The Business of HockeyDiscuss the financial and business aspects of the NHL. Franchise sales, valuations, TV contracts, ratings, expansion, relocation, the CBA and work stoppage discussion goes here.
The problem with using hockey as a business is its not a good model. In business 10 companies can all make a profit, all 10 are winners. In hockey 1 team gets the cup, the other 29 are losers.
Hockey isn't a business, its an arms race. Why do countries spend billions on armies and nukes? Did the US and USSR really need 10,000s of nukes? Nope, so why so many? Because their opponents had them. It only takes one or two countries to start the whole arms race off and everyone else gets dragged along.
A hand of countries started the spending war and the arms dealers (players) are laughing all the way to the bank. Countries eventually work it out and sign treaties limiting arms, hopefully the NHL clubs will too.
Plus, the owners don't need a salary cap. All 30 owners can come together and make a verbal agreement amongst each other that the highest salary they will pay is say $8 mill a season and control spending reasonably without a cap.
It's a good thought, but that's collusion, and that's illegal.
Plus, the owners don't need a salary cap. All 30 owners can come together and make a verbal agreement amongst each other that the highest salary they will pay is say $8 mill a season and control spending reasonably without a cap. It's their own fault they are in this mess, they have control over the salaries and let it get out of hand and are now blaming the players for it. Too many times the owners give in to a player demanding a high salary because they fear it will hurt their team more than help it, but if the owners can get some guts, then they can stand up to the players and refuse to pay a ludicris contract.
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Thats called collusion and it is illegal.
I dont think you have a firm grasp on what the problem is. It is not just owners v players. It is most of the owners v 4-5 owners v players. When you have 4-5 owners throwing off salary structures it effects the whole league. A cap is needed or you will see 4-6 teams fold....which wouldnt be a bad thing either.
That's exactly the way I feel. Is it the players fault that the owners shove money in their face?
no, its not. but now the players are taking full advatage of it, exploiting it as much as possible and are trying to say they are blame free in the matter. plus, its no like they werent asking for a lot to begin with. i remember whe roenick became a free agent. his demand in his last year with phoenix was starting at 5M. as the season rpgressed, he asked for more and more. so while the owners do hav a part it in, so do the players.
Instead of collusion.... why not common sense, it's not illegal! Some of the GM's and owners are world beaters when it comes to spending, and I think with all this CBA talk, and the focus on the almighty $$$ that maybe if these guys used some common $en$e things wouldn't be so bad in the future.
I dont think you have a firm grasp on what the problem is. It is not just owners v players. It is most of the owners v 4-5 owners v players. When you have 4-5 owners throwing off salary structures it effects the whole league. A cap is needed or you will see 4-6 teams fold....which wouldnt be a bad thing either.
Your right it is collusion. But what the owners can do is to promise to each other not to spend more than their expected revenues for that year. In some cases the expected revenues for that year will come up short, and in some cases it will come in higher. But no way should teams be losing like they are now.
I dont think you have a firm grasp on what the problem is. It is not just owners v players. It is most of the owners v 4-5 owners v players. When you have 4-5 owners throwing off salary structures it effects the whole league. A cap is needed or you will see 4-6 teams fold....which wouldnt be a bad thing either.
6 teams folding would be exactly what I'm hoping out of this whole mess.
and funny how the Pens were forced to get rid of popular players, and there is no cap. hmm....
That's because the organization is terrible, we knew this. It's not because of the players' salaries. It's not the players fault the Penguins can't sell out playoff games and have a terrible arena lease.
6 teams folding would be exactly what I'm hoping out of this whole mess.
I think this is what will happen also, so if 6 teams fold and everybody becomes more fiscally responsible, then the union is out of approx. 150 jobs... does this make sense for the union??? We all know that there are markets in the US that do not support hockey very well, and that the expansion into some markets was a mistake, so maybe the owners should fire Bettman, and the union fire Knob Goodenow, hire a couple of guys who care about the game, and bada bing the new boys get 'er done and we have a season... if it was only that simple! This whole thing is pi$$ing me off as a fan... something drastic has to happen!
Keep in mind that professional sports leagues are a cartel.
Is collusion actually illegal in a legalized cartel?
I would say that the owners could legally do this if they were smart enough.
I think it is illegal, but not because it is a cartel.
It would be illegal under employment laws. You can't arbitrarily limit a person's wages if there is a union involved (and most times even if there is no union invilved). If you have a union you have to negotiate collectively, or else what would be the point of having a union in the first place if an owner of a business could adjust wages willy-nilly?
Any concerted move by the owners to limit salaries that is not agreed to by collective bargaining would be collusion and is illegal. The owners would all have to act independently of each other for this to work. But if they did that, the union would point out that the owners were effectively colluding because they would be acting to impliment a salary structure that they tried to bargain and did not get. It would then be up to the owners to prove they were acting independently.
All in all, the owners would risk serious financial repercussion if they lost, not mention more union woes than they already have (if that's possible).
6 teams won't fold, they'll just be moved to a secure location if anything.
Meaning they would explore every opportunity in their current market before being moved. I don't suggest all 6 would be moved (being that one is the Rangers and another is the Blues)
Meaning they would explore every opportunity in their current market before being moved. I don't suggest all 6 would be moved (being that one is the Rangers and another is the Blues)
Are you saying the Rags and the Blues are two of those 6 teams that lost 170Mils last season?
Are you saying the Rags and the Blues are two of those 6 teams that lost 170Mils last season?
in terms of overall dollars lost.
While the Rangers may have been able to say they were "sold out" everynight, it would be a fabrication of the truth and when 40% of the actual folks that bought tickets don't show up the meat and potatoes of concession sales takes a heavy dip.
Add to that the Rangers had a 75+ millino dollar payroll and the Rangers losing 15-20 million is not far fetched.
Would perhaps a better solution be to put a cap on the players? As JR suggested earlier.
I happen to agree with the PA when they say that they should make less money because the owners are stupid. Wouldn't it make more sense to cap the UFA's rather than cap the teams in general? This way the lower-end guys aren't affected?
The question then comes to be 'How does that solve, say, Pittsburgh's problems?'. Well, it doesn't soley. This is why I also like the idea of a luxery tax. I have no problem with the Rangers signing 8 guys to $6 million dollar contracts (say that was the cap), so long as they are paying luxery taxes back to teams like Pittsburgh for doing so.
More to the point, I think it would be a mistake to handcuff a successful team when it comes to resigning their guys with a low cap. For instance, let's say you're team wins the cup. Would you want to see the franchise player, or if not him, key players beyond him, sent off in favour of draft picks just because the franchise guy wants a pay hike to $10 million and the cap is breached?
I personally prefer the luxery tax to a cap as a fan. The idea that a cap will make Edmonton (for example) better off I think is a fallacy. Any team that gets good is going to be near that cap, that is if it's $40 million or low, you can bet on it. Winning teams will be blown up due to financial reasons. I don't think that's fair. Rather than seeing that, why not give that team an option to go over the limit if they must, but set in place a system that will support a team like Edmonton or Pittsburgh when it does happen.
Last but not least, I do not mind a very high cap in the $60 - 70 million dollar range for the sole purpose of stopping a New York Yankees situation. I don't mind the Wings at $60 million and everyone else at $30 - 40 million. I do have a problem with the Rangers at $90 million and the Wild at $17 million. I also wouldn't mind seeing a MINIMUM cap of about $25 million, too. With the luxery tax, these cheapo teams wouldn't have an excuse to go below that.
Thats the problem with a salary cap. It destroys the chances of dynasties (at least true dynasties) and it means excessive player movement. I like the idea of a minimum salary range (concession to the players) and an extremely high say a percentage like 75% of a teams profit being the salary cap for the team (or just a set figure at like 60 million). Lets be reasonable, this is more than workable for the PA. I also think that a limit on UFA contracts is a must. This allows a lower market team to actually have the chance to sign a player, if they are willing to pony up to the max. Then its not about money, but location. I doubt any of this will come into play, but its all reasonable.
- Revenue sharing is a must, and without a doubt should be in the new CBA regardless of a cap or tax.
6 teams won't fold, they'll just be moved to a secure location if anything.
What 6 good hockey markets are available? And are of a large enough size to be able to support a $30-35M payroll?
What you would really need under the current system is find 6 billionares that happen to be huge hockey fans that don't mind losing money.
I don't blame the players for not turning down money when it's offered to them. The problem is that there are such HUGE economic disparities between franchises. What is insane for the Islanders (Yashin's contract) is a decent signing for the Rangers (Holik's contract). The problem is that in many cases the precedent is set by the biggest mistake. Chris Drury can point to Mike Peca's contract on why he deserves $4M. Then the Hawks trade Steve Sullivan because they are afraid he'll convince an arbitrator he's worth $4M with both of those guys as comparables.
I agree with others that a luxury tax system above a reasonable level ($35-40M) would be the best solution.
That's because the organization is terrible, we knew this. It's not because of the players' salaries. It's not the players fault the Penguins can't sell out playoff games and have a terrible arena lease.
actually, the Pens got good attendance for playoff games, they just havent been there in a few years. besides, what about the Oilers? theyve had to trade away Guerin, Weight and Carter just to name a few. Even in the years before the last two, the Pens still drew pretty good. we sold out the 2/3 of the seasn with Mario back, and went to the east finals, and barely made money. so its not all the organization.
Would perhaps a better solution be to put a cap on the players? As JR suggested earlier.
I happen to agree with the PA when they say that they should make less money because the owners are stupid. Wouldn't it make more sense to cap the UFA's rather than cap the teams in general? This way the lower-end guys aren't affected?
The question then comes to be 'How does that solve, say, Pittsburgh's problems?'. Well, it doesn't soley. This is why I also like the idea of a luxery tax. I have no problem with the Rangers signing 8 guys to $6 million dollar contracts (say that was the cap), so long as they are paying luxery taxes back to teams like Pittsburgh for doing so.
Pittsburgh's problems are WAY more than just Salary. The Team is tied into the Igloo until 2007 otherwise they would have moved or have been sold by now. That and the fan support is practically non-existent.
Quote:
Originally Posted by Jay Thompson
More to the point, I think it would be a mistake to handcuff a successful team when it comes to resigning their guys with a low cap. For instance, let's say you're team wins the cup. Would you want to see the franchise player, or if not him, key players beyond him, sent off in favour of draft picks just because the franchise guy wants a pay hike to $10 million and the cap is breached?
Well, the franchise guy is now not wanting to be a part of a winning team any more if he puts his bank account ahead of the team. My rebut to this statement is look at the New England Patriots. Two NFL Championships in three years with a cap.
Quote:
Originally Posted by Jay Thompson
I personally prefer the luxery tax to a cap as a fan. The idea that a cap will make Edmonton (for example) better off I think is a fallacy. Any team that gets good is going to be near that cap, that is if it's $40 million or low, you can bet on it. Winning teams will be blown up due to financial reasons. I don't think that's fair. Rather than seeing that, why not give that team an option to go over the limit if they must, but set in place a system that will support a team like Edmonton or Pittsburgh when it does happen.
Last but not least, I do not mind a very high cap in the $60 - 70 million dollar range for the sole purpose of stopping a New York Yankees situation. I don't mind the Wings at $60 million and everyone else at $30 - 40 million. I do have a problem with the Rangers at $90 million and the Wild at $17 million. I also wouldn't mind seeing a MINIMUM cap of about $25 million, too. With the luxery tax, these cheapo teams wouldn't have an excuse to go below that.
Ok I can appreciate where you're coming from. Again devils advocate here.... What about Parity? Wouldn't you agree a cap would bring more competition and parity to a league who's talent pool isn't as deep or as talented as the NBA or the NFL?
Pittsburgh's problems are WAY more than just Salary. The Team is tied into the Igloo until 2007 otherwise they would have moved or have been sold by now. That and the fan support is practically non-existent.
Little known fact: The Pens have one of the best TV contracts in the game. They get huge ratings.
