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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.

Lockout II - Moderated: Talk about your plenty, Talk about your ills...

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Old
12-05-2012, 06:53 PM
  #751
Riptide
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Originally Posted by damacles1156 View Post
Don't players have built in bonuses ? I know ELC do.
Bonuses are only in ELCs and in some very specific cases (on a 1 yr deal where the player missed a ton of injury time the year before, or for the +35 contract - although I'm not as familiar with those details). A normal SPC (not ELC, multi year deal and not a +35 contract), does not allow for bonuses other than league bonuses for major awards (I'm not sure how those are setup either, but I know there are some, and it's not negotiated into the standard contract on an individual basis).

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12-05-2012, 06:53 PM
  #752
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Originally Posted by Ernie View Post
Well, we don't know what the overall numbers are, and don't even know how to assign them them to league profits etc.

But it seems entirely unreasonable for a sector to have profits of that size.

My solution for ending this has been the same from the beginning:
1. Overall profits at around 10%,
2. Revenue sharing and greater salary cap flexibility to give everyone a chance to make money.
3. Remove the loopholes that teams have used to have a payroll below the cap and above it.

As for anyone who says I'm pro-owner, I've actually agreed with a 5 or 7 year contract term limit. If you can't buy insurance for it, it shouldn't be allowed. And you shouldn't lose a player because another manager is acting irresponsibly. Especially when, if the contract ends up going bad, the team that lost the player will likely end up paying revenue sharing to the team that acted stupidly.
You have to get to 10% profits first. Some teams are not even there.
So how do you do that without controlling your number one cost (player salary). ?


Revenue sharing is not the be all end all. The money has to come from somewhere. It's not coming from the T.V. deal.

Toronto and MTL are not going to subsidize the league. They are not the Yankee's or the Redsox.

So where is that money going to come from ?

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12-05-2012, 06:53 PM
  #753
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Originally Posted by damacles1156 View Post
Don't players have built in bonuses ? I know ELC do.
Bonuses:

Performance bonuses can be earned by the following players only:
- players on entry-level contracts.
- veteran players (400 or more games) signing one-year contracts after returning from long-term injuries (100 or more days on injured reserve in their recent year).
- players who sign a one-year contract after the age of 35.
A team can exceed the cap by 7.5% to pay bonuses, but its salary cap for the following season will be reduced by the excessive amount.

Last part didn't get used since it was the last year of the CBA

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12-05-2012, 06:54 PM
  #754
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And even the bonuses that are available are tightly limited.

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12-05-2012, 06:55 PM
  #755
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Originally Posted by Ernie View Post
Should players who outperform their contract receive higher compensation?

What we have here is a false equivalency.
What we have is a silly initial statement that I responded to.

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12-05-2012, 06:55 PM
  #756
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Originally Posted by Krishna View Post
Bonuses:

Performance bonuses can be earned by the following players only:
- players on entry-level contracts.
- veteran players (400 or more games) signing one-year contracts after returning from long-term injuries (100 or more days on injured reserve in their recent year).
- players who sign a one-year contract after the age of 35.
A team can exceed the cap by 7.5% to pay bonuses, but its salary cap for the following season will be reduced by the excessive amount.

Last part didn't get used since it was the last year of the CBA
Thanks that's interesting.

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12-05-2012, 06:58 PM
  #757
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Originally Posted by damacles1156 View Post
You have to get to 10% profits first. Some teams are not even there.
So how do you do that without controlling your number one cost (player salary). ?


Revenue sharing is not the be all end all. The money has to come from somewhere. It's not coming from the T.V. deal.

Toronto and MTL are not going to subsidize the league. They are not the Yankee's or the Redsox.

So where is that money going to come from ?
OVERALL profits. Should the worst performing franchise in the league see 10% profits? NOPE. That's just corporate socialism, my friend. And socialism is bad, mkay?

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12-05-2012, 07:00 PM
  #758
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Originally Posted by Ernie View Post
OVERALL profits. Should the worst performing franchise in the league see 10% profits? NOPE. That's just corporate socialism, my friend. And socialism is bad, mkay?
ok I get what your saying. But I doubt the owners would invest in that idea.

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12-05-2012, 07:02 PM
  #759
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Originally Posted by Cawz View Post
What we have is a silly initial statement that I responded to.
It's silly that a business that's poorly run should not make money?

I guess capitalism is silly. Communism is out too, clearly, since sharing revenue is a non-starter. Corporate welfare? Yes, yes, yes!

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12-05-2012, 07:05 PM
  #760
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Originally Posted by damacles1156 View Post
That is not even possible. You would have ZERO owners invest in that idea. That wouldn't even be in the realm of possible.
I think you're getting hung up on the term "overall." It doesn't mean that every team sees exactly 10% profits. It means that on $3.3bn of revenue, there are $330m in profits to be spread amongst the teams. That, generally speaking, indicates a healthy industry worthy of investment.

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12-05-2012, 07:05 PM
  #761
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Originally Posted by Ernie View Post
It's silly that a business that's poorly run should not make money?

I guess capitalism is silly. Communism is out too, clearly, since sharing revenue is a non-starter. Corporate welfare? Yes, yes, yes!
Its about as silly as stating that underperforming players should not make money. Whats the difference?

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12-05-2012, 07:05 PM
  #762
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Quote:
Originally Posted by damacles1156 View Post
You have to get to 10% profits first. Some teams are not even there.
So how do you do that without controlling your number one cost (player salary). ?


Revenue sharing is not the be all end all. The money has to come from somewhere. It's not coming from the T.V. deal.

Toronto and MTL are not going to subsidize the league. They are not the Yankee's or the Redsox.

So where is that money going to come from ?
bottom line.........owners share till now was 43% if the owners share jumps to 48% or 50% is a significant jump in profit.........

even with s drop off due to this lockout.


shave off a percantage or even .5% and thats money that wasnt there before shuffled to the bottom 10 teams ?

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12-05-2012, 07:08 PM
  #763
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Originally Posted by crazyforhockey View Post
bottom line.........owners share till now was 43% if the owners share jumps to 48% or 50% is a significant jump in profit.........

even with s drop off due to this lockout.


shave off a percantage or even .5% and thats money that wasnt there before shuffled to the bottom 10 teams ?
50/50 is a great deal for the owners. If they get a CBA that is 10 years, even better.

Cause the league will continue to grow.

Not disputing that they will make money.

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12-05-2012, 07:10 PM
  #764
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also keep in mind that a number of those "poor teams" if ever sold would bring significant profit over intial investment..ie buyin


and yes you do have to actually find a buyer..which could be a problem

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12-05-2012, 07:11 PM
  #765
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Originally Posted by Cawz View Post
Its about as silly as stating that underperforming players should not make money. Whats the difference?
Under our economic system, businesses that are run well succeed. Businesses that aren't fail.

But contracts are an agreement between two (or more) parties. They also underpin our economic system. Players do not make money unless they've reached a level of performance that secures them an NHL contract. Basically, a player agrees to provide his services (which is playing hockey) and the team agrees to pay him for it.

The problem is that, in your simple view of things, you think these two things are equivalent. They aren't. The reason they work as they do is because that's EXACTLY how they're supposed to work.

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12-05-2012, 07:12 PM
  #766
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Originally Posted by damacles1156 View Post
50/50 is a great deal for the owners. If they get a CBA that is 10 years, even better.

Cause the league will continue to grow.

Not disputing that they will make money.
they could even take another one of those 1%-2% and put it to make whole for a period of three years

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12-05-2012, 07:14 PM
  #767
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Originally Posted by Ernie View Post
OVERALL profits. Should the worst performing franchise in the league see 10% profits? NOPE. That's just corporate socialism, my friend. And socialism is bad, mkay?
So the players should sacrifice potential earnings so that the owners can place teams in marginal markets and hope for the best? Not fair unless players get a share of expansion and relocation fees.

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12-05-2012, 07:20 PM
  #768
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Quote:
Originally Posted by Ernie View Post
Under our economic system, businesses that are run well succeed. Businesses that aren't fail.

But contracts are an agreement between two (or more) parties. They also underpin our economic system. Players do not make money unless they've reached a level of performance that secures them an NHL contract. Basically, a player agrees to provide his services (which is playing hockey) and the team agrees to pay him for it.

The problem is that, in your simple view of things, you think these two things are equivalent. They aren't. The reason they work as they do is because that's EXACTLY how they're supposed to work.
Under our economic system, if you dont sufficiently perform the duties of your contract, you are let go.

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12-05-2012, 07:22 PM
  #769
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Originally Posted by PenguinPower420 View Post
So the players should sacrifice potential earnings so that the owners can place teams in marginal markets and hope for the best? Not fair unless players get a share of expansion and relocation fees.
Are we talking expansion? That provides more money for the players as it's a greater pool of revenue to split between them.

Relocation? I don't think a team is going to move from a high revenue market to a low revenue market, so this also works in the players' favour.

As for the related fees, the players are welcome to try to negotiate for that. Seems unlikely they'd get anywhere though.

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12-05-2012, 07:23 PM
  #770
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Originally Posted by PenguinPower420 View Post
So the players should sacrifice potential earnings so that the owners can place teams in marginal markets and hope for the best? Not fair unless players get a share of expansion and relocation fees.
No on expansion fees, but they will benefit in number of jobs and potentially pay in the future. And some future league earnings may go to support pensions for current players (ideally, not necessarily realistically).

IMO, expansion fee shouldn't even go directly to the owners. They should be held in escrow for up to 20 years to support the team gaining entry should the need arise. Prevents owners feasting on the bones of businessmen duped into purchase.

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12-05-2012, 07:23 PM
  #771
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Originally Posted by mossey3535 View Post
But that's predicated on the assumption that the players should have continued to make 57% - or even had a realistic chance of maintaining that %. I don't think that is a reasonable assumption.

Secondly, the players didn't even make 57% for the duration of the last CBA. This makes it even more unreasonable for them to feel entitled to that percentage.
How about doing the same thing they did in the last CBA.... a range, like 54-57%, so 50-54%.




Quote:
Originally Posted by damacles1156 View Post
Steve Fehr is not really like Donald.

Donald Fehr has proven to be an unreasonable man. That is why the NHL wanted him out of the room.
I think the NHL wanted him out the room because he sees through all their tricks and can turn the tables on them.

They're not trying to give the players much to consider, as every scenario has the PA giving up something.

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12-05-2012, 07:26 PM
  #772
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Originally Posted by Cawz View Post
Under our economic system, if you dont sufficiently perform the duties of your contract, you are let go.
Not unless you are in breach of your contract terms. Or if the contract has an out clause or some such thing. Neither of which apply to what your argument (if we can even call it that) is.

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12-05-2012, 07:26 PM
  #773
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Quote:
Originally Posted by Ernie View Post
Under our economic system, businesses that are run well succeed. Businesses that aren't fail.

But contracts are an agreement between two (or more) parties. They also underpin our economic system. Players do not make money unless they've reached a level of performance that secures them an NHL contract. Basically, a player agrees to provide his services (which is playing hockey) and the team agrees to pay him for it.

The problem is that, in your simple view of things, you think these two things are equivalent. They aren't. The reason they work as they do is because that's EXACTLY how they're supposed to work.
Not exactly. The fault in most often overlooked in capitalism is the need for a set of checks and balances. Businesses can succeed by being fraudulent. They can succeed by overwhelming force as well, eliminating competition. The object of the system should be to foster competition to provide services.

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12-05-2012, 07:28 PM
  #774
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Originally Posted by Ernie View Post
Not unless you are in breach of your contract terms. Or if the contract has an out clause or some such thing. Neither of which apply to what your argument (if we can even call it that) is.
What you're essentially saying is that you want typical common sense business practices to apply to the owners, but not the players.
Yeah. That's very fair.

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12-05-2012, 07:28 PM
  #775
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Originally Posted by Cawz View Post
Under our economic system, if you dont sufficiently perform the duties of your contract, you are let go.
NHL players can be let go to, only their contracts guarantee them the money they signed for. This is not a unique property of NHL contracts. Many employees of other professions have similar systems.

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