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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.

Contraction a necessary evil for survival of NHL says economist

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Old
11-30-2012, 12:59 PM
  #51
GuelphStormer
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I had dinner last week with a general in the katz pharmy and when I brought up the idea of contracting the yotes he said, "over daryl's dead body. if he's going to throw money down the drain he'll fly his kids to paris for lunch, he won't vote to contract the phoenix coyotes".

i'm thinking daryl's not the only one to voice an "over my dead body" opinion to bettman, especially given the promise made in BK. it will be relocated. so too will the other drains.

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11-30-2012, 01:03 PM
  #52
KINGS17
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Quote:
Originally Posted by Melrose Munch View Post
I know your half joking but this is what I am talking about. You hit the nail on the head. This is part of the reason why I support the players. The NHL is so two face. They talk about growing the game, yet look who is on NBC. The NHL is doing the same thing baseball does but because of the salary cap people like to pretend there is parity while turning a blind eye to the fact even the NHL know showing markets(outside LA) in the west is not a money maker. This is league is just like the MLB, except the salary cap gives people hope of false parity.
Please define "false parity", because I think the parity is real. The GMs are forced to compete on a level playing field, even more so after this CBA when a lot of the cap circumvention loopholes will be closed.

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11-30-2012, 01:03 PM
  #53
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Why does it have to become a national sport in the US? The NHL has been trying to do that for 20 years and it's been an complete failure.
Actually the NHL has been trying to land the big national TV deal since 1970 when they started showing games on NBC. 42 years and still trying. The vast majority of people don't care about hockey and never will.

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11-30-2012, 01:18 PM
  #54
Top 6 Spaling
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Big markets will be pro-contaction, small markets will be against it. Very easy to say you are for it when you are a fan of the Habs, Leafs, Bruins, etc. Imagine yourself in the shoes of a team on the chopping block. Not as much fun for us...


Last edited by Top 6 Spaling: 11-30-2012 at 01:23 PM.
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11-30-2012, 01:19 PM
  #55
Pilky01
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There is nothing "evil" about contraction. It would improve the league a huge amount.

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11-30-2012, 01:19 PM
  #56
KINGS17
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Originally Posted by XX View Post
Doug MacLean commenting on competitive teams hilarity aside, that is basically the premise of the salary cap. Coyotes don't even have an owner for ****s sake and went to the conference finals/won their division.
Another fact that is often ignored.

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11-30-2012, 01:21 PM
  #57
coldsteelonice84
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Originally Posted by KINGS17 View Post
Another fact that is often ignored.
It's a fact better left ignored if you are in favor of keeping the team in Phoenix.

They finished dead last in attendance.

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11-30-2012, 01:24 PM
  #58
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Quote:
Originally Posted by XX View Post
Doug MacLean commenting on competitive teams hilarity aside, that is basically the premise of the salary cap. Coyotes don't even have an owner for ****s sake and went to the conference finals/won their division.
It was a great run(unless you're a fan of creative hockey as opposed to watching a goalie block 60 shots a game)....

....so, that being said, where are the fans(paying market value prices, I mean)?

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11-30-2012, 01:31 PM
  #59
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With the KHL expanding and possibly less and less quality players available in that pool for NHL, contraction is THE solution.

let's drop the weak ducks, let's cut the bad branches.

The league will offer a better product overall and teams will be more successful financially.

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11-30-2012, 01:32 PM
  #60
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Quote:
Originally Posted by GordieHoweHatTrick View Post
Revenue sharing modeled after the NFL is not suitable for the NHL. Do the opposite instead, contraction. Get it done already. That big fat TV contract is never gonna happen for the NHL so further expansion into the states is a fool's errand
If this season is lost, the next time the big, fat TV contract can start is in 11 years from now. That's two CBAs down the line.

And probably with half of all current owners gone.

Bottom line? If it were such a great investment, current franchise values would reflect the potential.


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Originally Posted by kaneone View Post
How would contraction even work? Would the NHL have to buy the team from the owner of the contracting team?
Quote:
Originally Posted by coldsteelonice84 View Post
Yes, each owner would have to pay a part of it, but they have technically already done that with Phoenix so it would just be that they wouldn't get anything back.
No one knows how it would work. If an owner can't make money and throws the keys to the NHL, or he can't move the team himself, the option to close it exists. I believe the NHL could simply revoke the franchise rights to that market.

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11-30-2012, 01:34 PM
  #61
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Quote:
Originally Posted by Habtchum View Post
With the KHL expanding and possibly less and less quality players available in that pool for NHL, contraction is THE solution.

let's drop the weak ducks, let's cut the bad branches.

The league will offer a better product overall and teams will be more successful financially.
Ok, your favorite team is the first one cut.

I'm not saying contraction is an all bad idea, but it isn't that simple. I think relocation is a much better strategy, but even then, you're taking hockey away from the passionate fans in an area. There may be a smaller number of die-hards in, say Phoenix than in Montreal, but the ones who are committed deserve a team just as much. They different in quantity, not passion.

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11-30-2012, 01:35 PM
  #62
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Originally Posted by Top 6 Spaling View Post
Ok, your favorite team is the first one cut.

I'm not saying contraction is an all bad idea, but it isn't that simple. I think relocation is a much better strategy, but even then, you're taking hockey away from the passionate fans in an area. There may be a smaller number of die-hards in, say Phoenix than in Montreal, but the ones who are committed deserve a team just as much. They different in quantity, not passion.
Passion doesn't pay the bills.

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11-30-2012, 01:36 PM
  #63
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Quote:
Originally Posted by Top 6 Spaling View Post
Ok, your favorite team is the first one cut.

I'm not saying contraction is an all bad idea, but it isn't that simple. I think relocation is a much better strategy, but even then, you're taking hockey away from the passionate fans in an area. There may be a smaller number of die-hards in, say Phoenix than in Montreal, but the ones who are committed deserve a team just as much. They different in quantity, not passion.
We don't have a team anymore in Montreal. Dies it mean I don't like baseball anymore ? I can still root for the Red Sox or the Dodgers.

Same with football. Montreal doesn't have a NFL team. Does it mean I can't support a team elsewhere ?

Thre is no NHL: team in the maritime Provinces. Does it mean fans over thre never go to Montreal , Ottawa or Toronto to see a game.... ?

You know, television exists too.


There is more hardcore hockey fans in Drummondvulle or Peterborough than in the whole Phoenix area. Does it mean they deserve a NHL team ?
And what about a huge market like L.A. who got no NFL team ?

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11-30-2012, 01:39 PM
  #64
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Originally Posted by preissingg View Post
Passion doesn't pay the bills.
The only chance the NHL has of ever landing a big TV deal and becoming competitive with the NBA/MLB/etc. is by becoming a national sport. Right now, southern teams are losing money. I can't deny that. But it's an investment in the NHL's future. The league is paying now to spread the game so it is more widely profitable in the future.

Think of it like starting a business. The first year or two, while the word gets out, you don't expect to make money, but you are willing to take the loss because you believe eventually the business will turn a profit. That's where we are right now. We are playing the price to grow the game into something that will "work" more widely. It's growing in Nashville, that's for sure.

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11-30-2012, 01:39 PM
  #65
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Quote:
Originally Posted by Top 6 Spaling View Post
Ok, your favorite team is the first one cut.

I'm not saying contraction is an all bad idea, but it isn't that simple. I think relocation is a much better strategy, but even then, you're taking hockey away from the passionate fans in an area. There may be a smaller number of die-hards in, say Phoenix than in Montreal, but the ones who are committed deserve a team just as much. They different in quantity, not passion.

Of course relocation is preferred, but only to markets where the franchise fee isn't massive. Why would the current BOG want to share a lucrative expansion fee with the guy cashing out? The fee may be higher than anything needed to have him fold (putting aside any PR issues which may be moot with the big dollars involved).

It's going to be a 'net' consideration by the NHL, which controls who can go where and when.

That said, let's say there are six teams that are dying on their respective vines. Are there six new locations that would be better?

I can think of two that are good bets: Seattle, Toronto. QC 'may' be an option, but I don't think the NHL really wants another team in a small Cdn market.

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11-30-2012, 01:41 PM
  #66
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Originally Posted by Fugu View Post
Of course relocation is preferred, but only to markets where the franchise fee isn't massive. Why would the current BOG want to share a lucrative expansion fee with the guy cashing out? The fee may be higher than anything needed to have him fold (putting aside any PR issues which may be moot with the big dollars involved).

It's going to be a 'net' consideration by the NHL, which controls who can go where and when.

That said, let's say there are six teams that are dying on their respective vines. Are there six new locations that would be better?

I can think of two that are good bets: Seattle, Toronto. QC 'may' be an option, but I don't think the NHL really wants another team in a small Cdn market.

Yeah... NHL prefers Nashville and Phoenix instead... Makes sense ?

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11-30-2012, 01:43 PM
  #67
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Quote:
Originally Posted by Habtchum View Post
We don't have a team anymore in Montreal. Dies it mean I don't like baseball anymore ? I can still root for the Red Sox or the Dodgers.

Same with football. Montreal doesn't have a NFL team. Does it mean I can't support a team elsewhere ?

Thre is no NHL: team in the maritime Provinces. Does it mean fans over thre never go to Montreal , Ottawa or Toronto to see a game.... ?

You know, television exists too.


There is more hardcore hockey fans in Drummondvulle or Peterborough than in the whole Phoenix area. Does it mean they deserve a NHL team ?
And what about a huge market like L.A. who got no NFL team ?
Of course I (and others) would still follow the NHL, but with no teams in the south, it would be nearly impossible to land a big TV deal. ESPN wouldn't want to cover a sport that essentially half the US doesn't have a stake in. See my last post for my point about losing money at the start to gain more later.

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11-30-2012, 01:44 PM
  #68
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Originally Posted by Top 6 Spaling View Post
The only chance the NHL has of ever landing a big TV deal and becoming competitive with the NBA/MLB/etc. is by becoming a national sport. Right now, southern teams are losing money. I can't deny that. But it's an investment in the NHL's future. The league is paying now to spread the game so it is more widely profitable in the future.

Think of it like starting a business. The first year or two, while the word gets out, you don't expect to make money, but you are willing to take the loss because you believe eventually the business will turn a profit. That's where we are right now. We are playing the price to grow the game into something that will "work" more widely. It's growing in Nashville, that's for sure.
By "We", I assume you mean teams whose fanbases actually support them with dollars as opposed to passion...

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11-30-2012, 01:48 PM
  #69
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Lets say they contracted the bottom 2 revenue teams. Wouldnt that just raise the average HHR and make the 3rd and 4th lowest revenue teams have to come up with more money to get to the floor?

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11-30-2012, 01:50 PM
  #70
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Originally Posted by preissingg View Post
By "We", I assume you mean teams whose fanbases actually support them with dollars as opposed to passion...
I mean paying NHL fans as a whole, yes. Including those in southern and northern markets.

OT: Even if teams are contracted, Nashville probably isn't near the top of the chopping block. 97.5% of seats last year were sold. Averaged 16,690

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11-30-2012, 01:51 PM
  #71
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Originally Posted by Top 6 Spaling View Post
Of course I (and others) would still follow the NHL, but with no teams in the south, it would be nearly impossible to land a big TV deal. ESPN wouldn't want to cover a sport that essentially half the US doesn't have a stake in. See my last post for my point about losing money at the start to gain more later.
Where is the TV contract ? Show me the money ? I see nothing at the horizon.

As long as you have New-York, Chicago, LA markets, that is already a good start. Don't tell me people cannot live without hockey in Florida, Phoenix and Nashville .

Thre is no NFL teams in Canada. People are watching and loving the game anyway.

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11-30-2012, 01:51 PM
  #72
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This viewpoint usually stems from people who don't understand the real financial situation the NHL is in. Contraction isn't neccesary, but it is an evil. Expansion will happen.

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11-30-2012, 01:53 PM
  #73
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Originally Posted by txomisc View Post
Lets say they contracted the bottom 2 revenue teams. Wouldnt that just raise the average HHR and make the 3rd and 4th lowest revenue teams have to come up with more money to get to the floor?
If they contracted and then lowered the floor significantly then no.

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11-30-2012, 01:54 PM
  #74
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This viewpoint usually stems from people who don't understand the real financial situation the NHL is in. Contraction isn't neccesary, but it is an evil. Expansion will happen.
Yeah. Let's have a more diluted sport. No wonder they call that equity. It's hard to find 2 or 3 top talented players in each team anymore. Some teams don't have any.

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11-30-2012, 01:55 PM
  #75
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Originally Posted by Fugu View Post
Of course relocation is preferred, but only to markets where the franchise fee isn't massive. Why would the current BOG want to share a lucrative expansion fee with the guy cashing out? The fee may be higher than anything needed to have him fold (putting aside any PR issues which may be moot with the big dollars involved).

It's going to be a 'net' consideration by the NHL, which controls who can go where and when.

That said, let's say there are six teams that are dying on their respective vines. Are there six new locations that would be better?

I can think of two that are good bets: Seattle, Toronto. QC 'may' be an option, but I don't think the NHL really wants another team in a small Cdn market.
Quote:
Originally Posted by Habtchum View Post
Yeah... NHL prefers Nashville and Phoenix instead... Makes sense ?
They do. While I argue against this, Winnipeg is a lateral move interns of fan interest for example. Also, having the Canadian teams provide so much revenue is is crippling the NHL in the US as well.

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