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What are the pro-PA differences between the NHL and the other Big Three?

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12-23-2012, 10:01 AM
  #1
haseoke39
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What are the pro-PA differences between the NHL and the other Big Three?

So baseball pays its people 42-45%, the NFL 47%, and the NBA 50%. The NHL has offered better core financials than all those, going 50% plus $300M. The argument goes that they've offered a more than fair deal.

Whenever that gets raised, people chime in and say "but the NHL is different than those other sports, so their players deserve more." And that may be true, but I have yet to hear examples of specific differences between these leagues that suggest why the NHL's players deserve more. So this thread is to explore those differences.

From my perspective, the biggest differences between the NHL and the other Big Three actually suggests the NHL should offer less than these other leagues. For example:

(1) the NHL and NBA probably have substantially similar fixed operating costs. They play the same number of nights in the same arenas, so leases and staff costs are probably close. But the NBA makes a ton more money, so that suggests to me that if the NHL's owners are paying similar costs out of a smaller revenue pool, they should be offering their players less money.

(2) The NHL doesn't have a big national TV deal to split, like the NFL. Even if you added up all the small ones (which I seriously doubt you'd ever get to go into RS, because that gives the franchises horrible incentives to try and get a good local TV deal for themselves), it wouldn't come close to the amounts the NFL can redistribute. That means less revenue sharing, which means to do the same work of propping up poor franchises, more money has to come from other places. Like the players.

Those are the biggest differences I see, and they actually suggest to me the NHL should be paying less, not more. But I'm interested in hearing of some of the pro-PA people have a more specific set of things that they think of when they say these sports are different that actually mean the NHL should be paying its people more.

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12-23-2012, 12:16 PM
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Originally Posted by haseoke39 View Post
So baseball pays its people 42-45%, the NFL 47%, and the NBA 50%. The NHL has offered better core financials than all those, going 50% plus $300M. The argument goes that they've offered a more than fair deal.

Whenever that gets raised, people chime in and say "but the NHL is different than those other sports, so their players deserve more." And that may be true, but I have yet to hear examples of specific differences between these leagues that suggest why the NHL's players deserve more. So this thread is to explore those differences.

From my perspective, the biggest differences between the NHL and the other Big Three actually suggests the NHL should offer less than these other leagues. For example:

(1) the NHL and NBA probably have substantially similar fixed operating costs. They play the same number of nights in the same arenas, so leases and staff costs are probably close. But the NBA makes a ton more money, so that suggests to me that if the NHL's owners are paying similar costs out of a smaller revenue pool, they should be offering their players less money.

(2) The NHL doesn't have a big national TV deal to split, like the NFL. Even if you added up all the small ones (which I seriously doubt you'd ever get to go into RS, because that gives the franchises horrible incentives to try and get a good local TV deal for themselves), it wouldn't come close to the amounts the NFL can redistribute. That means less revenue sharing, which means to do the same work of propping up poor franchises, more money has to come from other places. Like the players.

Those are the biggest differences I see, and they actually suggest to me the NHL should be paying less, not more. But I'm interested in hearing of some of the pro-PA people have a more specific set of things that they think of when they say these sports are different that actually mean the NHL should be paying its people more.
One thing to point out is that the NBA seats more people in the same arenas because the basketball court takes up less space than hockey ice. It's not a huge difference in numbers, but those courtside seats are even more expensive than rinkside seats.

And yes, NHL players get way too much, and no... they don't deserve more than players from the other leagues.

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12-23-2012, 02:24 PM
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Another thing to note is that basketball related income is a different calculation from hockey related revenue, and that football related income gets to skim a pile off the top first. They are all different calculations - 50% of BRI is not the same as 50% of HRR.

The just expired cba was working perfectly according to all including Bettman at 55% of HRR. Then it stopped working presumably. Because the big few markets made too much money?

If that is the case, it must imply then that the more money the league makes, the bigger percentage of whatever artificial number they came up with for sharing with the players they are entitled to?

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12-23-2012, 02:29 PM
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The NHL has not as deep and widespread a fanbase, and therefore makes a lot less money, with the exception of a very few choice NHL markets.

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12-23-2012, 02:31 PM
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My guess is the owners might have a long term plan to get the % int he 40's down the road. With where the NHL is compared to the other sports financially, the players are vastly overpaid. Too much pie given up. You cannot do it in one shot though.

The players have basically been overpaid for years and years. They are used to it. It is hard for them to accept financial realities.

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12-23-2012, 02:37 PM
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My guess is the owners might have a long term plan to get the % int he 40's down the road. With where the NHL is compared to the other sports financially, the players are vastly overpaid. Too much pie given up. You cannot do it in one shot though.

The players have basically been overpaid for years and years. They are used to it. It is hard for them to accept financial realities.
I don't think you'd say that hockey players don't deserve as much as the athletes in those other sports, hell perhaps a hockey player does deserve more than the average player in those other sports. But the "reality" is the market place, and the hockey market place is much smaller than the market places for those other leagues. It's just the economic reality and the position of hockey as a League sport in North America (and in the world for that matter). There are just not a lot of places where hockey can earn those huge profits in order to pay players huge salaries.


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12-23-2012, 03:33 PM
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Another thing to note is that basketball related income is a different calculation from hockey related revenue, and that football related income gets to skim a pile off the top first. They are all different calculations - 50% of BRI is not the same as 50% of HRR.
HRR & BRI are much more alike than they are different.

While the exact definitions of BRI have not been made available - the NBA & NBPA have not publicly released their new (or old) CBA - everything I've read makes BRI sound VERY similar to HRR. Specifically, they are very similar in how they net Direct Costs related to revenue generation.

The revenue streams generated by the NHL & NBA are virtually identical - gate, luxury boxes, local RSN & national TV deals, concessions, parking, advertising, sponsorships, merchandising, etc.

Pre-Lockouts (NBA & NHL), BRI was running ~$900M/yr higher than HRR - the bulk of the difference being attributable to the difference in the US national broadcast deals. Given that those deals have low Direct Costs - the NBA accrues an add'l ~30% in revenue with few costs - it could be argued that the Players Share in the NHL should be lower than the NBA.

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12-23-2012, 06:21 PM
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Whenever that gets raised, people chime in and say "but the NHL is different than those other sports, so their players deserve more."
NHL players should get less than the other major sports. Why? It comes down to TV money. With no significant national TV deal in the US, it really hinders the financial model. Its basically why we have the lockout today as the league has attempted to get that TV deal for everyone's benefit (except some regional fans of course). Players need to accept reality and get a 50/50 deal. Some of the pts they should be arguing about never come up in public discourse. Long term, the players should be focusing on building a fanbase and getting that TV money. Of course, it might never happen to a great extent as the NHL has to compete against so many different events on TV (NFL doesnt). The league has a lot of problems on this front, namely that the game has become too boring (even simple things as decent lighting in some arenas have yet to be overcome in 2012!).

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12-23-2012, 06:25 PM
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The biggest difference is the NHL stopped playing games and very few people cared.

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12-23-2012, 06:42 PM
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The biggest difference is the NHL stopped playing games and very few people cared.
Depends on where you live I guess. The sport stations here talk about it most of the day.

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12-23-2012, 09:31 PM
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Another thing to note is that basketball related income is a different calculation from hockey related revenue, and that football related income gets to skim a pile off the top first. They are all different calculations - 50% of BRI is not the same as 50% of HRR.

The just expired cba was working perfectly according to all including Bettman at 55% of HRR. Then it stopped working presumably. Because the big few markets made too much money?

If that is the case, it must imply then that the more money the league makes, the bigger percentage of whatever artificial number they came up with for sharing with the players they are entitled to?
We know nothing about BRI and nobody outside the NBA does; more likely than not they are pretty close because NBA makes money just like the NHL does: by playing in arenas, running the arenas, getting people in the luxury boxes and broadcasting those games on TV.

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12-23-2012, 10:59 PM
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Originally Posted by thinkwild View Post
Another thing to note is that basketball related income is a different calculation from hockey related revenue, and that football related income gets to skim a pile off the top first. They are all different calculations - 50% of BRI is not the same as 50% of HRR.

The just expired cba was working perfectly according to all including Bettman at 55% of HRR. Then it stopped working presumably. Because the big few markets made too much money?

If that is the case, it must imply then that the more money the league makes, the bigger percentage of whatever artificial number they came up with for sharing with the players they are entitled to?
This would be exactly the kind of fact I was hoping would come out of this discussion. Do you have any sources?

If it could be shown that HRR leaves out some big chunks of money that other sports include in their revenue counts, that would be a significant difference.

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12-23-2012, 11:29 PM
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I've been thinking of something similar except in the opposite direction. Instead of asking the question 'why is the NHLPA making more than the other big 3', why not ask 'couldn't the NFLPA be making more than the NHLPA'?

Basically, these things work like a pendulum. If the balance of power shifts too far to one side, that gives the other side greater motivation and resilience to hold out and get what they want or need. If the PA is taking home all the profits and leaving none for the owners, then obviously the owners don't lose anything by locking the PA out for as long as necessary to get some back, implement a salary cap, or whatever. Similarly, if the PA is doing as good as they are then usually they will in effect lose more from holding out for a year than they would by accepting a lesser offer.

But the NFL? I don't follow it all but it seems to me like they're making boatloads of cash. Aren't their revenues something like $10B? And having the weakest CBA between the capped leagues it seems like the pendulum would be well over on the owners side. So what would happen if the NFLPA made a hardball demand like 'guarantee our contracts or no CBA'?

In an NHL lockout Bettman can't get to the podium quick enough to tell us how all these teams are losing millions so they may as well be better off not playing if they can't get a better deal. That obviously isn't the case in the NFL, so couldn't their PA make the owners sweat by making some hardline demands for the next labour negotiations?

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12-24-2012, 12:11 AM
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Originally Posted by RandV View Post
I've been thinking of something similar except in the opposite direction. Instead of asking the question 'why is the NHLPA making more than the other big 3', why not ask 'couldn't the NFLPA be making more than the NHLPA'?

Basically, these things work like a pendulum. If the balance of power shifts too far to one side, that gives the other side greater motivation and resilience to hold out and get what they want or need. If the PA is taking home all the profits and leaving none for the owners, then obviously the owners don't lose anything by locking the PA out for as long as necessary to get some back, implement a salary cap, or whatever. Similarly, if the PA is doing as good as they are then usually they will in effect lose more from holding out for a year than they would by accepting a lesser offer.

But the NFL? I don't follow it all but it seems to me like they're making boatloads of cash. Aren't their revenues something like $10B? And having the weakest CBA between the capped leagues it seems like the pendulum would be well over on the owners side. So what would happen if the NFLPA made a hardball demand like 'guarantee our contracts or no CBA'?

In an NHL lockout Bettman can't get to the podium quick enough to tell us how all these teams are losing millions so they may as well be better off not playing if they can't get a better deal. That obviously isn't the case in the NFL, so couldn't their PA make the owners sweat by making some hardline demands for the next labour negotiations?
If the NFL and NBA decided they wanted better terms, you might have longer lockouts in those leagues. I think that's about it.

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12-24-2012, 12:18 AM
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Your example of the NFL TV contract actually works towards the owners having MORE control in the NFL, not less.

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12-24-2012, 12:24 AM
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Your example of the NFL TV contract actually works towards the owners having MORE control in the NFL, not less.
Not really sure what you're saying or what control has to do with what we're talking about here.

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12-24-2012, 12:31 AM
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What it comes down to is that the other leagues have more control over their sports than the NHL. They have major TV contracts. Much more marketing and merchandising. Vastly more non local revenue. This puts those leagues in much stronger bargaining vs their respective PAs.

Players have shorter careers(In the NFL especially). The expected life span of an NFL star is only like 5 seasons. In the NHL You have people who are stars for multiple decades.

The other sports also have no meaningful competition from other leagues. Ovechkin or Malkin could go make basically the same amount of money at home. Or something like the WHL could show up again.

All the NHL really has going for it is history, they own the trophy.

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12-24-2012, 12:37 AM
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Not really sure what you're saying or what control has to do with what we're talking about here.
The NFL TV/marketing machine is league created revenue. The League controls it and can dish it out as they see fit.

Where as NHL revenue is almost entirely local. It's controlled by the individual teams and varies dramatically from market to market. The league doesn't control ****. This gives the player more power.

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12-24-2012, 01:09 AM
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So baseball pays its people 42-45%, the NFL 47%, and the NBA 50%. The NHL has offered better core financials than all those, going 50% plus $300M. The argument goes that they've offered a more than fair deal.

Whenever that gets raised, people chime in and say "but the NHL is different than those other sports, so their players deserve more." And that may be true, but I have yet to hear examples of specific differences between these leagues that suggest why the NHL's players deserve more. So this thread is to explore those differences.
......
Those are the biggest differences I see, and they actually suggest to me the NHL should be paying less, not more. But I'm interested in hearing of some of the pro-PA people have a more specific set of things that they think of when they say these sports are different that actually mean the NHL should be paying its people more.

I think you're looking at this from absolutely the wrong angle.

"Deserve" and "should" have no place in a discussion about economics.

NHL players get paid what they get paid because of supply and demand--- in spite of the artificial restraints inherent in modern North American sports leagues (draft, free agency, caps).

The NFL and NBA meanwhile have an almost endless and steady supply of players who go straight from college to the professional leagues. While their roster sizes are vastly different in make up as compared to each other (and the NHL), those leagues don't have to scout worldwide, have a network of leagues to monitor and finally fund their own AHL teams to put on the finishing touches. Does it take a lot more time and effort to bring up younger players (prospects) to an NHL level? Are the players generally older when they do break in as regulars?

All of this, in my mind, signifies a greater investment that must be made in players just to get to a point teams consider 'NHL-ready' and from probably a smaller pool of young men overall. Yet all the major league teams seem to have roughly the same number of teams.

Finally, an additional thought on the types of players that make a difference on a basketball, football, hockey or baseball team. How many options do you have in finding those key players? I don't know how many college football programs there are, but every one of them has quarterbacks that are being developed and groomed every single season, for example. A guy that breaks through in the NFL can have a ten year career? Maybe longer, exempting an injury. That gives teams a lot of QBs to look over before they have to find the next one 'good enough'. Basketball has a smaller number of roster spots, but again, the key guys can have very long careers, so teams aren't hanging on every single draft to get that key player, and in fact, may be able to find plenty of guys who are good enough overall.

I don't follow the other sports enough to know the cycles very well, but they do seem to have an advantage that there are so many developmental levels that stretch out over the entire US. It seems that supply will always be far, far greater than demand. A more interesting question would be why those leagues' players actually do get as much as they do given the greater number of players feeding into the system.

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12-24-2012, 01:23 AM
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I think you're looking at this from absolutely the wrong angle.

"Deserve" and "should" have no place in a discussion about economics.

NHL players get paid what they get paid because of supply and demand--- in spite of the artificial restraints inherent in modern North American sports leagues (draft, free agency, caps).
Interesting to read such a statement from you.. whenever it fits you you go the capitalism route...
and this lockout shows that the demand is quickly declining.. since the demand side is the owners side and they value the price of offered goods as being too high (and rightly so) .. there's only demand if the demanding party can gain something from obtaining the goods.. in the NHL: to make more money than is being spent..

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12-24-2012, 01:26 AM
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I think you're looking at this from absolutely the wrong angle.

"Deserve" and "should" have no place in a discussion about economics.

NHL players get paid what they get paid because of supply and demand--- in spite of the artificial restraints inherent in modern North American sports leagues (draft, free agency, caps).

The NFL and NBA meanwhile have an almost endless and steady supply of players who go straight from college to the professional leagues. While their roster sizes are vastly different in make up as compared to each other (and the NHL), those leagues don't have to scout worldwide, have a network of leagues to monitor and finally fund their own AHL teams to put on the finishing touches. Does it take a lot more time and effort to bring up younger players (prospects) to an NHL level? Are the players generally older when they do break in as regulars?

All of this, in my mind, signifies a greater investment that must be made in players just to get to a point teams consider 'NHL-ready' and from probably a smaller pool of young men overall. Yet all the major league teams seem to have roughly the same number of teams. For example, I'd say there are about the same number of elite centers and elite quarterbacks in the 2 leagues.

Finally, an additional thought on the types of players that make a difference on a basketball, football, hockey or baseball team. How many options do you have in finding those key players? I don't know how many college football programs there are, but every one of them has quarterbacks that are being developed and groomed every single season, for example. A guy that breaks through in the NFL can have a ten year career? Maybe longer, exempting an injury. That gives teams a lot of QBs to look over before they have to find the next one 'good enough'. Basketball has a smaller number of roster spots, but again, the key guys can have very long careers, so teams aren't hanging on every single draft to get that key player, and in fact, may be able to find plenty of guys who are good enough overall.

I don't follow the other sports enough to know the cycles very well, but they do seem to have an advantage that there are so many developmental levels that stretch out over the entire US. It seems that supply will always be far, far greater than demand. A more interesting question would be why those leagues' players actually do get as much as they do given the greater number of players feeding into the system.

This doesn't really make much sense to me . . .so you are saying that because there are more football players there are more elite players to pick from and this drops demand. This makes the assumption that because there are more players that you have more "Crosbys" to pick from? This is just not true. The players are judged against each other not in a vaccuum. There will always be a small elite group no matter how many people you have to pick from, the top end talent will just be better than if you had less people to pick from.


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12-24-2012, 01:39 AM
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This doesn't really make much sense to me . . .so you are saying that because there are more football players there are more elite players to pick from and this drops demand. This makes the assumption that because there are more players that you have more "Crosbys" to pick from? This is just not true. The players are judged against each other not in a vaccuum. There will always be a small elite group no matter how many people you have to pick from, the top end talent will just be better than if you had less people to pick from.

No, I'm saying that there are far more players that are all good enough. The difference in those leagues may simply be opportunity, whether an opening that year exists, but when it does come up, you have 20 guys in line for a top spot, 100 for the average/filler spots, and so on (made up numbers).

The difference in the NFL for position X for the guy that makes it and the guy that gets cut may not be as big as the difference between prospects who do end up in NHL uniforms and the guys who fall to wayside earlier. For example, one thing that I think is often a key differentiating point is the inability of many prospects to adjust to the speed of the NHL game. They can have a good mix of other tools, skills, but if they don't have that one element, they'll never become NHL players. It's a pretty big differentiating point, imo. You don't see something that fundamental for all positions in the other leagues. The differentiating points that do exist are very position-specific (especially in the NFL with all the special teams, and offensive and defensive groupings, where players play half or less of a game, not having to fit in seamlessly into the entire game).

Edit: And overall, we're looking at stocking 30-32 teams. There are probably far more prospects to consider at the entry league level for the NFL and NBA (not sure about MLB) than there are NHL feeder leagues.

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12-24-2012, 01:41 AM
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Interesting to read such a statement from you.. whenever it fits you you go the capitalism route...
and this lockout shows that the demand is quickly declining.. since the demand side is the owners side and they value the price of offered goods as being too high (and rightly so) .. there's only demand if the demanding party can gain something from obtaining the goods.. in the NHL: to make more money than is being spent..

I always do go the free market route. If I flip-flopped on my positions, I wouldn't have a very consistent argument, would I?

The owners can only unilaterally make their 'demands' about price while a union exists, and actually signs the dotted line.

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12-24-2012, 09:27 AM
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I guess I assumed the bri calc was different, im not sure where I got that idea. I did once try to wade through the Byzantine monstrosity that is the nba cba but my understanding of that remains about the same as the bri calc. However, given that the respective unions would all likely be using forensic audit types and making challenges through the grievance procedure for revenues, yes, I guess it does make sense that there would be a lot of commonality and structure in that calculation between the two arena leagues.

Licensing and new media revenues have the potential to get more dominant going forward; im not sure if that would change things or give incentive for the pa to wait to see how that develops before signing anything long term. But perhaps, especially from 35,000 feet, the difference in those two calculations is insignificant. The NFL however im led to understand gets far more exclusive control over certain luxury box revenues and gets to set aside revenues for new stadiums when netting direct costs. Of course a stadium hosts far fewer events than an arena and so deserves some differences from arena leagues I‘d figure.

50-50 seems like a fair number now, but is it just another convenient ideal? Last time the argument was why cant players see that taking 57% is fair? Why cant they live on that? Next time will it be: why should the players get half, 43% is more than fair? Are the players expected to look forward to this treadmill to an obscurity percentage?

Lets say that a new European sports network, out of the blue told the nhl, we’ll give you $1bil for rights to cover the next season and playoffs? Basically cost free to the league, a windfall of free money. How should that be split between players and owners?

I guess as a member of the pro-PA species whose opinion you are apparently uniquely seeking in the OP for its likelihood to be different on this issue, I had always seen it the other way from most, in that once the fixed costs are all covered, marginal revenues should be breaking heavily in the talents favour. However I cannot deny the value and skill required to generate that new revenue and so im not positive what, even if it were relevant, I find the least offensive to my sense of justice in crafting a compromise on splitting it.

But it might be the arena vs. stadium and ballpark differences that are more consequential.

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12-24-2012, 09:38 AM
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Originally Posted by thinkwild View Post
50-50 seems like a fair number now, but is it just another convenient ideal? Last time the argument was why cant players see that taking 57% is fair? Why cant they live on that? Next time will it be: why should the players get half, 43% is more than fair? Are the players expected to look forward to this treadmill to an obscurity percentage?
That's hogwash, no one was arguing about percentage split last time, the players didnt even start at 57%, the player's share of HRR went up once revenue targets were met.
Basically you're using fear to justify the player's position and that's all on the one making the assumption: the last two times CBAs have needed to be established player share has had to come down because it was astronomically high prior to the salary cap being implemented. The NHL could have asked for a much lower percentage of HRR going to the players once the PA was in disarray but they didn't; the owners wanted a cap and got it (as well as taking the 24% rollback that was offered by the PA, a shrewd move no doubt) but in return the owners relaxed the rules on free agency and gave more than half of the revenues to the players.

There is absolutely no basis to the notion that the owners take for the sake of it.

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