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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.

A hard cap doesn't prevent teams from keeping star players.

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Old
12-21-2004, 12:40 PM
  #26
The Kitner Boy
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Originally Posted by John Flyers Fan
Agreed you can keep all your star players, and the rest of your team will be junk (see: Indy defense).

Indy's defense is far from junk. They are solid enough to make them a contending team alomst every year.

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12-21-2004, 01:12 PM
  #27
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Originally Posted by Herbie Verstinks
I dont see why not.

You have two similar business's that generate revenue from TV, ticket sales, merchandise, and beer.

the fact that one makes a lot more money than the other doesnt mean it cant be a template.
The NFL only has a national TV contract that all teams share the revenues equally.
The NHL has local TV contracts that are different for each team and are not shared.

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12-21-2004, 04:08 PM
  #28
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Originally Posted by Slewfoot
The NFL only has a national TV contract that all teams share the revenues equally.
The NHL has local TV contracts that are different for each team and are not shared.
Ummm perhaps I'm missing something and the pro-nhlpaers can set me straight.

Revenue sharing doesn't affect overall league revenue, right?

The owners are willing to give them a fixed share of the overall league revenue at the same level the players just volunteered to re-establish.

What possible difference is it to the players which franchises make money and which ones lose money?

If the owners are willing to sign the deal and gamble that they can make the smaller markets profitable, what difference does that make to the players? If the NHL is successful, in getting a TV deal or simply expanding the revenue base in the small markets, then the players will get their lions share. If not, then that is the owners problem.

Revenue sharing is totally irrelevant to anyone but the owners and they seem quite happy to keep it at a minimum. In reality, this isn't even a CBA issue. The owners will decide amoungst themselves to share whatever % they want without any PA input and that is exactly how it should work.

Until proven otherwise, this is just another PA smokescreen.

Edit##I could see the issue if the NHL had set the salary cap minimum well below the maximum, but that was clearly not the case.

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12-21-2004, 04:34 PM
  #29
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Originally Posted by Thunderstruck
Ummm perhaps I'm missing something and the pro-nhlpaers can set me straight.

Revenue sharing doesn't affect overall league revenue, right?

The owners are willing to give them a fixed share of the overall league revenue at the same level the players just volunteered to re-establish.

What possible difference is it to the players which franchises make money and which ones lose money?

If the owners are willing to sign the deal and gamble that they can make the smaller markets profitable, what difference does that make to the players? If the NHL is successful, in getting a TV deal or simply expanding the revenue base in the small markets, then the players will get their lions share. If not, then that is the owners problem.

Revenue sharing is totally irrelevant to anyone but the owners and they seem quite happy to keep it at a minimum. In reality, this isn't even a CBA issue. The owners will decide amoungst themselves to share whatever % they want without any PA input and that is exactly how it should work.

Until proven otherwise, this is just another PA smokescreen.

Edit##I could see the issue if the NHL had set the salary cap minimum well below the maximum, but that was clearly not the case.
Let's look at 2 teams, Vancouver and Nashville.

In Vancouver last year with a 42 million dollar payroll our team made a 25 million dollar profit, this is well documented in the Vancouver media. With a 31 million dollar cap, John McCaw now pockets 36 million in profit.

In Nashville they were losing money on a 23 million dollar payroll. In all cap systems there is a minimum, now you are forcing Nashville who is already losing money, to spend even more on payroll they already can't afford. What is the purpose to this, contraction?

The reality of the hockey world, in 1990 the Penguins and Oilers where dominant teams, the money losers Denver (Nordiques) and Vancouver.

Oh and here is a thought, in 1992/93 season, who had the biggest payroll in the league? Pittsburg

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12-21-2004, 04:56 PM
  #30
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Originally Posted by vanlady
Let's look at 2 teams, Vancouver and Nashville.

In Vancouver last year with a 42 million dollar payroll our team made a 25 million dollar profit, this is well documented in the Vancouver media. With a 31 million dollar cap, John McCaw now pockets 36 million in profit.

In Nashville they were losing money on a 23 million dollar payroll. In all cap systems there is a minimum, now you are forcing Nashville who is already losing money, to spend even more on payroll they already can't afford. What is the purpose to this, contraction?

The reality of the hockey world, in 1990 the Penguins and Oilers where dominant teams, the money losers Denver (Nordiques) and Vancouver.

Oh and here is a thought, in 1992/93 season, who had the biggest payroll in the league? Pittsburg
Lot's of words but none addressed the central point.

If Nashville isn't profitable that is their owners problem. If he is willing to sign on to the CBA, why should the players care?

Revenue sharing is a smokescreen designed to get the owners to spend an even higher % of revenues on salaries.

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12-21-2004, 05:05 PM
  #31
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Originally Posted by Thunderstruck
Lot's of words but none addressed the central point.

If Nashville isn't profitable that is their owners problem. If he is willing to sign on to the CBA, why should the players care?

Revenue sharing is a smokescreen designed to get the owners to spend an even higher % of revenues on salaries.
Does a cap not tie salaries to revenues? So you now want to reward owners of poorly managed franchises by reducing there labor costs, you want to really reward the owners of the big franchises with even bigger profits? What incentive is there for owners to drive revenue generation when they are already guarenteed a profit?

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12-21-2004, 05:08 PM
  #32
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Quote:
Originally Posted by vanlady
Does a cap not tie salaries to revenues? So you now want to reward owners of poorly managed franchises by reducing there labor costs, you want to really reward the owners of the big franchises with even bigger profits? What incentive is there for owners to drive revenue generation when they are already guarenteed a profit?
because billionaires generally have the idea that you can never have too much money. because owning a team is prestigious and hockey teams with huge revenues are great for bragging rights among billionaires

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12-21-2004, 05:12 PM
  #33
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Quote:
Originally Posted by vanlady
Does a cap not tie salaries to revenues? So you now want to reward owners of poorly managed franchises by reducing there labor costs, you want to really reward the owners of the big franchises with even bigger profits? What incentive is there for owners to drive revenue generation when they are already guarenteed a profit?

Perhaps you should make up your mind. Is Nashville making a profit or not?

The vast majority of teams in the league would have to attempt to raise revenues in order to turn a profit or at least cover the minimum salary cap. As an added bonus, the players would recieve the benefits of their hard work.


The NHLPA should have the balls to negotiate 65 or 70% of revenues, instead of hiding behind a limp-wristed luxury tax or "revenue sharing".

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12-21-2004, 05:16 PM
  #34
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Originally Posted by txomisc
because billionaires generally have the idea that you can never have too much money. because owning a team is prestigious and hockey teams with huge revenues are great for bragging rights among billionaires
Ummm have you ever heard of Bill Wirtz, that just blows your theory right out the window.

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12-21-2004, 05:29 PM
  #35
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Originally Posted by vanlady
Ummm have you ever heard of Bill Wirtz, that just blows your theory right out the window.
umm no it doesnt. one guy not spending a ton of money does not blow a theory out of the window. You think even Bill Wirtz doesnt want revenues to increase? Come on of course he does. Every owner in every professional sports league wants more revenue

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12-21-2004, 05:48 PM
  #36
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Originally Posted by txomisc
umm no it doesnt. one guy not spending a ton of money does not blow a theory out of the window. You think even Bill Wirtz doesnt want revenues to increase? Come on of course he does. Every owner in every professional sports league wants more revenue
The only way Bill Wirtz wants more revenue if it goes directly into his pocket. And if Bill wants more revenue, why has he never allowed local broadcast contracts for the Blackhawks?

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12-21-2004, 06:00 PM
  #37
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So Vanlady, have you figured out why the Nashville owner would want to raise revenues yet?

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12-21-2004, 06:41 PM
  #38
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Originally Posted by Hockeyfan02
You can keep your star players in a cap, but it doesnt leave you much room to keep some of the other role players.
Bingo, we have a winner. Those of a fantasy league mentality (read: focus solely on name players) would of course note that teams can maintain their "star" players.

That's not the point. You cannot simply change a significant part of your roster annually and expect to maintain any semblance of continuity, familiarity and confidence/devotion among teammates that is essential to the success of an NHL team. And a hardcap will indeed require an overturning of "non-stars", yet players still critical to the cohesion and success of a team.

(Does this really need to be explained to anyone?!)

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12-21-2004, 06:48 PM
  #39
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Quote:
Originally Posted by vanlady
The only way Bill Wirtz wants more revenue if it goes directly into his pocket.
Imagine that, a businessman wanting to make money.

Wirtz is a posterboy for the NHLPA. They love him, he's Bob Goodenow's hero. You know, a guy that owner that only pays as much as he wants. Bob is always saying that's all they need to do. Get another 29 Wirtzes and stick one in charge of each franchise, then let them set "market value" and see if Bob still wants "market value".


Quote:
And if Bill wants more revenue, why has he never allowed local broadcast contracts for the Blackhawks?
Wirtz's explaination is he doesn't want local TV because he believes it damages attendance, which is lowers his cut.

So what is it, Wirtz wants more money in his pocket or not. You statements seem contradictory. So what if he blows off $15m in TV revenue if he thinks it makes him more money. Lord knows the players don't need that $15m.

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12-21-2004, 08:34 PM
  #40
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Quote:
Originally Posted by Trottier
Bingo, we have a winner. Those of a fantasy league mentality (read: focus solely on name players) would of course note that teams can maintain their "star" players.

That's not the point. You cannot simply change a significant part of your roster annually and expect to maintain any semblance of continuity, familiarity and confidence/devotion among teammates that is essential to the success of an NHL team. And a hardcap will indeed require an overturning of "non-stars", yet players still critical to the cohesion and success of a team.

(Does this really need to be explained to anyone?!)
This doesn't really make much sense. Sure initially there is likely to be be a fair amount of movement, but after that... where are all these players going to go? What team is going to give unproven guys or plumbers or third or fourth line guys bigger contracts? To some degree I can see where you are coming from, but it doesn't seem very likely to unfold the way you suggest. I won't go so far as to say there is no way that will happen, because I guess it is a possiblity.... but I sure don't see it as the logical outcome you do.

The salaries will simply be much more stable and will rise with the players age and skill and production in a less dramatic fashion than they do now.

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12-21-2004, 08:42 PM
  #41
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Quote:
Originally Posted by vanlady
The reality of the hockey world, in 1990 the Penguins and Oilers where dominant teams, the money losers Denver (Nordiques) and Vancouver.

Oh and here is a thought, in 1992/93 season, who had the biggest payroll in the league? Pittsburg
http://www.westegg.com/inflation/
Pittsburgh $15.2m * inflation (92 to 03) comes to $19.6m.

The largest payroll in the league in 92 has outstripped inflation yet is now one of the smallest. I'll bet they wish they still have the best team in the NHL because they are still paying as if they do.

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12-21-2004, 10:15 PM
  #42
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Originally Posted by John Flyers Fan
The difference is that the NFL broadcast rights are a huge national TV deal.

In the NHL it's a few small National TV deals (NBC, ESPN, TSN and CBC) and 30 local broadcast contracts. The owners that get paid big rights fees to broadcast their games, do NOT want to share them with the teams that get much smaller local TV deals
Today the national TV deal sucks, but it could improve some in the future with high definition. Bottom line: hockey doesn't enjoy a tv bonanza.

If teams owned by conglomerates in big media markets aren't expected to defraud their investers by "turning socialist" and sharing their local tv earnings with teams in little media markets, they can hardly be expected to share earnings league-wide with the NHLPA's membership.

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12-21-2004, 11:08 PM
  #43
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Originally Posted by quat
This doesn't really make much sense. Sure initially there is likely to be be a fair amount of movement, but after that... where are all these players going to go? What team is going to give unproven guys or plumbers or third or fourth line guys bigger contracts? To some degree I can see where you are coming from, but it doesn't seem very likely to unfold the way you suggest. I won't go so far as to say there is no way that will happen, because I guess it is a possiblity.... but I sure don't see it as the logical outcome you do.

The salaries will simply be much more stable and will rise with the players age and skill and production in a less dramatic fashion than they do now.
I think you missed the point and thought of another one. I'll try to explain what he's trying to say. Say the cap is 35 million. Your team already has 29 million in guranteed money heading in to the offseason. You have two free agents: Ilya Kovalchuk who is coming off a 60 goal season and hart and conn smyth winner who now enters UFA (just go along with it). Ilya would like to be paid in the 5 million a year range. You have Kris Draper who is also a free agent and was the selke winner. He earned 4 million last year and isnt looking for a raise, but the same 4 million he made last season from the team. Teams are going to sign the star player in Ilya, but are going to be forced to let Draper go elsewhere. Trottier's point is that teams will be able to keep star players, but they will be forced to let guys go who are also important to the club but arent "star" players. Therefore, some teams wont be kept together, but will have to bring in guys who are lesser than the guy they let go. I hope I explained that clearly, but his point wasnt about salaries rising, it was about how teams wont be able to keep continuity and will have to let go some key parts to the team (like a leader in locker room) to keep your best players.

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12-22-2004, 12:06 AM
  #44
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Quote:
Originally Posted by Hockeyfan02
I think you missed the point and thought of another one. I'll try to explain what he's trying to say. Say the cap is 35 million. Your team already has 29 million in guranteed money heading in to the offseason. You have two free agents: Ilya Kovalchuk who is coming off a 60 goal season and hart and conn smyth winner who now enters UFA (just go along with it). Ilya would like to be paid in the 5 million a year range. You have Kris Draper who is also a free agent and was the selke winner. He earned 4 million last year and isnt looking for a raise, but the same 4 million he made last season from the team. Teams are going to sign the star player in Ilya, but are going to be forced to let Draper go elsewhere.
You talk Draper into taking $3.5m, Kovalchuk into taking $4.5m and then dispatch Marik Malik and his $2m for a pick, send him to the minors or buy him out.

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12-22-2004, 12:55 AM
  #45
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Originally Posted by me2
You talk Draper into taking $3.5m, Kovalchuk into taking $4.5m and then dispatch Marik Malik and his $2m for a pick, send him to the minors or buy him out.
I wasnt trying to argue anything, just clearing up someones point. Besides, I wouldnt give Malik 2 million, I would have let him walk a long time ago and called up a prospect.

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12-22-2004, 01:18 AM
  #46
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And if Bill wants more revenue, why has he never allowed local broadcast contracts for the Blackhawks?




Wirtz's explaination is he doesn't want local TV because he believes it damages attendance, which is lowers his cut.

Thats partly true,but the biggest reason is no local TV company would offer him enough money to bother risking season ticket and walkup fans. He wasn't evened offered half of what teams like Detroit or Philli were getting so he said screw it!

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12-22-2004, 01:46 AM
  #47
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Quote:
Originally Posted by Hockeyfan02
I think you missed the point and thought of another one. I'll try to explain what he's trying to say. Say the cap is 35 million. Your team already has 29 million in guranteed money heading in to the offseason. You have two free agents: Ilya Kovalchuk who is coming off a 60 goal season and hart and conn smyth winner who now enters UFA (just go along with it). Ilya would like to be paid in the 5 million a year range. You have Kris Draper who is also a free agent and was the selke winner. He earned 4 million last year and isnt looking for a raise, but the same 4 million he made last season from the team. Teams are going to sign the star player in Ilya, but are going to be forced to let Draper go elsewhere. Trottier's point is that teams will be able to keep star players, but they will be forced to let guys go who are also important to the club but arent "star" players. Therefore, some teams wont be kept together, but will have to bring in guys who are lesser than the guy they let go. I hope I explained that clearly, but his point wasnt about salaries rising, it was about how teams wont be able to keep continuity and will have to let go some key parts to the team (like a leader in locker room) to keep your best players.

First, thanks for writing this. I did however understand his point. My feeling was that in a market such as the one suggested by Bettman, third line players wouldn't be making 4 million dollar contracts. Even under todays CBA, no team keeps all it's players, and I don't agree that it becomes necessary to lose a great deal of your team every year, as players expectations for earnings will be tied to a smaller market of available funds. The past agreement was such that there really was no ceiling. This will have a pronounced effect on bargaining imo.

As others have pointed out, the speed at which salaries inflate is too high. Trottier doesn't seem to account for the fact that escalation of salaries will have a big effect on what everyone makes. Like I said, I could be wrong here, but I don't think I am.

It could also be said that a Selke winner actually is a star as well.... heh.

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12-22-2004, 05:45 PM
  #48
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You missed my point, or simply choose to disagree with it, which is your perogative.

If you think a hardcap (in concert with the inevitable liberalizing of player UFA rights) will not result in increased player movement, see the NFL. Even at a lower pay scale, players will actively seek the "best" deal....and opportunities will be there, even moreso than today.

More free agents = more job openings = more movement. The middle-to-lower level player will become more devalued under a cap, and hence more easily (and more frequently) replaced, salary-slot-wise.

Given your remark on another thread, however, it's not worth the time trying to explain this point further. If one wishes to ignore the realities of the detrimental effects a hardcap can have on roster continuity leaguewise, based on past and present history right before them (read: NFL), indeed, ignorance is bliss.

***

Hockeyfan02 - thanks for "getting it".


Last edited by Trottier: 12-22-2004 at 05:55 PM.
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12-22-2004, 06:22 PM
  #49
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Quote:
Originally Posted by Trottier
You missed my point, or simply choose to disagree with it, which is your perogative.

If you think a hardcap (in concert with the inevitable liberalizing of player UFA rights) will not result in increased player movement, see the NFL. Even at a lower pay scale, players will actively seek the "best" deal....and opportunities will be there, even moreso than today.

More free agents = more job openings = more movement. The middle-to-lower level player will become more devalued under a cap, and hence more easily (and more frequently) replaced, salary-slot-wise.

Given your remark on another thread, however, it's not worth the time trying to explain this point further. If one wishes to ignore the realities of the detrimental effects a hardcap can have on roster continuity leaguewise, based on past and present history right before them (read: NFL), indeed, ignorance is bliss.

***

Hockeyfan02 - thanks for "getting it".

Sure, like I said I did understand what you wrote. The only example you've given is the NFL, which everyone understands is dealing with waaaay more money, non guaranteed contracts, a completely different kind of roster, not to mention the very obvious fact that the games require completely different kinds of strategy and practice. To be honest, I'm suprised you haven't bothered to think about these things yourself.

Less money means that what you can earn in a different market may not be substantially larger. Moving family, losing the familiarity you have with team mates may be more a of concideration in hockey.

One needs to look no further than Naslund as an example of a player who willingly took a fair amount less than he could have on an open market for the above reasons.

So, sorry pal, but I don't have any difficulty understanding what you're talking about, and as I have pointed out, it does have some merrit; I just chose to think in this case you are mistaken. Telling me I'm ignoring facts in this case is wrong. I would suggest that you haven't spent enough time thinking things through.

Getting huffy because someone called your mocking, condecending post crap.... well, sorry it got your nose out of joint.

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12-22-2004, 06:26 PM
  #50
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Quote:
Originally Posted by MR. X
For those who think a hard cap will not allow teams to keep thier star players:


http://sports.espn.go.com/nfl/news/story?id=1949512
You miss the whole point: it is better to be able to keep some of your star players than none of them. The purpose of the cap is to spead the talent, not allow teams to to keep a roster of stars.

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