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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, and NHL revenues.

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01-02-2013, 07:40 PM
  #601
Scheme
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Originally Posted by Stix and Stones View Post
If the sales person makes 10% on his sales no matter what they are, it sounds fixed to me.
Depends on your definition of "fixed".

The original question was which industries has employees earning a "fixed amount of revenues". I take that to mean that if you are salaried then you are at a pre-determined wage scale that cannot exceed x% of revenues. That is fixed. Most industries are like that.

In the world of commission sales though, most likely there is a progressive compensation plan in terms of performance. ie. You sell 1-10, you get x%, you sell 11-25, you get x+%, etc. So this is not fixed to the company revenues directly, but LINKED to the amount of revenues that this particular salesperson creates. I guess if you are saying if this person's wage is "fixed" to the particular compensation plan then yes I would agree. But usually that compensation plan is progressive in nature - not fixed at something at 10% of his/her sales. This is why you have top players in the industry make big figures.

However, the point still stands that if employee wages, including commissions, exceed the operating costs and expenses of the company, and profits are not made, then either salaries need to be cut, or compensation plans will need to be re-adjusted downward. Failing that, the company will need to lay off employees or shut down itself. No matter how much revenues are coming in, revenues are not the same as profits.

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01-02-2013, 07:42 PM
  #602
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Originally Posted by schminksbro View Post
Every commission salesperson gets a percentage of revenue.
Only the revenues they themselves generate though. Big difference. There may be a company pool bonus if the company does well, but again, revenues are not the same as profits, so if the company is actually losing money, it will have to readjust compensation plans downward, lay off employees, or shut down altogether.

Imagine paying commission salespeople at your company a percentage of your revenues but your company is losing money, because these salespeople keep demanding perks like separate hotel rooms, pension plans (even though they are making millions). You need to tweak their compensation plans a bit to give your company a chance to survive (they would still be making millions) but they are resisting like hell and threatening to sue you. Oh, and the kicker is if they are sick and can't work, they still get paid. Now add in the additional kicker that if they don't perform well, they still get paid. This would never happen in the world of commission sales - you either perform or you're out. But welcome to the world of the professional NHL player.


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01-02-2013, 07:53 PM
  #603
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How is spreading out the talent to all 30 teams reducing the overall quality of the league? If 4-5 teams compete for and sign all the high end developed talent in the league how does that improve the overall quality?
Because instead of having 10 or so super teams that are highly marketable and make for great TV, you have 20 or more watered down lesser teams that make for boring viewing. Do you know what sells? The Patriots and Giants in a Clash of the Titans for the World Championship. Do you know what sells? The Cardinals, an injury riddled team whose quality when healthy pales in comparison to the almighty Phillies talent, stealing the series in Game 5. Do you know what sells? The Red Wings-Avalanche rivalry, a rivalry highlighted by unmitigated talent and unadulterated hatred, two superstar studded lineups highlighted by blood. Some team from Columbus taking on a New York Rangers team that could be so much more? That doesn't sell. That's not interesting.

You all shudder when the MLB is brought up. I don't get it. The MLB is the shining example of a league with over half its franchises being competitive without a cap. You have the most talented division of the big four in the AL East, where all five teams are capable of making the playoffs. You have the Detroit Tigers and LA Dodgers using shrewd management and big market money to build super teams. You have the upstart small market teams like the Rays, Orioles, and Athletics whose business models allow them to be the David that can take down Goliath.

I would love for the NHL to emulate the MLB model. It would create fantastic competition and high quality teams. Why? Because the goal is to win. Winning=more money. Money=good. You have competition. Competition creates parity, not a salary cap. Without a cap and left to their own devices, the good teams regardless of what sized markets they are in would succeed because they would create and maintain proper business models to be managed by and would adapt to changes to the game.

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01-02-2013, 07:56 PM
  #604
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Maybe I am wrong. Maybe the NHL is doomed, the game is too complex for American fans, the NHL's system is flawed and destined to fail, the league will eventually collapse on itself and will be reduced to a 10 team league with a cult following, and at last the MLS will over take the NHL in North America.

Either way I am going to continue to root for the Bruins and watch the NHL because that's what I do. I am a hockey fan.
Cheers dude. And I will root for my Rangers, because, well, I'm a fan too......and perhaps I fell on my head a few too many times.

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01-02-2013, 08:32 PM
  #605
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Originally Posted by JmanWingsFan View Post
Because instead of having 10 or so super teams that are highly marketable and make for great TV, you have 20 or more watered down lesser teams that make for boring viewing. Do you know what sells? The Patriots and Giants in a Clash of the Titans for the World Championship. Do you know what sells? The Cardinals, an injury riddled team whose quality when healthy pales in comparison to the almighty Phillies talent, stealing the series in Game 5. Do you know what sells? The Red Wings-Avalanche rivalry, a rivalry highlighted by unmitigated talent and unadulterated hatred, two superstar studded lineups highlighted by blood. Some team from Columbus taking on a New York Rangers team that could be so much more? That doesn't sell. That's not interesting.

You all shudder when the MLB is brought up. I don't get it. The MLB is the shining example of a league with over half its franchises being competitive without a cap. You have the most talented division of the big four in the AL East, where all five teams are capable of making the playoffs. You have the Detroit Tigers and LA Dodgers using shrewd management and big market money to build super teams. You have the upstart small market teams like the Rays, Orioles, and Athletics whose business models allow them to be the David that can take down Goliath.

I would love for the NHL to emulate the MLB model. It would create fantastic competition and high quality teams. Why? Because the goal is to win. Winning=more money. Money=good. You have competition. Competition creates parity, not a salary cap. Without a cap and left to their own devices, the good teams regardless of what sized markets they are in would succeed because they would create and maintain proper business models to be managed by and would adapt to changes to the game.
Revenues in the NHL are driven by gate receipts not TV money. Franchises that don't ice a competitive team will not generate much revenue.

What were the TV ratings for the NHL in the so-called great days when Colorado and Detroit were super teams?

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01-02-2013, 08:40 PM
  #606
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Originally Posted by JmanWingsFan View Post
Because instead of having 10 or so super teams that are highly marketable and make for great TV, you have 20 or more watered down lesser teams that make for boring viewing. Do you know what sells? The Patriots and Giants in a Clash of the Titans for the World Championship. Do you know what sells? The Cardinals, an injury riddled team whose quality when healthy pales in comparison to the almighty Phillies talent, stealing the series in Game 5. Do you know what sells? The Red Wings-Avalanche rivalry, a rivalry highlighted by unmitigated talent and unadulterated hatred, two superstar studded lineups highlighted by blood. Some team from Columbus taking on a New York Rangers team that could be so much more? That doesn't sell. That's not interesting.

You all shudder when the MLB is brought up. I don't get it. The MLB is the shining example of a league with over half its franchises being competitive without a cap. You have the most talented division of the big four in the AL East, where all five teams are capable of making the playoffs. You have the Detroit Tigers and LA Dodgers using shrewd management and big market money to build super teams. You have the upstart small market teams like the Rays, Orioles, and Athletics whose business models allow them to be the David that can take down Goliath.

I would love for the NHL to emulate the MLB model. It would create fantastic competition and high quality teams. Why? Because the goal is to win. Winning=more money. Money=good. You have competition. Competition creates parity, not a salary cap. Without a cap and left to their own devices, the good teams regardless of what sized markets they are in would succeed because they would create and maintain proper business models to be managed by and would adapt to changes to the game.
Again MLB’s system works for them because the Yankees, Dodgers, and Red Sox are all worth over 1 billion dollars and those three teams alone bring in a combined 1 billion dollars a year in revenue. And those teams’ profits are a result of 100 years of tradition and huge local TV deals not because they operate in an uncapped league. That combined with MLB’s massive revenue sharing program helps float the perennial basement dwellers and small market teams in MLB. But the NHL doesn’t have that luxury as there is no way the leagues few big money makers can keep the 13 teams losing money or breaking even in the NHL afloat. And what would happen to those teams if they had no real chance of competing on a yearly basis short of landing a Crosby in the draft. Especially when even if they land a Crosby he leaves in 5-6 years to chase the big market money? MLB gets by with a flawed system because it's known as "America's past time", has huge local and national TV deals, and its top teams bring in a disgusting amount of revenue every year. The MLB flourishes in spite of an uncapped system not because of it.


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01-02-2013, 08:59 PM
  #607
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Revenues in the NHL are driven by gate receipts not TV money. Franchises that don't ice a competitive team will not generate much revenue.

What were the TV ratings for the NHL in the so-called great days when Colorado and Detroit were super teams?
The Bruins/Canucks 2011 Cup final averaged a 5.0 rating which crushed any finals from 1995-2004. Last years finals average of 4.0 was a huge disapointment and still had better ratings than any final from 1995-2004 except the Detriot/Philly final in 1997 which tied it.

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01-02-2013, 09:05 PM
  #608
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The Bruins/Canucks 2011 Cup final averaged a 5.0 rating which crushed any finals from 1995-2004. Last years finals average of 4.0 was a huge disapointment and still had better ratings than any final from 1995-2004 except the Detriot/Philly final in 1997 which tied it.
Competition sells. I watched every game of the Bruins/Canucks SCF. It was great hockey, and of course I watched every Kings' playoff game either on TV or in person.

The kind of garbage you see about how great the NHL was when there were "super" teams is posted by the fans of those teams. Of course they look back on those days with fond memories when they could outspend every other team for whatever holes they needed to have filled.

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01-02-2013, 09:38 PM
  #609
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Competition sells. I watched every game of the Bruins/Canucks SCF. It was great hockey, and of course I watched every Kings' playoff game either on TV or in person.

The kind of garbage you see about how great the NHL was when there were "super" teams is posted by the fans of those teams. Of course they look back on those days with fond memories when they could outspend every other team for whatever holes they needed to have filled.
I agree, I just don't understand why some big market fans are unable to see the forest through the trees when it comes to the NHL and the salary cap.

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01-02-2013, 11:41 PM
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Of course. That said, no one will hear it from a Bruins fan because Jacobs.

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01-02-2013, 11:45 PM
  #611
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I agree, I just don't understand why some big market fans are unable to see the forest through the trees when it comes to the NHL and the salary cap.
Because they actually feel like they are entitled to an uneven playing field. All they want is their unfair advantage back

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01-02-2013, 11:47 PM
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Depends on your definition of "fixed".

The original question was which industries has employees earning a "fixed amount of revenues". I take that to mean that if you are salaried then you are at a pre-determined wage scale that cannot exceed x% of revenues. That is fixed. Most industries are like that.
I beg your pardon? Most industries work on a set rate per hour per worker, or per day per worker, or per year per worker in the case of salaried workers, and the budget for their workforce is largely (though obviously not entirely) unlinked from revenue. You have a payroll budget, and you work within it, any surplus revenue is surplus revenue, the workers don't "own" any of it (Marxist claptrap notwithstanding). Now there are absolutely exceptions to that, but you're making statements about how most industries work. To the best of my knowledge, that's how they work.

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However, the point still stands that if employee wages, including commissions, exceed the operating costs and expenses of the company, and profits are not made, then either salaries need to be cut, or compensation plans will need to be re-adjusted downward. Failing that, the company will need to lay off employees or shut down itself. No matter how much revenues are coming in, revenues are not the same as profits.
Bingo. If labor costs are too high, you have three choices. Bring labor costs down, find a way to have another entity (such as a government) absorb some of those costs, or reduce the labor force. Right now the NHL is vigorously pursuing the first and second of these options. In the absence of any particular success on either front, the third option becomes the only remaining one available. If the NHLPA can't see that then they're fools.

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01-02-2013, 11:53 PM
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Because they actually feel like they are entitled to an uneven playing field. All they want is their unfair advantage back
The joke being, if you had 6 or 10 super teams they'd all play each other. It would be like a league where every team was the 80's Islanders or the 80's Oilers. That sounds sexy, but it ignores the relative nature of talent.

Standout players stand out compared to the talent around them. If the talent is dense, fewer players will stand out. 10 super teams would just reindex what an "average player" looks like in the NHL. And quite frankly, the average NHL player today is a whole heck of a lot more talented than the average NHL player was in 1970, so I'm not sure there'd be that much of an upgrade in actual quality of hockey. Just fewer players getting a chance to surprise.

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01-02-2013, 11:59 PM
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Here's a thought while I'm spamming: You probably could improve the talent level of the league if you cut each roster down to 17 and cut the 4th line out of every team in the league. That would be the same talent density in theory as cutting the 3 worst franchises, and it would allow the poorer markets to save some salary. Who's going to fight for the right of 4th liners to play hockey? Cut the fat, trim the goons and the forwards who are only here to rough people up and play less than 10 minutes of hockey a night. Raise the standard of entry to the current third line level. You'd be surprised how little you lost, and the average salary of the remaining players would look sexy on a spreadsheet.

Don't want to go for that? Then you're not really worried about depth of talent in this league. You just want certain franchises to go away because you don't like them.

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01-03-2013, 12:56 AM
  #615
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Originally Posted by Stix and Stones View Post
If the sales person makes 10% on his sales no matter what they are, it sounds fixed to me.
Commission is about as variable a cost as you can get - but it is definitely not fixed to "total revenues".


The cap is bad for hockey.

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01-03-2013, 12:59 AM
  #616
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Pretty much all of them. My company, one of the largest in the world, requires a site to have 650k in revenue per full time employee. Drop below that rate for any amount of time and you reduce head count (usually through retirements or just no replacement when someone leaves). Go above that rate and you hire.

And that isn't unusual. It may not be explicitly laid out in a CBA but it exists and exists everywhere. If labor costs exceed what a company has set as an acceptable level it's dealt with. Luckily for NHL players it's dealt with through escrow rather than layoffs.


edit: or as the poster above said...any business that requires any sort of management. Which is of course every business.
So your company has a fixed percentage of revenues paid as expenses? Must be a dream to audit them - the same percentage each year with no variance analysis required!

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01-03-2013, 01:01 AM
  #617
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So the owners take steps to make hockey more national by having teams in Florida, California, Ohio, Phoenix, etc.....and they (and by extension, Bettman) get slammed for doing it. Even though it takes generations to develop a strong fan base. Does this make any sense to anyone?
How long do you think we should keep this up before we judge it a failure?

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01-03-2013, 02:16 AM
  #618
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Here's a thought while I'm spamming: You probably could improve the talent level of the league if you cut each roster down to 17 and cut the 4th line out of every team in the league. That would be the same talent density in theory as cutting the 3 worst franchises, and it would allow the poorer markets to save some salary. Who's going to fight for the right of 4th liners to play hockey? Cut the fat, trim the goons and the forwards who are only here to rough people up and play less than 10 minutes of hockey a night. Raise the standard of entry to the current third line level. You'd be surprised how little you lost, and the average salary of the remaining players would look sexy on a spreadsheet.

Don't want to go for that? Then you're not really worried about depth of talent in this league. You just want certain franchises to go away because you don't like them.
If you actually liked to watch hockey you wouldn't suggest this at all. It would hurt the level of play.

Also, eliminating the three lowest paid players is not going to do much. In total you save maybe $2-3-million/team. I don't get your logic.

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01-03-2013, 02:27 AM
  #619
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Competition sells. I watched every game of the Bruins/Canucks SCF. It was great hockey, and of course I watched every Kings' playoff game either on TV or in person.

The kind of garbage you see about how great the NHL was when there were "super" teams is posted by the fans of those teams. Of course they look back on those days with fond memories when they could outspend every other team for whatever holes they needed to have filled.
The Bruins/Canucks series sold well because of the strength of the markets, not the level of play.

The salary cap and parity has nothing to do with it. Strong franchises draw well. A Yankees/Dodgers World Series always draws well, no matter how bad the fielding and even if the pitching sucks. In hockey, one Canadian team (weak or strong draws all the canadian audience) and one strong-market American team (with a strong regional audience and maybe even some national following) does the trick.

Band-wagon-jumpers at playoff time aren't exactly connaisseurs evaluating the quality of play.

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01-03-2013, 04:28 AM
  #620
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The Bruins/Canucks series sold well because of the strength of the markets, not the level of play.

The salary cap and parity has nothing to do with it. Strong franchises draw well. A Yankees/Dodgers World Series always draws well, no matter how bad the fielding and even if the pitching sucks. In hockey, one Canadian team (weak or strong draws all the canadian audience) and one strong-market American team (with a strong regional audience and maybe even some national following) does the trick.

Band-wagon-jumpers at playoff time aren't exactly connaisseurs evaluating the quality of play.
Bruins vs Canucks was terrible hockey, slow, injury riddled players playing sluggish boring games or complete blowouts. Canucks could barely skate as the series went on.

People only watched because they liked the Bruins or hated the Canucks(most of the world) or in BC liked the Canucks.

I didn't even watch Kings vs Devils, the playoffs were so bad up to that point I gave up.

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01-03-2013, 05:43 AM
  #621
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Bruins vs Canucks was terrible hockey, slow, injury riddled players playing sluggish boring games or complete blowouts. Canucks could barely skate as the series went on.

People only watched because they liked the Bruins or hated the Canucks(most of the world) or in BC liked the Canucks.

I didn't even watch Kings vs Devils, the playoffs were so bad up to that point I gave up.
I often wonder if people really like hockey on this site or if they just secretly created an account to express their hate of the sport.

I thought the playoffs over the last 5 years was some of the best ever and I have been watching the NHL for 25+ years but to each their own. Either way the ratings numbers speak for themselves, so say what you will about the uncapped era more people watch hockey now than compared to 10-15 years ago.

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01-03-2013, 07:09 AM
  #622
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Band-wagon-jumpers at playoff time aren't exactly connaisseurs evaluating the quality of play.
Haha, not sure how band-wagon-jumpers helped the Bruins-Canucks playoffs series get record high national TV ratings. Unless
of course you are insinuating that band-wagon-jumping is a new phenomenon in the NHL?


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01-03-2013, 07:30 AM
  #623
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How long do you think we should keep this up before we judge it a failure?
You may have missed the point here...

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01-03-2013, 07:49 AM
  #624
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You may have missed the point here...
Yeah, let teams lose money for generations so you can show that players make too much of the revenue and continually force them to give concessions, thus earning the top teams more money.

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01-03-2013, 08:08 AM
  #625
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Because they actually feel like they are entitled to an uneven playing field. All they want is their unfair advantage back
How on earth does being a bigger market, making more money, and thus spending more money, create an "uneven playing field"?

Success = money = power. That opportunity is equally available to every team. Its called capitalism.

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Originally Posted by KINGS17 View Post
The kind of garbage you see about how great the NHL was when there were "super" teams is posted by the fans of those teams. Of course they look back on those days with fond memories when they could outspend every other team for whatever holes they needed to have filled.
The kind of garbage you see about how great the NHL is now that every team has a strict talent cap imposed on them is posted by fans of those teams that aren't able to compete in a free market and who directly benefit from the effect of the talent cap.

See, the "you only like what works for you" argument works both ways.

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