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2014-15 cap to hit $75m? (2013 escrow near 17%)

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06-26-2013, 04:11 PM
  #1
LadyStanley
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2014-15 cap to hit $75m? (2013 escrow near 17%)

mirtle 12:34pm via TweetDeck Was asked about Stan Bowman's comment that the cap could rise to $75-million after next season - here: http://t.co/BEQ6Ixtg8O

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06-26-2013, 04:41 PM
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jol
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Quote:
Originally Posted by LadyStanley View Post
mirtle 12:34pm via TweetDeck Was asked about Stan Bowman's comment that the cap could rise to $75-million after next season - here: http://t.co/BEQ6Ixtg8O
I wouldn't be surprised, two years worth of growth, revenues would be at $4.5 billion.
If this season's revenue is at $2.4 billion (CBC?? estimate earlier) for short season, full season revenue would be at $4.1 billion (probably just cannot take number of games in short season and then multiply it by number of games in full season games, but then add all stars and outdoor games). Then just add 10% growth.

JOL

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06-26-2013, 05:05 PM
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danishh
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mirtle projected ~3.4B revenue for 2014-15 at 5% growth.
http://www.theglobeandmail.com/sport...rticle7029575/

but there are a few other factors:
1. NHL's popularity has unexpectedly skyrocketed this season
2. New Canadian TV contract for the 2014-15 season
3. Outdoor games for everyone


@jol, i dont really know where your calculations come from but mirtle estimates that a 75M cap means ~4.1B revenue.

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06-26-2013, 05:14 PM
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jol
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Originally Posted by danishh View Post
@jol, i dont really know where your calculations come from but mirtle estimates that a 75M cap means ~4.1B revenue.
My bad, i used $75 million as midpoint, should have used $67 million, then revenues would be about at $4.1 million. So this would mean cap will be much higher than $75 million?

JOL

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06-26-2013, 06:18 PM
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Shrimper
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I think around $70m is more likely and realistic. There's no doubt that the cap could well reach around $80m by the time the league has to get a new CBA. Is there going to be a point though when they say that it's reached high enough and they stop it going any higher?

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06-26-2013, 06:39 PM
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DaveG
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cap at 64.3 next year? Yeah I can see it getting somewhere between 70 and 75 million by 14-15. Growth out of the last lockout was astronomic shattering most everyones expectations, I can see this taking a similar path.

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06-26-2013, 06:52 PM
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Quote:
Originally Posted by Shrimper View Post
I think around $70m is more likely and realistic. There's no doubt that the cap could well reach around $80m by the time the league has to get a new CBA. Is there going to be a point though when they say that it's reached high enough and they stop it going any higher?
You think the cap will only go up $16M over the next 7 years (the earliest point at which a new CBA can be negotiated)?

Remember, it went from $39M to $70M between 2005=2006 and2012-2013.

And there's no provision in the current CBA for the cap to hit a max. It is purely based on hockey-related revenues.

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06-26-2013, 07:17 PM
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You think the cap will only go up $16M over the next 7 years (the earliest point at which a new CBA can be negotiated)?

Remember, it went from $39M to $70M between 2005=2006 and2012-2013.

And there's no provision in the current CBA for the cap to hit a max. It is purely based on hockey-related revenues.
Growth is hard to sustain for prolonged periods of time especially when you compare the state of hockey popularity in 05 and now.

I hope that it does stop at some point as I'd hate to get to the point where the cap is $90m or above.

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06-26-2013, 07:25 PM
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Originally Posted by LadyStanley View Post
...the cap could rise to $75-million after next season ...
What's the cap floor at that level, under the new CBA?

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06-26-2013, 07:47 PM
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Quote:
Originally Posted by Shrimper View Post
Growth is hard to sustain for prolonged periods of time especially when you compare the state of hockey popularity in 05 and now.

I hope that it does stop at some point as I'd hate to get to the point where the cap is $90m or above.
Why does it matter? Players would be making more, so it would all even out.

It's like wanting to become rich in Zynga Poker just so you could bet more money in richer tables. It's the same ****.

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06-26-2013, 07:47 PM
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Much scoffing was had at the NHLPA's suggestion that 7%, or better, growth was possible.


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06-26-2013, 11:45 PM
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James Mirtle
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Originally Posted by jol View Post
I wouldn't be surprised, two years worth of growth, revenues would be at $4.5 billion.
If this season's revenue is at $2.4 billion (CBC?? estimate earlier) for short season, full season revenue would be at $4.1 billion (probably just cannot take number of games in short season and then multiply it by number of games in full season games, but then add all stars and outdoor games). Then just add 10% growth.

JOL
No. Revenue was $3.303-billion for the last full season (2011-12). Even if we project very high growth (let's say 9% annually for this season and next) revenues would top out at about $3.9-billion, which is equivalent to about a $70-million cap the following season.

You really can't simply divide revenues by 58% and work out what this season would have been in a full year - the league had a full postseason and a lot of the sponsorships etc. were kept intact or nearly intact by playing a good portion of a season. I'd expected they would make about 70% of full revenues in a shortened season and that would mean $2.4-million prorates to something like $3.45-billion, or 4 per cent growth over 2011-12.

That makes sense given some of the losses involved i.e. not selling merchandise for months, etc. Add another 10% growth on for next season with all the outdoor games and they'd be into the $3.75-billion range which would beget a $71- to $72-million cap. I think that's probably the high end.

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06-27-2013, 12:28 AM
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Quote:
Originally Posted by James Mirtle View Post
I'd expected they would make about 70% of full revenues in a shortened season and that would mean $2.4-million prorates to something like $3.45-billion, or 4 per cent growth over 2011-12.
I seem to recall 72% of revenues in Bettman's state of the league pre-Final speech.

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06-27-2013, 12:40 AM
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Much scoffing was had at the NHLPA's suggestion that 7%, or better, growth was possible.

cmon, you know the drill.

Every year is the best year ever. Unless the CBA is up - then they're loosing too much money.

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06-27-2013, 02:30 PM
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Quote:
Originally Posted by Shrimper View Post
I think around $70m is more likely and realistic. There's no doubt that the cap could well reach around $80m by the time the league has to get a new CBA. Is there going to be a point though when they say that it's reached high enough and they stop it going any higher?
Artificially capping the salary cap only means that players receive much bigger escrow payments, as they are entitled to 50% of HRR.

I'll be honest...this lockout has changed my view of the lower revenue teams. I was a supporter before, but after another lockout to lower the players' share, if they can't keep up with the 50-50 share then it sucks to be them.

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06-27-2013, 02:38 PM
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The bad thing about the cap going up and in the eventuality reaching, say, $85m means that some teams would struggle surely to cope? Phoenix right now are in the hole and how would they cope when the floor would be what, something near $64m? How would they pay for that? Ticket increases? Increase in sponsorship?

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06-27-2013, 02:56 PM
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Originally Posted by Shrimper View Post
The bad thing about the cap going up and in the eventuality reaching, say, $85m means that some teams would struggle surely to cope? Phoenix right now are in the hole and how would they cope when the floor would be what, something near $64m? How would they pay for that? Ticket increases? Increase in sponsorship?
If it wasn't for the business section, I'd be twiddling my thumbs on my way to and from work.

I wait like a giddy school boy in anticipation of this eventuality that we all saw coming from a mile away. What excuse will the NHL backers have next time?

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06-27-2013, 03:39 PM
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Here's a question for everyone - will the money being spent by teams on compliance buyouts change the total profits (thereby effecting the cap number for next year)?

I was wondering about that this morning while considering how much $$$ was spent on just the Bryz and Lecavalier buyouts.

Or does the money spent on buyouts count for the 12-13 season (since we are still pre-July 1) and therefore would NOT affect next year's profits/losses?

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06-27-2013, 03:45 PM
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Originally Posted by jimmy1100 View Post
Here's a question for everyone - will the money being spent by teams on compliance buyouts change the total profits (thereby effecting the cap number for next year)?

I was wondering about that this morning while considering how much $$$ was spent on just the Bryz and Lecavalier buyouts.

Or does the money spent on buyouts count for the 12-13 season (since we are still pre-July 1) and therefore would NOT affect next year's profits/losses?
They count against player HRR, at least a google search told me so

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06-27-2013, 04:14 PM
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Originally Posted by jimmy1100 View Post
Here's a question for everyone - will the money being spent by teams on compliance buyouts change the total profits (thereby effecting the cap number for next year)?

I was wondering about that this morning while considering how much $$$ was spent on just the Bryz and Lecavalier buyouts.

Or does the money spent on buyouts count for the 12-13 season (since we are still pre-July 1) and therefore would NOT affect next year's profits/losses?
The cap is based on revenues, not profits. The buyouts have zero effect on HRR, so they will have zero effect on the next years cap.

However, they are included in the 50% Players Share, so every net dollar spent comes out of the other Players pockets through escrow.

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07-06-2013, 08:21 PM
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for fugu:


edit: actual revenue is 7% growth in all other seasons (what NHLPA was projecting during CBA negotiations).
the reason for 10% growth in 2013-14 is all the outdoor games.


with this, i got 76M cap for 2014-15. Maybe stan bowman isnt that nuts?


Last edited by danishh: 07-06-2013 at 08:50 PM.
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07-06-2013, 08:28 PM
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for fugu:
That's some interesting numbers-prospective 6.8 billion in revs? 100 mil salary cap?

those would make for some very interesting times in the next decade......

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07-06-2013, 08:57 PM
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Thanks for running the numbers, danishh. I hope a good portion of those revenues are centrally generated.

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07-06-2013, 10:09 PM
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for fugu:


edit: actual revenue is 7% growth in all other seasons (what NHLPA was projecting during CBA negotiations).
the reason for 10% growth in 2013-14 is all the outdoor games.


with this, i got 76M cap for 2014-15. Maybe stan bowman isnt that nuts?
Thank you man. Can't wait for the 100m cap. Only 6 teams will make money by then.

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07-06-2013, 10:37 PM
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Thank you man. Can't wait for the 100m cap. Only 6 teams will make money by then.
How do you figure that? Who is making all the cash when revenues double from 3.1 to 6.2 billion?

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