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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.

Any deal potentially a bad deal? (Please tell me im wrong)

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Old
12-22-2012, 09:14 PM
  #1
Eddie Vedder
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Any deal potentially a bad deal? (Please tell me im wrong)

I poke my head in here from time to time to check news, or spit ball an idea off the minds kicking around here.

Heres my current brain fart:

At this point, damage to league is real though extent is obviously unknown. When the league comes back, the salary cap will be based on a % of league wide revenue as it always has been, though the share will be more even. Great.

Heres what I am concerned about: The Canadian teams wont take a big revenue hit, imo. Theres too many people like me who will watch every game, buy some tickets a couple times a year, and swoon over every moment of the schedule.

The big revenue hit will *probably* be in non-traditional US markets that are already struggling.

My Concern, in a tl;dr format:

Canadian teams will keep LEAGUE revenue relatively very high, which in turn will keep the cap #s (floor/ceiling) quite high (relatively) and the teams struggling now will continue to struggle because of this and ultimately lead to another lockout one day, or more instability.

Discuss

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12-22-2012, 09:16 PM
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Unless they're completely brain-dead I doubt the players will want another lockout after this one.

Fehr's already done a pretty good job of ****ing them over. They just don't know it yet.

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12-22-2012, 09:17 PM
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Eddie Vedder
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Quote:
Originally Posted by Wingsfan2965 View Post
Unless they're completely brain-dead I doubt the players will want another lockout after this one.

Fehr's already done a pretty good job of ****ing them over. They just don't know it yet.
The main idea I'm looking to have a discussion about is more that the league will continue to struggle with instability because of the nature of the markets, rather than another lockout specifically

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12-22-2012, 09:38 PM
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Killion
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Hard to say. Short term, depends upon just how much damage the Lockout's wrought, from the sponsors to luxury suite holders, within the corporate sector, obviously the fan base itself, and how long it takes for any number of franchises to win back that support. Many of course going into the Lockout were already seriously challenged, and clearly, this isnt going to help matters at all. Long term, without having addressed the need for far greater revenue sharing, its possible if not entirely probable that we'll find ourselves back here again in 2017 or thereabouts.

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12-22-2012, 09:50 PM
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Originally Posted by Eddie Vedder View Post
Discuss
Not sure there's a whole lot to discuss. The issue you raise is a legitimate concern, and further highlights that the owners are floating proposals that continue failing to deal with the fundamental problem.

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Old
12-22-2012, 09:52 PM
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Quote:
Originally Posted by Eddie Vedder View Post
I poke my head in here from time to time to check news, or spit ball an idea off the minds kicking around here.

Heres my current brain fart:

At this point, damage to league is real though extent is obviously unknown. When the league comes back, the salary cap will be based on a % of league wide revenue as it always has been, though the share will be more even. Great.

Heres what I am concerned about: The Canadian teams wont take a big revenue hit, imo. Theres too many people like me who will watch every game, buy some tickets a couple times a year, and swoon over every moment of the schedule.

The big revenue hit will *probably* be in non-traditional US markets that are already struggling.

My Concern, in a tl;dr format:

Canadian teams will keep LEAGUE revenue relatively very high, which in turn will keep the cap #s (floor/ceiling) quite high (relatively) and the teams struggling now will continue to struggle because of this and ultimately lead to another lockout one day, or more instability.

Discuss
What makes you think that?

Note: I don't necessarily disagree with you. I just see this assumption thrown around on these boards, and am interested to know if someone can explain to me why they think this way.

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12-22-2012, 10:02 PM
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DuklaNation
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Its a similar situation in the political arena where the pressure to compromise results in an untenable structure. At some point, the system needs to be fixed. Not on my watch and kick the can down the road are the common symptoms.

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12-22-2012, 11:24 PM
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I would not assume that the new economic format will include a defined revenue split or salary cap.

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12-22-2012, 11:25 PM
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Eddie Vedder
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Quote:
Originally Posted by Plan The Parade View Post
What makes you think that?

Note: I don't necessarily disagree with you. I just see this assumption thrown around on these boards, and am interested to know if someone can explain to me why they think this way.
Im basing it on the personal experience I have with hockey. Sure Canada might lose a certain amount of fans but if the canucks lose even 10% of season ticket holders.. more even.. the waiting list instantly replaces them all. Some company will wanna buy box seats. Etc.

For a team like nashville.. im using nashville because i dont want to pick on another team where the product isnt as good.. but nashville the dollars they had might move on and it was a documented struggle to build the corporate side.

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12-22-2012, 11:48 PM
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To me, a winning team is gonna bring back fans. (Unless of course you're Phoenix)

Short term, there might be some hurt, but long term, I think most of the fan base comes back.

And the positive thing is, maybe the lockout puts hurt on the few teams that really shouldn't be there at all, and they get moved to legitimate locations.

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12-23-2012, 01:50 AM
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Quote:
Originally Posted by DuklaNation View Post
Its a similar situation in the political arena where the pressure to compromise results in an untenable structure. At some point, the system needs to be fixed. Not on my watch and kick the can down the road are the common symptoms.
I agree with your take much more than the original question of the thread. The answer to the original question is that it depends on the market and that is not split entirely along country lines.

Quote:
Originally Posted by Wingsfan2965 View Post
To me, a winning team is gonna bring back fans. (Unless of course you're Phoenix)

Short term, there might be some hurt, but long term, I think most of the fan base comes back.

And the positive thing is, maybe the lockout puts hurt on the few teams that really shouldn't be there at all, and they get moved to legitimate locations.
I actually think Phoenix might improve modestly if they have a real owner. Their biggest issue has been corporate sponsorships (almost nil) and STHs. Give a committed org some time to drum up interest with the promise that they are staying and who knows what will happen. They can't go lower. It won't be cellar to penthouse in one swoop, but I could see them getting about halfway up the stairs out of the basement towards the first floor.

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12-23-2012, 01:20 PM
  #12
thinkwild
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Quote:
Originally Posted by Eddie Vedder View Post
The main idea I'm looking to have a discussion about is more that the league will continue to struggle with instability because of the nature of the markets, rather than another lockout specifically
Is there any deal that the league is reasonably likely to get that would prevent them from locking the players out again next time, because after all, the nfl gets to skim a couple billion of the top before revenue sharing with the players. How can the NHL owners possibly forgo that opportunity? But that's the next lockout propaganda, no one is really rallying around that terrible injustice to nhl owners in these, what shall we call them, talks?

But due to the nature of the markets? I guess we are acknowledging that the NHL is in markets that dont have the revenue parity, or revenue sharing responsibilities met, in order to reasonably compete as one of 30 equal spending teams. And also operates with 2 currencies that can fluctuate wildly.

Last time the cap and lower player salaries were said to be needed to save the small Canadian markets and keep all 30 teams in their current locations, and everyone, including Bettmans own statements, at the time confirmed success, finally, in that regard. Everything seemed to be humming along famously, most figuring from Bettmans words that cba talks would be a breeze, until last year when Bettman declared radical changes were required once again.

Now the very nature of that last deal, linkage and a floor, once seen as the saviour of the NHL forever more, is now seen as the very cause of the problems requiring new solutions. Although no changes are proposed there, and no one wants to talk about the past cba deals.

Perhaps its because so many are intent on forgetting the past, that that was then and this is now, what can possibly be gained by learning from past mistakes, that the exact same solution that failed last time is being re-proposed. What is the likelihood that this time it works, is that the question?

The league as a whole isnt in dire straits, as a whole it is profitable. There are some teams, for various reasons, that cant keep up. And the players have acknowledged that. Are there likely still going to be teams in that position at then end of any next cba should one be negotiated? It would seem inevitable to me.

So once again we will have forced 30 equal spending teams from 30 wildly divergent revenue generating capacities, and then will be complaining they cant all keep up and the only solution is that the players need to take less again. Maybe we should focus on creating 30 equally profitable teams instead. And give teams that cant spend equally other advantages like more draft picks or other such competitive equalization structures. It seems to me to be a lack of imagination that thinks the only way to be fair is to spend the same. We keep trying it. It will keep not working without lockouts imo.

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Old
12-23-2012, 02:46 PM
  #13
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I think that your theory is correct and could lead to some short and even for a couple of franchises, long term financial pain. To your point, there could be a reduction in league wide HRR and it won't be felt equally by all markets. Many markets will have almost no reduction to revenue, while others will likely experience double digit % decreases.

Bettman surely has mandates and strategy in place and discussed with team owners, especially the top money makers on how the new world CBA would look.

While 700 basis points less in revenue to salaries will help offset some of the lost revenue, the top profit owners will know they'll be bailing out the bottom markets for the next 2-3 years.

We will probably see a lower $ or % to the medium cap floor to help the bottom market teams survive. This is also likely we the league wants a longer term CBA 8-10 years because the top markets will take it on the chin for a few years and then make it up in later years.

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