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Stern to NHLPA on Levitt:"can't imagine a person of more reliability on economics.."

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Old
03-01-2004, 04:03 PM
  #76
discostu
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Quote:
Originally Posted by thinkwild
But there were no numbers in this report. It answered nothing. It shed no light. Just a bunch of blank if impressive looking schedules, with vague guidelines, like - use your best guess, that were to be filled out by owners with vastly different sets of books.
Thanks for your response thinkwild.

I realize that the owners don't necessarily have a history worthy of the benefit of the doubt, and it's a tough hurdle for them to overcome if they want complete buy-in from fans, but I think they have done a good job with commissioning this report.

There's two aspects to the report, the credibility of the guy conducting it (Levitt) and the methodology used. Contrary to what you've said, there are numbers in this report. Perhaps they are not at the level of detail as you would like them, but they are there, and they are the result of a detailed methodology. To me, the methodology is sound, and if someone asked me to write out what methodology I would use to determine league profitability with full access to the books before this report was even mentioned, it would have been very similar. The only areas of difference would have marginal impact, and not necessarily in any particular favour. To me, that indicates a sound methodology. I'll touch back on this a little later down.

The other aspect, as mentioned, is the credibility. To have faith in these results, you need to know the person conducting the audit will not alter the results (i.e. falsify the figures) in order to get the outcome desired by any affected party. The NHL did a good job of getting someone who is reputable, and stands to lose a lot by adjusting his results.

To determine how much you trust Levitt, you should ask yourself, if someone else with complete credibility conducted the same audit with the same methodology, would they have come to the same result? I think the answer is, quite simply, yes. Others may disagree, but I have yet to see a convincing arguement that a man of Levitt's stature would risk so much, for so little gain.

Now, if Levitt is trustworthy enough to adjust his results, then any issue with the results has to be with the methodology. It's interesting that the NHLPA, while expressing distrust in the results, have not pointed out any flaws in the methodology. I find this rather revealing. It's outlined very well, with very little room for subjectivity in the prescribed methodology.

The NHLPA's stance has been rather curious. They have said that they do not trust the report, but they have failed to qualify it. They haven't stated that they feel that Levitt may have been willing to compromise his results in some way. That haven't stated any revenue streams that they think should be included. They haven't identified anything they would do differently, if they could commission their own report on the NHL's finances.

You've stated that your position is formed in large part of the owner's history on such matters. That's perfectly acceptable, however, I have to ask, what have the players done to deserve their credibility. They haven't qualified their objections yet to this report, so it's hard to take the reaction to it too seriously. They haven't produced any evidence on the matter (not that they are in a position to). I would think, at best, that you would have a neutral position on the matter.

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03-04-2004, 04:04 PM
  #77
Tom_Benjamin
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Quote:
Originally Posted by discostu
I realize that the owners don't necessarily have a history worthy of the benefit of the doubt, and it's a tough hurdle for them to overcome if they want complete buy-in from fans, but I think they have done a good job with commissioning this report.
Nonsense. If they had done a good job, they would have announced the audit when they hired Levitt and invited Goodenow to include a person on Levitt's team. Instead it was a secret audit. Do you honestly believe that if Levitt didn't understand who was paying him and produce the "right" report, Bettman would have called a press conference and announced that Levitt had discovered the owners were a pack of thieves? Or do you doubt that someone else - say hired by the NHLPA - couldn't have looked at the same books of the teams and produced the "wrong" report?

How many impossible things do you decide to believe before breakfast?

Quote:
You've stated that your position is formed in large part of the owner's history on such matters. That's perfectly acceptable, however, I have to ask, what have the players done to deserve their credibility. They haven't qualified their objections yet to this report, so it's hard to take the reaction to it too seriously. They haven't produced any evidence on the matter (not that they are in a position to). I would think, at best, that you would have a neutral position on the matter.
The players have not done anything to lose credibility. Have the owners? The players don't have to produce anything. The players don't have to believe or disbelieve the owners to hold their position because their position is very simple.

If, as result of the slowdown in revenue growth teams are losing money, the solution is obvious: cut salaries. Stop throwing ridiculous amounts of money at unrestricted free agents. Do without Martin LaPointe or Darius Kasparaitus. It is easy. Cut payroll. Even the Rangers are doing it these days. The ALS is surely going down this season after last summer. It will go down again next summer.

Under a market based system, players don't need to know the financial state of the game. They don't have to see the books. They are irrelevant. If the owners have the money - they do see the books - fine, they pay. If they don't, they don't pay. Why is that so hard for a bunch of billionaires to understand? If they freely pay 75% of revenues to players as they claim, that's obviously the right split.

Any other system requires that the players trust a bunch of people who have proven themselves very untrustworthy. Jacobs and Wirtz and Eagleson managed things so well, Bobby Orr left the game on one leg and broke. Bobby Orr!

The same pack of thieves is now running a PR campaign instead of negotiating. They have not defined the problem specifically. They have not tabled a single proposal designed to address the defined problem. Bettman claims that the owners have known since 1999 that this CBA was a disaster, and that the owners need fundamental change. Have they told either us or the NHLPA what they really want? No. In fact they specifically deny asking for a salary cap at $31 million. They have only given the NHLPA a "one pager" that demands an unspecified link between player costs and revenue that is not defined. That's five years of work to produce no specifics and a "one pager".

They blamed the CBA for the Ottawa and Buffalo bankruptcies when we all know both situations were the result of owner malfeasance. The set up a website for CBA news with misleading charts. Goals have become more expensive? Well, duh. There are 30% fewer of them. I'm really surprised that anyone believes a single word they say.

They are transparently dishonest. They think fans are a bunch of stupid rubes who will swallow anything and cluck about player salaries and endure a lockout to benefit them. Unfortunately, they aren't far off.

These guys don't just have a credibility problem. They have zero credibility. How many impossible things do you decide to believe before breakfast?

Tom

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Old
04-02-2004, 10:20 AM
  #78
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Quote:
Originally Posted by discostu
Now, if Levitt is trustworthy enough to adjust his results, then any issue with the results has to be with the methodology. It's interesting that the NHLPA, while expressing distrust in the results, have not pointed out any flaws in the methodology. I find this rather revealing. It's outlined very well, with very little room for subjectivity in the prescribed methodology.
There is an excellent, but lengthy, recap of the report here:
http://ordinaryleastsquare.typepad.c...g_compreh.html

Some quotes from the article:

"And I hate to say it, but I come away believing Levitt has performed a conscious, if completely legitimate, sleight of hand, designed first, last, and always to support the NHL's claims, not test them."

"Beyond that, the issue of revenue allocation is one of the stickiest issues in this whole debate. How much is appropriate for one business to allocate to its sister operation? Especially when, as is common, the relationship is bilateral -- a hockey team pays rent to the entity it shares arena-wide revenue with. Really, the only sensible way to analyze this situation is in the very context that owners get into it in the first place -- by looking at the entire business proposition. But Levitt wasn't instructed to look at it that way -- he was told to do the exact opposite, to extricate the two."

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04-02-2004, 11:56 AM
  #79
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Quote:
Originally Posted by BlackRedGold
There is an excellent, but lengthy, recap of the report here:
http://ordinaryleastsquare.typepad.c...g_compreh.html

Some quotes from the article:

"And I hate to say it, but I come away believing Levitt has performed a conscious, if completely legitimate, sleight of hand, designed first, last, and always to support the NHL's claims, not test them."

"Beyond that, the issue of revenue allocation is one of the stickiest issues in this whole debate. How much is appropriate for one business to allocate to its sister operation? Especially when, as is common, the relationship is bilateral -- a hockey team pays rent to the entity it shares arena-wide revenue with. Really, the only sensible way to analyze this situation is in the very context that owners get into it in the first place -- by looking at the entire business proposition. But Levitt wasn't instructed to look at it that way -- he was told to do the exact opposite, to extricate the two."
I have begun reading the article and have found a problem with it in the first couple of paragraphs.

"Levitt even includes minor league salaries, which would be fine if minor league revenues were included, but they were not."

I believe it is fine to include minor league salaries in the report since most NHL teams do not own their own minor league franchises (there are exceptions) yet pay the salaries of minor league players they have under contract.

But you know what? Trying to argue all of this is useless. Until both sides come to an agreement on how to improve the sport so average fans can actually access the games, and do so affordably, it all means nothing. I am a huge Flames fan living in Texas and despite making a decent living I find it hard to justify forking over $300+ to see the Flames when they come to town for 3 hours of entertainment.

For that kind of cash I could call up former Washington State football coach Mike Price and we could hit the town and have a whole night of fun.

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Old
04-02-2004, 12:29 PM
  #80
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What do ticket prices have to do with the Levitt report?

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