someone posted this on the main board and it really helped me understand this whole mess. Maybe our resident experts can comment on how accurate it is?
Most of what he has written there is pretty accurate IMO. He uses numbers from Forbes which are pretty darn close - some of the numbers I've posted previously are confirmed by the NHLPA.
Some problems I have with it:
It refers to franchise values as non HRR revenues. Well, the value of the franchise is not a revenue, and wont be until the team is sold. These are investors investing hundreds of millions of dollars who want their investment to increase in value. if not, they wouldn't be a part of it and there would be no hockey. The majority of teams have investors (look at the NJD and their $80 million loan payments a year to their investors - they are not the owners but investors, lenders also trying to make a profit).
It refers to the guesstimate in expenses as increased to $35 million per team from the $26 million from the Levitt report. Rather on the low side for me.
I appreciate the way he tries to make it easier for the average fan to understand, but unless there is 100% revenue sharing and 100% expense sharing, it just doesn't work for individual teams. The Leafs profit for example (and to his credit, mentions it) wipes out the losses of 6 money losing teams. So while he shows a small profit by breaking it down as such, what profit is there individually when 6 of those 7 teams are losing money?
I agree this is an owner vs owner problem - to an extent. But the 57% the players receive IS a problem regardless of revenue sharing. We need look no further then escrow.
Escrow is there to protect the owners in the event that revenues to meet expectations to cover the players share weren't met. One since 2008 the players received their escrow back. One time. Which just goes to prove that revenues to cover the players share is not there.
Add to that that the NHLPA had an escalator clause in the CBA to raise the cap by 5% and it makes it worse. The NHL had asked the NHLPA not to invoke the escalator for this season, yet they did and thus the $72 million cap - and with an expiring CBA why would they invoke it? My guess is because they know there will be some sort of roll back and they knew the rich teams would spend it anyway thus giving SOME players more money.
Im of the opinion that the players have no leverage, and some former players and agents have said as much. And when you have the richer players heading to Europe to recoup some of their lost millions, it'll be the blue collar players making the league average or less that doesn't have access to make up some of that money that'll say "hey, we're losing our income here".
Most of what he has written there is pretty accurate IMO. He uses numbers from Forbes which are pretty darn close - some of the numbers I've posted previously are confirmed by the NHLPA.
Some problems I have with it:
It refers to franchise values as non HRR revenues. Well, the value of the franchise is not a revenue, and wont be until the team is sold. These are investors investing hundreds of millions of dollars who want their investment to increase in value. if not, they wouldn't be a part of it and there would be no hockey. The majority of teams have investors (look at the NJD and their $80 million loan payments a year to their investors - they are not the owners but investors, lenders also trying to make a profit).
It refers to the guesstimate in expenses as increased to $35 million per team from the $26 million from the Levitt report. Rather on the low side for me.
I appreciate the way he tries to make it easier for the average fan to understand, but unless there is 100% revenue sharing and 100% expense sharing, it just doesn't work for individual teams. The Leafs profit for example (and to his credit, mentions it) wipes out the losses of 6 money losing teams. So while he shows a small profit by breaking it down as such, what profit is there individually when 6 of those 7 teams are losing money?
I agree this is an owner vs owner problem - to an extent. But the 57% the players receive IS a problem regardless of revenue sharing. We need look no further then escrow.
Escrow is there to protect the owners in the event that revenues to meet expectations to cover the players share weren't met. One since 2008 the players received their escrow back. One time. Which just goes to prove that revenues to cover the players share is not there.
Add to that that the NHLPA had an escalator clause in the CBA to raise the cap by 5% and it makes it worse. The NHL had asked the NHLPA not to invoke the escalator for this season, yet they did and thus the $72 million cap - and with an expiring CBA why would they invoke it? My guess is because they know there will be some sort of roll back and they knew the rich teams would spend it anyway thus giving SOME players more money.
Im of the opinion that the players have no leverage, and some former players and agents have said as much. And when you have the richer players heading to Europe to recoup some of their lost millions, it'll be the blue collar players making the league average or less that doesn't have access to make up some of that money that'll say "hey, we're losing our income here".
Agree completely, once those 'average' players start missing pay cheques they won't be so unified. The owners know this.
So if you figure 22 guys per team, 30 teams in the league...that's 660 players. If 241 never played in the NHL again, that's 37% turnover. That's just nuts.
You seem to be trying to make a point, but are talking around it. Maybe you don't realize you are doing this. I don't know.
Have I ever owned anything? Have I ever been an employee? Do I know what a salary is? What is it you are trying to say?
I'll tell you where I'm coming from: I am not a players' union supporter. I think the owners should hold all the cards. I don't think employees should be sharing in the league profits because they are employees of the business, not owners. They don't take the same kinds of risks owners take. That's not to say they don't take risks, but their payoff is in their contracted-for salary and bonuses, if any.
If the players don't care for the salaries, they should be free to go play somewhere where they would be happiest, either for another team or for another league.
If the owners don't run the league well (i.e. don't pay well, don't offer decent contracts, etc.) then their league will fold. Not healthy for the business. So the business model has to be such that the business sustains itself, i.e. it retains highly talented, highly paid players, and puts fans' butts in the seats.
The market should drive all these decisions. If there was no player union, there would likely be hockey right now.
I'll try one more time.
Employees don't share in "profit."
They make a salary. Owners pay employees a salary.
You keep saying they should share the expenses. THEY ARE THE EXPENSES.
You are not making any sense. Feel free to reply to this, I'll read it, but I am done with this nonsense. You can be pro-owners, anti-unions, all you want, but I can't deal with the illogical argument. That I can't deal with.
Question for everyone no matter where you fall in this debate:
Do you think the costs of the Coyotes should be included or excluded in the owner's argument?
(Obviously they will include it, but I am asking if you think that is fair.)
Well, since the NHLPA wants the $25 million that the City of Glendale taxpayers paid last season and have already said they will cover this season towards the Coyotes $30 million losses, and have taken the league to binding arbitration to ensure it is, what do you think?
And I'm not sure if you mean the costs of operating the team or revenue (loss). Whether the team relocated, or stayed in Phoenix, they would still have costs.
As for the money the NHL puts into Phoenix, isn't that revenue sharing in a way? For example, let's say the Leafs paid $10 million in revenue sharing to Phoenix under the proposed NHLPA proposal. That $10 million is still HRR earned by the Leafs. Maybe it shouldn't be counted. What to you think?
Well, since the NHLPA wants the $25 million that the City of Glendale taxpayers paid last season and have already said they will cover this season towards the Coyotes $30 million losses, and have taken the league to binding arbitration to ensure it is, what do you think?
And I'm not sure if you mean the costs of operating the team or revenue (loss). Whether the team relocated, or stayed in Phoenix, they would still have costs.
As for the money the NHL puts into Phoenix, isn't that revenue sharing in a way? For example, let's say the Leafs paid $10 million in revenue sharing to Phoenix under the proposed NHLPA proposal. That $10 million is still HRR earned by the Leafs. Maybe it shouldn't be counted. What to you think?
When the league says it is losing money on half the teams Phoenix is included on that list.
The league is keeping that team there at a loss instead of selling it and letting It move to a major market. Now, I understand the logic of keeping the team there, but you can't have It both ways.
EDIT: After typing that on my phone just wanted to add since your post was more detailed.
Whatever the league gets from Glendale should go to covering the costs of the team. The NHL only has an obligation to cover the salary floor worth of contracts.
But I don't think the losses incurred by the owners during their ownership of the Yotes should be used in any figures when talking about failing teams or the NHL losing money.
Last edited by EverettMike: 09-18-2012 at 07:44 PM.
When the league says it is losing money on half the teams Phoenix is included on that list.
The league is keeping that team there at a loss instead of selling it and letting It move to a major market. Now, I understand the logic of keeping the team there, but you can't have It both ways.
EDIT: After typing that on my phone just wanted to add since your post was more detailed.
Whatever the league gets from Glendale should go to covering the costs of the team. The NHL only has an obligation to cover the salary floor worth of contracts.
But I don't think the losses incurred by the owners during their ownership of the Yotes should be used in any figures when talking about failing teams or the NHL losing money.
I get what you're saying and asking Mike. But I think the NHLPA gave the NHL the right to talk about losses in Phoenix by demanding that what the City of Glendale taxpayers paid gets counted as revenue.
I get the relocation factor too, but there`s an expense to that as well. Let`s say they move to Quebec. Sure expenses such as travel are reduced. But if you want to maintain two balanced conferences, it requires a team from the east to move west. So while that expense may be reduced for Phoenix/Quebec it's increased for someone else, with no cost savings, and I would argue increased.
Expansion? Maybe Seattle? Again, doing some quick calculations, travel would be further for Seattle throughout the West then for Phoenix. It's not always so clear cut.
All this proves is the frustration level for the fan. Personally, I don't care if they are out 3 weeks, 3 months, or the full season. I'll always come back. This isn't a hockey lockout, it's an NHL lockout and it bugs me (the media is to blame here) when they call it a hockey lockout.
I have more then enough hockey to keep me busy starting with 4 games in 4 cities this weekend and 918 kms of driving. But I understand that for many it's the NHL or nothing, but in fairness, for entertainment, I don't think those people have given other leagues a chance. I definitely prefer seeing the Knights vs Rangers over the Islanders vs Columbus and I bet most people here would too if they gave it a chance.
The NHL isn't the only ticket in town so to speak. And once the NHL and NHLPA realize that, we will all be better off for it. I'm surprised though, that based on where the players come from, they don't see that.
I get what you're saying and asking Mike. But I think the NHLPA gave the NHL the right to talk about losses in Phoenix by demanding that what the City of Glendale taxpayers paid gets counted as revenue.
I get the relocation factor too, but there`s an expense to that as well. Let`s say they move to Quebec. Sure expenses such as travel are reduced. But if you want to maintain two balanced conferences, it requires a team from the east to move west. So while that expense may be reduced for Phoenix/Quebec it's increased for someone else, with no cost savings, and I would argue increased.
Expansion? Maybe Seattle? Again, doing some quick calculations, travel would be further for Seattle throughout the West then for Phoenix. It's not always so clear cut.
All this proves is the frustration level for the fan. Personally, I don't care if they are out 3 weeks, 3 months, or the full season. I'll always come back. This isn't a hockey lockout, it's an NHL lockout and it bugs me (the media is to blame here) when they call it a hockey lockout.
I have more then enough hockey to keep me busy starting with 4 games in 4 cities this weekend and 918 kms of driving. But I understand that for many it's the NHL or nothing, but in fairness, for entertainment, I don't think those people have given other leagues a chance. I definitely prefer seeing the Knights vs Rangers over the Islanders vs Columbus and I bet most people here would too if they gave it a chance.
The NHL isn't the only ticket in town so to speak. And once the NHL and NHLPA realize that, we will all be better off for it. I'm surprised though, that based on where the players come from, they don't see that.
It should be counted when looking at the team's finances. All money that comes in is revenue. Why would it not be counted? What is the argument? How could the league say (making up figures) we are losing 100 million a year on the Coyotes and not include 25 million they get from the city of Glendale? That means they are losing 75 million, not 100 mill.
As always, the owners get to count revenue as they want, but that doesn't always reflect how profitable their team may be. You know how often in professional sports their kid or nephew is collecting a big paycheck for some ******** job. Yet that counts as a cost.
The number one thing that is causing this lockout is the fact the owners can't come up with a fair and reasonable owner-revenue sharing program. It works in the NFL, it has helped tremendously in MLB (with the luxury tax), and the NBA is a stupid game where superstars determine championships a ridiculous amount of time, so money is less relevant.
Maybe the players have no leverage. Maybe this can only end one way, with them giving in to the owners.
That doesn't make it right, and it doesn't mean I am going to fault them for a situation that is mostly the other group's fault.
First, as mentioned, the $25mm subsidy from the City of Glendale covers most (but not all) of the losses. No different from any other city who builds an arena or gives out a sweetheart lease deal.
Second, and more fundamentally, the league was quick to grab expansion dollars while pushing the idea of growing the game in non-traditional markets. If growing the game there is truly the way to expand the game, they need to set up a system that allows those teams to succeed, and not have all of the players suffer with salary rollbacks becasue some number of teams are not profitable. The league has an asinine revenue sharing plan now as market size prevents teams like the Islanders and Coyotes from receiving money.
If the NHL owners were willing to line their pockets with expansion dollars, they should be willing to balance revenues for those teams to keep them viable, not use those teams as the basis to reduce the players share.
I'm all for reengineering the players share below 57%, but the rationale should not be based on a handful of teams that lose alot of dough.
They make a salary. Owners pay employees a salary.
You keep saying they should share the expenses. THEY ARE THE EXPENSES.
You are not making any sense. Feel free to reply to this, I'll read it, but I am done with this nonsense. You can be pro-owners, anti-unions, all you want, but I can't deal with the illogical argument. That I can't deal with.
I think players can have both Mike.
In my current company employees (higher up not the low cubeworld people like me) at the managing director level receive salary (which is not even close to 50% of company renenue) then they receive profit sharing based on the company bottom line. These are the people that travel and do the money making work for the company. So it is in their best interest to keep the company costs low (travel, entertainment of clients and such) because their major source of income (profit sharing not salary) is directly linked to the company bottom line.
This company is in fantastic shape financially and that salary structure I feel is a major reason why.
A lot of the millionaire/billionaire owners love money so much that they won't even use their own to build arenas.
These incredibly wealthy people instead prefer to hold municipal governments hostage "build me an arena or we're leaving."
Look at Edmonton....Katz is in line to get $125 million from the city of Edmonton to build a new arena.
Now according to reports, Katz is asking the city of Edmonton for $6 million a year for operating costs of the arena.
Yet when it comes to money coming out their own pockets, the owners just can't handle it....and if/when the team makes money do you think that the owners give some of it back to the city?
"Katz says he has always made it clear to city negotiators that there should be a subsidy for him to operate the arena, and that he had in mind a gaming subsidy similar to what the Winnipeg Jets and Pittsburgh Penguins receive in their new deals. In Winnipeg, the team gets $12 million a year in operating subsidies, Katz said, a portion coming from gaming."
As always, the owners get to count revenue as they want, but that doesn't always reflect how profitable their team may be. You know how often in professional sports their kid or nephew is collecting a big paycheck for some ******** job. Yet that counts as a cost.
Don't care about other sports, but in hockey no I don't. They aren't public companies so I don't have access to that information. However, I am sure you are sworn to secrecy so you can't reveal that information to us.
I'm not sure why the NHLPA with it's independent auditors won't make a bigger stink about it other then their general "Why doesn't the NHL try and curb other costs" comment.
As for your "the owners get to count revenue as they want" comment, it's simply not true. The NHL and NHLPA agreed to how revenue is counted in the just expired CBA, (section 50.1 page 160 to 181) and any matter that was under dispute was and could be settled by binding arbitration. One case went to that and the NHL lost: the $25 million paid (twice) by the City of Glendale regarding the Coyotes. The NHLPA also insisted on the relocation fee paid by the Jets to be counted as revenue when it was expressly worded in the CBA that it is not HRR.
Also, Section 50.1 (f) page 185 states:
Quote:
(f) "Actual HRR." "Actual HRR" shall mean the actual HRR for the League
Year ended June 30, calculated by the Independent Accountants and set forth in the Final HRR Report, as provided in Section 50.12(d)(ii) of this Agreement
Yeah so the owners get to count revenue how they want. (again, independent accountants are agreed to by both parties)
And before you bring up that they hide things through "other companies" read those 21 pages. Sister companies, subsidiary companies etc are all covered in those 21 pages.
I think all fans of NHL hockey should ban the first game of the season when the game returns. I mean mass ban, no going to the games, no watching on TV or listening to the radio. We as fans need to show owners and players that we will not take this any longer.
Would it be awesome to see on the sports hightlights empty arena's? You think those optics might get the owners/players attention?
Don't care about other sports, but in hockey no I don't. They aren't public companies so I don't have access to that information. However, I am sure you are sworn to secrecy so you can't reveal that information to us.
I'm not sure why the NHLPA with it's independent auditors won't make a bigger stink about it other then their general "Why doesn't the NHL try and curb other costs" comment.
As for your "the owners get to count revenue as they want" comment, it's simply not true. The NHL and NHLPA agreed to how revenue is counted in the just expired CBA, (section 50.1 page 160 to 181) and any matter that was under dispute was and could be settled by binding arbitration. One case went to that and the NHL lost: the $25 million paid (twice) by the City of Glendale regarding the Coyotes. The NHLPA also insisted on the relocation fee paid by the Jets to be counted as revenue when it was expressly worded in the CBA that it is not HRR.
Also, Section 50.1 (f) page 185 states:
Yeah so the owners get to count revenue how they want. (again, independent accountants are agreed to by both parties)
And before you bring up that they hide things through "other companies" read those 21 pages. Sister companies, subsidiary companies etc are all covered in those 21 pages.
Next.
I thought we were having a nice conversation.
But if you want to be condescending ill pass. I expect better from you, but whatever, no skin off my ass.
I think all fans of NHL hockey should ban the first game of the season when the game returns. I mean mass ban, no going to the games, no watching on TV or listening to the radio. We as fans need to show owners and players that we will not take this any longer.
Would it be awesome to see on the sports hightlights empty arena's? You think those optics might get the owners/players attention?
If were boycotting the game should we also not watch the highlights?
If were boycotting the game should we also not watch the highlights?
ok start it up, I could do a one game ban. I would miss hockey way too much for any more than that but i am all in for sending a message back to all involved in this process. start a thread. call the president. do whatever needs to be done. sorry patty meant to link lopey
Talks entering crucial phase, according to LeBrun:
Quote:
Judging from conversations I’ve had over the past 24 hours, the next seven to 10 days are seen as "crucial" by some to finding out whether there’s a meaningful negotiation between the sides and finally a bit of traction in talks, or whether there's a freezing-out period similar to eight years ago when three months went by without any negotiations occurring.
Don't care about other sports, but in hockey no I don't. They aren't public companies so I don't have access to that information. However, I am sure you are sworn to secrecy so you can't reveal that information to us.
I'm not sure why the NHLPA with it's independent auditors won't make a bigger stink about it other then their general "Why doesn't the NHL try and curb other costs" comment.
As for your "the owners get to count revenue as they want" comment, it's simply not true. The NHL and NHLPA agreed to how revenue is counted in the just expired CBA, (section 50.1 page 160 to 181) and any matter that was under dispute was and could be settled by binding arbitration. One case went to that and the NHL lost: the $25 million paid (twice) by the City of Glendale regarding the Coyotes. The NHLPA also insisted on the relocation fee paid by the Jets to be counted as revenue when it was expressly worded in the CBA that it is not HRR.
Also, Section 50.1 (f) page 185 states:
Yeah so the owners get to count revenue how they want. (again, independent accountants are agreed to by both parties)
And before you bring up that they hide things through "other companies" read those 21 pages. Sister companies, subsidiary companies etc are all covered in those 21 pages.
Next.
Dom, how large is the list of what they consider HRR and does anyone have a clue as to what the owners now want to count as HRR ?
Don't care about other sports, but in hockey no I don't. They aren't public companies so I don't have access to that information. However, I am sure you are sworn to secrecy so you can't reveal that information to us.
I'm not sure why the NHLPA with it's independent auditors won't make a bigger stink about it other then their general "Why doesn't the NHL try and curb other costs" comment.
As for your "the owners get to count revenue as they want" comment, it's simply not true. The NHL and NHLPA agreed to how revenue is counted in the just expired CBA, (section 50.1 page 160 to 181) and any matter that was under dispute was and could be settled by binding arbitration. One case went to that and the NHL lost: the $25 million paid (twice) by the City of Glendale regarding the Coyotes. The NHLPA also insisted on the relocation fee paid by the Jets to be counted as revenue when it was expressly worded in the CBA that it is not HRR.
Also, Section 50.1 (f) page 185 states:
Yeah so the owners get to count revenue how they want. (again, independent accountants are agreed to by both parties)
And before you bring up that they hide things through "other companies" read those 21 pages. Sister companies, subsidiary companies etc are all covered in those 21 pages.
Next.
I am with you Dom. I also feel something could be worked out to link salary to Profit not revenue so that if expense growth is faster/higher then revenue growth it is the entire company (NHL owners and Players) that take a hit together.
Profit definition could be worked out just like the HRR definition was in the last CBA. Why should players continue to get a bigger piece of the bigger pie (revenue) if profit is going down? It is just bad business.
Now I blame the owners for not being smart enough to realize this in the last CBA but I don't have a problem with them trying to even out the split of HRR either.
However whenever I bring up linking salary to profit I get the argument that the owners can manipulate the books however they want which is just not true if they come to an agreement that is audited by independent accounts agreed upon by both parties.
I am with you Dom. I also feel something could be worked out to link salary to Profit not revenue so that if expense growth is faster/higher then revenue growth it is the entire company (NHL owners and Players) that take a hit together.
Profit definition could be worked out just like the HRR definition was in the last CBA. Why should players continue to get a bigger piece of the bigger pie (revenue) if profit is going down? It is just bad business.
Now I blame the owners for not being smart enough to realize this in the last CBA but I don't have a problem with them trying to even out the split of HRR either.
However whenever I bring up linking salary to profit I get the argument that the owners can manipulate the books however they want which is just not true if they come to an agreement that is audited by independent accounts agreed upon by both parties.
How does linking salaries to profit help the Phoenixs and Floridas? All it would do is put more money in the pockets of the teams already making tonnes of cash.
(again, independent accountants are agreed to by both parties)
