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2012-13 Lockout Discussion Part V: The "Back to square one" Edition

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10-24-2012, 01:54 PM
  #576
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Originally Posted by HatTrick Swayze View Post
This. Forbes may not be 100% accurate, but do people really think the majority of teams are profitable? If they were I would expect the lights would be on and there would be hockey right now.
Again, it depends on who you believe. According to McGuire, the majority of teams are profitable. If he's right, which I would trust him over Forbes, then the vast majority of teams either are profitable or don't care that they aren't.

You think what you think because you believe the NHL that this is about the solvency of the league. As far as I'm concerned, this is nothing more than a money grab.

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10-24-2012, 01:55 PM
  #577
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Nick Kypreos was discussing that with Daren Millard and Doug MacLean on Hockeycentral Fan 590 today. Kyper has good PA ties. He said the NHLPA wanted to discuss the make whole program but the NHL refused. Even MacLean who is pro-NHL owner and hates Fehr said the NHL was wrong for decling the meeting.
If that was the case, the owners are flat out wrong in this scenario.

I'd really like for a reporter to ask Bettman the direct question and get it confirmed on the record that they turned down a specific request to discuss the make-whole.

(BTW, if the players wanted to discuss the make-whole, but refused to say so, then they're idiots for not simply admitting to it.)

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10-24-2012, 01:56 PM
  #578
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Actually, that's only one part of it. The other, larger, part of it is that the owner's offer for a new CBA wouldn't fix the problems of a league with 60% of it's franchises losing money. The cut in percentage isn't nearly enough. The increase in revenue sharing isn't nearly enough.

The league is okay with these things because the whole premise they are using is not as true as they're making it out to be.
I'm not following how that's the case.

If 5 teams are making money, 5 teams are losing big money, and 20 teams are losing a little bit of money, a salary decrease of 7% could put those twenty teams into the black, no?

And revenue sharing is going up, I thought?

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10-24-2012, 01:57 PM
  #579
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Originally Posted by HatTrick Swayze View Post
From a financial standpoint I really fail to see how losing a year of salary is worth whatever "better deal" you will be able to get in the summer (or later).

Only exception I can think of is good players on their ELCs. Obviously only those who have really established themselves and don't risk being cut after their entry deals.
Or players who were already paid most of this year's salary as a bonus.

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10-24-2012, 01:58 PM
  #580
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Not every business is set up to make profits. Break even or small loses means low or no revenue tax. The use a branch of their enterprises to take on loses. The owner generates a salary while increasing franchise value. The sale is the payday. Forbes is gathering reports. Their info isn't the end all be all.

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10-24-2012, 02:01 PM
  #581
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If that mention about the Make Whole thing is true, Fehr would have said that to the press.

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10-24-2012, 02:02 PM
  #582
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Originally Posted by mschmidt64 View Post
I'm not following how that's the case.

If 5 teams are making money, 5 teams are losing big money, and 20 teams are losing a little bit of money, a salary decrease of 7% could put those twenty teams into the black, no?

And revenue sharing is going up, I thought?
Revenue sharing would go up, but not by enough.

The revenue growth of the league has been driven by the large markets, not by every market. That type of growth is going to continue. In year two of an agreement at 50%, with projected growth of 5%, the salary cap would be around $62m. In year 3, at 5% growth, the cap would be higher than what it was last season, when all these teams supposedly lost money. If the 5% growth is being driven by the top 5 teams, than that means that the rest of the teams are either static or anemic in revenue. Salary costs will continue rise on them without then bringing in much more revenue. That means that they'll just continue taking a loss.

The real problem in the league is a disparity between the largest markets and the smallest markets. Increasing revenue sharing by the NHL's proposal will help, but it won't do enough. Decreasing salaries doesn't address the problem at all and therefore is not motivated by losses.

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10-24-2012, 02:02 PM
  #583
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So, he's not representing the will of the players, but convincing them to believe what he believes.

I wasn't following very closely back in 2004 - but didn't the players start saying that they wouldn't take a cap and they ended up getting it and a rollback? How is that a better deal?
Its not.

And even though Fehr wasnt around in 2004, its ridiculous that he'd even bring this up.

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10-24-2012, 02:03 PM
  #584
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Originally Posted by Tawnos View Post
Again, it depends on who you believe. According to McGuire, the majority of teams are profitable. If he's right, which I would trust him over Forbes, then the vast majority of teams either are profitable or don't care that they aren't.

You think what you think because you believe the NHL that this is about the solvency of the league. As far as I'm concerned, this is nothing more than a money grab.
McGuire still said 13 teams are in the red. It may not be "most" but it indicates that the NHL has a profitability issue. I think at the end of the day this lockout is driven by a combination of a lot of teams losing money, and some profitable teams making a cash grab as you indicate.

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10-24-2012, 02:04 PM
  #585
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Originally Posted by Fire Sather View Post
If that mention about the Make Whole thing is true, Fehr would have said that to the press.
Maybe both sides decided the mature thing would be to stop using the media, stop grabbing at the fans affection, and commit to getting a deal done between them.

I'm joking of course.

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10-24-2012, 02:11 PM
  #586
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Originally Posted by Tawnos View Post
Revenue sharing would go up, but not by enough.

The revenue growth of the league has been driven by the large markets, not by every market. That type of growth is going to continue. In year two of an agreement at 50%, with projected growth of 5%, the salary cap would be around $62m. In year 3, at 5% growth, the cap would be higher than what it was last season, when all these teams supposedly lost money. If the 5% growth is being driven by the top 5 teams, than that means that the rest of the teams are either static or anemic in revenue. Salary costs will continue rise on them without then bringing in much more revenue. That means that they'll just continue taking a loss.

The real problem in the league is a disparity between the largest markets and the smallest markets. Increasing revenue sharing by the NHL's proposal will help, but it won't do enough. Decreasing salaries doesn't address the problem at all and therefore is not motivated by losses.
That's if the entire increase is driven only by the big teams.

I think the hope is that isn't the case.

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10-24-2012, 02:12 PM
  #587
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Originally Posted by HatTrick Swayze View Post
McGuire still said 13 teams are in the red. It may not be "most" but it indicates that the NHL has a profitability issue. I think at the end of the day this lockout is driven by a combination of a lot of teams losing money, and some profitable teams making a cash grab as you indicate.
At least 4 of the teams in the red aren't concerned that they are. I'm talking about the Sabres, the Stars, the Hurricanes, and the Predators. The Sabres because Pegula isn't in it for profit. The Stars because they're under new ownership and the new owner is in the process of trying to make them profitable again. The Hurricanes because Karamanos has shown little interest in whether or not the Hurricanes turn a profit year to year. He wants them too, but it isn't pressing. The Predators because they're on their way, even if they aren't there yet. I'd hazard a guess that 8 of the others are the Coyotes, the Jackets, the Islanders, the Lightning, the Panthers, the Ducks, the Jets, the Devils. The 9th could be anyone of the Avalanche, Sharks, Blues, or Wild. But guess what. The Jets and Devils losses have nothing to do with salaries. The Jets are startup costs and the Devils are arena debt. I'm not sure the Ducks or Lightning ownership care either. And the Coyotes, Jackets and Islanders have profitability issues that have nothing to do with the structure of the league.

What some people seem to think is that owning a pro sports team should be automatically profitable. I reject that notion. You still need to make good decisions, like the hiring of personnel or the structure of the lease you've entered into. Like marketing to your community, like the Predators have excelled at recently. It shouldn't be automatic.

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10-24-2012, 02:14 PM
  #588
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Originally Posted by mschmidt64 View Post
That's if the entire increase is driven only by the big teams.

I think the hope is that isn't the case.
It doesn't show any signs of changing.

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10-24-2012, 02:15 PM
  #589
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Originally Posted by HatTrick Swayze View Post
McGuire still said 13 teams are in the red. It may not be "most" but it indicates that the NHL has a profitability issue. I think at the end of the day this lockout is driven by a combination of a lot of teams losing money, and some profitable teams making a cash grab as you indicate.
I mean, no doubt the Rangers don't need the salary decrease.

But a lot of the other teams do.

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10-24-2012, 02:16 PM
  #590
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Originally Posted by HatTrick Swayze View Post
McGuire still said 13 teams are in the red. It may not be "most" but it indicates that the NHL has a profitability issue. I think at the end of the day this lockout is driven by a combination of a lot of teams losing money, and some profitable teams making a cash grab as you indicate.
As Tawnos pointed out, this new CBA doesn't fix anything beyond the first two or three years. It makes the rich teams richer and that's about it. It stalls salaries a few years.

So the queation is, if the NHL says it's broken why aren't they changing the system? Stupidity? Stubborn? Or it's not as bad as they claim.

You can either afford $40m in salary or you can't. Reducing the player share doesn't put more cash in an owner's pocket. It just lowers the cap floor. Growth will drown teams as it is, wait until two teams move to Canada.

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10-24-2012, 02:20 PM
  #591
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Its not like teams are selling out and still lose. The teams suck and play to empty houses. Or they are good and play in empty houses. You picked a bad market, stop blaming the wrong people.

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10-24-2012, 02:23 PM
  #592
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As Tawnos pointed out, this new CBA doesn't fix anything beyond the first two or three years. It makes the rich teams richer and that's about it. It stalls salaries a few years.
Won't it make the poor teams less poor as well?

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10-24-2012, 02:24 PM
  #593
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So the fact that 13 teams aren't losing a lot of money, or might soon be making a little bit of money, is supposed to mean the owners can't want to reduce costs elsewhere?

As was pointed out before, in the NFL, the vast majority of the teams are ludicrously profitable for the owners and there have been no serious work stoppages. Even though the top 3 teams dominate the industry, the bottom 29 teams still contribute 65% of the revenue.

In the NHL it's not anywhere close to that.

Sure it's a money grab. The owners want more money than they are getting now.

I still don't see the evidence that they are making unreasonable amounts in contrast to the players and considering their position as OWNERS.

In fact I think I just heard that 13 are losing money. So I'm still not following why reducing the cap is a bad thing.

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10-24-2012, 02:25 PM
  #594
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So apparently "actually having a NHL season this year" isn't a good enough reason for Bettman to have negotiations at this point

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10-24-2012, 02:35 PM
  #595
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Won't it make the poor teams less poor as well?
Temporarily, it might. Long term, no.

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10-24-2012, 02:37 PM
  #596
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At least 4 of the teams in the red aren't concerned that they are. I'm talking about the Sabres, the Stars, the Hurricanes, and the Predators. The Sabres because Pegula isn't in it for profit. The Stars because they're under new ownership and the new owner is in the process of trying to make them profitable again. The Hurricanes because Karamanos has shown little interest in whether or not the Hurricanes turn a profit year to year. He wants them too, but it isn't pressing. The Predators because they're on their way, even if they aren't there yet. I'd hazard a guess that 8 of the others are the Coyotes, the Jackets, the Islanders, the Lightning, the Panthers, the Ducks, the Jets, the Devils. The 9th could be anyone of the Avalanche, Sharks, Blues, or Wild. But guess what. The Jets and Devils losses have nothing to do with salaries. The Jets are startup costs and the Devils are arena debt. I'm not sure the Ducks or Lightning ownership care either. And the Coyotes, Jackets and Islanders have profitability issues that have nothing to do with the structure of the league.

What some people seem to think is that owning a pro sports team should be automatically profitable. I reject that notion. You still need to make good decisions, like the hiring of personnel or the structure of the lease you've entered into. Like marketing to your community, like the Predators have excelled at recently. It shouldn't be automatic.
Great post.

I dont think the problem with the teams is that there are too many, or it should be drastically contracted. I would say maybe two teams tops.

Im not sure how much of a 180 it would make but cutting Phoenix or moving them would drastically improve the financial situation for the league as a whole since they comprise by far the most amount of the losses.


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10-24-2012, 02:43 PM
  #597
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So the fact that 13 teams aren't losing a lot of money, or might soon be making a little bit of money, is supposed to mean the owners can't want to reduce costs elsewhere?.
Interesting wording here.

Anytime the NHL is in trouble financially the go-to move is a shameless money grab from the players' piece of the pie.

"Reduce costs elsewhere" is an awfully nice way to put a redundant practice without one iota of creativity.

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10-24-2012, 02:45 PM
  #598
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Great post.

I dont think the problem with the teams is that there are too many, or it should be drastically contracted. I would say maybe two teams tops.

Im not sure how much of a 180 it would make but cutting Phoenix or moving them would drastically improve the financial situation for the league as a whole.
I think moving the Coyotes to Seattle or QC would be positive, but I don't think that because of anything about the viability of the actual Phoenix market. I just think they made a huge mistake moving to Glendale.

Contracting even two teams wouldn't help the league at all and I don't think anyone in the league offices think that's a solution. Not while there are markets to relocate into. We're going to see expansion before we see contraction (provided that the league doesn't irreparably damage the sport through a prolonged work stoppage).

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10-24-2012, 02:49 PM
  #599
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I think moving the Coyotes to Seattle or QC would be positive, but I don't think that because of anything about the viability of the actual Phoenix market. I just think they made a huge mistake moving to Glendale.

Contracting even two teams wouldn't help the league at all and I don't think anyone in the league offices think that's a solution at all. Not while there are markets to relocate into. We're going to see expansion before we see contraction (provided that the league doesn't irreparably damage the sport through a prolonged work stoppage).
The NHLPA/NHL wouldnt do it but cutting the two biggest losers would help.

Glendale is only 10 miles from downtown Phoenix. Cities out there arent as centralized as here, so I dont think where the arena is matters. Phoenix area is all sprawl. It also has to be done right (arena community that is).

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10-24-2012, 02:56 PM
  #600
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Won't it make the poor teams less poor as well?
They won't generate more. They'll pay out less until the steady rate of growth drives the cap passed the current level. Revenue sharing, a player request, will help. The players asked this question since day one and tried to come up with a new system. They were denied.

The NFL. Tremendous revenue sharing. Healthy markets. Their is room for 30/32 teams. The NHL generates a third of the revenue the NFL makes.

MLB. A more accurate model. Huge spread on revenues. Luxury tax. Obvious issues with competitive balance. Some teams make more from sharing then they spend on roster players.

The NHL can trace every problem to 90s expansion. Bad markets and diluted talent. Not enough revenue and too much competition for elite and now average talent. Contraction is moot. They need to move failing franchises and stop expanding. That is half the battle. Contract reform levels the playing field in the summer. Phase the cap. Increased revenue sharing moves the needle for average franchises, but they need a hybrid system. Soft cap at the middle. Luxury tax for $10ish mil over the middle, then a hard cap. Soft cap on the floor, but revenue sharing is contingent on hitting it.

I think the big teams are the sticking point on the cap issues. More revenue sharing with no gain. Luxury tax for exceeding the cap is at least getting something for your buck.

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