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The Business of Hockey Discuss the financial and business aspects of the NHL. Topics may include the CBA, work stoppages, broadcast contracts, franchise sales, and NHL revenues.

Creative CBA solutions? Do you have one? Have you seen any?

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Old
09-16-2012, 09:55 AM
  #101
thinkwild
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The idea that each team puts 50% of its revenue into a pot and then shares it is basically what the players are asking for isnt it? I like the idea from a propaganda standpoint, it makes the owners look hypocritical if they then reject it. But they already do and dont care.

One of the problems the players are expressing is that every time they try and put forth a compromise that attempts to solve the owners stated issues, the owners then change their stated issues.

And now Bettman is basically just saying, look, this is my job, this is what i do, i lock players out. The only reason being put forth now is that they want to pay less in salaries and think they have enough leverage to get it.


-
Here's a wild idea, what if we get 3 salary caps, on players, teams, and the league as a whole, and link them all to revenues, as well as linking revenue sharing to revenues so that every team can spend to the midpoint of the cap range.

Then we could:
lower ticket prices,
save all 30 markets,
stop the need for any more lockouts in the future,
allow all small markets to keep their star ufa's and not lose them to big markets. No hometown discounts would be needed unless parity got really annoying and you wanted to find ways to circumvent it.



Oops, did i just say that out loud? How embarrassing eh. What kind of moran would put forth that idea? That couldnt possibly work as we all know. I mean sure, on paper, it sounds idealistically perfect, but in practice ...

Last time, the system increased the amount going to players as revenues grew. This time, the amount going to players decreases as revenues grow. Owners are no longer even trying to rationalize their arguments.

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09-16-2012, 10:27 AM
  #102
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Cap circumvention always benefits the rich teams and hurts the poor. It doesn't matter how a team gets their players, if they are allowed to add salary over and above the cap, the rich get richer as the poor get poorer.
But it would stop teams from buying the best players and instead rely more on drafting.

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09-16-2012, 10:48 AM
  #103
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I doubt the entire season is lost. Once the presidential election is over, they will hammer something out with one side having more bargaining power depending on the outcome of the election. They need to make it so that the new CBA does not expire during an American presidential year.

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09-16-2012, 11:05 AM
  #104
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I doubt the entire season is lost. Once the presidential election is over, they will hammer something out with one side having more bargaining power depending on the outcome of the election. They need to make it so that the new CBA does not expire during an American presidential year.
How will the presidential election have any impact on an NHL-NHLPA CBA??

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09-16-2012, 11:35 AM
  #105
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How will the presidential election have any impact on an NHL-NHLPA CBA??
The organized labor fight in The States is extreme right now and most NHL teams are in The States. The NHL's organized labor issues are an example of America's current political culture.

And I am contending that if Romney wins, then the owners will have the upper hand in new CBA negotiations. If Obama wins, then the NHLPA will have the upper hand.

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09-16-2012, 03:01 PM
  #106
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I've had somewhat of a similar thought before... but instead of the AHL, the NHL ownes Minor Hockey (in US and Canada)... From age 6 (and under) to 20...

Just a thought...
Very well thought out. Makes sense. The one thing that I'd worry about would be: The value of the NHL supporting youth hockey in that fashion probably doesn't outweigh the cost.

Right now, the NHL has programs where teams support youth hockey, building rinks, funding leagues, etc. But basically, the NHL is paying for lots of crappy kids who won't amount to NHL talent to play hockey until the competition gets too good for them to compete. Currently, the cost of those kids is absorbed by the parents, not the league.


The NHL buying the AHL concept "works" from multiple standpoints:

#1 - franchise values: (See my PHX example). Any franchise that goes up for sale, you can automatically hold a bidding war for an NHL team among owners looking at 15 markets, instead of one. Looking for a guy to own a team in PHX is proving difficult. Instead, you'd have 1-7 guys placing bids from difference cities: SEA, QUE, HAM, KC, OKC, MIL, PHX.

#2 - By relocating some AHL teams around the US, you can maximize the "growth of the game" aspect. The AHL currently has 23 traditional markets and 7 growth markets (Norfolk, Milwaukee, Charlotte, Houston, San Antonio, Austin, Oklahoma City), as does the NHL (TB, FLA, DAL, ANA, SJ, CAR, NASH).

Lots of the places we're talking about as potential NHL cities don't have AHL teams? That makes no sense. If the NHL owned the AHL, they could move teams out of small northeast markets that we know we'll have fans of the game (the coverage of teams in New England and Upstate New York is way too dense), and move them to these markets and scope out the fans of places like Seattle, Portland, Kansas City, Salt Lake City. And place teams a few hours away and use affiliations to create more fans in places like Florida and Tennessee.

AHL franchises are in towns that NHL teams view as battle-ground territories for fans. Hershey (PIT/PHI/WAS), Scranton (PHI/NYC), Albany (NY/BOS) for example. The idea is you put an affiliate there, and turn that town into fans of your team (TV viewers, merchandise and occasional ticket sales).

Las Vegas (LA/ANA), Reno (SJ), Salt Lake (COL) expands their fan bases outward and creates more NHL interest.

#3 - It gives you options for a doomsday scenario if a radical reconstruction of the NHL is needed. Teams wouldn't fold or move, they'd move to the AHL. Their colors and names would be tied to the city, rather than the franchise. "You'll be back in the NHL when you get an NHL arena, Islanders. Your spot in the NHL has been transferred to QUE."

Making a 20x3 Promotion/Relegation League? Piece of cake. You could get that going in an hour if you owned the 30 AHL franchises.

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09-16-2012, 06:46 PM
  #107
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Very well thought out. Makes sense. The one thing that I'd worry about would be: The value of the NHL supporting youth hockey in that fashion probably doesn't outweigh the cost.

Right now, the NHL has programs where teams support youth hockey, building rinks, funding leagues, etc. But basically, the NHL is paying for lots of crappy kids who won't amount to NHL talent to play hockey until the competition gets too good for them to compete. Currently, the cost of those kids is absorbed by the parents, not the league.
Hey, thanks for the response! I didn't think I'd ever share this idea, so I appreciate it...

With the idea, the parents would absorb exactly the same costs that they do today... The revenue generated from these expenditures, would go to the NHL... Where it makes it a great investment is that hockey is very much a gate revenue business... You're taking advantage of this on a much greater scale, without player costs cutting into the investment (parents are paying for the player costs - and whatever other costs - as they do now)...

I imagine that parents pay sign-up fees, as well as equipment costs, as well as I don't know... But I know it's expensive... I hear parents comment about how expensive it is all the time... Parents pay lots of money...

Just looking at jerseys... The NHL would have the minor hockey jerseys provided by the same supplier - except, "Vancouver" above the logo replaced by "Port Alberni"... It's basically, selling more NHL gear... With such an influx of new purchasers, I'd imagine that the NHL would also benefit from further volume discounts to supply the jerseys...

I don't know when parents stop paying for their children to continue with hockey, and then the league picks up the costs... If it's junior hockey, then this is when the parents would stop paying the NHL... If they do get paid, junior hockey players get paid much less than professional players, and also, gate revenue is probably much more significant than the lower levels of minor hockey... So, parents paying player costs (what they pay to see their kids on the ice) gets replaced by fans (paying at the gate to see their team on the ice)... Junior hockey is huge in Canada... The NHL gets paid every time the rink is being used, from 6 years old (parent is paying it) to the young prospect waiting to be eligible to join the NHL (fan is paying it)...

Also, since the NHL ownes the chain... the NHL alone can decide when that kid is eligible... Politics, be gone (or at least, significantly reduced)...

Crappy hockey playing kids (90% of them?), I think, can be transformed into future season ticket holders - with the right brainwashing from an early age They've already given the indication that they can be brainwashed - they joined a minor hockey league... The NHL can't let that slip, IMHO... The NHL needs to control and persuade this in a direction they want... They can also be brainwashed into exploring other careers that involve hockey... I think the key is to get kids, early, thinking about hockey being a life-long investment in entertainment, or career (be it player or somewhere along the line in the business chain - marketing? suppliers? managers? etc...)... Allow these hockey parents to have dinner with NHL players (during whatever hockey conference or camp), and have these hockey parents take pictures with these players, and have these hockey parents talking to their kids around the dinner table about how wonderful is Shane Doan, and hockey players are in general (and the kid has the same jersey as Shane Doan - "Glendale Coyotes" Minor Hockey Team - playing in an arena with the Coyotes logo on the ice (a somewhat replica of the Coyotes arena, but a mini-rink) - is a good way to plant the seed for a life long fan...

Also, another benefit is that the NHL could leverage their advertisers (for more advertising money)... The same in-rink advertisers who advertise in GM Place, could have their in-rink advertising in the mini-rink - for more money, of course... The mini-rink could be used for smaller events, rented for beer league games, etc... And the cities themselves would probably fund a good portion of the rinks - to stimulate local money spending...

Quote:
Originally Posted by KevFu View Post

The NHL buying the AHL concept "works" from multiple standpoints:

#1 - franchise values: (See my PHX example). Any franchise that goes up for sale, you can automatically hold a bidding war for an NHL team among owners looking at 15 markets, instead of one. Looking for a guy to own a team in PHX is proving difficult. Instead, you'd have 1-7 guys placing bids from difference cities: SEA, QUE, HAM, KC, OKC, MIL, PHX.

#2 - By relocating some AHL teams around the US, you can maximize the "growth of the game" aspect. The AHL currently has 23 traditional markets and 7 growth markets (Norfolk, Milwaukee, Charlotte, Houston, San Antonio, Austin, Oklahoma City), as does the NHL (TB, FLA, DAL, ANA, SJ, CAR, NASH).

Lots of the places we're talking about as potential NHL cities don't have AHL teams? That makes no sense. If the NHL owned the AHL, they could move teams out of small northeast markets that we know we'll have fans of the game (the coverage of teams in New England and Upstate New York is way too dense), and move them to these markets and scope out the fans of places like Seattle, Portland, Kansas City, Salt Lake City. And place teams a few hours away and use affiliations to create more fans in places like Florida and Tennessee.

AHL franchises are in towns that NHL teams view as battle-ground territories for fans. Hershey (PIT/PHI/WAS), Scranton (PHI/NYC), Albany (NY/BOS) for example. The idea is you put an affiliate there, and turn that town into fans of your team (TV viewers, merchandise and occasional ticket sales).

Las Vegas (LA/ANA), Reno (SJ), Salt Lake (COL) expands their fan bases outward and creates more NHL interest.

#3 - It gives you options for a doomsday scenario if a radical reconstruction of the NHL is needed. Teams wouldn't fold or move, they'd move to the AHL. Their colors and names would be tied to the city, rather than the franchise. "You'll be back in the NHL when you get an NHL arena, Islanders. Your spot in the NHL has been transferred to QUE."

Making a 20x3 Promotion/Relegation League? Piece of cake. You could get that going in an hour if you owned the 30 AHL franchises.
OK, I'm sold on adding the "main professional farm team league" to the minor hockey idea An added benefit is that I imagine that the NHL could make a lot of money relocating these AHL teams to various North American cities - when relocation happens...

The NHL is a gate revenue business... Increase the number of gates at a rate much higher than the player costs that they need to pay out (basically, all levels below the NHL) and it's a win... IMO, the NHL should expand... just not expand at the NHL level...

In the same mini-rink, the NHL could house hockey games from 6 years old (played on a Sunday morning) to AHL (played on a Saturday night)... The sale of concessions, etc... Huge potential money maker, IMHO... and the NHL has the infrastructure, expertise, and resources to make it work, at least from the chair I am sitting in...


Last edited by I in the Eye: 09-16-2012 at 07:04 PM.
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Old
09-16-2012, 07:50 PM
  #108
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The sooner the NHL and NHLPA realize the league is essentially minor league and will always be that way the better. Salary rollback, tight limits on contract dollars and length, and relocation/contraction are musts.

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09-16-2012, 08:04 PM
  #109
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There is no way to have a salary cap with a floor without substantial revenue sharing and have all teams viable. The Leafs, Rangers, etc.. make too much money for it to work.

So either have revenue sharing and have a salary cap that differs from team to team.

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09-16-2012, 09:54 PM
  #110
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Solution To Labor Problems: Move Teams and Relax the Hard Cap

The NHL owners keep talking about how their revenues are not enough. They desire the players to take less due to this reason, largely. I point out two no brainers:

1) The problem is this, the NHL wants to act like a business.
Well in a business, like McDonald's or Starbucks, franchises which lose money fire management or get closed.

The NHL has strong revenue generating markets (Rangers, Leafs) followed by some perpetual ne'er-do-wellers (Islanders, Devils, Panthers, Coyotes). The Coyotes offer the most extreme example, they are a market with a good team and good arena which bleeds money.

If the NHL is serious about their good business model they could start by moving Phoenix instead of underwritting them.
A good business model has franchises doing their fair share to contribute.
Phoenix is not profitable.
The Devils are another example. Good team, beautiful arena, and yet they still earn such poor revenues they can't afford the mortgage.

I just don't understand why the players, media, or any other parties do not express this point:

The NHL's problem is largely they have a lot of failing franchises.
They need to both improve revenue sharing, have a luxury tax, and relocate.

If you make the cup finals and cannot earn a profit in a new building then you are shouldn't be in the league. That make sense.

You could have three teams in Toronto and they'd make a profit. Heck try it in Quebec or Seattle.
You move the Devils, Islanders, and Coyotes to those markets and suddenly the league has three profitable franchises.

The stubborn refusal of the NHL to recognize and correct by relocation poor, poor "starbuck" locations is what is causing revenues issues both on a micro and macro level.



2) Relax the Hard Cap.
-The NHL's cap artificially raises revenue for some like the Rangers and Leafs who likely would spend another $30 million or so on players.
-This causes revenues to artificially raise leaving teams like the Islanders with a higher cap floor that they cannot meet without losing money.

Instead, do what MLB does and have a luxury tax that will be stiff enough to encourage teams to comply yet at the same time, should a team be over it will be penalized enough to provide small markets with a lot of extra revenue.


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09-16-2012, 10:03 PM
  #111
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Sounds like a good plan.

Quote:
Move teams north already

NHL spinning wheels in Phoenix, Florida


GARY BETTMAN is in charge of the future of the NHL and he needs to teach his owners to fish — not just give them dinner

The league says close to two-thirds of its teams are losing money. The players, who have access to the clubs’ books don’t debate this. Clearly the NHL has its problems.
http://www.winnipegfreepress.com/opi...169886886.html

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09-16-2012, 10:27 PM
  #112
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I think Miami, if good, can be profitable.

What cannot be profitable is New Jersey and the Islanders.
The proof is there, New Jersey has been a contender for almost two decades, they have a new arena, and the result is defaulting on the mortgage.

They need to move.

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09-16-2012, 10:30 PM
  #113
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The NHL is a poorly run league. 3.3B in revenues and only 8 teams are in the black? Something is wrong with your business model. And you know what? It has very little to do with how much money the players are making.

The sooner that Bettman and the league recognizes that hockey is a niche sport in the U.S., the sooner things will get better. Get teams out of unsuccessful markets. I'm not saying move them to Canada, but put them in markets where hockey can survive. There are lots of markets in the U.S. that are familiar with the game that don't have teams. Houston has had the WHA and the AHL for a number of years. Seattle has the Thunderbirds. Wisconsin isn't a stranger to the game, either.

Pick up a revenue sharing model. The NFL uses one, and it works. Distribute the wealth among the owners. You don't own a professional franchise to make money in the short term. You buy one you make more money on your investment when you sell it. If the entire league can become stronger by adopting a revenue sharing system, the league would be stupid not to do it.

Maybe when you get to that point you can talk about a realistic cap and salary rollbacks. But until you get there, salary rollbacks and a smaller cap is only a band-aid to the bigger problem.

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Old
09-16-2012, 10:33 PM
  #114
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The NHL is a poorly run league. 3.3B in revenues and only 8 teams are in the black? Something is wrong with your business model. And you know what? It has very little to do with how much money the players are making.

The sooner that Bettman and the league recognizes that hockey is a niche sport in the U.S., the sooner things will get better. Get teams out of unsuccessful markets. I'm not saying move them to Canada, but put them in markets where hockey can survive. There are lots of markets in the U.S. that are familiar with the game that don't have teams. Houston has had the WHA and the AHL for a number of years. Seattle has the Thunderbirds. Wisconsin isn't a stranger to the game, either.

Pick up a revenue sharing model. The NFL uses one, and it works. Distribute the wealth among the owners. You don't own a professional franchise to make money in the short term. You buy one you make more money on your investment when you sell it. If the entire league can become stronger by adopting a revenue sharing system, the league would be stupid not to do it.

Maybe when you get to that point you can talk about a realistic cap and salary rollbacks. But until you get there, salary rollbacks and a smaller cap is only a band-aid to the bigger problem.
Exactly.
Phoenix to Seattle.
Islanders to Quebec/Toronto.
Devils to Quebec/Toronto.

Guaranteed more revenue and profit.

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09-16-2012, 10:36 PM
  #115
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They need to move.
Your mistaken. What Jersey needs is a new owner.

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09-16-2012, 10:39 PM
  #116
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Your mistaken. What Jersey needs is a new owner.
No...they are not a good business franchise. They cannot make money with a contender and a nice building. In any other business (starbucks) this would mean closing.

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09-16-2012, 10:42 PM
  #117
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It takes decades to build a loyal fanbase for a sports team. Not at all comparable to Starbucks or McDonalds, where if one closes, the customers can just find one somewhere else.

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09-16-2012, 10:44 PM
  #118
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No...they are not a good business franchise. They cannot make money with a contender and a nice building. In any other business (starbucks) this would mean closing.
NJ is in the top half of NHL teams in terms of revenue, mainly because of a lucrative TV deal and high ticket prices. Their problem is that they built their new arena at the height of the real estate bubble and are drowning in debt.

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09-16-2012, 10:46 PM
  #119
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This is all very logical and obvious but these things WILL not happen in the near term. At most we'll see the cap floor being changed.

If Bettman is replaced by owners due to a full yr lockout (which I'm sure certain parts of the PA wouldn't mind just as the owners got rid of Goodenow) then we might see the NHL's relocation stance. If Fehr wants to really test waters, he starts talking relocation and seeing if the NHL is willing to put in a relocation clause for franchises constantly relying on revenue sharing. He basically just needs to state in the proposal that the NHL will "consider" the "possibility" of relocation if a franchise is losing X amounts of $ leading to revenue sharing reliance in X yrs in a row or something and just see how or if the NHL responds to that. He can use it to help with the PR war if nothing else.

Also we have the folks who think that making the cap ceiling more lenient will mean that we have no parity because they think that Columbus or Florida are actually gonna win the cup even if the cap is 60 M lol. They also mistake parity with every team being good enough to win a cup, no parity just means the gap isn't that big and that you have at least 5 contenders, more than most major sports leagues imo which we'd still have if teams were allowed to spend a bit above the cap with a tax.

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09-16-2012, 10:49 PM
  #120
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This is all very logical and obvious but these things WILL not happen in the near term. At most we'll see the cap floor being changed.

If Bettman is replaced by owners due to a full yr lockout (which I'm sure certain parts of the PA wouldn't mind just as the owners got rid of Goodenow) then we might see the NHL's relocation stance. If Fehr wants to really test waters, he starts talking relocation and seeing if the NHL is willing to put in a relocation clause for franchises constantly relying on revenue sharing. He basically just needs to state in the proposal that the NHL will "consider" the "possibility" of relocation if a franchise is losing X amounts of $ leading to revenue sharing reliance in X yrs in a row or something and just see how or if the NHL responds to that. He can use it to help with the PR war if nothing else.
Every relocated team = decades wasted in building up fanbases

Teams that would have been relocated over the last decade if the NHL hadn't stepped in:
Edmonton, Ottawa, Buffalo, Pittsburgh, Phoenix.

I'm sure the NHL is glad try didn't let Ottawa, Edmonton, and Pittsburgh move when they were all troubled, right?

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09-16-2012, 10:55 PM
  #121
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No...they are not a good business franchise. They cannot make money with a contender and a nice building. In any other business (starbucks) this would mean closing.
... Ownership. All boils down to the guy at the top...


Last edited by Killion: 09-17-2012 at 08:38 PM.
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09-16-2012, 11:24 PM
  #122
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No...they are not a good business franchise. They cannot make money with a contender and a nice building. In any other business (starbucks) this would mean closing.
They have had a profit every year in Newark with playoff hockey.

So, in any other business (starbucks) this would mean staying open.

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09-16-2012, 11:30 PM
  #123
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Quote:
Originally Posted by TheDevilMadeMe View Post
Every relocated team = decades wasted in building up fanbases

Teams that would have been relocated over the last decade if the NHL hadn't stepped in:
Edmonton, Ottawa, Buffalo, Pittsburgh, Phoenix.

I'm sure the NHL is glad try didn't let Ottawa, Edmonton, and Pittsburgh move when they were all troubled, right?
Apples/oranges. We're at an impasse here with huge profit v huge loss. I don't think that type of clause should be permanent, it should be over the next 5 yrs because conditions are ripe to move. It might change but they're ripe right now.

Anyways, that suggestion to put that clause in is like I said, more of a PR strategy which the PA should be using. Putting the word "explore the possibility of relocation for franchises relying on X amoutn of rev sharing over X yrs" is just lawyer speak...it doesn't even lead to obligation, "explore" means nothing but shows that the PA is suggesting an alternate solution which you know majority of fans would be on board with (certainly Cdn ones).

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09-17-2012, 12:31 AM
  #124
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lawless doesnt understand the economics here.

due to the system the owners have concocted, the more weak (low-revenue) franchises there are, and the weaker they are, the more profit the other owners make. Low revenue teams drive salaries down. Low revenue teams give the owners a leg to stand on every 6-7 years when the CBA comes up. These teams paid them large sums of money to join, and then their losses become someone else's problem. If they do manage to turn it around and raise their revenues, the other owners win again from the increased tv revenues.

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09-17-2012, 03:11 AM
  #125
KevFu
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Join Date: May 2009
Location: New Orleans
Country: United States
Posts: 3,891
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Quote:
Originally Posted by blues10 View Post
At the risk of sounding like a broken record, simply moving the poor teams to new locations just changes the names of the teams who can't keep up. Instead of teams we don't like not having the dough, you'd have teams we do like not having the dough.

TYING SALARY TO REVENUE AT LEAGUE AVERAGE DOES NOT WORK WHEN THE GROWTH RATE AT THE TOP BLOWS THE AVERAGE OUT OF THE WATER.

CBA needs one change: change "Midpoint is 57% average revenue" to "midpoint is 57% MEDIAN revenue.
20 of 30 teams have below average revenue. Use media, and 15 of 30 will be above and below, guaranteed, every year.

If the Bell/Rogers merger means TOR makes $100 million MORE in profits, they could move the average revenue so that 24 of 30 teams are below average. That can't happen if you use median.

Quote:
Originally Posted by Scoobs View Post
Pick up a revenue sharing model. The NFL uses one, and it works. Distribute the wealth among the owners. You don't own a professional franchise to make money in the short term. You buy one you make more money on your investment when you sell it. If the entire league can become stronger by adopting a revenue sharing system, the league would be stupid not to do it.

Maybe when you get to that point you can talk about a realistic cap and salary rollbacks. But until you get there, salary rollbacks and a smaller cap is only a band-aid to the bigger problem.
Funny how MLB has more revenue sharing than the NHL and the NFL shares a ridiculous percentage of money (100% of TV, 40% of gate).

If the NHL simply did 100% broadcast revenue sharing for all teams, and switched to MEDIAN revenue for the midpoint, 29 of 30 teams could probably spend TO THE CAP. NHLPA wins, NHL Owners win. My team? Still waiting on a new arena (sigh).

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