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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.

Good article from Darren Rovell

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Old
02-11-2005, 09:21 AM
  #26
Brewleaguer
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Quote:
Originally Posted by Crazy Lunatic
Look how long they lasted while losing millions and millions more than they lost this year. A lockout will delay their demise a lot longer than playing under the old CBA would have. Many teams aren't losing anything by locking the doors, they are saving money.
How can you save money you don't have coming in?
The 10 mil is to cover their overhead, but it can't last for much longer.

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02-11-2005, 09:22 AM
  #27
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Quote:
Originally Posted by likea
small market teams will actually have a chance to compete for a playoff spot if run well. we all know if teams are winning it attracts fans but now if teams win they will not be a farm team to the larger markets therefore they will not put their fans on a roller coaster ride

by building and losing for a few years then winning then not being able to afford their players therefore trading them for prospects and trying to build and win again

its a cycle that fans hate and the majority of the league has been forced to do it

it is also unfair because the big market teams stopped giving top value to prime players because they knew the small markets had to trade them

look at the NFL, if 24 teams have a shot to get in the playoffs with 10 games l;eft, thats good for the game because 24 cities are excited...
While I agree with you that the cap will put all teams on a more financial level playing fileld my issue is with the floor specifically. About a third of the league can be considered small revenue. Can we agree that on ice success is what will make a franchise more financially successful? If so, how many of the 12 teams will enjoy enough long term success to meet the floor in a cap era?

The problem with the floor as I see it is that if you are a small revenue team of 53 million and the floor is 32 milllion than your cost ratio is about 60%. The point of the article is that post lockout this ratio is likely to get worse for most small revenue teams because they are not as likely to recapture the casual fan. To me, this should not be the cost certainty the league is looking for.

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Old
02-11-2005, 09:27 AM
  #28
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Quote:
Originally Posted by Crazy Lunatic
Bettman has said that the NHL will insure that all teams get to the salary floor of 32 (probably a 22 million floor by this time next year) by revenue sharing. A team needs to meet the NHLs criteria, like have 75% attendance and they automatically get revenue sharing help to bring them to the floor. Too bad the 32 - 42 million range is dead in the water. We're looking at a range of 22-32 for next year. Way to go NHLPA!
Actually in the NHLPA proosal they claim the NHL number was 80% along with the vague "assuming appropriate level of performance within their respective market". r Post lockout how many of the small revenue markets will meet these criteria which we don't even know? This is a far cry from "certainty"

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02-11-2005, 09:33 AM
  #29
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Quote:
Originally Posted by John Flyers Fan
The Flyers claimed that if no hockey was to be played this year they'd lose $15 million. I would have to think that most teams are in that ballpark of $10-20 million.

I'm curious, but what do you base this $10-$20 million figure on? To believe that, one would also believe these teams were earning money before the lockout.

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02-11-2005, 09:35 AM
  #30
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Quote:
Originally Posted by John Flyers Fan
Each team has $10 million to draw from in the war chest. They need NHL permission before they can withdraw any or all of that money.
According to Larry Brooks,no team has requested their $10 million yet

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02-11-2005, 09:35 AM
  #31
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Quote:
Originally Posted by Brewleaguer
How can you save money you don't have coming in?
The 10 mil is to cover their overhead, but it can't last for much longer.
I'm not sure "saving money" is the right phrase. It might be better to say they're losing less money by not playing.

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Old
02-11-2005, 09:38 AM
  #32
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Quote:
Originally Posted by shnagle
Actually in the NHLPA proosal they claim the NHL number was 80% along with the vague "assuming appropriate level of performance within their respective market". r Post lockout how many of the small revenue markets will meet these criteria which we don't even know? This is a far cry from "certainty"
Teams that last year failed to draw 75%:

Pittsburgh, Carolina, Chicago

Teams that failed to draw 80%: Pittsburgh, Carolina, Chicago, Nashville, New Jersey, and Washington.

Unsure on Coyotes status as they changed buildings mid-way through the season.

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Old
02-11-2005, 09:40 AM
  #33
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i hope the players are listening to fan 590 this morning-they are haveing 24 sec fan rants and the fans are unloading on them--i get the impression that fans would welcome replacements with open arms---btw i live in the south and have always been curious as why the NFL has never expanded into Canada?- do they have some sort of agreement with the CFL? i would have thought there would have a team in Toronto at the least.

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Old
02-11-2005, 09:45 AM
  #34
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Quote:
Originally Posted by CarlRacki
I'm curious, but what do you base this $10-$20 million figure on? To believe that, one would also believe these teams were earning money before the lockout.
Ron Ryan, President of the Philadelphia Flyers, gave the $15 million figure in an article to the Philadelphia Inquirer, in September/October. The $10-20 million is an educated guess, based on the Flyers number.

Teams are currently bringing in little or no revenue. They still have expenses:

Coaches, front office personell, scouts, accounting & sales staff etc.

Other expenses include: property taxes (huge in Canada), arena leases or mortgage payments, debt service.

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02-11-2005, 09:45 AM
  #35
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Quote:
Originally Posted by John Flyers Fan
Teams that last year failed to draw 75%:

Pittsburgh, Carolina, Chicago

Teams that failed to draw 80%: Pittsburgh, Carolina, Chicago, Nashville, New Jersey, and Washington.

Unsure on Coyotes status as they changed buildings mid-way through the season.
Thanks for the info. Well, out of those teams Nashville and Pittsburgh would be in desperate need for revenue sharing and would not receive any. Do you know what other small revenue teams were close to 80% who might fall below if the lockout continues. Also, any idea of what other things the NHL might mean by "appropriate level of performance"?

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02-11-2005, 09:52 AM
  #36
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Quote:
Originally Posted by shnagle
Thanks for the info. Well, out of those teams Nashville and Pittsburgh would be in desperate need for revenue sharing and would not receive any. Do you know what other small revenue teams were close to 80% who might fall below if the lockout continues. Also, any idea of what other things the NHL might mean by "appropriate level of performance"?
Attendance link:
http://sports.espn.go.com/nhl/attend..._avg&year=2004

Have no idea.

IMO the NHL should make it a flat figure, because buildings are different sized.

Make it 15,000 and you have to meet minimum spending requirements on player salaries.

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Old
02-11-2005, 10:02 AM
  #37
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Quote:
Originally Posted by shnagle
While I agree with you that the cap will put all teams on a more financial level playing fileld my issue is with the floor specifically. About a third of the league can be considered small revenue. Can we agree that on ice success is what will make a franchise more financially successful? If so, how many of the 12 teams will enjoy enough long term success to meet the floor in a cap era?

The problem with the floor as I see it is that if you are a small revenue team of 53 million and the floor is 32 milllion than your cost ratio is about 60%. The point of the article is that post lockout this ratio is likely to get worse for most small revenue teams because they are not as likely to recapture the casual fan. To me, this should not be the cost certainty the league is looking for.
look, i dont think anyone would ever accuse me of being on the ownerside in this mess, but the 32million floor is itself an inflationary componenet of the deal. you said it yourself, its a 60% ratio for many teams.

of all the things offered by the NHL, the floor is probably the only real item that is a victory for the PA.

so, if the NHL has promised to make sure all teams can at least meet the floor, doesnt that resolve the issue you raise ?

dr

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Old
02-11-2005, 10:03 AM
  #38
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Quote:
Originally Posted by John Flyers Fan
Teams that last year failed to draw 75%:

Pittsburgh, Carolina, Chicago

Teams that failed to draw 80%: Pittsburgh, Carolina, Chicago, Nashville, New Jersey, and Washington.

Unsure on Coyotes status as they changed buildings mid-way through the season.
When you look at teams that are below the 80%, you seem teams that are struggling record wise. Beyond that Washington is rebuilding and traded off many of the big name players and Nashville really needs to have 2-3 winning season before you can actually take a look at their draw.

Winning will bring back the fans. As for NJ, I don't know what to think there. They consistantly win, but it is boring hockey.

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Old
02-11-2005, 10:04 AM
  #39
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teams are losing 7-10 million this year? i don't understand where all this money is being spent. i figure if the team owns the rink, they have to pay upkeep, some if not all staff has to be kept... what else?

i'm not trying to be reactionary, i just want to know what else could eat up such an incredible amount of money.

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02-11-2005, 10:09 AM
  #40
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Quote:
Originally Posted by Frenzy1
When you look at teams that are below the 80%, you seem teams that are struggling record wise. Beyond that Washington is rebuilding and traded off many of the big name players and Nashville really needs to have 2-3 winning season before you can actually take a look at their draw.

Winning will bring back the fans.
Teams aren't always going to win. Even if the NHL ever got all 30 teams to compete on exactly even footing financially, which won't happen, more than 45% of all teams will miss the playoffs every year.

A salary cap isn't going to guarantee playoff teams in Washington, Pittsburgh etc. etc.

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02-11-2005, 10:09 AM
  #41
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Quote:
Originally Posted by DR
look, i dont think anyone would ever accuse me of being on the ownerside in this mess, but the 32million floor is itself an inflationary componenet of the deal. you said it yourself, its a 60% ratio for many teams.

of all the things offered by the NHL, the floor is probably the only real item that is a victory for the PA.

so, if the NHL has promised to make sure all teams can at least meet the floor, doesnt that resolve the issue you raise ?

dr
The NHL has only promised to help those teams meet the floor provided they meet an appropriate level of business performance such as 80% attendance. Currently, there are two teams(Pittsburgh,Nashville) who need that assistance below the level. Four other small revenue markets are close in Florida(82.6), Atlanta(81.5), Buffalo(80.6) and Phoenix(?). Assuming a drop off in attendance post lockout how will these teams qualify for the revenue sharing they need? Isn't the point of this lockout to ensure 30 solvent franchises, I don't see how the floor does this?


Last edited by shnagle: 02-11-2005 at 10:17 AM.
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Old
02-11-2005, 10:11 AM
  #42
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Quote:
Originally Posted by DR
Because 20m doesnt grow on tree's. Where do you expect them to come up with the cash if the banks wont finance them ?

DR
They'll do just the same thing they've been doing the past 10 years, the owners will finance the teams with their own money.

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Old
02-11-2005, 10:11 AM
  #43
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Quote:
Originally Posted by StanTheMan
teams are losing 7-10 million this year? i don't understand where all this money is being spent. i figure if the team owns the rink, they have to pay upkeep, some if not all staff has to be kept... what else?

i'm not trying to be reactionary, i just want to know what else could eat up such an incredible amount of money.
#1. Property taxes, a huge expense especially for Canadian teams.

#2. Very few teams own their building outright, with no debt-service. Most either pay a lease, or are paying off huge loans that went into building construction.

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02-11-2005, 10:15 AM
  #44
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Originally Posted by Smail
They'll do just the same thing they've been doing the past 10 years, the owners will finance the teams with their own money.
well, that doesnt make sense....

if they can afford to throw 20m into a non revenue generating black hole, why cant they afford to a more workable salary drag system and get their game back on the ice ?

i have been led to believe they are taking this hardline bully stance because they cant afford to do otherwise/

dr

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02-11-2005, 10:16 AM
  #45
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Quote:
Originally Posted by shnagle
While I agree with you that the cap will put all teams on a more financial level playing fileld my issue is with the floor specifically. About a third of the league can be considered small revenue. Can we agree that on ice success is what will make a franchise more financially successful? If so, how many of the 12 teams will enjoy enough long term success to meet the floor in a cap era?

The problem with the floor as I see it is that if you are a small revenue team of 53 million and the floor is 32 milllion than your cost ratio is about 60%. The point of the article is that post lockout this ratio is likely to get worse for most small revenue teams because they are not as likely to recapture the casual fan. To me, this should not be the cost certainty the league is looking for.

the Pittsburgh Penguins, 4 years ago had a payroll of 34 million and they made money

5 years ago they had a payroll of 32 million and they made money

Lemieux and the Penguins made a small amount of profit the first three to four years he owned the team

the problem came when they had to give raises to all their players...Jagr, Straka, Kasper, Lang, Kovy, Boughner...ect...ect..

they could not afford to raise payroll over 34 million and not lose a ton of money

they were forced to unload these players for less value than they are worth because the big market teams knew they could not hang onto them

the fans went from making the conference finals to watching a minor league team on the ice all because of money

if big market teams cannot give Lang 5 million a year, Jagr 11, Kovy 6, Boughner 3, Kasper 4 and the players price range fell to where it is reasonable...the Pens would have been able to at least keep a core together and build around them

but why keep Kovy's 6 million when you lose the rest of your all-stars and your probably going to lose anyways

look at the Pens attendence when they win or are in a race for the playoffs, its very good for the arena they have

the NHL will revenue share to get every team to 32 million....once they get to 32 million, with good hockey moves they should be able to compete

once they can compete year in and year out then they should be able to aquire a fan base

its like a domino effect....but they must be able to compete

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Old
02-11-2005, 10:19 AM
  #46
Paul Martin Jones
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Quote:
Originally Posted by shnagle
The NHL has only promised to help those teams meet the floor provided they meet an appropriate level of business performance such as 80% attendance. Currently, there are two teams(Pittsburgh,Nashville) who need that assistance below the level. Four other small revenue markets are close in Florida(82.6), Atlanta(81.5), Buffalo(80.6) and Phoenix(?). Assuming a drop off in attendance post lockout how will these teams qualify for the revenue sharing they need? Isn't the point of this lockout to ensure 30 solvent franchises, I don't see how the floor does this?
well, its not like the players care. they would take the last CBA in a heart beat without any thought to those teams.

anyhow, i can see it as an argument that the NHL doesnt know what its doing, but not as an argument for the players to not take the offer. short of reverting to the old CBA, the salary floor offer is the best part of the owners offer.

dr

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Old
02-11-2005, 10:19 AM
  #47
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Quote:
Originally Posted by John Flyers Fan
Teams aren't always going to win. Even if the NHL ever got all 30 teams to compete on exactly even footing financially, which won't happen, more than 45% of all teams will miss the playoffs every year.

A salary cap isn't going to guarantee playoff teams in Washington, Pittsburgh etc. etc.

but it will guarantee a chance to compete which will have a direct effect on the revenues

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Old
02-11-2005, 10:21 AM
  #48
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Quote:
Originally Posted by likea
but it will guarantee a chance to compete which will have a direct effect on the revenues
this is hte part of the cappers argument that drives me bonkers.

teams can compete just fine under the old CBA. stop being a ******.

dr

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02-11-2005, 10:23 AM
  #49
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Quote:
Originally Posted by likea
but it will guarantee a chance to compete which will have a direct effect on the revenues
That's far from proven anywhere. The Caps until this past season, when they sold everyone off, had plenty of people to go see: Gonchar, Bondra, Kolzig, Jagr, and have been a good franchise for most of the last 20 years.

Other than Jagr's first year, when they had a big jump in attendance, the Caps have always had huge trouble drawing fans.

Even during the playoffs if the play the Flyers or Penguins, their building gets over run by the opponents fans.

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02-11-2005, 10:25 AM
  #50
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Quote:
Originally Posted by DR
this is hte part of the cappers argument that drives me bonkers.

teams can compete just fine under the old CBA. stop being a ******.

dr

look at the last 4 NHL seasons

take the top 15 in payroll and the bottom 15

who has the best chance to make the playoffs, is it even, if every team has the same chance to compete it should be even...right???

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