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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.

Are the big market teams the losers here?

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Old
12-30-2012, 02:41 PM
  #26
I Am Classless
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They objectively are the big losers of this (along with the fringe players), but it's hard to say that they shouldn't have either had more foresight or fought harder against the owners who were committed to locking out the NHL.

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12-30-2012, 02:42 PM
  #27
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Originally Posted by Riptide View Post
Why? They make more money with a cap on spending and writing revenue sharing cheques than they do if they could spend freely.
Haha, I don't get how people can miss this point. Spend 60 million to field a competitive hockey team and rake in the profits hand over fist or compete with other big markets for free agents with massive contracts and spending. These guys are business men interested in making money first and foremost and this system allows them to kill it while only having to spend a capped amount of money on players.

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12-30-2012, 03:02 PM
  #28
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Haha, I don't get how people can miss this point. Spend 60 million to field a competitive hockey team and rake in the profits hand over fist or compete with other big markets for free agents with massive contracts and spending. These guys are business men interested in making money first and foremost and this system allows them to kill it while only having to spend a capped amount of money on players.

That is something some people don't get though. For some owners it isn't really about making money first. Katz(Rexall) and David Thomson(richest canadian) are examples of being fans. It's about ego's much like it is for buyers of cars in the Barrett-Jackson auctions. They don't do it for the money.

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12-30-2012, 03:13 PM
  #29
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Originally Posted by no1b4me View Post
That is something some people don't get though. For some owners it isn't really about making money first. Katz(Rexall) and David Thomson(richest canadian) are examples of being fans. It's about ego's much like it is for buyers of cars in the Barrett-Jackson auctions. They don't do it for the money.
If they are really a fan of the game then they know throwing money at players in an attempts to buy a championship is just silly and only rarely does it ever work. This system allows organizational strength to shine through on all levels. From scouting, drafting, coaching and player development teams are forced to make smart business decisions and every team in on a level playing field. It makes for a better NHL and provides a more marketable product to the masses. At least that's how I see it.

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12-30-2012, 03:18 PM
  #30
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Originally Posted by no1b4me View Post
Well, look at teams like the Rangers and Flyers for example. Dolan and Snider want to win the cup. If they are handcuffed by trades they made in the past and those players are sent to the minors or retire on their new teams the Flyers and Rangers are on the hook. They have to put the players salary under thier cap which hurts their chances of winning since their own roster has to be trimmed.

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Originally Posted by no1b4me View Post
That is something some people don't get though. For some owners it isn't really about making money first. Katz(Rexall) and David Thomson(richest canadian) are examples of being fans. It's about ego's much like it is for buyers of cars in the Barrett-Jackson auctions. They don't do it for the money.
Of course they do it for the money! Why do you think that the NHL is looking for salary concessions from the players (among other things)? Why do you think NYR, Philly, TML, etc all agreed to a cap last time around?

Yes there are a few owners who might not be doing it solely for money, but the vast majority of owners are. Thompson and Katz are NOT those guys. Thompson (or rather Chipman) has said several times that they will not spend like a big club, and that the Jets has to be run as a business - aka they're not spending money on a shiny toy just to win. Katz, if he cared so much wouldn't be trying to string another few million out of Edmonton over the new arena.

They may say they're fans first, but their actions say otherwise. The only owners that comes to mind (and we'll still have to wait and see how long that continues) are Burkle (Penguins), Pegula (Sabres) and Wang (Islanders). And I'm not even sure Pittsburgh qualifies due to the insane talent they're spending the money on (they'd have to be completely stupid to not spend some money), and now with the new rink, it's not really the issue it was 3-4 years ago. Wang had to ride out the lease (every single Islanders fan had better be thanking him dearly for that), however things should be getting better there in the near future.

But the point is that while these guys say they're fans (and no one really buys a team to get rich), these guys for the vast majority run these teams as businesses. So when it comes to collective bargaining, they negotiate a deal that gives them the best chance to make money - regardless if that handicaps them on the ice. Or maybe they were selfless (because they're fans first ) and decided that the health of the league was more important then them winning a championship.

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Old
12-30-2012, 03:18 PM
  #31
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Originally Posted by du5566 View Post
If they are really a fan of the game then they know throwing money at players in an attempts to buy a championship is just silly and only rarely does it ever work. This system allows organizational strength to shine through on all levels. From scouting, drafting, coaching and player development teams are forced to make smart business decisions and every team in on a level playing field. It makes for a better NHL and provides a more marketable product to the masses. At least that's how I see it.
I think it's a good pro-parity move too, though I wish it was accompanied by a big raise to the cap floor that forced everyone to spend about as much money. Maybe that will be Fehr's last Hail Mary, it would be fun to watch what Charlie Wang and a few others say

That being said, there's no way that the Rangers, the Wild and the other teams who have already thrown money at players trying to win in the short-term didn't have to be dragged kicking and screaming.


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12-30-2012, 03:41 PM
  #32
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that's false. They will share around 200 million, of over 3 billion in revenue. It's chump change compared to the other leagues.

The big market clubs will just make more money in the end, hence why they have allowed these lockouts to occur.
Just to use a ball park number here of $200M split between the bottom 15 teams, that's $13.3M from each of the top 15 (That number doesn't included the fact that #1 revenue team will contribute more than #15)

They have saved approx 13% on salaries (57% down to 50% share). Using a cap of $70M, this will save a cap team $9.1M.

These are ballpark numbers obviously and I'm assuming top revenue teams are all cap teams. That being said, these top teams will be spending an additional $4.2M (on average) to assist smaller markets.

I'm all for revenue sharing b/c it's necessary for the overall health of the game, but you have to wonder how they feel about losing millions for a lockout that is going to cost them even more yearly.

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12-30-2012, 03:45 PM
  #33
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Look at it this way, If you are the richest Canadian, a 20 billionaire why if gods name would you buy an nhl team in a small market? It certainly isn't to make money.

And as for Katz, if someone is willing to give you money for an arena to take it.

I think maybe Snider and Dolan are going with the flow and not putting up a fight although no one really will ever know due to Bettman muzzling the owners. Maybe Dolan won't care unless he realizes he has to gut some of his team if the Habs put Gomez in the minors and he has to make room for 7.3 million.

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12-30-2012, 08:14 PM
  #34
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Originally Posted by no1b4me View Post
That is something some people don't get though. For some owners it isn't really about making money first. Katz(Rexall) and David Thomson(richest canadian) are examples of being fans. It's about ego's much like it is for buyers of cars in the Barrett-Jackson auctions. They don't do it for the money.
Yet Katz and Thomson haven't been operating their respective teams at the salary cap? If they didn't care about the bottom line why haven't they been spending more to improve their team rosters?

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12-30-2012, 08:17 PM
  #35
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Obviously the big markets lose.

Because of the anticompetitive rules the NHL has implemented in their CBA San Jose fans can watch a superior product for far cheaper than a fan in the same seat can watch for far more money in big markets.

Pretty basic economics here.

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12-30-2012, 09:39 PM
  #36
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Originally Posted by no1b4me View Post
Look at it this way, If you are the richest Canadian, a 20 billionaire why if gods name would you buy an nhl team in a small market? It certainly isn't to make money.

And as for Katz, if someone is willing to give you money for an arena to take it.


I think maybe Snider and Dolan are going with the flow and not putting up a fight although no one really will ever know due to Bettman muzzling the owners. Maybe Dolan won't care unless he realizes he has to gut some of his team if the Habs put Gomez in the minors and he has to make room for 7.3 million.
How many other Canadian teams are available? Leafs at 1Bm or the Habs at 400m (or whatever they went for), or the Jets what... 160m? And they play in a rink TNSE already owns. Then why aren't they spending more? I'm not saying they're not fans. But they're clearly not 'just rich fans', or they would be operating their team differently.

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Yet Katz and Thomson haven't been operating their respective teams at the salary cap? If they didn't care about the bottom line why haven't they been spending more to improve their team rosters?
Exactly.

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12-30-2012, 09:43 PM
  #37
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The NHL is the only league on earth that is run by it's poorest members.

It is a big reason why it will never surpass leagues that understand all markets are not created equal.

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12-30-2012, 09:45 PM
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Originally Posted by Bomber0104 View Post
Obviously the big markets lose.

Because of the anticompetitive rules the NHL has implemented in their CBA San Jose fans can watch a superior product for far cheaper than a fan in the same seat can watch for far more money in big markets.

Pretty basic economics here.
Demand for tickets drives up ticket prices, pretty basic economics...... and the Sharks have the 8th highest average ticket price in the NHL.

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12-30-2012, 09:48 PM
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The NHL is the only league on earth that is run by it's poorest members.

It is a big reason why it will never surpass leagues that understand all markets are not created equal.
The NHL is not run by its poorest members and the NBA and the NFL have similar systems to help out the small market teams to compete and survive. Again the notion that the new CBA somehow hurts the large market teams is just ludicrous.

The NFL has a hard salary cap of about 120.6 million and full time rosters of 53 players. Both numbers are double that of the NHL yet the Dallas Cowboys still manage to thrive in that system and are worth 1.85 billion dollars for tops in the NFL. Which is apparently amazing considering that they are not allowed to simply buy championships like people think the Leafs and Rangers need to be able to do in order for the NHL to become relevant.


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12-30-2012, 10:09 PM
  #40
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Yet Katz and Thomson haven't been operating their respective teams at the salary cap? If they didn't care about the bottom line why haven't they been spending more to improve their team rosters?
Seriously?

So the years leading up to the Oilers rebuild, when they were placing huge bids for Hossa and Heatley was just completely forgotten? What were they supposed to do, spend $5M on another Horcoff just to maximize their cap spending to prove to the world they were a player?

Some of the funniest stuff I've read all day. You should be looking to how well Katz has compensated Eberle and Hall before commenting. You can be damn sure that when the Oilers have a reason to graze the cap they will be.

...Unless the idiots in city hall continue to be hostile towards their NHL team.

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12-30-2012, 10:25 PM
  #41
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With the maximum 6-years contract they are proposing, if it would have been in place when the Hawks won the cup, they would not have been able to afford Hossa and not have won the cup. Another team would have been fortunate to have Hossa but this to me is what I call bad parity. That you can't have as much good players as you can. This is how the big markets will be penalized the most, esp. the fans of big markets, they'll have to relly on watching weaker teams. Your team generate money anyway, who cares, right.

If I was Phillie, TO, the Habs, etc...I would propose a "franchise player" rule for the biggest earners. You get the chance to have one player that you can pay what you want and it doesn't count against the cap.

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12-30-2012, 10:29 PM
  #42
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Originally Posted by du5566 View Post
The NHL is not run by its poorest members and the NBA and the NFL have similar systems to help out the small market teams to compete and survive. Again the notion that the new CBA somehow hurts the large market teams is just ludicrous.

The NFL has a hard salary cap of about 120.6 million and full time rosters of 53 players. Both numbers are double that of the NHL yet the Dallas Cowboys still manage to thrive in that system and are worth 1.85 billion dollars for tops in the NFL. Which is apparently amazing considering that they are not allowed to simply buy championships like people think the Leafs and Rangers need to be able to do in order for the NHL to become relevant.
But the NFL could have all bad markets teams and it would not matter because they roll in money because of the huge tv deals. They could have a team in Alaska attended by 15 people.

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12-30-2012, 10:42 PM
  #43
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But the NFL could have all bad markets teams and it would not matter because they roll in money because of the huge tv deals. They could have a team in Alaska attended by 15 people.
So your point is that it doesn't matter what system the NFL uses because they get money from the TV deal? Well let's say for sake of argument that's true, how does a system which would allow big market teams to spend tons of money on free agent players in attempts to win a championships while at the same time assuring that small market teams cannot compete consistently make the NHL a more viable and profitable league?

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12-30-2012, 10:48 PM
  #44
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So your point is that it doesn't matter what system the NFL uses because they get money from the TV deal? Well let's say for sake of argument that's true, how does a system which would allow big market teams to spend tons of money on free agent players in attempts to win a championships while at the same time assuring that small market teams cannot compete consistently make the NHL a more viable and profitable league?
Magor League Baseball seems to be doing very well with that concept.

I'm not saying a cap doesn't work but there has to be SOME reward of bringing in money, of being a successful market.

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12-30-2012, 10:54 PM
  #45
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Yet Katz and Thomson haven't been operating their respective teams at the salary cap? If they didn't care about the bottom line why haven't they been spending more to improve their team rosters?
Agreed. One guy owned the arena and the other guy is crying about free money and both don't spend to the cap limit. Sounds like they are cheap fans.

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12-30-2012, 10:56 PM
  #46
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Well, look at teams like the Rangers and Flyers for example. Dolan and Snider want to win the cup. If they are handcuffed by trades they made in the past and those players are sent to the minors or retire on their new teams the Flyers and Rangers are on the hook. They have to put the players salary under thier cap which hurts their chances of winning since their own roster has to be trimmed.
In defense of the Rangers it seems like putting a cap max, made them think twice about making dumb moves. Before first lockout I think they didn't make the playoffs for like 7-8 seasons, after the lockout they made it every year.

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12-30-2012, 11:10 PM
  #47
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Magor League Baseball seems to be doing very well with that concept.

I'm not saying a cap doesn't work but there has to be SOME reward of bringing in money, of being a successful market.
MLB is a farce and lost its crown as #1 sport in America for a long time now. The league lives off of the very few rich markets that buy their championships. There are literally franchises in the MLB who spend as little as possible so as to profit from their ridiculous profit sharing model.

Nobody watches or plays baseball anymore. The league is dying a slow death. I'll give you one guess as to who was responsible for the downfall of baseball.

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12-30-2012, 11:19 PM
  #48
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MLB is a farce and lost its crown as #1 sport in America for a long time now. The league lives off of the very few rich markets that buy their championships. There are literally franchises in the MLB who spend as little as possible so as to profit from their ridiculous profit sharing model.

Nobody watches or plays baseball anymore. The league is dying a slow death. I'll give you one guess as to who was responsible for the downfall of baseball.
I'm not saying MLB has the best model but they are successful at having just a bunch of wealthy franchises. They are far more successful than the NBA and the NHL for example. In my opinion the NFL has a great blueprint how to manage a sport league but again it cannot be compared to the NHL because the NHL doesn't have that big influx of cash coming in. The little the most successful franchises make, they are not interested to share it with abysmal markets and that's understandable.

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12-30-2012, 11:21 PM
  #49
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If I was Phillie, TO, the Habs, etc...I would propose a "franchise player" rule for the biggest earners. You get the chance to have one player that you can pay what you want and it doesn't count against the cap.
You think that Bettman would cater to those teams? VS what he believes is best for the league as a whole?

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12-30-2012, 11:25 PM
  #50
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I'm not saying a cap doesn't work but there has to be SOME reward of bringing in money, of being a successful market.
There is. Massive profits for those corporations. And that's what they are. Toronto, Philly, New York are all owned by huge corporations. Corporations look for one thing... the profits for their shareholders. The less money Toronto spends on players, the more profits get sent to their parent companies... and honestly the more my stock in Bell is worth.

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