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Professor rips NHL for treating fans as stupid

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Old
11-21-2012, 12:12 AM
  #51
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Originally Posted by MarkGio View Post
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Meanwhile they're outlining 40 million in players costs for each team as this outrageous cost for a business, when really 40 million for each team is really only eating up 33% of revenue. Clearly teams are spending more (57%).

Still, that's not bad considering your business model is based around your employees.

And since 3.3 billion in HRR is a net calculation, I still fail to see how player salaries are killing this league.
40/110 is 36.36%. And that's if it's 40m, and not more. KevFu said somewhere that the average was 44m (which is then 40% of 110m) - not sure of his source. And that's for teams who are at or above the league average in revenue - which according to Forbes is 9 teams. So for 9 teams in the league they're spending less than 36-40% of their revenue on non-player expenses. And the other 21 teams are spending more than 36-40% on non-player expenses.

Now if you're using Forbes revenue numbers, there's only 5 additional teams who are above the median of 96m and below the league average of 110m. Lets drop those and say it's possible that their numbers are inaccurate. That still leaves 16 teams who are spending on average 47-52% of their revenue on non-player expenses. Yes it's Forbes with Atlanta and NYI numbers (with their crappy lease) in there. But even if you shave off a few %, it's still pretty bad for those teams who are in the lower 1/3rd of the league. Those from the 33-53% mark aren't as bleak... but it's certainly not sunshine and roses.

Now add in the fact that each team must spend upwards of 50m on player expenses... in addition to 40-44m in non-player expenses... that doesn't leave a lot of room... especially when you consider that the median revenue is 96m.

Player costs are something that can be negotiated down (not the actual contracts - well those too I suppose - but am referring specifically to the split). If a team is not already doing everything possible to minimize their non-player expenses while still being as effective as possible, then they deserve to waste that money. But non-player costs are something that is likely to only increase with time. Yes they have some control over those expenses, but only to an extent. Non-player staff still need to be paid (coaches, trainers, doctors, marketing/advertising, etc). I'm sure teams already do the best they can when it comes to travel (quality charter planes that don't break the bank, and things of this nature). But other than staff, these costs are pretty fixed from team to team (travel dependent, etc).

Player costs really are the only thing that they have some ability to negotiate and that will make a large difference to a majority of the league.

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Median being the average once you remove the outliers like Toronto, New York, Montreal, Phoenix, Islanders, Atlanta, from the equation.

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11-21-2012, 12:19 AM
  #52
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Now if you're using Forbes revenue numbers, there's only 5 additional teams who are above the median of 96m and below the league average of 110m. Lets drop those and say it's possible that their numbers are inaccurate. That still leaves 16 teams who are spending on average 47-52% of their revenue on non-player expenses. Yes it's Forbes with Atlanta and NYI numbers (with their crappy lease) in there. But even if you shave off a few %, it's still pretty bad for those teams who are in the lower 1/3rd of the league. Those from the 33-53% mark aren't as bleak... but it's certainly not sunshine and roses.

Now add in the fact that each team must spend upwards of 50m on player expenses... in addition to 40-44m in non-player expenses... that doesn't leave a lot of room... especially when you consider that the median revenue is 96m.
Okay, let's back up. Winnipeg is probably easy to figure out, just take Edmonton as an example, notch it down a smidge. That only leaves the Isles.

How many teams is that, but more importantly how did you come up with the nonplayer expenses?

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11-21-2012, 08:22 AM
  #53
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Ogopogo, if I'm remembering correctly, those numbers were discovered to be somewhat incorrect. They were Forbes estimates which ended up being slighted somewhat negatively. The actual numbers are almost the reverse, I think it was discovered to be something like 17 teams in the black and 13 in the red, or something like that. However, the point still remains that a number of those teams in the Red are so because of the way the revenue had been split between the players and the owners. Changing up that split in order to give the owners a bigger piece of the pie (the 50/50 number that's been endlessly mentioned) would put another bunch of those teams from the negative side into the positive side. The revenues are there (or at least were there), it's just that the players have been getting a 57% share.

Edit: But yes, "great" was an overstatement. The League has been doing 'fine'.
Saying the league is doing "fine" is like saying the world is doing fine. Sure, some places like Canada are doing fine but, what about Gaza? What about Afghanistan and Iraq?

The league is not doing fine - part of the league is doing fine. Part of it is dying, thus the lockout.

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11-21-2012, 08:35 AM
  #54
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Originally Posted by Ogopogo View Post
Saying the league is doing "fine" is like saying the world is doing fine. Sure, some places like Canada are doing fine but, what about Gaza? What about Afghanistan and Iraq?

The league is not doing fine - part of the league is doing fine. Part of it is dying, thus the lockout.
The lockout is because the owners want to change how revenues are divied up, and of course the players don't want to give up any share of what they've been getting. And yes, the owners want to do that because many teams have been struggling financially. But revenues have been there, it's just that too small a portion of those revenues has been going to the owners. Now, is changing up the revenue split, to be the way the owners want it, going to solve every team's financial woes, No, it's not. There are certain teams which desperately need a greater fix, but on the whole, with a better revenue split for the owners, the League has been making enough revenue to offset the financial woes of a few teams with revenue sharing. On the other hand, if the problems of those specific teams are ultimately deemed too serious, especially for their respective owners, then the League may have to bite the bullet and accept a couple of relocations. Still though, all in all, it can't truly be claimed that the League has been doing badly in financial terms, not with the highest revenues ever recorded. If the League has been in such extremely bad financial shape in recent years, then it must have been on life-support for most of its history prior to the last lockout.

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11-21-2012, 08:37 AM
  #55
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The NBA burned two months of games to the tune of the same "ruining fan goodwill" arguments only for everyone's memories to be wiped by the intrigue of a chaotic season and a ridiculously compelling playoffs.

The league will be fine, so long as there's actually hockey this season. A shortened year means teams like the Leafs can put together a solid 40 games and find themselves in the playoffs, rather than having to duplicate that success for another half-year.

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11-21-2012, 09:07 AM
  #56
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The lockout is because the owners want to change how revenues are divied up, and of course the players don't want to give up any share of what they've been getting. And yes, the owners want to do that because many teams have been struggling financially. But revenues have been there, it's just that too small a portion of those revenues has been going to the owners. Now, is changing up the revenue split, to be the way the owners want it, going to solve every team's financial woes, No, it's not. There are certain teams which desperately need a greater fix, but on the whole, with a better revenue split for the owners, the League has been making enough revenue to offset the financial woes of a few teams with revenue sharing. On the other hand, if the problems of those specific teams are ultimately deemed too serious, especially for their respective owners, then the League may have to bite the bullet and accept a couple of relocations. Still though, all in all, it can't truly be claimed that the League has been doing badly in financial terms, not with the highest revenues ever recorded. If the League has been in such extremely bad financial shape in recent years, then it must have been on life-support for most of its history prior to the last lockout.
Until the early 90s, player salaries were reasonable - probably 25% of revenues - and the league was doing well. In the 90s we saw a rapid escalation to the point of about 75% was going to the players before the last lockout. At that point, the league was on life support - Canadian cities were losing their teams, the business model made no sense. The last lockout made things better but not good enough.

The NHL is not doing well. You don't shut down a league unless there are serious problems. Revenue numbers are completely irrelevant if expenses eat it all up.


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11-21-2012, 09:44 AM
  #57
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He's right. I'll support my team because I love the Habs but I won't give the NHL another dime. I may watch on TV but no games, no jerseys, no concessions, no NHL Center ice, no NHL Gamecenter, no website hits. MOD


Last edited by LadyStanley: 11-21-2012 at 10:12 AM. Reason: editorial comment not needed
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11-21-2012, 10:39 AM
  #58
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I disagree with his view. The NHL is not doing this to the fans, they are doing what they need to do to survive financially. In fact, they are doing this FOR the fans - without significant changes, many teams people cheer for will not exist.

Fans who are offended, make me shake my head. Be offended at the players - every one of them is making good money. They are driven by greed, 18 NHL teams are driven by survival.
Ok so if that's true the Bettman should be fired by the owners. But looks he's not. I wonder why, clearly the owners like what he has done for the last two decades.

The leagues numbers and business decisions don't add up.

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11-21-2012, 10:42 AM
  #59
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He's right. I'll support my team because I love the Habs but I won't give the NHL another dime. I may watch on TV but no games, no jerseys, no concessions, no NHL Center ice, no NHL Gamecenter, no website hits. MOD
The only dime they will get from me will be from my tsn/sportsnet cable bill.

Heck I tured down free golds to a leaf game last year because I didn't want them to get my parking/beer money.

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11-21-2012, 11:27 AM
  #60
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Originally Posted by Ogopogo View Post
Until the early 90s, player salaries were reasonable - probably 25% of revenues - and the league was doing well. In the 90s we saw a rapid escalation to the point of about 75% was going to the players before the last lockout. At that point, the league was on life support - Canadian cities were losing their teams, the business model made no sense. The last lockout made things better but not good enough.

The NHL is not doing well. You don't shut down a league unless there are serious problems. Revenue numbers are completely irrelevant if expenses eat it all up.
You just made my argument. The problem is the League has allowed costs, specifically player salaries, to outstrip the League revenues. The owners are attempting now to bring that under control, but the problem is that when you let the animal out of its cage it becomes mighty hard to put it back in again. The League has been stupid, incredibly stupid, to allow this situation to transpire. At a time when the NHL is earning more than ever, it's also allowed the cost of doing business to cut too deeply into those gains. That's not a major league sport that's struggling, that's a major league sport that's poorly economically structured. And it's not going to be an easy task to fix it. But if both sides, owners and players, want a healthy League moving forward, they should see the writing on the wall with regards to what needs to be done. It's really for the benefit and job security of both sides. A strong foundation is in fact being established in this sport, but it needs to be managed in a much more economically practical manner. The NHL has come a long way, and what we see isn't built on fabrication; it's real. But there are problems, yes.

Revenue numbers are Not irrelevant to expenses, in fact the exact opposite. Expenses need to be inline with revenue numbers. And they are not.


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11-21-2012, 11:31 AM
  #61
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Ok so if that's true the Bettman should be fired by the owners. But looks he's not. I wonder why, clearly the owners like what he has done for the last two decades.

The leagues numbers and business decisions don't add up.
Bettman, and Fehr shouldn't be around the next time the CBA is up...the 50-50 should do it, and at that point the owners need to control expenses outside the players salaries...

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11-21-2012, 11:34 AM
  #62
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I know I'm not spending any money on NHL merchandise this holiday season. And I'll watch the games when they come back, but I doubt I'll be going to any games. It's not a arms crossed, and stick out my tongue spiteful action. It's just a, "I'm sick of giving money to a league and players that would do this, and seem completely unconcerned about the fans." They have one job, to make sure people are entertained, and since June, they've done nothing but give the people grief. Both sides.

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11-21-2012, 11:36 AM
  #63
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Bettman, and Fehr shouldn't be around the next time the CBA is up...the 50-50 should do it, and at that point the owners need to control expenses outside the players salaries...
I would at least say this: Bettman shouldn't be the guy in charge of such negotiations for the League. And neither should Fehr, which in his case means that he shouldn't have any connection at all with the NHL. Fehr apparently has no idea at all about NHL realities; all he's focused on is making a bigger name for himself as a union negotiator. Most of the players almost certainly understand NHL realities better than he does.

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11-21-2012, 11:51 AM
  #64
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Originally Posted by Ogopogo View Post
Until the early 90s, player salaries were reasonable - probably 25% of revenues - and the league was doing well. In the 90s we saw a rapid escalation to the point of about 75% was going to the players before the last lockout. At that point, the league was on life support - Canadian cities were losing their teams, the business model made no sense. The last lockout made things better but not good enough.

The NHL is not doing well. You don't shut down a league unless there are serious problems. Revenue numbers are completely irrelevant if expenses eat it all up.
Another response, taking a different form of trying to make my point. There are two ways, as I see it, of looking at what has transpired here, and both can easily be given a positive spin but with a negative result.

1) The League allowed its ego to get the best of it, and resulting from that it allowed the mentality that it could offer players much higher salaries and benefits in general than what the League could actually support. That again is not to say that the League has in any way been doing poorly on the economic front, but that it has over-extended itself in player costs.

Or
2) That the League simply didn't anticipate its own strong growth, which obviously is a positive, and as such it created an economic structure that ended up giving the players too much of the economic pie and starving many of the owners.

Either way you look at it though, the NHL has been doing just fine; it's just that it hasn't managed it's gains very well.

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11-21-2012, 12:16 PM
  #65
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The NBA burned two months of games to the tune of the same "ruining fan goodwill" arguments only for everyone's memories to be wiped by the intrigue of a chaotic season and a ridiculously compelling playoffs.

The league will be fine, so long as there's actually hockey this season. A shortened year means teams like the Leafs can put together a solid 40 games and find themselves in the playoffs, rather than having to duplicate that success for another half-year.
Yeah, but which half will we get?

In 2010-11, the Leafs played well in the second half of the season.
In 2011-12, the Leafs played well in the first half of the season.

Who knows, we could easily get the poor half of the season... and maybe land MacKinnon?

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11-21-2012, 05:04 PM
  #66
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Fugu, I took that number from KevFu in one of his posts. I can't remember if he posted a source for it or not. I took it on faith as he's usually pretty careful about what he posts.

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Originally Posted by MoreOrr View Post
You just made my argument. The problem is the League has allowed costs, specifically player salaries, to outstrip the League revenues. The owners are attempting now to bring that under control, but the problem is that when you let the animal out of its cage it becomes mighty hard to put it back in again. The League has been stupid, incredibly stupid, to allow this situation to transpire. At a time when the NHL is earning more than ever, it's also allowed the cost of doing business to cut too deeply into those gains. That's not a major league sport that's struggling, that's a major league sport that's poorly economically structured. And it's not going to be an easy task to fix it. But if both sides, owners and players, want a healthy League moving forward, they should see the writing on the wall with regards to what needs to be done. It's really for the benefit and job security of both sides. A strong foundation is in fact being established in this sport, but it needs to be managed in a much more economically practical manner. The NHL has come a long way, and what we see isn't built on fabrication; it's real. But there are problems, yes.

Revenue numbers are Not irrelevant to expenses, in fact the exact opposite. Expenses need to be inline with revenue numbers. And they are not.
Yes but that means the players would have to agree to take less for the betterment of the league. To date they've shown no real interest in doing so. Yes they'll eventually agree to take less, as long as it doesn't impact them in the process (even their latest proposal doesn't allow their share (money wise) to drop below what it is currently). So if **** happens, the NHL is still screwed.

I'm not saying this all has to be on the players, but unfortunately for them a good chunk of it will land there.

Personally if work came to me and said we want to pay you 20% less a year so that the business is healthy (which would mean no layoffs/lockouts), but would get continuous incremental raises yearly as long as revenues rise. I would absolutely take that. Especially when my other option is working for 10% of what I make today (and yes I consider myself overpaid), or getting what I make now for a few years, then perhaps taking less, or getting laid off or locked out while my union and company fight each other. One has to look at this long term... and long term the best way for me to continue to pay my mortgage is for my company to post profits and for me to hold my overpaid union job without any work stoppages.

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11-21-2012, 08:08 PM
  #67
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Fugu, I took that number from KevFu in one of his posts. I can't remember if he posted a source for it or not. I took it on faith as he's usually pretty careful about what he posts.



Yes but that means the players would have to agree to take less for the betterment of the league. To date they've shown no real interest in doing so. Yes they'll eventually agree to take less, as long as it doesn't impact them in the process (even their latest proposal doesn't allow their share (money wise) to drop below what it is currently). So if **** happens, the NHL is still screwed.

I'm not saying this all has to be on the players, but unfortunately for them a good chunk of it will land there.

Personally if work came to me and said we want to pay you 20% less a year so that the business is healthy (which would mean no layoffs/lockouts), but would get continuous incremental raises yearly as long as revenues rise. I would absolutely take that. Especially when my other option is working for 10% of what I make today (and yes I consider myself overpaid), or getting what I make now for a few years, then perhaps taking less, or getting laid off or locked out while my union and company fight each other. One has to look at this long term... and long term the best way for me to continue to pay my mortgage is for my company to post profits and for me to hold my overpaid union job without any work stoppages.
You would really trust your company to open up their books so you could see that they were or weren't doing better? I sure wouldn't. In fact if they tried to pull that on me I would be on work to rule or looking for another job.

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11-21-2012, 08:15 PM
  #68
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You would really trust your company to open up their books so you could see that they were or weren't doing better? I sure wouldn't. In fact if they tried to pull that on me I would be on work to rule or looking for another job.
Fine, let the NHL players go play somewhere else where the pay is comparable.

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11-21-2012, 08:28 PM
  #69
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If I didn't have an emotional connection to the Sens it wouldn't be hard to leave. Love the team, hate the league
The owners need to get rid of their mouthpiece and jointly with the NHLPA appoint a true commissioner. Who would lookout for the best interests of all parties, fans, players and owners.

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11-21-2012, 09:37 PM
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The entire sports business model is more or less based on the fan being an idiot. Without irrational attachment on part of fans, sports just don't work. In this environment, owners and players are responsible only for their own profits or advancement but it all relies on Average Joe Fan going to games and watching them no matter how much the team sucks out of a sense of devotion, a sense of one-sided attachment. If bad play actually had the same consequence an objectively terrible food item has (i.e. hardly anyone buys it) then most franchises would be dead already.

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11-21-2012, 09:58 PM
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The entire sports business model is more or less based on the fan being an idiot. Without irrational attachment on part of fans, sports just don't work. In this environment, owners and players are responsible only for their own profits or advancement but it all relies on Average Joe Fan going to games and watching them no matter how much the team sucks out of a sense of devotion, a sense of one-sided attachment. If bad play actually had the same consequence an objectively terrible food item has (i.e. hardly anyone buys it) then most franchises would be dead already.
You pretty much explained the entire Chicago Cubs fan base, the biggest idiots of the 4 major NA sports.

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11-21-2012, 10:30 PM
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I'm one of the crazy fans... (like most people here I would assume). I have season tickets to the Jets and I loved it last year. It took awhile but the league and players have totally crushed my interest in going to a game, sure I will watch it from home but I would feel dirty cheering for the players that sound like spoiled children begging for one more toy at the mall.

And for the love of god... if I hear one more player crying about how they are offering 50/50 split I'm going to go crazy..... ITS NOT 50/50 if u want to guarantee all your salary's.

Fun to watch and amazingly talented on the ice.. but OMG get a calculator and lay off the koolaid!

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11-22-2012, 12:40 PM
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I assumed they thought we were stupid when they did the Marvel Superhero league thing with Stan Lee.


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11-22-2012, 01:34 PM
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You just made my argument. The problem is the League has allowed costs, specifically player salaries, to outstrip the League revenues. The owners are attempting now to bring that under control, but the problem is that when you let the animal out of its cage it becomes mighty hard to put it back in again. The League has been stupid, incredibly stupid, to allow this situation to transpire. At a time when the NHL is earning more than ever, it's also allowed the cost of doing business to cut too deeply into those gains. That's not a major league sport that's struggling, that's a major league sport that's poorly economically structured. And it's not going to be an easy task to fix it. But if both sides, owners and players, want a healthy League moving forward, they should see the writing on the wall with regards to what needs to be done. It's really for the benefit and job security of both sides. A strong foundation is in fact being established in this sport, but it needs to be managed in a much more economically practical manner. The NHL has come a long way, and what we see isn't built on fabrication; it's real. But there are problems, yes.

Revenue numbers are Not irrelevant to expenses, in fact the exact opposite. Expenses need to be inline with revenue numbers. And they are not.
In hindsight, the league should have held out last time, to ensure that things were permanently stable. Easier said than done, I suppose. Unfortunately, the compromise they finally signed was a bit of a high wire act, and as we see, there are still problems to be fixed.

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11-22-2012, 01:35 PM
  #75
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Originally Posted by struckbyaparkedcar View Post
The NBA burned two months of games to the tune of the same "ruining fan goodwill" arguments only for everyone's memories to be wiped by the intrigue of a chaotic season and a ridiculously compelling playoffs.

The league will be fine, so long as there's actually hockey this season. A shortened year means teams like the Leafs can put together a solid 40 games and find themselves in the playoffs, rather than having to duplicate that success for another half-year.
I agree that if a season is saved, a lot of that anger and resentment will be dissipated, if the season and playoffs are exciting. Still, regardless if the season is saved, I still wanna see fans show some of their anger by boycotting the first week to send a message.

If the season is cancelled, like MLB after the strike, it'll take 5-10 years for the NHL to recover and by the time it recovers, it goes from a 30 team league to a 24 team league with southern sunbelt teams moved/relocated.

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