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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.

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Old
09-25-2004, 05:24 PM
  #176
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Quote:
Originally Posted by Seachd
More realistic based on what?
Based maybe that many owners lied all the time about their #'s unless they are a stock market company & with the recent law that would call companies for more transparence , that's why you see a lot of companies going down the drain '' la Enron''.

You call players greedy because they make millions but you think a BILLIONAIRE is not greedy ? come on , wake up.

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09-25-2004, 05:29 PM
  #177
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Originally Posted by Russian Fan
Based maybe that many owners lied all the time about their #'s
Prove it. Prove to me that the players get 65% of revenue.

Quote:
Originally Posted by Russian Fan
You call players greedy because they make millions but you think a BILLIONAIRE is not greedy ? come on , wake up.
Greedy owners aren't going to jeopardize the future of my team (which isn't owned by a billionaire) in the league.

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09-25-2004, 10:25 PM
  #178
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Quote:
Originally Posted by Seachd
More realistic based on what?
linkage

Three examples of overstatement in player costs along with the underreported revenue cited in conjunction with direct costs that should not have been netted out of gross revenue, NHL award payments, insurance payments for injured players, and minor league salaries or revenues -- make the 75% ratio plummet.

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09-25-2004, 10:49 PM
  #179
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Originally Posted by habitual_hab
linkage

Three examples of overstatement in player costs along with the underreported revenue cited in conjunction with direct costs that should not have been netted out of gross revenue, NHL award payments, insurance payments for injured players, and minor league salaries or revenues -- make the 75% ratio plummet.
From the report you are quoting...

Net revenue is not a term you will find in any accounting glossary. The closest you'll come is net sales, allowing deduction for returns, discounts, and undeliverable merchandise from gross revenue. Gross profit, the closest accounting term to the NHL's net revenue, is net sales minus the actual cost of goods sold -- for a hockey operation, the cost of food sold by concessions, for example. The NHL goes beyond that, deducting every direct cost from gross revenue, not just cost of goods sold (to extend the concession example, the cost of labor).

Easily found on the net...

net revenue: A common term for profit, as the difference between total revenue and total cost. When used in the real world of business wheeling and dealing, this notion of net revenue general refers to accounting profit rather than economic profit. The "net" aspect of net revenue indicates that some (that something being cost) is deducted from total or "gross" revenue. Other common terms used in this same context are net income and net earnings.

http://www.amosweb.com/cgi-bin/gls.p...ey=net+revenue


JULY 15, 2003 (IDG NEWS SERVICE) - IT services provider Accenture Ltd. exceeded net revenue and earnings expectations for its third quarter of fiscal 2003, as the company, whose core business is consulting, continued to expand its outsourcing business.

http://www.computerworld.com/managem...,83089,00.html

The Sunnyvale, Calif., company reported net income of $50.8 million, or 8 cents per diluted share, on net revenue of $321.4 million for the quarter that ended June 30. Net revenue was up 42% over the $225.8 million it reported a year ago. Net income was also up from last year's $21.4 million, or 3 cents per share.

http://www.computerworld.com/news/20...2913%2C00.html



Contrary to some peoples beliefs, I don't trust anything blindly. I do actually investigate things if they don't sound right. The link you are reporting goes to great lengths to throw doubt on everything in the Levitt report, yet the author does not seem to know a reletively common business term. This tends to cast doubt on the link you are using to refute the Levitt report. I hope this isn't the only source of your doubts...


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09-25-2004, 11:01 PM
  #180
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Originally Posted by djhn579


Contrary to some peoples beliefs, I don't trust anything blindly. I do actually investigate things if they don't sound right. The link you are reporting goes to great lengths to throw doubt on everything in the Levitt report, yet the author does not seem to know a reletively common business term. This tends to cast doubt on the link you are using to refute the Levitt report. I hope this isn't the only source of your doubts...

I'm not saying the author is perfect but he does raise some very interesting doubts about both Levitt's and the NHL's calculations: Three examples of overstatement in player costs along with the underreported revenue cited in conjunction with direct costs that should not have been netted out of gross revenue, NHL award payments, insurance payments for injured players, and minor league salaries or revenues -- make the 75% ratio plummet. Yet you're willing to dismiss these issues over semantics.

And I hope puppet Bettman's rants and the NHL commissioning an "independent" report from Levitt and NHL owners history of "honest business dealings" isn't what makes you believe them.

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09-25-2004, 11:12 PM
  #181
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Originally Posted by habitual_hab
I'm not saying the author is perfect but he does raise some very interesting doubts about both Levitt's and the NHL's calculations: Three examples of overstatement in player costs along with the underreported revenue cited in conjunction with direct costs that should not have been netted out of gross revenue, NHL award payments, insurance payments for injured players, and minor league salaries or revenues -- make the 75% ratio plummet. Yet you're willing to dismiss these issues over semantics.

And I hope puppet Bettman's rants and the NHL commissioning an "independent" report from Levitt and NHL owners history of "honest business dealings" isn't what makes you believe them.
I dismiss it because the author goes to great lengths to dismiss everything Levitt said, mainly on semantics: this term does not exist (yet it does seem to exist...), they didn't say this in the interview/presentation (I have seen many presentations, and there are many facts that are in the reports that are not discussed in the presentation of the work, it is assumed that people will read it and no one can remember everything off the top of their head, not to mention that no one wants to listen to every little detail).

The funniest thing is that he questions the legitamacy of the report because Levitt was paid by the NHL to do it. Every audit is paid for by the company being audited. That is how these things work.

Levitts credentials are well known and easy to find. What are "Dubi's" credentials?

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09-27-2004, 12:09 AM
  #182
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Quote:
Originally Posted by habitual_hab
I'm not saying the author is perfect but he does raise some very interesting doubts about both Levitt's and the NHL's calculations: Three examples of overstatement in player costs along with the underreported revenue cited in conjunction with direct costs that should not have been netted out of gross revenue, NHL award payments, insurance payments for injured players, and minor league salaries or revenues -- make the 75% ratio plummet. Yet you're willing to dismiss these issues over semantics.

And I hope puppet Bettman's rants and the NHL commissioning an "independent" report from Levitt and NHL owners history of "honest business dealings" isn't what makes you believe them.
First, NHL award payments are salaries... Second, insurance payments for injured players is money that can be fairly counted as "player cost", at least imo since it's to cover the player's salary (which is paid to the player). Third, minor league salaries only include players with NHL contracts playing in the minors (like Karl Dykhuis). I think it's fair, since they are paid like NHLers, not minor leaguers. Also, the minor league teams usually are owned by a third entity, so I don't see much revenue there...

All of these must not account for a lot though, especially #1 and #3.

Also, as another poster stated, auditors are always paid by the company doing the audit, that is standard business practice. The stock market is based on those auditors statements and reports, and believes they are independant. Why should Levitt be considered any other way?

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09-27-2004, 01:00 AM
  #183
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Originally Posted by habitual_hab
The NHL's case of crippling poverty is based on fictional numbers. The NHLPA has provided a starting point for negotiations...
NHLs offer is far from crippling. 10 years ago the players played for 1/2 the $31m offered. Inflation has been 28% over that period according the CPI. They didn't feel "crippled then", so why would a raise of 50-70% more in actual value be crippling. That is a huge raise.

Quote:
What industry are NHL players involved in? Yes, that's right - the sports-entertainment industry. So, you're telling me that by accepting a 30% paycut, NHL players will still receive 4 times what their brethren in the NBA, NFL, MBA make?

Fine, the let them go work in the NBA, NHL, MLB. Their choice and they are free to make it, they are free to change sports anytime they want. Don't let the door hit them on way out.

Why not suggest the restaurant employees use the average NBA, NFL, or MLB contract.

"Hey Shaq is an MVP and is pulling down US$18m. Since I'm the most restaurants MVW (most valuable waiter) I want a raise to Shaq pay level. Give me $18m/y or we strike.".

But really that isn't a sensible example of using the other leagues, different business and all. So lets keep it to the same industry. In the restaurant scenario, there are other restaurants out there the waiters are free to work for. There are other hockey leagues the players are free to work for

the players are free to go work in the AHL
the players are free to go work in OSHL
the players are free to go work in WHA
the players are free to go work in SEL
the players are free to go work in German League
the players are free to go work in RSL
the players are free to go work in Swiss league
the players are free to go work in Finnish League
the players are free to go work in Czech league
............................

If they can get a better deal from one of these leagues then more power to them. If they can't, maybe the 4-10 times as much the NHL is offering is fair market value.


Last edited by me2: 09-27-2004 at 01:04 AM.
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09-27-2004, 01:11 AM
  #184
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Quote:
Originally Posted by habitual_hab
No, they're in the sports-entertainment industry.

Part of Mr. Levitt's assignment included looking at the NBA and NFL to see how they handle related party revenue allocations. Why would the NHL commission to do comparisons of non-related industries? Because they are not non-related - they all in the sports-entertainment industry.

(And a sushi chef and a short-order cook might have different skill sets but they're still in the same industry.)
And they are free to change industries if they think they can get more money. If a sushi chef is getting more than a short order chef then the short order chef can hone his skills and move over.


If French restaurants are in vogue and there is more demand for French chefs they will get paid more. If you happen to be an out of vogue Italian chef and the French chef next door is getting paid twice as much because his restaurant earns twice as much, the tough luck because you won't get what that French chef earns. Either become a French chef or stop whinging.

If the NHLers are getting less than the NFLers, MLBers, NBAers then should do what the short order cook would do: hone their skills in the more profitable area and change jobs OR pray their industry becomes more profitiable and wait it out.


Last edited by me2: 09-27-2004 at 01:14 AM.
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09-27-2004, 01:21 AM
  #185
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Quote:
Originally Posted by habitual_hab
I'm not saying the author is perfect but he does raise some very interesting doubts about both Levitt's and the NHL's calculations: Three examples of overstatement in player costs along with the underreported revenue cited in conjunction with direct costs that should not have been netted out of gross revenue, NHL award payments, insurance payments for injured players, and minor league salaries or revenues -- make the 75% ratio plummet. Yet you're willing to dismiss these issues over semantics.
Minor league salaries are a player cost.
Insurance payments on players are a player costs (tied to salary)
As are benefits related to salary/employment etc

Travel costs I don't like.

As for Levitt, he concluded many of the teams were unprofitable. The "75%", the use of "net revenue" & "player cost" etc pretty much comes back to unprofitable.

The idea that NHLers deserve the same percentage of gross revenue as NBAes or NFLs is nonsense. The NHL would have much higher running costs/$ earned than these leagues due to the lower revenue stream. Maybe they should be offer 45% of gross revenue not 55%.

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09-27-2004, 09:08 AM
  #186
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Originally Posted by me2
Minor league salaries are a player cost.
Insurance payments on players are a player costs (tied to salary)
As are benefits related to salary/employment etc

Travel costs I don't like.

As for Levitt, he concluded many of the teams were unprofitable. The "75%", the use of "net revenue" & "player cost" etc pretty much comes back to unprofitable.

The idea that NHLers deserve the same percentage of gross revenue as NBAes or NFLs is nonsense. The NHL would have much higher running costs/$ earned than these leagues due to the lower revenue stream. Maybe they should be offer 45% of gross revenue not 55%.
You really seem to have no idea of what it is you're discussing:

"My (Levitt's) assignment was to make findings and reach conclusions as to whether the [URO] instructions account for relevant revenues and expenses associated with operating a professional hockey franchise in the NHL [and] whether member clubs accurately reported information requested by the UROs; whether related company income is reasonable for a professional hockey franchise [and] similar to treatment in Basketball Related Income [and] Defined Gross Revenue, as defined in the NBA and NFL collective bargaining agreement[s]; whether player costs and revenues [are] consistent with reasonable and sound business practices in this industry."

The NHL can't have its cake and eat it too, and neither can you. Levitt used the NBA & NFL to compare and contrast yet the NHLPA cannot use those same player cost ratios? Screw that BS.

Minor league salaries are only part of the equation if minor league revenues are part of the equation as well.

My employess receive benefits. One benefit they receive is a bonus which is negotiated with me. They pay income tax on that bonus - it is part of their salary. Other benefits (free meals, grocery items, free movie rentals, etc.) they receive are NOT deemed salary. Insurance, per diem expenses, social security, NHL trophy and playoff awards, worker's compensation, pension plan contributions are NOT player salaries - ask any accountant.


Last edited by habitual_hab: 09-27-2004 at 11:31 AM.
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Old
09-27-2004, 09:17 AM
  #187
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Originally Posted by djhn579
I dismiss it because the author goes to great lengths to dismiss everything Levitt said, mainly on semantics: this term does not exist (yet it does seem to exist...), they didn't say this in the interview/presentation (I have seen many presentations, and there are many facts that are in the reports that are not discussed in the presentation of the work, it is assumed that people will read it and no one can remember everything off the top of their head, not to mention that no one wants to listen to every little detail).

The funniest thing is that he questions the legitamacy of the report because Levitt was paid by the NHL to do it. Every audit is paid for by the company being audited. That is how these things work.

Levitts credentials are well known and easy to find. What are "Dubi's" credentials?
When I bought my business I wanted the business audited - so both the "vendor" and the "purchaser" paid for the audit equally so that the auditor is beholden to no-one. Standard practice as far as I know. Levitt's "credentials"? Wasn't he part of the Enron fiasco?

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09-27-2004, 06:18 PM
  #188
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Quote:
Originally Posted by habitual_hab
You really seem to have no idea of what it is you're discussing:
the feeling is mutual.

Quote:

"My (Levitt's) assignment was to make findings and reach conclusions as to whether the [URO] instructions account for relevant revenues and expenses associated with operating a professional hockey franchise in the NHL [and] whether member clubs accurately reported information requested by the UROs; whether related company income is reasonable for a professional hockey franchise [and] similar to treatment in Basketball Related Income [and] Defined Gross Revenue, as defined in the NBA and NFL collective bargaining agreement[s]; whether player costs and revenues [are] consistent with reasonable and sound business practices in this industry."

The NHL can't have its cake and eat it too, and neither can you. Levitt used the NBA & NFL to compare and contrast yet the NHLPA cannot use those same player cost ratios? Screw that BS.
Why is it BS? Different business have different running costs. An action movie would have a higher special effects budget than a drama. The NHL earns less revenues, its running costs (excluding player salaries/insurance etc) would probably make up a much higher portion of gross revenue.

Quote:
Minor league salaries are only part of the equation if minor league revenues are part of the equation as well.

My employess receive benefits. One benefit they receive is a bonus which is negotiated with me. They pay income tax on that bonus - it is part of their salary. Other benefits (free meals, grocery items, free movie rentals, etc.) they receive are NOT deemed salary. Insurance, per diem expenses, social security, NHL trophy and playoff awards, worker's compensation, pension plan contributions are NOT player salaries - ask any accountant.
Insurance for example is directly related to salary. The more a player earns the more the insurance on his contract. Common sense.

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09-27-2004, 07:12 PM
  #189
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Originally Posted by habitual_hab
When I bought my business I wanted the business audited - so both the "vendor" and the "purchaser" paid for the audit equally so that the auditor is beholden to no-one. Standard practice as far as I know. Levitt's "credentials"? Wasn't he part of the Enron fiasco?
Standard practice when purchasing a business, maybe. Is that standard practice when IBM is being audited? Who would be picking up the other half of the audit cost?



What was Levitt's roll in the Enron Fiasco?

Because of the Enron scandal, Arthur Levitt is now a wanted man. But far from being one of the villains of the saga, Levitt has emerged as the prophet whose preachings are finally gaining acceptance within his own constituency.

http://www.financialdirector.co.uk/Features/1127997



Once again, what are "Dubi's" credentials? They must be pretty impressive if he can tell us that common business terms aren't used in auditing...

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09-27-2004, 09:09 PM
  #190
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Originally Posted by djhn579
Standard practice when purchasing a business, maybe. Is that standard practice when IBM is being audited? Who would be picking up the other half of the audit cost?



What was Levitt's roll in the Enron Fiasco?

Because of the Enron scandal, Arthur Levitt is now a wanted man. But far from being one of the villains of the saga, Levitt has emerged as the prophet whose preachings are finally gaining acceptance within his own constituency.

http://www.financialdirector.co.uk/Features/1127997



Once again, what are "Dubi's" credentials? They must be pretty impressive if he can tell us that common business terms aren't used in auditing...
In January the New York Times reported that the SEC had, on Levitt's watch, given Enron huge exemptions from securities laws intended to protect investors. In particular, an exemption in 1997 from the Investment Company Act of 1940 "cleared the path for the company to both expand overseas and make use of the special partnerships that have caused the company so much turmoil" the Times stated. These partnerships allowed Enron to hide hundreds of millions of dollars of debt. Levitt was tied to Clinton and Clinton was tied to Enron and we all know both Clinton's and Enron's ethics.

Your problem with Dubi is he writes stuff you don't want to hear. He brings up valid points concerning the NHL's accounting practices and you dismiss them offhand due to semantics. And how about the NHL owners' credentials? Many NHL owners have dubious records when it comes to finance and the law and yet you're willing to believe the documents they give to Levitt are truthful.

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09-27-2004, 09:28 PM
  #191
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Quote:
Originally Posted by habitual_hab
Your problem with Dubi is he writes stuff you don't want to hear. He brings up valid points concerning the NHL's accounting practices and you dismiss them offhand due to semantics. And how about the NHL owners' credentials? Many NHL owners have dubious records when it comes to finance and the law and yet you're willing to believe the documents they give to Levitt are truthful.

Does "Dubi" even have any credentials?

That's probably true. I don't want to hear from some random web site that someone with documented experience in a given field doesn't know what he is talking about. I take everything I read with a grain of salt, especially something I read on the web.

I give the owners (and Levitt) the benefit of the doubt because of the things I have seen going on around the league over the last 10 years, and because, in my opinion, it doesn't make sense to lock out the players and risk angering your fan base unless you are not making money in the first place. Since the owners are in the business of making money, they would have to be in pretty bad shape to risk destroying a $2B industry just to increase profits (as opposed to reducing losses.).

And Me2 is correct,

Minor league salaries are a player cost.
Insurance payments on players are a player costs (tied to salary)
As are benefits related to salary/employment etc

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