HFBoards

Go Back   HFBoards > NHL Eastern Conference > Metropolitan Division > New York Islanders
Mobile Hockey's Future Become a Sponsor Site Rules Support Forum vBookie Page 2
Notices

Revenue Sharing & Islanders: Answered, Mostly

Reply
 
Thread Tools
Old
05-04-2014, 12:00 AM
  #1
A Pointed Stick
There Is Always...
 
A Pointed Stick's Avatar
 
Join Date: Dec 2010
Posts: 7,437
vCash: 250
Revenue Sharing & Islanders: Answered, Mostly

Right up front, all the credit goes to Chris Botta, and strangely enough, the New York Islanders. Here is the link to Chris' story last week: http://www.sportsbusinessdaily.com/S...NHL-Shift.aspx

Here's the part that matters:
Quote:
The New York Islanders this week released an offering memorandum for majority ownership to potential bidders for the team, according to a source in the finance industry.

In the memo, Islanders owner Charles Wang offers 75 percent ownership of the club, with a five-year option on the other 25 percent. The memo also states that the Islanders sustained an operating loss during the 2013-14 season of $4.8 million, with the loss minimized greatly by $15 million received from NHL revenue sharing and escrow payments.

According to the memo, total revenue for the Islanders in the just-completed season was $84 million.
I apologize for the dramatic bold and underline, but really that's the meat on the bone. This would appear to bluntly state Wang got $15 million back from the league for his troubles. Quickly doing the math on our cap for the year:

Cap Hit: $51,716,431
Cap Floor: $44 Million

Source: Capgeek http://www.capgeek.com/islanders?exc...team=islanders

If I take the $15 Million, from the $51.7 Million, that ultimately drops the salary expense to below the cap floor by slightly over $7 Million. If you want to be generous, subtract the $4 million loss. There are probably some errors on the capgeek site, but even allowing for some big ones I am left with a bit of a sour mood regarding our roster cost. I know it takes time for the checks to be cut and sent, possibly into the next season which may explain our inactivity in the summer (again, being generous), but it still leaves some questions for me:
- Was that the reason for the timing of the Vanek trade?
- Will the league tolerate our bargain basement salary costs if Snow doesn't go out and spend, finally?
- Should we even care where the money comes from, as long as it gets spent on a better roster?
- Would Snow & Wang have anyone left to defend them if they don't spend money this upcoming summer, knowing they got a bonus check last year, and have another one on the way this year, and don't use it to improve the club?

I am thinking yes, no, no, and I hope "hell no." $15 million... That's a goaltender, a stud on defense or up front next to Tavares, and a few million for operating expenses. There you go Wang, it lets you still revel in the lowest out of pocket expenses in the NHL considering the multitude of front loaded contracts you finagled.

In fairness I would like to see the actual memo to verify the amounts, particularly the breakdown on RSOC check amount if it is spelled out, although we all know it isn't a matter of if he got a check, but for how much (please see the 2013 CBA if you are uncomfortable with this concept).

Here is a link to all 400+ pages of the 2013 CBA (head to Article 49, page 199) http://www.nhl.com/nhl/en/v3/ext/CBA...A_2013_CBA.pdf

PS - If I have the cap hit (the adjusted, CBA accounted hit) wrong, please educate me.


Last edited by A Pointed Stick: 05-04-2014 at 02:27 AM.
A Pointed Stick is offline   Reply With Quote
Old
05-04-2014, 12:31 AM
  #2
First Blood
Registered User
 
First Blood's Avatar
 
Join Date: Feb 2014
Country: Lithuania
Posts: 971
vCash: 500
Eye opener... Yeah I'll hold Wang accountable as I always have if he isn't going to spend.

First Blood is offline   Reply With Quote
Old
05-04-2014, 01:21 AM
  #3
Lenny on Ice
Registered User
 
Join Date: Feb 2012
Posts: 445
vCash: 500
$4.8M operating loss + $15M revenue sharing = $19.8M

Do you think Wang lost 20M again without revenue sharing???

Lenny on Ice is offline   Reply With Quote
Old
05-04-2014, 01:35 AM
  #4
A Pointed Stick
There Is Always...
 
A Pointed Stick's Avatar
 
Join Date: Dec 2010
Posts: 7,437
vCash: 250
Quote:
Originally Posted by Lenny on Ice View Post
$4.8M operating loss + $15M revenue sharing = $19.8M

Do you think Wang lost 20M again without revenue sharing???
I think you need to subtract the loss from the revenue sharing bonus money. I should have put that in there (I will edit).

And I do not believe it touches all forms of revenue, like the cable deal.

How much did he really lose last year?

A Pointed Stick is offline   Reply With Quote
Old
05-04-2014, 02:01 AM
  #5
Nelly
Registered User
 
Nelly's Avatar
 
Join Date: Jul 2011
Posts: 195
vCash: 500
Quote:
Originally Posted by A Pointed Stick View Post
I think you need to subtract the loss from the revenue sharing bonus money. I should have put that in there (I will edit).

And I do not believe it touches all forms of revenue, like the cable deal.

How much did he really lose last year?
He lost 4.8 million! Why do people over analyze things? He's selling the team. Nothing to hide. It's all in the books for the potential new owners to see. Wouldn't it look better if he said he made 50 gazillion dollars? It would but he didn't. Really this goes to show Wang's budget is to lose at worst 20 million like every other year.

And of course the cable deal is included. Those 5000 paid for seats every game barely pays for the Yashin/DP buyouts. Although Forbes did report Wang is paying his players in Bitcoins.

Nelly is offline   Reply With Quote
Old
05-04-2014, 02:05 AM
  #6
Lenny on Ice
Registered User
 
Join Date: Feb 2012
Posts: 445
vCash: 500
Quote:
Originally Posted by A Pointed Stick View Post

Cap Hit: $51,716,431
Cap Floor: $44 Million

If I take the $15 Million, from the $51.7 Million, that ultimately drops the salary expense to below the cap floor by slightly over $7 Million.
The Cap Hit doesn't matter much, only matters is the Cap Floor which must be reached and the actual Salary they spend. They used backloaded contracts for a reason and DP's contract doesn't show up on the Cap Hit but still must be paid.

Isles Cap Hit was only 8M above the Cap Floor because the Floor was so low the last 2 seasons. Don't expect Isles to spend 8M over the Floor next season again.

All you need to know is Isles have financial restrictions. They are so restricted that they didn't take salary back at the deadline. Vanek's salary without the BUF retained salary was 5.152M for the season. JT's salary was 5M for the season. But JT got injured in the olympics and insurance paid the rest of his salary 4 games before the deadline. The insurance payment Isles got was more than the rest of Vanek's salary after the deadline and still Isles didn't take salary back in the Vanek trade at the deadline.

Lenny on Ice is offline   Reply With Quote
Old
05-04-2014, 06:02 AM
  #7
BillD
Registered User
 
Join Date: Feb 2004
Posts: 7,237
vCash: 500
Quote:
Originally Posted by Nelly View Post
He lost 4.8 million! Why do people over analyze things? He's selling the team. Nothing to hide. It's all in the books for the potential new owners to see. Wouldn't it look better if he said he made 50 gazillion dollars? It would but he didn't. Really this goes to show Wang's budget is to lose at worst 20 million like every other year.

And of course the cable deal is included. Those 5000 paid for seats every game barely pays for the Yashin/DP buyouts. Although Forbes did report Wang is paying his players in Bitcoins.
Actual loss is below $4.8MM (after applying the league revenue sharing). In fact, that is an accounting loss (or net loss) but not a cash loss. What we have learned recently is that IRS rules allow the NHL to amortize a portion of the players salary for tax reporting who are on multi-year contracts (they used the word amortize, it is more descriptive to classify it depreciation). Example: Hamonic salary $3MM (which can be expensed). But he is on a 6 year contract so the IRS says the value of the contract can be depreciated over that useful life (not sure of the rate of depreciation but use straight-line !0% or double depreciation which is allowed, 20% and you get to $600,000). So $600,000 is deducted from any net profit. The same for Grabs, Bailey, JT, Okposo all the players on multi year contracts.

BillD is offline   Reply With Quote
Old
05-04-2014, 06:30 AM
  #8
Sparksrus3
Registered User
 
Join Date: Jun 2012
Posts: 1,167
vCash: 500
The last handful of games, the ones where Bailey was our highest paid player, our on ice payroll
Was anywhere front 22-25 mill. Depending on if Nabby played. Even if it was 8 games or so that's still
10% of the season.(we all remember those games, the ones we looked great)

As long as we Halakemup ( sign halak) quickly that's all that matters this week.
Great link Thanks for the read!

Sparksrus3 is offline   Reply With Quote
Old
05-04-2014, 06:58 AM
  #9
JeffNYI
Registered User
 
Join Date: Jun 2006
Posts: 1,535
vCash: 500
Quote:
Originally Posted by A Pointed Stick View Post
- Was that the reason for the timing of the Vanek trade?
- Will the league tolerate our bargain basement salary costs if Snow doesn't go out and spend, finally?
- Should we even care where the money comes from, as long as it gets spent on a better roster?
- Would Snow & Wang have anyone left to defend them if they don't spend money this upcoming summer, knowing they got a bonus check last year, and have another one on the way this year, and don't use it to improve the club?

I am thinking yes, no, no, and I hope "hell no."

My answers would be: the (original) Vanek trade was actually a hockey move and the financial aspects were side details, yes, as fans we can't help but care and not applicable.

To the 2nd and 4th questions - as long as the Islanders are following the rules and the CBA, the NHL will not (and can not) do anything about it.

If we're cap compliant they will tolerate our behavior, regardless of what we actually spend..

JeffNYI is offline   Reply With Quote
Old
05-04-2014, 07:43 AM
  #10
blitzkriegs
Registered User
 
blitzkriegs's Avatar
 
Join Date: May 2003
Location: Beach & Mtn & Island
Posts: 8,926
vCash: 500
The NHL cares based on the CBA for the most part. So, don't look there. You already have your answer where it matters most: the players KNOW and so do the agents about the Isles. That's all you need to know. It's obvious.

blitzkriegs is offline   Reply With Quote
Old
05-04-2014, 11:25 AM
  #11
Jester9881
Registered User
 
Jester9881's Avatar
 
Join Date: May 2006
Location: Long Island NY
Posts: 5,809
vCash: 500
Quote:
Originally Posted by blitzkriegs View Post
The NHL cares based on the CBA for the most part. So, don't look there. You already have your answer where it matters most: the players KNOW and so do the agents about the Isles. That's all you need to know. It's obvious.
And proof of this is the fact that they changed the last CBA to prevent the Islanders from using bonuses to trick the cap. The NHL might not be able to do anything, but they sure as hell know it's happening and they don't like it.

Jester9881 is offline   Reply With Quote
Old
05-04-2014, 11:59 AM
  #12
A Pointed Stick
There Is Always...
 
A Pointed Stick's Avatar
 
Join Date: Dec 2010
Posts: 7,437
vCash: 250
Quote:
Originally Posted by Nelly View Post
He lost 4.8 million! Why do people over analyze things? He's selling the team. Nothing to hide. It's all in the books for the potential new owners to see. Wouldn't it look better if he said he made 50 gazillion dollars? It would but he didn't. Really this goes to show Wang's budget is to lose at worst 20 million like every other year.

And of course the cable deal is included. Those 5000 paid for seats every game barely pays for the Yashin/DP buyouts. Although Forbes did report Wang is paying his players in Bitcoins.
Yeah probably but there was an article hinting at a struggle against including non-nhl involved deals. There are other revenue streams besides the cable deal.

And he's not losing money now. Also, that bonus money is meant mostly for use on the roster per the NHL. So where's the beef?

A Pointed Stick is offline   Reply With Quote
Old
05-04-2014, 12:35 PM
  #13
Nelly
Registered User
 
Nelly's Avatar
 
Join Date: Jul 2011
Posts: 195
vCash: 500
Quote:
Originally Posted by A Pointed Stick View Post
Yeah probably but there was an article hinting at a struggle against including non-nhl involved deals. There are other revenue streams besides the cable deal.

And he's not losing money now. Also, that bonus money is meant mostly for use on the roster per the NHL. So where's the beef?
Nice avatar btw,

The NHL is a gate driven league. The Rogers TV deal doesn't kick in until next year, and it's still a drop in the bucket compared to other leagues.

Let's face it without the cable deal the Islanders for sure would have been gone considering the SMG lease through out the years.

They don't make nearly as much as the other NHL teams in licensing fees. All you have to do is look at the NHL.com, football fanatics, Mitchell and Ness, lids etc. to see their merchandise is underrepresented compared to other teams.

Nelly is offline   Reply With Quote
Old
05-04-2014, 05:12 PM
  #14
Dutch Frost
Everything is Fine!!
 
Dutch Frost's Avatar
 
Join Date: Mar 2010
Location: Queens, NY
Posts: 2,662
vCash: 500
This is why the league always calls against us during games. This is the conspiracy! The us against them nonsense we talk about all the time.. It comes down to this.

The league does not like Charles Wang and the Islanders get screwed. Is it any wonder why in the last decade the Islanders have had the most penalties called against them then any other team?

Dutch Frost is offline   Reply With Quote
Reply

Forum Jump


Bookmarks

Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off



All times are GMT -5. The time now is 02:42 AM.

monitoring_string = "e4251c93e2ba248d29da988d93bf5144"
Contact Us - HFBoards - Archive - Privacy Statement - Terms of Use - Advertise - Top - AdChoices

vBulletin Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.
HFBoards.com is a property of CraveOnline Media, LLC, an Evolve Media, LLC company. ©2014 All Rights Reserved.