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Gary Lawless: Jets would have lost money if they spent to cap

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11-20-2012, 02:49 AM
  #1
BrianSTC
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Gary Lawless: Jets would have lost money if they spent to cap

This isn't regarding the lockout, but more so one of GL's questions to Bettman:

Lawless starts his question with: "Winnipeg isn't an artificial market. They pay NHL prices for NHL hockey. But they had unexpectedly robust revenue last year, they paid bottom third of the league in salary and they made money. But had they spent to the cap, they would have lost money."

http://www.winnipegfreepress.com/opi...179909441.html

I was under the assumption that the Jets were at least in the top half of revenue earners last year. Also, last year is probably the best it will get for revenue earned (other than playoff money). So when I hear that the Jets would've lost money by spending to the cap, I see a huge RED FLAG.

I will admit that I am pro-owner in this dispute, but that bit of reality just solidifies it for me.

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11-20-2012, 06:56 AM
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King Woodballs
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I don't understand how people can get bent out of shape after reading Lawless' article.

Revenue /=/ Profit.

We all knew that this team would be a mid cap team AT BEST, most years.
I have no doubts the Jets would have lost money had they spent the cap.

There are a ton of expenses that need to come out of that revenue stream.

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11-20-2012, 07:51 AM
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I suspect theres more than a few teams in the league that would lose money if they spent more...

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11-20-2012, 09:38 AM
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A team like the Jets who get 15k + to every single game and every butt in the seats has paid real NHL prices should be able to run a profit even if they spend to the top of the cap....that is what is wrong with the league.....the top and bottom of the cap are to high...

If we ever want a real shot at the cup we should all be cheering for the owners to get a big win where a team like Winnipeg can spend to the top of the cap (and make money) instead of praying all the stars align and we can do it from the middle of the cap pack.


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11-20-2012, 12:50 PM
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David Thomson is worth 23 billion dollars. He's the richest owner in all of sports. He could lose 50m every year for the rest of his life and not put a dent in his fortune. For these guys these teams are a plaything. When the time is right he'll spend and try to win.

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11-20-2012, 12:56 PM
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Holden Caulfield
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Quote:
Originally Posted by Flying High View Post
David Thomson is worth 23 billion dollars. He's the richest owner in all of sports. He could lose 50m every year for the rest of his life and not put a dent in his fortune. For these guys these teams are a plaything. When the time is right he'll spend and try to win.
Rich people don't get rich by tossing money around, or throwing money after bad money...it is a minor investment for somebody like Thomson, but he has made it perfectly clear that he anticipates the Jets to be a smart solid investment, not a money drain...not too mention he is only 50% owner, with the other 50% being Mark Chipman who cannot afford to throw money around on that level. Do not anticipate TNSE to treat these team as an expense.

I have no doubt we will follow a SJS/NSH type model...during lean rebuilding years we will be near the bottom on payroll, but we will spend when we have the team to spend. When it becomes time to rebuild again we will be cutting salary. The life of a mid market team...

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11-20-2012, 12:56 PM
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Quote:
Originally Posted by Flying High View Post
David Thomson is worth 23 billion dollars. He's the richest owner in all of sports. He could lose 50m every year for the rest of his life and not put a dent in his fortune. For these guys these teams are a plaything. When the time is right he'll spend and try to win.
Agreed. And you don't buy a sports franchise to make money, that being said you should not have to worry about spending to the cap and losing money when you sell out every game, at the 2nd highest ticket prices in the league. This league is broken, and guys like Fehr are only making it worse.

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11-20-2012, 12:59 PM
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I like Winnipeg but can someone tell me why the thompson family bought the jets but did not buy the Toronto Maple leafs?

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11-20-2012, 01:00 PM
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I like Winnipeg but can someone tell me why the thompson family bought the jets but did not buy the Toronto Maple leafs?
Because the Leafs are an embarassment.

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11-20-2012, 01:03 PM
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His argument is extremely hollow, because if we had spent more money the revenue would've been different. Imagine how much money TNSE would've made if we made the playoffs, even to get swept in the first round?

That's 5+ million right there in ticket sales, never mind merch sales.

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11-20-2012, 01:05 PM
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Quote:
Originally Posted by Flying High View Post
David Thomson is worth 23 billion dollars. He's the richest owner in all of sports. He could lose 50m every year for the rest of his life and not put a dent in his fortune. For these guys these teams are a plaything. When the time is right he'll spend and try to win.
Quote:
Originally Posted by Holden Caulfield View Post
Rich people don't get rich by tossing money around, or throwing money after bad money...it is a minor investment for somebody like Thomson, but he has made it perfectly clear that he anticipates the Jets to be a smart solid investment, not a money drain...not too mention he is only 50% owner, with the other 50% being Mark Chipman who cannot afford to throw money around on that level. Do not anticipate TNSE to treat these team as an expense.

I have no doubt we will follow a SJS/NSH type model...during lean rebuilding years we will be near the bottom on payroll, but we will spend when we have the team to spend. When it becomes time to rebuild again we will be cutting salary. The life of a mid market team...
Quote:
Originally Posted by hockeyarenadotnet View Post
Agreed. And you don't buy a sports franchise to make money, that being said you should not have to worry about spending to the cap and losing money when you sell out every game, at the 2nd highest ticket prices in the league. This league is broken, and guys like Fehr are only making it worse.
Quote:
Originally Posted by thom View Post
I like Winnipeg but can someone tell me why the thompson family bought the jets but did not buy the Toronto Maple leafs?
I think the flaw in all of this thinking is that we are looking at the Winnipeg Jets as a separate entity. I don't believe that Thomson or Chipman do. They look at the Jets as an anchor for a much much larger investment in downtown Winnipeg. Having a healthy successful team that sells out every year spurs spending all over the SHED, in which they will be very invested. So, if they have a team that can compete for a championship but operates at a loss, they IMHO will accept that as a cost of feeding their bigger investment. They will look at the balance sheet of the total investment and as long as that is making money they will be satisfied.

As for the Leafs thing, there is really a big opportunity here for growth and investment for Thomson and I think that, coupled with personal affection for Winnipeg led Thomson to invest in the Jets and downtown Winnipeg.

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11-20-2012, 01:06 PM
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Quote:
Originally Posted by thom View Post
I like Winnipeg but can someone tell me why the thompson family bought the jets but did not buy the Toronto Maple leafs?
David Thomson has a long standing relationship with Mark Chipman, they have worked together for many years. They have owned TNSE for quite some time, and have been working together to secure an NHL franchise for Winnipeg dating back to at least 07 on a serious level. So there's that.

Also, the Leafs were not put on the market until AFTER the Jets had been acquired.

I believe that in the past David Thomson did own a small part of the Leafs while OTPP owned the majority stake, but he sold it when the chance to own the Jets came up with Chipman.

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11-20-2012, 01:12 PM
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Quote:
Originally Posted by Holden Caulfield View Post
Rich people don't get rich by tossing money around, or throwing money after bad money...it is a minor investment for somebody like Thomson, but he has made it perfectly clear that he anticipates the Jets to be a smart solid investment, not a money drain...not too mention he is only 50% owner, with the other 50% being Mark Chipman who cannot afford to throw money around on that level. Do not anticipate TNSE to treat these team as an expense.

I have no doubt we will follow a SJS/NSH type model...during lean rebuilding years we will be near the bottom on payroll, but we will spend when we have the team to spend. When it becomes time to rebuild again we will be cutting salary. The life of a mid market team...
Normally I agree with you...but Thomson is just so insanely rich I can't imagine the winnipeg jets money means anything to him. If sold all his assets for cash he could sustain a lose of 10m a year until the year 4312...

Let's do some equivalent math. Thomson spending 10m dollars would be the same as someone with 23k spending 10$. When you have that large of a cash pile, spending it in your lifetime is almost impossible. Sure he wont spend to spend. But when the time is right the Jets will be a cap team.

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11-20-2012, 01:13 PM
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Thank-you for the response it will be interesting to look into the future and who makes it to the finals first

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11-20-2012, 02:02 PM
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Does this include the revenue from all non-hockey events?

Because when this team does make a push to improve and spend more, I am sure any minimal loses could be subsidized by all the concerts and other events held at the MTSC. Not to mention the insane playoff revenue once we finally make it!

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11-20-2012, 02:32 PM
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I'm not exactly sure what % of TNSE David Thomson owns, I guess I'd be surprised if it was 50%, but maybe it is....
my understanding is that he owned the property the Eatons building sat on and when that was looked at as being a possible location for MTS Centre, David Thompson, rather than taking cash for the purchase of the property, asked for an ownership position ... how that was structured, I don't really know, but would Chipman sell 50% of TNSE / Moose (at the time) to acquire the land??

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11-20-2012, 03:04 PM
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Can somebody please explain this:

http://www.forbes.com/nhl-valuations/list/

Not only does Forbes claim Winnipeg was only 24 in revenue (I was really under the assumption they were top 15 at least)

but also, Forbes says they lost 5.2 million!

WTF???

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11-20-2012, 03:45 PM
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Lawless is big mouth piece for the pro owner side of things.

The Jets owners have been pretty quiet about this whole thing so far so I don't want to throw them under the bus but if they really wanted people on their side they would just open the books and show us.

If what Lawless says is true then show us. I would be pro owner then. Personally from what I know from people that work for the Thompson family the Jets could have easily spent to the cap and made alot of money this year.

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11-20-2012, 03:53 PM
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Quote:
Originally Posted by BrianSTC View Post
Can somebody please explain this:

http://www.forbes.com/nhl-valuations/list/

Not only does Forbes claim Winnipeg was only 24 in revenue (I was really under the assumption they were top 15 at least)

but also, Forbes says they lost 5.2 million!

WTF???
Aren't the numbers used in that from the Thrashers still or something? That's what I remember hearing.

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11-20-2012, 03:54 PM
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Quote:
Originally Posted by BrianSTC View Post
Can somebody please explain this:

http://www.forbes.com/nhl-valuations/list/

Not only does Forbes claim Winnipeg was only 24 in revenue (I was really under the assumption they were top 15 at least)

but also, Forbes says they lost 5.2 million!

WTF???
Easy. The list was released in November 2011.

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11-20-2012, 04:47 PM
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Quote:
Originally Posted by BrianSTC View Post
Can somebody please explain this:

http://www.forbes.com/nhl-valuations/list/

Not only does Forbes claim Winnipeg was only 24 in revenue (I was really under the assumption they were top 15 at least)

but also, Forbes says they lost 5.2 million!

WTF???
NHL fiscal year starts part way (I cant remember if it's in Dec or Jan) so all Forbes reportings are about two halves of a season.


Last edited by garret9: 11-20-2012 at 06:05 PM. Reason: halves... not halfs... wow
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11-20-2012, 04:52 PM
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Quote:
Originally Posted by Holden Caulfield View Post
Rich people don't get rich by tossing money around, or throwing money after bad money...it is a minor investment for somebody like Thomson, but he has made it perfectly clear that he anticipates the Jets to be a smart solid investment, not a money drain...not too mention he is only 50% owner, with the other 50% being Mark Chipman who cannot afford to throw money around on that level. Do not anticipate TNSE to treat these team as an expense.

I have no doubt we will follow a SJS/NSH type model...during lean rebuilding years we will be near the bottom on payroll, but we will spend when we have the team to spend. When it becomes time to rebuild again we will be cutting salary. The life of a mid market team...
While some are being ignorant in say "ya but they're rich", this bolded part shows the truth, in my opinion. I remember them saying those things as well. This is a business. If they were OK with bleeding and this is just an expensive toy, we'd be a cap ceiling team and not a low-mid like they promised... after all what's a couple extra million to billionares right?...

And while the Jets may only be one part of a larger puzzle, these are profit maximizing men. They do have a heart and affinity for the team, but they won't and wouldn't want to do this if it becomes a fiscal trainwreck.

If the CBA continues to be good for small markets and the Can:US economy ratio continues to be stable, I won't have any fears.

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11-20-2012, 05:33 PM
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That's not really a surprise. The Jets may have had a huge year revenue-wise that they're not likely to ever repeat (accounting for inflation) but they also had huge expenses aside from just purchasing the team. The upgrades to the arena couldn't have been cheap, especially if you include ones done in anticipation of getting the team such as the expansion of the press-box. Also, no one who has followed the team at all expects them to be a cap team unless they have a real shot at the cup or thinks that Thompson got in to this to throw money around on a losing business.

Still, the fact they've taken on some salary for this/next year shows they're willing and able to spend more. For example, they went out and got Jokinen in free agency, which completely flies in the face of the "spent to the floor, tank and build through first overall picks" mantra that so many on HFBoards seem to subscribe to for smaller market teams.

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11-20-2012, 05:39 PM
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Quote:
Originally Posted by thom View Post
I like Winnipeg but can someone tell me why the thompson family bought the jets but did not buy the Toronto Maple leafs?
Don't you listen to primetime sports with Bob Mcgowan and company? A few years ago, when it was rumored that Thompson was part of an ownership group interested in bringing team to Winnipeg, McGowan and his cohorts said Winnipeg was simply a stopgap until a second arena was built in GMA of Toronto to host a second NHL team. At that point, say 5 - 7 years down the road, Thompson and Chipman would move the team to Toronto where they would make tens of millions in profits.

We need to enjoy this team while we can. They will be gone before 2020. Bob Mcgowan said so.


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11-20-2012, 05:46 PM
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Does this include the revenue from all non-hockey events?

Because when this team does make a push to improve and spend more, I am sure any minimal loses could be subsidized by all the concerts and other events held at the MTSC. Not to mention the insane playoff revenue once we finally make it!
No, I'm pretty sure it's just HRR..gate receipts, concessions, parking and merchandise bought at the Jets store at the MTS centre.

If they included profits from the MTS Iceplex, concerts at MTS centre and the soon to-be-built Hotel and Restaurant, this team would operate at a profit, even as a cap team.

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