pisses me off. Unions.....

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08-10-2012, 01:56 PM
  #938
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A couple of quick points:

- Fehr is opposed to revenue sharing as he needs big money teams (think Yankees) to use their financial heft to drive salaries for players ever upward. He opposed the so-called luxury tax in Baseball which forced the big spending teams to share revenues with their weaker brethren if they spent over a certain amount on player salaries.

- this system will never be fixed without contraction. Contracting the weakest franchises will make the remaining teams stronger. I like the idea of an extra roster spot to assure fewer player jobs will be lost.

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08-10-2012, 02:02 PM
  #939
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The league contracting is as realistic as Bettman accepting the elimination of the salary cap. It isn't happening.

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08-10-2012, 02:12 PM
  #940
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Quote:
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The league contracting is as realistic as Bettman accepting the elimination of the salary cap. It isn't happening.
Maybe not, but then we will be hearing about more bankruptcies and the need to redo the CBA again in a few years regardless of how the current negotiations turn out.

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08-10-2012, 02:23 PM
  #941
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I like the idea of an extra roster spot to assure fewer player jobs will be lost.

IMHO, that just means the enforcer is assured a role.

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08-10-2012, 02:35 PM
  #942
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IMHO, that just means the enforcer is assured a role.
I like!

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08-10-2012, 02:52 PM
  #943
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Maybe not, but then we will be hearing about more bankruptcies and the need to redo the CBA again in a few years regardless of how the current negotiations turn out.
With numerous cities vying to house an NHL franchise from Quebec to Hamilton to Markham to Seattle to Kansas City and who knows where else, there is no way the league or even the PA would consider contraction as an option. I asked this question earlier, name me the last team from any of the four major team sports that contracted. If a team isn't succeeding at a market, then they will look to relocate. We hear about bankruptcies in sports many times every year and lo and behold, there are always suitors lining up to enter the world of professional sports. These things are novelties for billionaires.

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08-10-2012, 02:53 PM
  #944
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The players don't want to lose their jobs, and the owners don't want to lose their teams. The league won't contract.

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08-10-2012, 04:25 PM
  #945
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Contraction may never happen, but that doesn't mean that its not the best option to improving the financial health of the league. It makes the most business sense.

Hockey will not survive in Seattle or Kansas City. Seattle doesn't have an arena. If they wouldn't renovate Key for an NBA team, why would they do it for a hockey one? Kansas City = Phoenix, but smaller. The Leafs would never approve another team in Hamilton. The only probably place for relocation right now is Quebec City. I highly doubt any of these cities have made a serious offer for an NHL franchise, because if they did, Phoenix would be gone already. They might be offering low values to offset the risk, but that's about it.

The only other option is to fix revenue sharing, which is very broken. The bottom 15 money teams are eligible to get money from the pool. The problem is, many of them don't qualify or get a full share. There are attendance goals to be met. Phoenix and Dallas didn't hit the 80% home attendance needed to qualify. Columbus and the Islanders barely made it, I'm not sure how it affects their share. Certain teams in the bottom half don't even qualify because their markets are too big. Teams like the Islanders, Devils, Ducks, and again Dallas aren't even eligible.

I just never see revenue sharing working that well. It helps, but there is such a big gap between the top and bottom. Ideally for me, Phoenix moves to QC and the Islanders and Columbus are contracted. Expand the roster a spot to minimize player job lost. Columbus has an owner that obviously doesn't care, given that Howson still has a job after failing miserably with that franchise. They've largely been in the mid 70s-mid 80s attendance percentage wise. The NYI are in my opinion, the worst franchise in the NHL. Barely pulling 80% home attendance and having revenues in the 60 million range in the biggest market by far is absolutely ridiculous.

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08-10-2012, 05:15 PM
  #946
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Quote:
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A couple of quick points:

- Fehr is opposed to revenue sharing as he needs big money teams (think Yankees) to use their financial heft to drive salaries for players ever upward. He opposed the so-called luxury tax in Baseball which forced the big spending teams to share revenues with their weaker brethren if they spent over a certain amount on player salaries.

- this system will never be fixed without contraction. Contracting the weakest franchises will make the remaining teams stronger. I like the idea of an extra roster spot to assure fewer player jobs will be lost.
Hi piston,

I remember back in the day you had access to the Kings books (when exactly was that?)

You seem to be much more the expert in this field, as someone with only a couple of economics and business classes to his credit I still feel a bit lost when digging deeper into the numbers.

It just looks bleak to me, especially since you say the PA doesn't want any revenue sharing, which I wasn't aware of, but your points seem valid.

Do you know how in depth the numbers were that the league sent to the NHLPA a couple of weeks back. I just have a hard time believing the players and their reps can look at these numbers and not realize just how bad a shape some of these teams are in.

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08-10-2012, 05:33 PM
  #947
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I think K17 brought up a couple of points that have been overlooked.

1. The strength of the dollar. The dollar will eventually gain strength, it may not be for a few years, but when it does you are going to see the same thing that happened in the late 90's with the exodus of teams out of Canada. No way can Winnipeg or Edmonton survive if the dollar gets back to it's levels of the 90's. Remember these teams are taking in gates, merchandise and local TV deals in Canadian dollars and paying out salaries in American dollars. If the cap were to stay in the same ballpark it's at right now with what the exchange rate was in say 1997, not only would those teams struggle, you would also possibly lose Calgary and Ottawa.

2. The salaries for bottom line role players. Like I mentioned earlier with my post about Bill Veeck and his great quote. And as we saw with the other thread about Zach Parise and jersey sales, it's not the star players salaries that are awful, it's the lesser players.

Quote:
Regarding your comment on player salaries, when you buy a ticket are you paying to see Kopitar, or Stoll and Fraser? And I would argue that most players as individuals don't put butts in the seats by themselves, so a winger at $12M is beyond ridiculous.
Anze Kopitar will recoup that money in on ice performance combined with ticket and merchandise sales because people want to see him play. If Anze Kopitar were to leave the Kings his loss would be felt not only on the ice but on the Kings bottom line. If Fraser or Stoll left no one would really care, some people love Stoll, some people love Fraser but they are replaceable on the ice and make little to no impact on the bottom line. How many people are saying "hey the Kings are in town, Jarret Stoll is worth the price of admission" or how many Colin Fraser jerseys do you see at Staples?

If anything the star players are underpaid.

If Stoll is worth $3.5 million, what is Kopitar's true value, I would argue in the neighborhood of 9 million.
If Jiri Hudler is worth 4, what is Iginla worth, probably around 8-9.

There are examples like this on every team, as the salaries of role players go through the roof.


Last edited by Herby: 08-10-2012 at 05:40 PM.
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08-10-2012, 06:00 PM
  #948
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I think K17 brought up a couple of points that have been overlooked.

1. The strength of the dollar. The dollar will eventually gain strength, it may not be for a few years, but when it does you are going to see the same thing that happened in the late 90's with the exodus of teams out of Canada. No way can Winnipeg or Edmonton survive if the dollar gets back to it's levels of the 90's. Remember these teams are taking in gates, merchandise and local TV deals in Canadian dollars and paying out salaries in American dollars. If the cap were to stay in the same ballpark it's at right now with what the exchange rate was in say 1997, not only would those teams struggle, you would also possibly lose Calgary and Ottawa.

2. The salaries for bottom line role players. Like I mentioned earlier with my post about Bill Veeck and his great quote. And as we saw with the other thread about Zach Parise and jersey sales, it's not the star players salaries that are awful, it's the lesser players.



Anze Kopitar will recoup that money in on ice performance combined with ticket and merchandise sales because people want to see him play. If Anze Kopitar were to leave the Kings his loss would be felt not only on the ice but on the Kings bottom line. If Fraser or Stoll left no one would really care, some people love Stoll, some people love Fraser but they are replaceable on the ice and make little to no impact on the bottom line. How many people are saying "hey the Kings are in town, Jarret Stoll is worth the price of admission" or how many Colin Fraser jerseys do you see at Staples?

If anything the star players are underpaid.

If Stoll is worth $3.5 million, what is Kopitar's true value, I would argue in the neighborhood of 9 million.
If Jiri Hudler is worth 4, what is Iginla worth, probably around 8-9.

There are examples like this on every team, as the salaries of role players go through the roof.
I think that is also a side effect of only (Role ) Players making it too the market (FA).

I mean, How much would Quick have gotten on the open market ?

Lots....

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08-10-2012, 07:09 PM
  #949
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Contraction may never happen, but that doesn't mean that its not the best option to improving the financial health of the league. It makes the most business sense.

Hockey will not survive in Seattle or Kansas City. Seattle doesn't have an arena. If they wouldn't renovate Key for an NBA team, why would they do it for a hockey one? Kansas City = Phoenix, but smaller. The Leafs would never approve another team in Hamilton. The only probably place for relocation right now is Quebec City. I highly doubt any of these cities have made a serious offer for an NHL franchise, because if they did, Phoenix would be gone already. They might be offering low values to offset the risk, but that's about it.

The only other option is to fix revenue sharing, which is very broken. The bottom 15 money teams are eligible to get money from the pool. The problem is, many of them don't qualify or get a full share. There are attendance goals to be met. Phoenix and Dallas didn't hit the 80% home attendance needed to qualify. Columbus and the Islanders barely made it, I'm not sure how it affects their share. Certain teams in the bottom half don't even qualify because their markets are too big. Teams like the Islanders, Devils, Ducks, and again Dallas aren't even eligible.

I just never see revenue sharing working that well. It helps, but there is such a big gap between the top and bottom. Ideally for me, Phoenix moves to QC and the Islanders and Columbus are contracted. Expand the roster a spot to minimize player job lost. Columbus has an owner that obviously doesn't care, given that Howson still has a job after failing miserably with that franchise. They've largely been in the mid 70s-mid 80s attendance percentage wise. The NYI are in my opinion, the worst franchise in the NHL. Barely pulling 80% home attendance and having revenues in the 60 million range in the biggest market by far is absolutely ridiculous.
If the NHL contracts then that just means 16 out of 28 teams are losing money instead of 18 out of 30.

And there can be a lot of reasons why a franchise is failing. It doesn't always mean the market isn't viable. Columbus and NYI are struggling for obvious reasons, and I don't think it's because the markets are necessarily bad.


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1. The strength of the dollar. The dollar will eventually gain strength
They used to say the same thing about the Pound Sterling.

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08-10-2012, 07:15 PM
  #950
ninetynine*
 
Join Date: Sep 2009
Location: Behind you...
Country: Canada
Posts: 1,730
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Quote:
Originally Posted by Herby View Post
I think K17 brought up a couple of points that have been overlooked.

1. The strength of the dollar. The dollar will eventually gain strength, it may not be for a few years, but when it does you are going to see the same thing that happened in the late 90's with the exodus of teams out of Canada. No way can Winnipeg or Edmonton survive if the dollar gets back to it's levels of the 90's. Remember these teams are taking in gates, merchandise and local TV deals in Canadian dollars and paying out salaries in American dollars. If the cap were to stay in the same ballpark it's at right now with what the exchange rate was in say 1997, not only would those teams struggle, you would also possibly lose Calgary and Ottawa.
Unlikely to happen, at least to a 1997 extent.

3 reasons:
1. US Debt and Debt rating
2. Rising oil prices make most Alberta Bitumen profitable.
3. US REAL umemployment rate and other economic issues.

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