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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, NHL revenues, relocation and expansion.

What if...(mod: relocation proposal, subsequent effect on HRR)

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Old
01-04-2013, 11:28 AM
  #26
sandysan
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Originally Posted by MoreOrr View Post
I'm answering your question rather than arguing your hypothetical:

Carolina, Tampa Bay, Nashville, and who knows about the Islanders in their new digs,... but 3 of them would replace the 3 teams you relocated, as revenues push higher and stretch to compete with increasing salaries cause those teams to be in very similar dire straits as the teams you first chose to relocate.
I understand this and think it is perfectly logical but it is fraught with its own problems. If you let teams in bad markets to spend what they can afford, there goes parity, if you go with the median instead of the average, the players really take a huge hit and there is not a lot of confidence that the teams at the bottom will be able to grow the game and keep pace with big market teams.

Its a very strange situation where one can argue that moving teams from bad markets to good markets is a bad idea because it will further destabilise the league. I'm not saying its not true, just strange.

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01-04-2013, 11:32 AM
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Its not draw, its revenues. If Columbus wanted to draw more advertise your selling beer at cost and giving away a car between periods. you would literally be turning them away at the doors. But that does not translate into revenues which is what they need.

So the new metric of success is being marginally better off than an unmitigated disaster? Why not use Atlanta as the barometer? Since they went poof, if the team factually exists, it must mean that it is a success.

The way some people act reminds me of Jake blues staring down the barrel of a gun.

Actually it is about draw to me, considering I care about growing the popularity of hockey.

If you've got to lose money now to flourish later, that's acceptable.

The only people who can't understand that concept are the ones who aren't patient enough to wait for it. The NFL didn't become a powerhouse instantly. Toronto didn't become the massive hockey city that it was with the snap of a finger. Anybody expecting teams to be put in non-hockey locations and become unconditionally successful is only kidding themselves.

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01-04-2013, 11:37 AM
  #28
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Originally Posted by Mayor Bee View Post
I've said it before, and I'll say it again. When you personally are losing money due to the existence of Columbus (or any other team), feel free to play the white knight "saving" hockey. Until then, you don't have the slightest clue of what hockey (not just the NHL) in Columbus looks like.
I don't know what hockey in Montreal currently looks like because of what hockey looks like in Columbus and other markets.

I'm a fan, I don't care how much Molson makes off the habs. But because teams in bad markets cry poor, there are no games. The have could have used the last CBA, and if I have to chose between letting crappy markets dictate when we play or cut the chaff, I chose the latter. If that makes me selfish, so be it.

my opinion the league is fine without Columbus. You seem to think that the league could be better with Columbus. Again. I ask, when?

If columbus' failings only affected them, they could run their team into the ground for all I care.

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01-04-2013, 11:42 AM
  #29
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Actually it is about draw to me, considering I care about growing the popularity of hockey.

If you've got to lose money now to flourish later, that's acceptable.

The only people who can't understand that concept are the ones who aren't patient enough to wait for it. The NFL didn't become a powerhouse instantly. Toronto didn't become the massive hockey city that it was with the snap of a finger. Anybody expecting teams to be put in non-hockey locations and become unconditionally successful is only kidding themselves.
It took until 1930 for pro football to be regarded as equal to college football in terms of level of play. It took until the 1950s to be regarded as a somewhat honorable way to make a living (previously it was regarded as a refuge for ruffians and criminals). It took until the 1990s to overtake baseball, and a large part of that had to do with MLB shooting itself in the foot over much of the preceding 40 years.

The NBA didn't become a truly major sport until the 1980s, thanks to the entrance of Bird/Magic/Jordan. That was 40 years after the foundation of the league, and 80 years after the first leagues were formed.

MLB actually does apply here. In 1899, the National League (the only major league) eliminated the teams in Baltimore, Cleveland, Louisville, and Washington. A minor league immediately put franchises in those cities, renamed itself the American League, and declared itself to be a second major league. Two years later, an AL team won the first World Series.

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01-04-2013, 11:44 AM
  #30
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Originally Posted by sandysan View Post
I don't know what hockey in Montreal currently looks like because of what hockey looks like in Columbus and other markets.

I'm a fan, I don't care how much Molson makes off the habs. But because teams in bad markets cry poor, there are no games. The have could have used the last CBA, and if I have to chose between letting crappy markets dictate when we play or cut the chaff, I chose the latter. If that makes me selfish, so be it.

my opinion the league is fine without Columbus. You seem to think that the league could be better with Columbus. Again. I ask, when?

If columbus' failings only affected them, they could run their team into the ground for all I care.
Who cried poor in 1994? New York (Islanders), Hartford, Quebec, Winnipeg, Edmonton, New Jersey.

Who cried poor in 2004? Ottawa, Buffalo, Pittsburgh.

Are we better off without the markets that lack teams, and would we be better off without those who still have teams?

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01-04-2013, 11:50 AM
  #31
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39 million is not the anchor you think it is.
Arguing in circles again? I already addressed the point that the lease buyout isn't the reason why the Blue Jackets aren't going anywhere. Did you think I'd forgotten our last go around?

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01-04-2013, 11:50 AM
  #32
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New York Isles => Brooklyn
Phoenix => Seattle
Florida => Quebec City
Columbus => Toronto 2

This relocation would most likely strengthen the overall NHL economy IMO. Of course there would be ups and downs - but here we are talking about putting hockey back into areas that know the game or can support a professional team IMO.

Carolina, Tampa Bay, Nashville, Anaheim, St Louis and Dallas may all still struggle though. Non traditional hockey markets in the South. Buffalo & New Jersey are borderline economically as well.

On the other hand - other mentioned alternatives may not be better either.

Portland, Kansas City, Las Vegas, Houston, Halifax, Anchorage and New England are all remote possibilities, but most likely on par with or below the above markets that are already struggling with NHL franchises.

Time will tell.

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01-04-2013, 11:50 AM
  #33
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Originally Posted by Wingsfan2965 View Post
Actually it is about draw to me, considering I care about growing the popularity of hockey.

If you've got to lose money now to flourish later, that's acceptable.

The only people who can't understand that concept are the ones who aren't patient enough to wait for it. The NFL didn't become a powerhouse instantly. Toronto didn't become the massive hockey city that it was with the snap of a finger. Anybody expecting teams to be put in non-hockey locations and become unconditionally successful is only kidding themselves.
So then why don't these teams have 5 cent beer nights like minor league baseball used to? I don't expect these teams to be like Toronto, but if the existing evidence is that these teams have done a poor job at developing their markets, why do people think that this is simply a bunch of bad luck and not a statement of the inviability of the markets.

Columbus could sell out every night offering 10 buck tickets, but that does not decrease the difference in revenues. Once you are at capacity, if you want mor revenues you need to find new sources or increase ticket prices. As the majority of teams that are struggling area at the bottom of average ticket prices I think the robustness of the health of these markets is questionable.

Good teams recognize the limitations of their markets and adjust so as to not fall behind in revenue. Winnepeg has lower population and to adjust they have the second highest ticket prices, they don't have economic plans that necessitate things that they cannot directly control ( like going deep in the playoffs every year).

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01-04-2013, 11:51 AM
  #34
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Originally Posted by sandysan View Post
Its not draw, its revenues. If Columbus wanted to draw more advertise your selling beer at cost and giving away a car between periods. you would literally be turning them away at the doors. But that does not translate into revenues which is what they need.

So the new metric of success is being marginally better off than an unmitigated disaster? Why not use Atlanta as the barometer? Since they went poof, if the team factually exists, it must mean that it is a success.

The way some people act reminds me of Jake blues staring down the barrel of a gun.
sandy, is there any particular reason why you feel it necessary to single out Columbus, disturbing & upsetting an entire fan base in espousing opinion that is only half formed, selective? Ignoring the realities of gross incompetence in the Executive & General Managers suites combined with a punitive lease & avaricious competitive facility who had agreed to non-compete's but breached their agreement further exacerbating the already tenuous & difficult position the franchise had found itself in?.

Over the past 12-24 months, they have managed to re-write their lease, addressed the issues, hired a new President in the highly respected John Davidson, have found their sea legs, wind returning to the sails. Ohio, despite its low production of actual players over the years has a history of hockey & support thereof that is easily on par with the best that Quebec, Ontario, BC, Michigan or anywhere else you'd care to throw at it in comparison.

Im stumped to understand why you would feel it necessary to continually rub Blue Jacket's fans and or simply the proud residents of the states noses in the past decade of failure as though they are somehow responsible for it, and "undeserving" of their place in the NHL. Its disingenuous. You really need to bone up on your history, and I would suggest you start with the Cleveland Indians, Barons & Falcons, Crusaders etc etc etc, then take a good hard look at what the Blue Jackets have had to suffer through right out of the box.

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01-04-2013, 11:54 AM
  #35
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I understand this and think it is perfectly logical but it is fraught with its own problems. If you let teams in bad markets to spend what they can afford, there goes parity, if you go with the median instead of the average, the players really take a huge hit and there is not a lot of confidence that the teams at the bottom will be able to grow the game and keep pace with big market teams.

Its a very strange situation where one can argue that moving teams from bad markets to good markets is a bad idea because it will further destabilise the league. I'm not saying its not true, just strange.
It's not fraught when the primary disparity that exists is top-level. Removing a few teams at the bottom end doesn't change that huge economic disparity between the top 3-6 teams and the rest of the League.

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01-04-2013, 11:56 AM
  #36
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Arguing in circles again? I already addressed the point that the lease buyout isn't the reason why the Blue Jackets aren't going anywhere. Did you think I'd forgotten our last go around?
You first denied it calling it fairy dust. That's not addressing the point, nor is expecting your baseless proclamations to get accepted if you repeat them enough.

There are markets who want a team. Columbus is valued around 160 million, and the out adds another 40 for 200 million. There will be ancillary costs but so let's generously say 250 million. I can think of two markets that could almost certainly swing this.

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01-04-2013, 11:57 AM
  #37
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Lets just say you turned

Columbus into Quebec City
(Sells out every night)

Phoenix into Seattle
Sells 85-90% every night

Panthers into Toronto x 2
(Sells out every night)


How much more money would the league make? HRR would be much better just by switching these 3 correct?
Quebec City eats into the profits of Montreal, splitting both revenue from fans and corporations into two different pots. Who are the new corporate sponsor's that Quebec will bring in? What new advertising markets? What new fans are there to grow?

Phoenix to Seattle might work

Panthers to TO--destablilize a Sabres franchise which counts on many ticket buyers from Canada to earn revenue--and then see the same analysis as the Quebec City move. And add to both the potential regression of the Canadian Dollar vs. the US dollar and with more teams based in Canada, it would equal more risk to the league as a whole.

Face it, there is only so much money to made in Canada from hockey and with the exception of raising ticket prices, that mark has pretty much been reached. Canadian Tire, Molson, RIM and other Canadian companies don't need to spend more money on an audience they already control and there aren't any US companies that will pony up more to see a team in QC or TO. And any chance of getting a better TV deal is shot and the revenue streams of selling merchandise to a larger audience are gone.

Basically, short term gain with long term consequenses to the overall health of the league. The idea is to build hockey in North America--not suck more money from the people who are already paying for it.

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01-04-2013, 11:59 AM
  #38
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It's not fraught when the primary disparity that exists is top-level. Removing a few teams at the bottom end doesn't change that huge economic disparity between the top 3-6 teams and the rest of the League.
So the leagues primary problem is that the leafs rangers and habs run their markets too well?

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01-04-2013, 12:01 PM
  #39
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So then why don't these teams have 5 cent beer nights like minor league baseball used to? I don't expect these teams to be like Toronto, but if the existing evidence is that these teams have done a poor job at developing their markets, why do people think that this is simply a bunch of bad luck and not a statement of the inviability of the markets.

Columbus could sell out every night offering 10 buck tickets, but that does not decrease the difference in revenues. Once you are at capacity, if you want mor revenues you need to find new sources or increase ticket prices. As the majority of teams that are struggling area at the bottom of average ticket prices I think the robustness of the health of these markets is questionable.

Good teams recognize the limitations of their markets and adjust so as to not fall behind in revenue. Winnepeg has lower population and to adjust they have the second highest ticket prices, they don't have economic plans that necessitate things that they cannot directly control ( like going deep in the playoffs every year).
Because the amount of money they'd lose by not profiting in beer sales would put them further in the hole?

MOD


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01-04-2013, 12:05 PM
  #40
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Did fine...when? When the team was contending, and then stopped showing up when the team was struggling?

Tell you what. Tell me what years Columbus has contended and also had poor attendance.
How about I tell you the years Columbus didn't contend and made a profit?

2000-01
2001-02
2002-03
2003-04

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01-04-2013, 12:05 PM
  #41
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So the leagues primary problem is that the leafs rangers and habs run their markets too well?
Basically. Yes. Those markets do too well.

If the people running the Leafs really were upset about putting money into revenue sharing to keep certain teams afloat, they could try doing this to eliminate them...

Quadruple their ticket prices. People in Toronto would still pay this. The revenues of the league would take a dramatic increase driving up the cap to a point where no amount of revenue sharing would allow these teams to survive.

Just spit-balling, but the way I look at it is, if the top 3-5 teams didn't want to put any money into revenue sharing, they wouldn't.

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01-04-2013, 12:05 PM
  #42
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So then why don't these teams have 5 cent beer nights like minor league baseball used to? I don't expect these teams to be like Toronto, but if the existing evidence is that these teams have done a poor job at developing their markets, why do people think that this is simply a bunch of bad luck and not a statement of the inviability of the markets.

Columbus could sell out every night offering 10 buck tickets, but that does not decrease the difference in revenues. Once you are at capacity, if you want mor revenues you need to find new sources or increase ticket prices. As the majority of teams that are struggling area at the bottom of average ticket prices I think the robustness of the health of these markets is questionable.

Good teams recognize the limitations of their markets and adjust so as to not fall behind in revenue. Winnepeg has lower population and to adjust they have the second highest ticket prices, they don't have economic plans that necessitate things that they cannot directly control ( like going deep in the playoffs every year).
Every one of these arguments ends up the same way.
Other person: "Your market is terrible. No one cares."
Me: "Here are the attendance numbers that very clearly refute that."
Other person: "Those numbers are probably fudged."
Me: "You don't know that, don't know who else has done it, and don't know when it was done. That's strictly speculative."
Other person: "They probably had to use promotions to get people to show up."
Me: "Like when Detroit used to give away a new car every game during the height of the Dead Things era?"
Other person: "That's different."
Me: "Why?"
Other person: "Because Gordie Howe used to play there, damn it."

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01-04-2013, 12:08 PM
  #43
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It took until 1930 for pro football to be regarded as equal to college football in terms of level of play. It took until the 1950s to be regarded as a somewhat honorable way to make a living (previously it was regarded as a refuge for ruffians and criminals). It took until the 1990s to overtake baseball, and a large part of that had to do with MLB shooting itself in the foot over much of the preceding 40 years.

The NBA didn't become a truly major sport until the 1980s, thanks to the entrance of Bird/Magic/Jordan. That was 40 years after the foundation of the league, and 80 years after the first leagues were formed.

MLB actually does apply here. In 1899, the National League (the only major league) eliminated the teams in Baltimore, Cleveland, Louisville, and Washington. A minor league immediately put franchises in those cities, renamed itself the American League, and declared itself to be a second major league. Two years later, an AL team won the first World Series.
Very informative, but if we are going to talk about what attributes Columbus can leverage to become a self supporting productive member of the league, can we talk about Columbus now and going forward, not some team in another league from 50 years ago and just presume they are comparable?

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01-04-2013, 12:09 PM
  #44
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You first denied it calling it fairy dust. That's not addressing the point, nor is expecting your baseless proclamations to get accepted if you repeat them enough.

There are markets who want a team. Columbus is valued around 160 million, and the out adds another 40 for 200 million. There will be ancillary costs but so let's generously say 250 million. I can think of two markets that could almost certainly swing this.
That'd go over real well.

"Hey, John P. McConnell. Remember when your father bought an NHL expansion team as the culmination of his lifelong efforts to put Columbus on the map without having to specify 'Ohio' after the city name? Remember when he floated millions of dollars to local charities, and the Columbus Zoo, and turned a desolate wasteland into a business district that several other cities have used as a model? Well, here's a check to take all of that away...I think you'll find the Forbes declared value more than reasonable, and surely the money will make it much easier to face the people of Columbus every single day who already went through this with Art Modell taking the Cleveland Browns away."

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01-04-2013, 12:15 PM
  #45
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Every one of these arguments ends up the same way.
Other person: "Your market is terrible. No one cares."
Me: "Here are the attendance numbers that very clearly refute that."
Other person: "Those numbers are probably fudged."
Me: "You don't know that, don't know who else has done it, and don't know when it was done. That's strictly speculative."
Other person: "They probably had to use promotions to get people to show up."
Me: "Like when Detroit used to give away a new car every game during the height of the Dead Things era?"
Other person: "That's different."
Me: "Why?"
Other person: "Because Gordie Howe used to play there, damn it."
Attendance, like population does not define markets.

If winnepeg sells the same number of tickets at twice the cost as Columbus, which one is a better market? I don't have to fudge numbers to demonstrate this so your little hypothetical is a straw man.
If you would like I can point you to the link.

I've never badmouthed columbuses attendance because to me its not the primary measure of a market. Still no projections on how long a team can flounder before you get to question the viability of a market?

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01-04-2013, 12:21 PM
  #46
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That'd go over real well.

"Hey, John P. McConnell. Remember when your father bought an NHL expansion team as the culmination of his lifelong efforts to put Columbus on the map without having to specify 'Ohio' after the city name? Remember when he floated millions of dollars to local charities, and the Columbus Zoo, and turned a desolate wasteland into a business district that several other cities have used as a model? Well, here's a check to take all of that away...I think you'll find the Forbes declared value more than reasonable, and surely the money will make it much easier to face the people of Columbus every single day who already went through this with Art Modell taking the Cleveland Browns away."
People lose money and have their dreams and legacies crushed all the time. If you make an investment that goes south, you can't just sue people in hopes of making it back.

The jackets have a lease with nationwide, this lease includes an out. My presumption is that the team can legally break the lease if they pay the fee. Why the zoo gets to comment on how it would affect them ( they are not a party of the lease) is beyond me.

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01-04-2013, 12:22 PM
  #47
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Attendance, like population does not define markets.
Determining the short-term and long-term viability of a market is absolutely based on attendance and population. They're not the be-all-end-all, but it's pretty damned important. To use a standard example, Green Bay is able to have an NFL team because they have a major city just down the road AND because they've been around since the beginning of the league.

Smaller cities are much more sensitive to the disruptions that may be faced. If a major employer closes up shop in Chicago, it's an annoyance. If it happens in Columbus, it's a big deal. If it happens in Youngstown, it's a huge deal. Minor league cities that had long histories had to close up shop when a localized economic downturn couldn't be weathered; the mill closing in "Slap Shot" and destroying Charlestown has a basis in reality and history.

(Readying myself for the standard deflection to Mexico City in 3...2...1...)

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If winnepeg sells the same number of tickets at twice the cost as Columbus, which one is a better market? I don't have to fudge numbers to demonstrate this so your little hypothetical is a straw man.
Your question has nothing to do with the setup. It's like me asking, "If my favorite color is orange and my wife's favorite color is purple, which of us is a better person?"

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I've never badmouthed columbuses attendance because to me its not the primary measure of a market. Still no projections on how long a team can flounder before you get to question the viability of a market?
No, I'm not going to project it. And for two very good reasons:
1) I'm trying to juggle my schedule to watch the WJC gold medal game, featuring two of our local products playing for Team USA.
2) It's not my ****ing business to question the viability of a market.

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01-04-2013, 12:25 PM
  #48
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I don't know what hockey in Montreal currently looks like because of what hockey looks like in Columbus and other markets.

I'm a fan, I don't care how much Molson makes off the habs. But because teams in bad markets cry poor, there are no games. The have could have used the last CBA, and if I have to chose between letting crappy markets dictate when we play or cut the chaff, I chose the latter. If that makes me selfish, so be it.

my opinion the league is fine without Columbus. You seem to think that the league could be better with Columbus. Again. I ask, when?

If columbus' failings only affected them, they could run their team into the ground for all I care.
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Originally Posted by Mayor Bee View Post
It took until 1930 for pro football to be regarded as equal to college football in terms of level of play. It took until the 1950s to be regarded as a somewhat honorable way to make a living (previously it was regarded as a refuge for ruffians and criminals). It took until the 1990s to overtake baseball, and a large part of that had to do with MLB shooting itself in the foot over much of the preceding 40 years.

The NBA didn't become a truly major sport until the 1980s, thanks to the entrance of Bird/Magic/Jordan. That was 40 years after the foundation of the league, and 80 years after the first leagues were formed.

MLB actually does apply here. In 1899, the National League (the only major league) eliminated the teams in Baltimore, Cleveland, Louisville, and Washington. A minor league immediately put franchises in those cities, renamed itself the American League, and declared itself to be a second major league. Two years later, an AL team won the first World Series.
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Who cried poor in 1994? New York (Islanders), Hartford, Quebec, Winnipeg, Edmonton, New Jersey.

Who cried poor in 2004? Ottawa, Buffalo, Pittsburgh.

Are we better off without the markets that lack teams, and would we be better off without those who still have teams?

You are both missing a HUGE point. Columbus isn't crying poor. Columbus ownership has never said one word about crying poor.

They did commission a study to show they had a bad arena deal and it got handled. In fact, Columbus has made decisions to forgoe significant revenue sharing by regularly spending above the midpoint.

If anyone doesn't get to watch hockey, that's their choice.
I get to watch hockey regularly and still enjoy it. I attend NCAA hockey games, I watch Juniors on TV. I especially enjoyed the WJHCs so far.

None of us get to watch NHL hockey because the players and owners haven't found enough common ground to finalize a CBA. No particular market is driving that condition.

It's much easier to blame some bad guy for this situation, be it Bettman, Fehr, Jacobs, Ryan Miller, or Southern Hockey. You can even be ignorant enough to call Columbus southern and blame the city of Columbus. Why not face reality- there is no NHL Hockey because the majority of NHL owners want to pay the players less.

If you eliminate Phoenix, Columbus, Nashville, Florida,Ottawa, Tampa, Winnipeg, Buffalo, Calgary and Edmonton the situation won't change.

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01-04-2013, 12:40 PM
  #49
TaketheCannoli
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Quote:
Originally Posted by DontToewzMeBro View Post
Lets just say you turned

Columbus into Quebec City
(Sells out every night)

Phoenix into Seattle
Sells 85-90% every night

Panthers into Toronto x 2
(Sells out every night)


How much more money would the league make? HRR would be much better just by switching these 3 correct?
Let's use these numbers;

Columbus ( 85 million) into Quebec City (100 mil) slightly less than Forbes etimates for Winnipeg

Phoenix (83 mill) into Seattle (91 mill) equivalent to Colorado

Panthers (87 mill) into Toronto x 2 (128 mill) equivalent to Red Wings

Net result? 74 million increased revenues-

/30 teams = 2.4 million per team.

Cap increase @ 50% = $1.2 million


End result? Blues, Islanders and probably Sabres are in trouble.

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01-04-2013, 12:43 PM
  #50
Mayor Bee
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Quote:
Originally Posted by TaketheCannoli View Post
Let's use these numbers;

Columbus ( 85 million) into Quebec City (100 mil) slightly less than Forbes etimates for Winnipeg

Phoenix (83 mill) into Seattle (91 mill) equivalent to Colorado

Panthers (87 mill) into Toronto x 2 (128 mill) equivalent to Red Wings

Net result? 74 million increased revenues-

/30 teams = 2.4 million per team.

Cap increase @ 50% = $1.2 million


End result? Blues, Islanders and probably Sabres are in trouble.
Minus costs of buying teams in order to move them, minus costs to break leases and settle lawsuits...

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