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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.

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Old
12-05-2012, 08:29 PM
  #776
damacles1156
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Originally Posted by SJeasy View Post
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.
This is a more accurate description. the U.S. Taxpayer bailed out plenty of fail, we Americans know plenty of that.

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12-05-2012, 08:30 PM
  #777
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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.
Sorry, I should have said "how our economic system is supposed to be."

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12-05-2012, 08:31 PM
  #778
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Originally Posted by damacles1156 View Post
This is a more accurate description. the U.S. Taxpayer bailed out plenty of fail, we Americans know plenty of that.
And yet you are suggesting that the NHL should structure a system to continually do that? Of course, as long as it's coming out of the players' pockets it doesn't matter to you. Which once again, is what this is all about in your mind, isn't it?

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12-05-2012, 08:32 PM
  #779
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And yet you are suggesting that the NHL should structure a system to continually do that? Of course, as long as it's coming out of the players' pockets it doesn't matter to you. Which once again, is what this is all about in your mind, isn't it?
50/50 split is fair. If an owner can't live under that agreement than it's his problem.

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12-05-2012, 08:35 PM
  #780
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Originally Posted by Disgruntled Observer View Post
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.
Seriously?

There's absolutely nothing stopping a team from signing a player for one year. Indeed, a large number of contracts of this length are signed each season.

Players are signed to longer term contracts when they've earned them. The team takes a risk in hopes that their performance over the life of the contract will equal or exceed the contract value.

I find it very unsettling that these basic concepts are so unfamiliar to so many posters on these forums.

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12-05-2012, 08:37 PM
  #781
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Originally Posted by Ernie View Post
Seriously?

There's absolutely nothing stopping a team from signing a player for one year. Indeed, a large number of contracts of this length are signed each season.

Players are signed to longer term contracts when they've earned them. The team takes a risk in hopes that their performance over the life of the contract will equal or exceed the contract value.

I find it very unsettling that these basic concepts are so unfamiliar to so many posters on these forums.
There is plenty of things stopping teams from one year deals.

Market value, competition for said player. Player agent (biggest one).

It's not so cut and dry bro.

Are fringe players mostly one year deals ? Yes.

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12-05-2012, 08:39 PM
  #782
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Originally Posted by damacles1156 View Post
50/50 split is fair. If an owner can't live under that agreement than it's his problem.
You're all over the place.

50/50 isn't sustainable if you're the Florida Panthers and have to reach the cap floor. It's a money machine if you're the Toronto Maple Leafs and only have to spend to the cap maximum.

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12-05-2012, 08:40 PM
  #783
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You're all over the place.

50/50 isn't sustainable if you're the Florida Panthers and have to reach the cap floor. It's a money machine if you're the Toronto Maple Leafs and only have to spend to the cap maximum.
Then move Florida, Find a market that can work under 50/50. They can put triggers in that keep the Cap and the floor at reasonable levels.

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12-05-2012, 08:41 PM
  #784
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Originally Posted by damacles1156 View Post
There is plenty of things stopping teams from one year deals.

Market value, competition for said player. Player agent (biggest one).

It's not so cut and dry bro.

Are fringe players mostly one year deals ? Yes.
Market value? Competition? What are these words I'm reading. It's almost like there's some kind of an economic system underpinning these transaction? That can't be! Everyone knows that the players should be thankful for whatever scraps the owners are willing to throw them.

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12-05-2012, 08:41 PM
  #785
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Originally Posted by damacles1156 View Post
Then move Florida, Find a market that can work under 50/50.
There aren't 30 markets in North America that could operate under 50/50. Probably not even 15.

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12-05-2012, 08:43 PM
  #786
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Originally Posted by Ernie View Post
Seriously?

There's absolutely nothing stopping a team from signing a player for one year. Indeed, a large number of contracts of this length are signed each season.

Players are signed to longer term contracts when they've earned them. The team takes a risk in hopes that their performance over the life of the contract will equal or exceed the contract value.

I find it very unsettling that these basic concepts are so unfamiliar to so many posters on these forums.
If people are going to say that "poorly run teams" should lose money... the end!!!!
then I'll respond by saying that poorly performing players should be fired... the end!!! No more guaranteed contracts.

Luckily, neither the nhl and nhlpa take such ridiculous hard line stances.

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12-05-2012, 08:48 PM
  #787
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Originally Posted by Disgruntled Observer View Post
If people are going to say that "poorly run teams" should lose money... the end!!!!
then I'll respond by saying that poorly performing players should be fired... the end!!! No more guaranteed contracts.

Luckily, neither the nhl and nhlpa take such ridiculous hard line stances.
Poorly run teams should lose money. Full stop. I think the NHL and NHLPA are probably in agreement in that.

But should a well run team in a small market make money? That's the question at hand. Obviously, if the NHL is committed to keep teams in small markets, the answer is yes.

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12-05-2012, 08:52 PM
  #788
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I was under the impression that the NHL broke even with the Yotes (they bought it for 120m, and it sold for 160m)?
It's not sold yet. AFAIK, the asking price is $170mm. Even the $50mm "increase" will not cover the tens of millions lost over the past 3 years by the league running the team (and the interest charges incurred by borrowing from the league line of credit to pay for the costs). (Not even adding in the $25mm year payment from COG.)

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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).
League bonuses do not count against the cap (or player share). This includes playoff $$ paid to teams (and split among players), cash bonus for winning all individual awards -- varying amount depending on award.

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12-05-2012, 09:06 PM
  #789
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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.
Then where should it go?

So a guy buys a "franchise" for 150m (Columbus and Nashville paid 80m each - but inflation is a ***** ). Say the league pays out 60% of that to it's members (90m), and puts the other 60m into an account for buddy to draw on at a later date. The new club draws on it over a 6 year period (say 10m a year) to help offset their losses. Now they've bought into the NHL for 150m, received 60m back in gifts from the NHL for a total purchase price of 90m. That seems like a pretty cheap entry fee into the NHL when Forbes (yes I know) says the average team value is 280m. Even if a more realistic sale price is in the 150-200 range, buddy is getting a heck of an investment.

I'm not saying it should all just get paid out to the NHL members, but neither do I think it should go into some sort of fund that goes directly back to the club for development purposes. If that's the case, why not just lower the fee and make it cheaper to join?

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Old
12-05-2012, 09:10 PM
  #790
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There aren't 30 markets in North America that could operate under 50/50. Probably not even 15.
Don't know about that. Lop off the top 6 or 7 teams and the bottom 3 or 4, and there isn't a whole lot of economic difference between the remaining 20 teams. Using those 20 teams, most could probably do okay under a 50/50 format.

It's primarily the top 3 to 6 teams that create economic standards that much of the rest of the League can't compete with.

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12-05-2012, 09:17 PM
  #791
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Don't know about that. Lop off the top 6 or 7 teams and the bottom 3 or 4, and there isn't a whole lot of economic difference between the remaining 20 teams. Using those 20 teams, most could probably do okay under a 50/50 format.

It's primarily the top 3 to 6 teams that create economic standards that much of the rest of the League can't compete with.
Yes but as the math has shown, as long as there's a large disparity in revenue, it doesn't matter who the bottom guy is. 50/50 based on average revenue will eventually screw the guy at the bottom. RS and a cap floor that are % based should help offset this... But there's no guarantee. And a cap floor/ceiling that's % based causes it's own issues.

That's where I actually think another team in Toronto/Southern Ontario and 1 in QC would help things. Yes it would bump up the cap (based on an increase in revenue), however both of those teams would be posting profits and would be able to provide more money into the RS system.

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12-05-2012, 09:22 PM
  #792
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Is the meeting ongoing?

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12-05-2012, 09:25 PM
  #793
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Originally Posted by MoreOrr View Post
Don't know about that. Lop off the top 6 or 7 teams and the bottom 3 or 4, and there isn't a whole lot of economic difference between the remaining 20 teams. Using those 20 teams, most could probably do okay under a 50/50 format.

It's primarily the top 3 to 6 teams that create economic standards that much of the rest of the League can't compete with.
Well, yes, I mean that there likely aren't 15 teams that could be sustainable, including the top teams among the ones that could.

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12-05-2012, 09:29 PM
  #794
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Then where should it go?

So a guy buys a "franchise" for 150m (Columbus and Nashville paid 80m each - but inflation is a ***** ). Say the league pays out 60% of that to it's members (90m), and puts the other 60m into an account for buddy to draw on at a later date. The new club draws on it over a 6 year period (say 10m a year) to help offset their losses. Now they've bought into the NHL for 150m, received 60m back in gifts from the NHL for a total purchase price of 90m. That seems like a pretty cheap entry fee into the NHL when Forbes (yes I know) says the average team value is 280m. Even if a more realistic sale price is in the 150-200 range, buddy is getting a heck of an investment.

I'm not saying it should all just get paid out to the NHL members, but neither do I think it should go into some sort of fund that goes directly back to the club for development purposes. If that's the case, why not just lower the fee and make it cheaper to join?
After 20 years or so, the teams existent at the time get their share of the leftovers. Escrow closes.

I am sort of in line with Fugu about growing the game although ultimately I don't agree about contraction. The ROI hasn't been that great and it might be downright awful so far. Minny is the exception, going for $250mil. Most of the expansion teams are under $200mil as are a bunch of teams from the first expansion era. And a lot of teams have had a string of cash calls. There are outliers at the top that inflate the average . . . a lot. I also don't consider buying for $200mil and selling for $200mil a wash if there were cash calls in the interim.

I am not entirely opposed to your idea of a mix of immediate return plus escrow. Nice bit of middle ground.

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12-05-2012, 09:30 PM
  #795
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NHL podium was taken down and is now getting set back up

hmmmmm

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12-05-2012, 09:32 PM
  #796
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Yes but as the math has shown, as long as there's a large disparity in revenue, it doesn't matter who the bottom guy is. 50/50 based on average revenue will eventually screw the guy at the bottom. RS and a cap floor that are % based should help offset this... But there's no guarantee. And a cap floor/ceiling that's % based causes it's own issues.
But again, knock off the top 7 teams in Revenue and the bottom 3 teams, and the difference between the other 20 isn't that large. And again, I'm just saying that the revenue advantage of that top 4 to 7 teams really makes it difficult for the rest. This isn't a league in which 10 to 15 teams that struggle economically; it's a league that's economically top-heavy. Because, as you said, even if you cut the League down to just 10 teams, that top 7 would cause the other 3 to be in financial crisis.

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12-05-2012, 09:35 PM
  #797
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Well, yes, I mean that there likely aren't 15 teams that could be sustainable, including the top teams among the ones that could.
And including those top teams, surely there isn't 15 markets that could be sustainable at a strict 50/50; there's probably not even 10.

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12-05-2012, 09:38 PM
  #798
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Quote:
Originally Posted by Motown Beatdown View Post
NHL podium was taken down and is now getting set back up

hmmmmm
Where you hearing this stuff from?

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12-05-2012, 09:44 PM
  #799
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Twitter is buzzing with NHL stuff right now. Podium being set up again?

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12-05-2012, 09:46 PM
  #800
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Tim Panaccio ‏@tpanotchCSN
Ladies and gentlemen ... The Podium! pic.twitter.com/Tkm0hQBx

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