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Forbes slams Levitt report

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11-12-2004, 09:53 AM
  #51
vanlady
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Quote:
Originally Posted by BM67
Forbes says the NYR lost $3.3 mil before interest etc. Forbes also lists the NYR as having a debt load of 92% of their value of $272 mil in 2003. So what is the interest on a $250 mil debt?

He gives two good examples of unclaimed hockey revenue, but most of his other claims are terrible. A concert or hotel development are not hockey revenue. If the arena wasn't owned by the teams owner they wouldn't be hockey revenue, so they shouldn't be HR just because you own the team and arena.
This also includes arena debt, and with the renovations they just did to the Gardens no wonder it is so high, but if you want to go by those numbers then, the interest is neglagible because you will also now include revenue from basketball and other sources of revenue that are not counted.

Why wouldn't it include the arena they bought both of them as a package, why should they be seperated now?

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11-12-2004, 09:56 AM
  #52
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Originally Posted by vanlady
Why wouldn't it include the arena they bought both of them as a package, why should they be seperated now?
The arena and the team should always be viewed seperately because if the NHL teams themselves aren't profitable then there's no reason for owners to own the teams themselves.

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11-12-2004, 09:56 AM
  #53
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Originally Posted by ceber
Sounds to me like the article is saying the teams should basically be run as loss-leaders in order for the owners to get all the business that comes from the arena.

I worry that an owner would decide to stop running the team after a while, though. Especially if the popularity of the game continues to drop. The owners have the sweet arena deals and the revenue from all the ancillary stuff. At some point, the balance sheet will look better without the team on it. What happens then?

Whether it's right or not, I don't know, but if the owners are going to insist on profitable hockey teams with a very conservative definition of hockey revenues, what can I do about? Not a damned thing, that's what. I can decide not to give them any money, but then I don't get to see any NHL hockey. I can try to pressure them (not sure how, though) to abandon their plans for profitable teams, but if they then decide to fold the team, I don't get to see any NHL hockey. Either way, I get no NHL hockey. The owners stay rich in any case. They get no sympathy from me, but they've got me by the short hairs.
No worries 90% of the arena deals they have are based on their hockey teams, look at New Jersey, the state government just whipped 3 million a year out from under the Devils because they are not playing. Teams have these spectacular arena deals with a promise to stay in your city.

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11-12-2004, 09:58 AM
  #54
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Quote:
Originally Posted by vanlady
What I am getting at here is, they sacrafice a little money on their hockey team to make huge money from other related assets.
I think the owners have decided they've reached the point where it's no longer necessary to have a loss-leader. What do we do then? Do we want them to keep the running the teams, or don't we? Right or wrong, they've said they want their teams to be profitable now. The NHLPA either needs to convince the owners to continue to operate the teams as loss-leaders (in some markets) or accept that the owners want the teams to be profitable and maximize the players' portion of revenues under that condition. Personally, I think it's going to be really hard to convince the owners to continue to operate the teams at a loss, so I think the PA should switch gears and start aggressively negotiating some sort of system that allows the owners to make a minimum profit over a span of a few years.

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11-12-2004, 10:04 AM
  #55
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Originally Posted by ceber
The accounting firms that do impartial audits get paid, too. There are rules and practices put in place to make sure things are accurate. Forbes can only make educated (we hope) guesses at revenues and costs.

I seriously doubt that either the Forbes reporter or Levitt has any conflicting interest whatsoever in the CBA negotiations. Levitt got his money up front and could say whatever he wanted to. Forbes makes money selling magazines. Neither of them gives a rat's patootie about the NHL or the NHLPA.
If the NHL and Levitt are so lily white, why did the NHL not hire Mr Levitt directly? They hired him through a law firm, why would they do that, two words, Plausible Denyablity. What does that mean, it means the Bettman knew that someone would find holes in the Levitt report and now he can say he has no knowledge of how Mr. Levitt came to his conclussions, and Mr. Levitt can say I could only use the numbers supplied by the owners.

If it was done any other way and the URO's got out it could launch a SCC investingation into the publically traded companies and an IRS audit of thase that are not.

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11-12-2004, 10:04 AM
  #56
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Quote:
Originally Posted by vanlady
No worries 90% of the arena deals they have are based on their hockey teams, look at New Jersey, the state government just whipped 3 million a year out from under the Devils because they are not playing. Teams have these spectacular arena deals with a promise to stay in your city.
96% of statistics are made up on the spot. The ownership groups would be able to close the teams and replace them with other ventures, more concerts, etc. The cities are happy with or without the hockey team, provided there's some sort of event that is bringing in the dollars. If it makes more sense to put on 20 more concerts and bring in a lacrosse team, the owners will do it if they want to and the cities will be more than happy to take in the tax revenue.

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11-12-2004, 10:04 AM
  #57
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Quote:
Originally Posted by ceber
the PA should switch gears and start aggressively negotiating .
like i have said before, lets be careful what we wish for. i think TBY probably likes owning the rights to Lecalier and Richards for 13 years. I think CGY likes knowing they own Iginla until he is 31. I think OTT is pretty happy to have SPezze, Havlat, HOssa and the others tied up as well.

It is much better for the fans for the *owners* to cave and negotiate the players proposal.

dr

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11-12-2004, 10:07 AM
  #58
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Quote:
Originally Posted by vanlady
If the NHL and Levitt are so lily white, why did the NHL not hire Mr Levitt directly? They hired him through a law firm, why would they do that, two words, Plausible Denyablity. What does that mean, it means the Bettman knew that someone would find holes in the Levitt report and now he can say he has no knowledge of how Mr. Levitt came to his conclussions, and Mr. Levitt can say I could only use the numbers supplied by the owners.

If it was done any other way and the URO's got out it could launch a SCC investingation into the publically traded companies and an IRS audit of thase that are not.
What difference does it make?

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11-12-2004, 10:08 AM
  #59
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Originally Posted by rwilson99
You've actually stumbled across something here.

If suite revenue was $15M with the Hawks and now $12M without, holding additional events constant with 03-04, it is clear that $3 Million is hockey revenue.

Any share of that revenue paid to other arena owners is RENT, and should not factor in hockey revenue calculations.
That would be true if the owners held the arena leases, they don't the hockey teams do. How do you think the owners are getting these arena's for free, cities build them and hand them over to the teams not the owners. The owners then seperate them. How do you think owners could sell these arena's with their teams? Why did the owner of the Thrashers have to be sold with the arena and basketball team, because the Thrashers have the Arena not the owner.

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11-12-2004, 10:09 AM
  #60
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Originally Posted by DementedReality
like i have said before, lets be careful what we wish for. i think TBY probably likes owning the rights to Lecalier and Richards for 13 years. I think CGY likes knowing they own Iginla until he is 31. I think OTT is pretty happy to have SPezze, Havlat, HOssa and the others tied up as well.

It is much better for the fans for the *owners* to cave and negotiate the players proposal.

dr
I wish there were more free agents available at a cheaper price. I wish it was easier for free agents to select the team they want to play for based on the team, not on the salary.

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11-12-2004, 10:15 AM
  #61
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Originally Posted by Pepper
Yes, he was paid well for his job.

But the FACT is that LEvitt has seen the books, Forbes has not. Levitt has a very good reputation and any doubts about him being impartial & objective means he can kiss goodbye to all those lucrative auditing deals in the future. Reputation is his bread & butter, any experienced auditor can analyze the books and reach the same conclusions but Levitt has the credibility & reputation which makes him more lucrative choice. If he loses that he doesn't have anything special.

Think before you post.
Why do you think you have never heard of Levitt doing one of these reports before? Because the US senate pointed the finger directly at Levitt for the collapse of Enron and Worldcom when he headed the SCC. He isn't doing audits all over the US, give your head a shake.

http://www.findarticles.com/p/articl...18/ai_83699604

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11-12-2004, 10:17 AM
  #62
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Originally Posted by dawgbone
WHAT?

I'm sorry, but I'd think the Lakers or the Clippers may argue with you about that.
Try again, they got the lease on the backs of the Kings read the article again, would it surprise you to learn that all the paper work with the city is in the corporate name of the LA Kings.

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11-12-2004, 10:19 AM
  #63
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Originally Posted by Digger12
This is a point that often gets overlooked. Levitt had stated on numerous occasions that he insisted that the NHL pay his fee in full, and up front regardless of his findings.

The guy's retired, what the hell does he care whether he paints a rosy picture for the NHL or not? He had his money from them either way.

While I agree that perhaps the NHL could've handled this better and an auditor that both the NHL and NHLPA agreed upon would've been a better solution, the truth of the matter is that the NHLPA has shown zero interest in being part of any process that involves sitting down and hashing out what should define hockey revenue, so that this stupid argument can be put to rest once and for all. If they don't want to get their nose dirty, where the bloody heck do they get off beaking off that "they don't trust the numbers"? IMO this is an indefensible stance by them.

If they've got it in their heads that they're not going to trust the owners no matter what's said and done, than they may as well fold the NHL now because it'll be on a one way ticket to oblivion anyway...may as well put a bullet in its head and lessen its suffering.

That being said, the owners also collectively need to to realize that for them to be anything more than a regional sport, they've got to get their accounting practices out of the 60's and 70's, and into the 21st century. Bending the players over a log is only going to accomplish a nasty strike in the not too distant future, the NHL HAS to get into a partnership with the NHLPA and stop looking at them as a slave revolt.
No Levitt could not say what he wanted to, read his statements on NHL.com. Levitt was handed a very specific definition about what revenue was he could not deviate from that list.

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11-12-2004, 10:21 AM
  #64
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Originally Posted by vanlady
Would you trust someone that has already stolen from you? The owners have already stolen from the players.
That is the whole point. NO ONE is asking the players to trust the owners, not even the owners.

By putting "cost certainty" on the table the owners have in reality invited the PA to bring in their own analysts to look at the books and NEGOTIATE what exactly is considered hockey revenue and what the players fair share should be.

The PA realizes this and still refuses to attempt to determine the scope of the problem, just like they refused the offer from Levitt to go over the report with his firm.

Why?

Because they have no desire to fix the problem, prefering to just gouge every penny they can get out of the sport.

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11-12-2004, 10:23 AM
  #65
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Quote:
Originally Posted by DementedReality
like i have said before, lets be careful what we wish for. i think TBY probably likes owning the rights to Lecalier and Richards for 13 years. I think CGY likes knowing they own Iginla until he is 31. I think OTT is pretty happy to have SPezze, Havlat, HOssa and the others tied up as well.

It is much better for the fans for the *owners* to cave and negotiate the players proposal.

dr
Not much good having their rights if you have to go bankrupt paying them. Don't worry about free agency horror stories. Under a cap, the advantage of the "haves" will be diminished.

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11-12-2004, 10:26 AM
  #66
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Originally Posted by Cully9
Not much good having their rights if you have to go bankrupt paying them. Don't worry about free agency horror stories. Under a cap, the advantage of the "haves" will be diminished.
Especially since the age of free agency MAY still stay relatively high and teams may be allowed to spend extra on players they develop. Cap opponents like to gloss over the fact that numerous checks and balances are available to be negotiated.

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11-12-2004, 10:29 AM
  #67
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Originally Posted by vanlady
No Levitt could not say what he wanted to, read his statements on NHL.com. Levitt was handed a very specific definition about what revenue was he could not deviate from that list.
I've got a better idea...why don't you give me a link to the article where Levitt states that he couldn't say what he wanted to? I've got a staff meeting in 20 minutes, and you obviously have scads of time on your hands.

You're the link queen after all, and you seem all too eager to show us mere mortals the error of our ways.

And while you're at it, could I trouble you to send me the links of the Eagleson fall, and how his secretaries had to go into witness protection and how Goodenow risked his life...you've mentioned these before. I'm not doubting you, I just can't find any info about it. Thanks.

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11-12-2004, 10:33 AM
  #68
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Originally Posted by tantalum
My goodness people. That article says virtually NOTHING about the NHL franchises. What it says is that holdings that have connections with the teams can make money. THe owners aren't going to deny this. HOWEVER, these things are not that relevant when it comes to profitability of the NHL entity....which is what the LEvitt report and URO's are about.

Let's go point by point:
Before the union folks go all crazy the first thing it says is over half the teams lost money. That's 17 teams before taxes and depriciation. With taxes added you are going to bump that number up a few more I think. so somewhere in between 55-70% of the teams are indeed losing money even according to Forbes.

Appreciation of a franchise means nothing until it is sold. THEN AND ONLY then can it be considered profit. I guarantee you that for most teams there are not buyers lining up.

Chicago - those suites are not just for Blackhawk games. As the arena is not just for Blackhawk games. Not all arena revenues can be justified to go to the Blackhawks in the first place. Secondly unless Forbes has a copy of the URO's (which they do not from anything I've ever heard...the NHLPA, NHL and LEvitt have received those. Not outside sources) they DO NOT KNOW if the blackhawks reported this as revenue to the NHLPA. It may not show up on the blackhawks balance sheet and instead as part of the arena affiliate but those affiliates are to be included in teh URO. Unless there is proff that those numbers were not reported I'm going with the guy whose reputation is beyond reproach and has seen the numbers in the URO. Also btw Levitt accounted for things he thought might have been amiss and estimated numbers that perhaps should have been included.

Islanders cable deal - there might be a point here but again it depends how it was reported in the URO.

Kings - Staples center is a separate entity. Just because it is owned by the same guy means nothing. Clipper rent etc. SHOULD not and DOES not go the Kings as operating revenue. Further development again doesn't have anything to do with the Kings operating revenue.

Ditto for the Coyotes stuff.

Yes Comcast used the Flyers to build Sportsnet. So what? Why would anything other than the cable rights, which are substantial at $8 mil, go on the Flyers URO? Sportsnet is a separate entity. Just because The flYers may be the main draw oin the channele doesn't mean the FLYERS get any of the TV revenue from the other programs. They just get a substantial cable deal for their rights.

IN the end all this article says is that a hockey team can be an important part of a conglomerates and large scale developments. I don't think any of the owners would argue anything different. What it also says is that on their own a hockey team doesn't make money. And that last little bit is the whole issue. Things like revenues from the arena on non-NHL nights don't really have any business on the NHL teams balance sheet or URO (btw many teams do include such things as concerts revenue junior hockey games in the URO...such as the flames and Oilers). NHL teams should be able to make money on their own without these other things instead of merely being a big name tenant of the commercisl district.

And as the last point about transparency. The players don't have the right negotiate what should or should not be included in those numbers until they agree to tie themselves to those numbers. That is the only time they have the right to discuss these other sources of income talked about in the article...and then I don;t think you;ll find that they get very far as you really have to make a stretch to even think about those things as being part of the NHL team business entity and as such revenues/expenses.
This is the world of corporate finance not you checking account. Let me explain, let's look at the Pheonix Coyotes, there asset valuation is up 14% over last year which represents over a 17 million dollar increase. So the corporate bottom line has increased 17 million, but the posted a 7 million dollar loss. Bottom line, there corporate value has increase 10 million.

By the way do people realize these companies supply most of the information themselves to Forbes. Companies trip over themselves to make and stay on the Forbes fortune 500 list. Companies who come off that list see losses and struggle to get back on that list. Why, because in the financial world the Forbes magazine is a bible.

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11-12-2004, 10:35 AM
  #69
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Originally Posted by Thunderstruck
This is the key point which is continually overlooked by the PA apologists.

The PA has no desire to examine the real scope of the problem and make a meaningful contribution to a solution. Until they do, they will get no sympathy from anyone who has given the situation an impartial examination.
Again I ask, would you trust someone who has stolen from you? Why should the players.

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11-12-2004, 10:35 AM
  #70
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LOL WHAT A JOKE the OWNERS are. With there LIES LIES AND LIES!

224 MILLION LOST? ********! It was only 94 MILLION and the AVERAGE lost per team is only 3.1 MILLION. A salary cap for THAT? I DONT THINK So. I have lost ALL respect for the owners side now. The Levitt report was from the NHL side..the Forbes report is NEUTRAL.

Might i had only 17 Teams LOST money. So its not even LEAGUE WIDE. Im sure the TEAMS that did loose money are the ones where

1) The OWNERS set up a team in a HORRIBLE LOCATION like NASHVILLE where nobody cares about hockey
2) OWNERS made there PAYROLL way too high.

I was PRO owners for AWHILE but after this Im going to support the players. And its only a HANDFUL of players who want the big bucks...the Average player salary is like 1.85 MILLION only..which is VERY fair for a PROFESSIONAL ATHLETE.

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11-12-2004, 10:38 AM
  #71
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Originally Posted by Stich
The arena and the team should always be viewed seperately because if the NHL teams themselves aren't profitable then there's no reason for owners to own the teams themselves.
Because quite simply, the owner would not have the arena if it were not for his team. You seem to think that the owners have invested their hard earned money in these arenas. Wrong, read the article again over 19 billion dollar in facilities have been built and owners of major league franchises have paid less than 1/3 of that. The tax payer pays the rest. What do the tax payers get, a guarentee that there team stays in the city.

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11-12-2004, 10:39 AM
  #72
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Quote:
Originally Posted by vanlady
Try again, they got the lease on the backs of the Kings read the article again, would it surprise you to learn that all the paper work with the city is in the corporate name of the LA Kings.
Do you think they would have gotten it if the Lakers and Clippers weren't going to be tenants as well (mostly the Lakers though)?

They actually went as a package as Anschutz (who owns the Kings) has a 30% stake in the Lakers, along with majority owner Jerry Buss. Buss and Anschutz were going together, and that's why Staples was built.

They weren't going to build it just for the Kings...

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11-12-2004, 10:40 AM
  #73
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Quote:
Originally Posted by vanlady
Again I ask, would you trust someone who has stolen from you? Why should the players.
When, in the last 10 years have the owners stolen from players?

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11-12-2004, 10:42 AM
  #74
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Originally Posted by vanlady
Again I ask, would you trust someone who has stolen from you? Why should the players.
NO ONE, not even the owners, is asking the PA to trust them.

Keep repeating the same lie over and over, it won't be any more true.

The players are intentionally sticking their head in the sand trying to ignore the problem. That is their right, but they shouldn't expect any sympathy, nor should they (or you) be allowed to pretend this is a matter of trust.

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11-12-2004, 10:44 AM
  #75
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Quote:
Originally Posted by vanlady
Because quite simply, the owner would not have the arena if it were not for his team. You seem to think that the owners have invested their hard earned money in these arenas. Wrong, read the article again over 19 billion dollar in facilities have been built and owners of major league franchises have paid less than 1/3 of that. The tax payer pays the rest. What do the tax payers get, a guarentee that there team stays in the city.
Sorry, if it isn't directly related to hockey, it shouldn't be counted as revenues for the purpose of the NHL.

Revenues from a dog show, or a monster truck rally aren't NHL revenue. The arena may be there primarily for the hockey team, but not all of that revenue is because of the players.

The players don't go out and draw an audience for the dog show, so why should that be counted in any revenues for purpose of a salary cap?

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