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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.

Mark Spector: Reflecting on bad decisions

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Old
11-19-2012, 03:52 PM
  #51
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Originally Posted by I am the Liquor View Post
They could fix this with a sizeable contraction. Cutting the league down to 22-24 teams...
The owners should make this proposal to the players: keep your salaries as they are but we are getting rid of of 20% of the staff that isn't worth keeping. I think the ****storm that would follow would be BETTER than January NHL games.

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11-19-2012, 03:55 PM
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Don't really understand why columnists from Canada are under the impression that Columbus is in the US sunbelt.

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11-19-2012, 03:55 PM
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Don't really understand why columnists from Canada are under the impression that Columbus is in the US sunbelt.
Relatively speaking?

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11-19-2012, 04:00 PM
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Don't really understand why columnists from Canada are under the impression that Columbus is in the US sunbelt.
Plus I don't know why people say its a bad hockey market. When you consider how poorly that franchise has been managed I think the amount of fan support they get is remarkable.


Last edited by Orrthebest: 11-19-2012 at 04:02 PM. Reason: failure to proof read
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11-19-2012, 04:07 PM
  #55
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Originally Posted by I am the Liquor View Post
When you are making a profit off of the tv contract alone, before selling even a single ticket, then it is much easier to give up a percentage of the gate.

The crux of the problem as has been pointed out already is that the NHL pushed into questionable markets in order to secure the coveted "national" tv contract in America. In effect they made a series of poor business decisions in order to try and get the tv deal that had eluded them.

Now they are in a position where they either have to support those questionable markets or lose the paltry tv contract they have. So far they have tried to avoid meaningful revenue sharing while trying to get the players to carry the burden of the poor business decisions of the BOG.

The owners have created this mess and are responsible for their own labour woes. The players are just trying to get what they can, which is what anyone would likely do.

They could fix this with a sizeable contraction. Cutting the league down to 22-24 teams, possibly moving back into a couple of Canadian markets and living with regional tv deals in the States. They likely have gone too far down the rabbit trail to attempt such a bold move, so we will have to live with a broken model and labour strife, lockouts and strikes every five or six years.
While I do not necessarily doubt the NHL over expanded. I am not convinced the only feasible solution is to contract. Hockey still retains a viable potential interest if they opted for better locations. Seattle is among the cities I feel could support a team for the long value. One has to wonder with lower costs, should they be obtained, if former experiments like Hartford or Kansas City couldn't work.

Bear in mind actual product is a contributor to underwhelming revenue. Columbus could very easily command a decent interest were their management not so horribly inept. San Jose, while not a top tier by any means, has at least broken even for the most part. LA seems to do be doing okay after their resurge to relevance.

At any right, I do not see contraction as the immediate fixer over the long haul.

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11-19-2012, 04:11 PM
  #56
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Originally Posted by Riptide View Post
Did you not read the post I quoted just above? Or run the math on a 3 team league? Here I'll even make it easy for you.

Going to an unlinked cap/HRR has it's own issues. What do you think would be happening today if the NHL had accepted Goodnows offer of a 49m cap (or whatever it was)? The NHL would have still locked the players out when the two sides could not come to an agreement. The players would have demanded the cap increase by 50% to match the increase in HRR. The league would have laughed at them, and we'd be in the same position we're in today. Actually this would have happened last year, as there's no chance the PA would have extended the deal by 1 year.

And if you think the PA would ever agree to a fixed cap of anything less than 80m you're dreaming (I'm not even sure that's high enough that the PA would accept it). 80m might work long long term... but it's still going to cause tons of issues short term.
Obviously I read the post, as I responded to it. No need to suggest otherwise.

I think I demonstrated a competent grasp of your point. It really isnt that difficult to comprehend.

Neither is the point that cutting out non-viable markets would make the need for low-balling players and locking them out passe. Linking the cap to revenues is a fools game as it only addresses one half of the balance sheet. If the owners and the players are to be true partners, then a profit sharing model would be more equitable, considering each side would share the benefits of revenue and the risks of expenses.

If the players take too much, then they have to pay back. If the players dont get enough, the owners then have to contribute to make up the difference. It would be in both sides best interest to grow the game, avoid damaging lockouts/strikes, and pruning the branches/teams that arent producing fruit/revenue.

Bettman has had three or four kicks at the can and he is no closer to ending labour strife than he was when he first took the job. That should result in his immediate dismissal as it was one of the main tenants of his mandate when he was initially hired.

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11-19-2012, 04:18 PM
  #57
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Plus I don't know why people say its a bad hockey market. When you consider how poorly that franchise has been managed I think the amount of fan support they get is remarkable.
So very true. I assume we'd have burned down our arena given the same set of circumstances.

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11-19-2012, 04:21 PM
  #58
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Originally Posted by Bourne Endeavor View Post
While I do not necessarily doubt the NHL over expanded. I am not convinced the only feasible solution is to contract. Hockey still retains a viable potential interest if they opted for better locations. Seattle is among the cities I feel could support a team for the long value. One has to wonder with lower costs, should they be obtained, if former experiments like Hartford or Kansas City couldn't work.

Bear in mind actual product is a contributor to underwhelming revenue. Columbus could very easily command a decent interest were their management not so horribly inept. San Jose, while not a top tier by any means, has at least broken even for the most part. LA seems to do be doing okay after their resurge to relevance.

At any right, I do not see contraction as the immediate fixer over the long haul.
Successful businesses have to be able to cut their losses and move on from failed ventures. At least a few of the expansion markets fall under that umbrella. The debacle in Phoenix being the most obvious.

Problem is the owners often hold citizens hostage in order for municipal and state/provincial govts to fund their capital projects. These govt's then usually request some kind of long term lease agreement/non-relocation agreement, which then ties the team's can to that market. This seems to be what is happening in Phoenix/Glendale.

The business model is a poor one. Broken even. All so they can pay the employees/players much more than they could/should be able to afford. Then when they try to correct the market by trying to rollback the player's salaries that the owners have agreed to, and in most cases, fallen over themselves to provide, there is understandable animosity from the players and you get a labour stoppage/strike/lockout which is what we get every time a cba comes due in the last couple of decades.

How successful businessmen can be so incompetent is hard to figure. But something drastic needs to be done to fix this, and now is as good a time as any. It will only get worse as time goes on.

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11-19-2012, 04:24 PM
  #59
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Originally Posted by Orrthebest View Post
Plus I don't know why people say its a bad hockey market. When you consider how poorly that franchise has been managed I think the amount of fan support they get is remarkable.
Nobody has lost more in the last few years than Edmonton. Not only has the on ice product been putrid, but now you have the owner threatening to move the team to Seattle of all places.

Compare and contrast the fan support of Edmonton to Columbus. Which is the better hockey market?

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11-19-2012, 04:29 PM
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Originally Posted by I am the Liquor View Post
Nobody has lost more in the last few years than Edmonton. Not only has the on ice product been putrid, but now you have the owner threatening to move the team to Seattle of all places.

Compare and contrast the fan support of Edmonton to Columbus. Which is the better hockey market?
Edmonton obviously. But that doesn't make Columbus bad.

Edmonton is top5 hockey market or top10 at least. We need to have more teams than that. Or that's the way NHL thinks.

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11-19-2012, 04:33 PM
  #61
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Originally Posted by I am the Liquor View Post
Obviously I read the post, as I responded to it. No need to suggest otherwise.

I think I demonstrated a competent grasp of your point. It really isnt that difficult to comprehend.

Neither is the point that cutting out non-viable markets would make the need for low-balling players and locking them out passe. Linking the cap to revenues is a fools game as it only addresses one half of the balance sheet. If the owners and the players are to be true partners, then a profit sharing model would be more equitable, considering each side would share the benefits of revenue and the risks of expenses.
Clearly you didn't, or you still wouldn't be parroting this. All cutting/relocating non-viable markets does is create new non-viable markets (under the current system).

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It would be in both sides best interest to grow the game, avoid damaging lockouts/strikes, and pruning the branches/teams that arent producing fruit/revenue.
It's in both sides best interest today to grow the game. Players average salary went up by over 1m in 7 years. As long as the cap is tied to revenues, then it's in the players best interests that revenues continue to increase. However they do not seem to care much at all about the overall health of the game, as none of their proposals do anything other than ensure they're paid as much as possible.

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Bettman has had three or four kicks at the can and he is no closer to ending labour strife than he was when he first took the job. That should result in his immediate dismissal as it was one of the main tenants of his mandate when he was initially hired.
It takes two sides to come to an agreement. So to blame this all on Bettman is just plain wrong. As long as the NHLPA continues to have almost zero interest in negotiating, then the lockout will continue. And while you're comparing Bettman's track record with work stoppages... how many did Fehr go through in the MLB?

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11-19-2012, 04:46 PM
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Clearly you didn't, or you still wouldn't be parroting this. All cutting/relocating non-viable markets does is create new non-viable markets (under the current system).
Ive addressed that in my posts.

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It's in both sides best interest today to grow the game. Players average salary went up by over 1m in 7 years. As long as the cap is tied to revenues, then it's in the players best interests that revenues continue to increase. However they do not seem to care much at all about the overall health of the game, as none of their proposals do anything other than ensure they're paid as much as possible.
Its not up to the players to tell the owners how to run their businesses. All they should be responsible for is saying what is or is not acceptable to them. Period.

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It takes two sides to come to an agreement. So to blame this all on Bettman is just plain wrong. As long as the NHLPA continues to have almost zero interest in negotiating, then the lockout will continue. And while you're comparing Bettman's track record with work stoppages... how many did Fehr go through in the MLB?
How many labour stoppages has MLB gone through when compared to the NHL in the last 20yrs? Poor example for your purposes.

The nhlpa has no interest in negotiating? Well maybe if the choices werent lose this much or lose that much of your pay, they may be a little more interested. Go figure.

How many of the current crop of players were active when Bettman got his mandate from the BOG in the early 90's? Im guessing none, but there may be a handful, but ya, lets blame the players for a system forced on them by Bettman. Makes sense to me.

If you are looking to spread the blame around, then I would say the owners would be a good start. They are currently in a BINGO of their own making. They could have went a dozen different ways over the last twenty years or so, but they chose to go into questionable markets and they chose to bid against one another in an effort to secure top talent, regardless of the implications down the road. They chose to implement a failed system and have refused/failed to come up with viable alternatives.

In your world the players are responsible because they are accepting the money that has been offered to them. Funny that.


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11-19-2012, 04:49 PM
  #63
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Edmonton obviously. But that doesn't make Columbus bad.

Edmonton is top5 hockey market or top10 at least. We need to have more teams than that. Or that's the way NHL thinks.
Im not saying it is a bad market. I couldnt really say if it was or wasnt tbh. I would question whether or not it was a good market. As you and/or others have pointed out, its hard to say when they havent had a successful team.

I think Nashville has been a pretty good success story. But they have had pretty good management. I guess that could be the difference.

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11-19-2012, 05:25 PM
  #64
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Originally Posted by I am the Liquor View Post
Ive addressed that in my posts. Are you being obtuse on purpose?



Its not up to the players to tell the owners how to run their businesses. All they should be responsible for is saying what is or is not acceptable to them. Period
Not intentionally... You replied to two of my posts, both of which indicate that cutting non-viable teams is a solution. If I somehow missed something, please point out what.

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It would be the first step to labour harmony. If you take out the weak markets, ie those that cannot make a financial go of it, then the league will conceivably be able to pay their players and wouldnt have to continually have to lock them out
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Originally Posted by I am the Liquor View Post
It really isnt that difficult to comprehend.

Neither is the point that cutting out non-viable markets
would make the need for low-balling players and locking them out passe.
Quote:
How many labour stoppages has MLB gone through when compared to the NHL in the last 20yrs? Poor example for your purposes.


How many of the current crop of players were active when Bettman got his mandate from the BOG in the early 90's? Im guessing none, but there may be a handful, but ya, lets blame the players for a system forced on them by Bettman. Makes sense to me.
So we'll only count the last 20 years that Bettman's been the comish, and ignore the fact that Fehr was involved in 6 work stoppages in MLB? Sure.

It takes two parties to come to an agreement, and neither side is blameless. However at least the NHL has showing some willingness to negotiate, where as the players have continued to simply say no, we don't like this. Come back with something better.

As for players involved in all 4 stoppages... Jagr comes to mind. As does Pronger, Whittney, Gonchar, Alfredsson, Doan? There's a few, but not many.

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In your world the players are responsible because they are accepting the money that has been offered to them. Funny that.
I've never once said that. Do not put words in my mouth.


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11-19-2012, 05:26 PM
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Don't really understand why columnists from Canada are under the impression that Columbus is in the US sunbelt.
As someone from Columbus who tested his snowthrower over the weekend, I used to get aggravated by the comments about sunbelt teams like Columbus- or even better yet the occasional COLOMBUS by some learned "journalists." Eventually, I realized there was no point in paying attention to those who choose to be uninformed.

Minor point, Columbus is closer to Toronto than it is to Nashville.

The closest NHL cities to Columbus in order: Pittsburgh, Detroit, Buffalo, Chicago, Toronto.

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11-19-2012, 05:38 PM
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All we need to do in order to get spending under control is to contract Toronto, Montreal, Philly, Boston and NYR.

Then they could expand into Charlotte, Houston, New Orleans, Kansas City and San Antonio.
You aren't far off.

If the League contracted Toronto, Montreal and New York, the other 27 teams would be much better off when the cap is a % of leaguewide HRR.

What this shows is that the real problem is a cap with, you guessed it, linkage!

The Islanders and the Leafs need to spend the same % of their revenues to be on an equal financial footing. This is Business 101 class.

Ratio books are a bible for showing what % of revenues each expense should be in an industry. They never say they should be some average of industry revenues. They are a percentage of individual company revenues. There is an entire industry based on ratio books.

They call them management consultants.


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11-19-2012, 07:45 PM
  #67
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Compare and contrast the fan support of Edmonton to Columbus. Which is the better hockey market?
Is there a contest?

CBJ fans have NEVER had anything to cheer for in their entire existence. They even blew the draft lottery. 11 seasons, zero playoff wins and only 4 playoff games. For the 1st 8 years, CBJ and Edmonton had pretty similar numbers, with CBJ being ahead a few of those years.

Give the BJ's a cinderella playoff run and maybe things are a bit different. As it stands, over 11 years they have averaged 500 less fans a night than the Oil. In fact, they seem slightly masochistic to me to still be showing up in the numbers they do.

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11-19-2012, 07:53 PM
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Not intentionally... You replied to two of my posts, both of which indicate that cutting non-viable teams is a solution. If I somehow missed something, please point out what.
Context, content, manners.

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So we'll only count the last 20 years that Bettman's been the comish, and ignore the fact that Fehr was involved in 6 work stoppages in MLB? Sure.
Not sure why that matters tbh, but you may want to count again, and you may want to use your fingers this time.

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It takes two parties to come to an agreement, and neither side is blameless. However at least the NHL has showing some willingness to negotiate, where as the players have continued to simply say no, we don't like this. Come back with something better.
Weve been over this before, and Im not much for repeating myself, but when the options are we take and you give or you give and we take, its awful hard to get excited about negotiating.

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As for players involved in all 4 stoppages... Jagr comes to mind. As does Pronger, Whittney, Gonchar, Alfredsson, Doan? There's a few, but not many.
Like I said, a handful, not really sure it matters much when you are talking about 700 players.

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I've never once said that. Do not put words in my mouth.
This is pretty rich coming from you, but really you seem to be pro nhl, so how am I putting words in your mouth? That's the jist of the situation. The players are responsible for accepting the outrageous contracts the owners are offering them, or conversely, for rejecting the contracts they think dont give them what they feel they are worth and could probably get elsewhere.

They arent responsible for how the nhl runs their business, other than approving or rejecting whatever cba model the owners propose. That's about the extent of their say in the matter. To suggest otherwise is pure folly.

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11-19-2012, 08:05 PM
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Is there a contest?

CBJ fans have NEVER had anything to cheer for in their entire existence. They even blew the draft lottery. 11 seasons, zero playoff wins and only 4 playoff games. For the 1st 8 years, CBJ and Edmonton had pretty similar numbers, with CBJ being ahead a few of those years.

Give the BJ's a cinderella playoff run and maybe things are a bit different. As it stands, over 11 years they have averaged 500 less fans a night than the Oil. In fact, they seem slightly masochistic to me to still be showing up in the numbers they do.
Link?

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11-19-2012, 08:16 PM
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Link?

http://en.wikipedia.org/wiki/List_of...ndance_figures

That's only the last two years, but going off that I'd say EDM would need a lot few people going to games with CBJ having a lot more to even it out to ~500 over 11 years.

I'm also interested in seeing a link.

Edit: screw it, I'll go through the last 11 years.

First team listed is CBJ, second team is EDM

2000-1: 17,457 15,611
2001-2: 18,136 16,592
2002-3: 17,744 16,657
2003-4: 17,369 17,677 (EDM overtakes)
2004-5:
2005-6: 16,796 16,832
2006-7: 16,401 16,839
2007-8: 14,823 16,839
2008-9: 15,543 16,839
2009-10: 15,416 16,839
2010-11: 13,658 16,839
2011-12: 14,660 16,839
2012-13:

I don't think I switched any of those numbers but it's worth double checking my double check.

Averages: (Wow, why did that take me about 15 tries!?)

CBJ: 16,182
Edm: 16,763

Capacity for Rexall is 16,839, putting Edmonton at 99.5% capacity for the last 11 years. Nationwide holds 18,144, putting CBJ at 89.2% of capacity for 11 years. So while CBJ is within about 500, that's likely only because Edmonton's arena is small.

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11-19-2012, 08:30 PM
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Originally Posted by Cheesesteak Invictus View Post
http://en.wikipedia.org/wiki/List_of...ndance_figures

That's only the last two years, but going off that I'd say EDM would need a lot few people going to games with CBJ having a lot more to even it out to ~500 over 11 years.

I'm also interested in seeing a link.
I think it showed the last three years, with Edmonton finishing 29th, 30th and 30th. Not really a fair comparison and Im not trying to sleight Cbus fans, who really do seem to be quite loyal considering all the suck they have had to endure, and the fact hockey isnt ingrained in their culture like it is in Canada.

I do think Columbus can make it, and hiring Davidson is a good start in the right direction.

However, as we have seen in Edmonton, poor management decisions can take years, even a decade to overcome.

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11-19-2012, 08:52 PM
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I think it showed the last three years, with Edmonton finishing 29th, 30th and 30th. Not really a fair comparison and Im not trying to sleight Cbus fans, who really do seem to be quite loyal considering all the suck they have had to endure, and the fact hockey isnt ingrained in their culture like it is in Canada.

I do think Columbus can make it, and hiring Davidson is a good start in the right direction.

However, as we have seen in Edmonton, poor management decisions can take years, even a decade to overcome.
Oh, absolutely. I'd say 90% attendance over the last decade is a damned good turnout considering the way Columbus has been managed.

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11-19-2012, 09:22 PM
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2B split into 32= 62,500,000 for each and every team.

Green Bay has a total salary for 2012 of $75,046,474.

Conversely the Green Bay of the nhl could be Edmonton.

200mill split into 30=6,666,666.

Edmonton has a total cap/salary for 2012 of $62,933,333.

You could argue there are regional and National tv deals in Canada for the Oilers, and that even if you were to estimate their take at around 20mill for that, which it may or may not be, you have a total tv take of ~25mill, which is far short of the 75mill for GB, even though the salaries of the respective clubs are within 10%approx of each other.

So while saying they dont need to sell a ticket to make a profit may be an exaggeration, it isnt that far off and the disparity between the two leagues in tv revenue, makes it a difficult comparison.

Add into that the Florida's and Phoenix' of the world who sell beers for a dollar and tickets for ten bucks and its hard to get on board with revenue sharing from an owner's perspective when you are talking about a Toronto or a NY Ranger perspective.
You are underestimating NFL TV revenues by a factor of 2.5-3x.

The NFL is currently pulling in ~$5B/yr - increasing to $6B in two years.

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Originally Posted by Perrah View Post
The NFL will be making 3 billion per year in TV contract revenue alone. The majority of the teams make money, and the total revenue for the 2010 season was 9 billion. That was with them only making 1.9 billion from the tv contract, and only the Detroit Lions lost money. Seems like logical reasoning for them to be paid more to me.
Actually, between FOX/CBS/NBC/ESPN/DirecTV the NFL will be pulling in ~$4.9B this year - increasing to ~$6B/yr in '14 when their new broadcast deals (FOX/CBS/NBC) kick in.

FOX: $725M/yr -> $1.1B/yr
CBS: $625M/yr -> $1.0B/yr
NBC: $612M/yr -> $950M/yr
ESPN: $1.9B/yr
DirecTV: $1B/yr

With Latest Network Agreements, the N.F.L. Outdoes Even Itself

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11-19-2012, 10:12 PM
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You are underestimating NFL TV revenues by a factor of 2.5-3x.

The NFL is currently pulling in ~$5B/yr - increasing to $6B in two years.
Thanks for that. For some reason I thought it was 2B/yr.

So it would seem they really can turn a profit without selling a single ticket.

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11-20-2012, 06:02 AM
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Plus I don't know why people say its a bad hockey market. When you consider how poorly that franchise has been managed I think the amount of fan support they get is remarkable.
The same claim could have been made for the Atlanta Thrashers, but few let that get in the way of the story they preferred to tell.

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