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NHL vs. NHLPA: Who's the real enemy?

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Old
05-26-2004, 08:58 PM
  #76
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Quote:
Originally Posted by Smail
They did provide the books of 4 hockey teams to the PA. Then the PA said those books weren't correct because all revenues brought in by the rink weren't accounted for (ie: rinks are often accounted as a different entity than the hockey team because their activities go farther than hockey, also rinks could be profitable without a hockey team). You'll never get anywhere when the PA asks that money coming in from independant events become "hockey revenue". The PA, regardless of access to the books or not, will always claim the owners are lying, whether in their books or in their words.

The Levitt audit has been done well and uses generally accepted accounting principles. If the PA can't even start working with that, it just means that they'll fight anything at all.
Yes but what if the going rate for a seperately owned rink is 3 million/year?? And the team which is playing in a rink owned by the same person who owns the team is being charged 12 million/ year?? Wouldn't that skew the books?? Why only give 4 books (which i'm sure the league selectively chose), why not give all 30?? Is there something to hide in the other 26. Which four are they, do the owners of the four in question also own the rinks??

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05-26-2004, 09:12 PM
  #77
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Quote:
Originally Posted by Beakermania
Yes but what if the going rate for a seperately owned rink is 3 million/year?? And the team which is playing in a rink owned by the same person who owns the team is being charged 12 million/ year?? Wouldn't that skew the books?? Why only give 4 books (which i'm sure the league selectively chose), why not give all 30?? Is there something to hide in the other 26. Which four are they, do the owners of the four in question also own the rinks??
Didn't they offer two or three books and allowed the NHLPA to select the remainder of the 4 from any team they wanted?

If one arena has been around for 20 years and had minimal outstanding debt, they would normally have a lower payment from the team, compared to an arena that has been around for 5 years and has to pay off $80M in bonds (or more). And let's not forget that in most cases the team sets up a separate company to run the arena for the city, but to do so they negotiate a payment schedule with the city. That will vary from one city to another...

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05-26-2004, 09:13 PM
  #78
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Quote:
Originally Posted by Beakermania
Yes but what if the going rate for a seperately owned rink is 3 million/year?? And the team which is playing in a rink owned by the same person who owns the team is being charged 12 million/ year?? Wouldn't that skew the books?? Why only give 4 books (which i'm sure the league selectively chose), why not give all 30?? Is there something to hide in the other 26. Which four are they, do the owners of the four in question also own the rinks??
Well that's something Levitt looked at. Most teams don't "pay" the rink to play in that rink. That's why when the Senators were on sale there was an investor willing to buy just the Corel center, not the team itself.

Anyway, the PA wants all the revenues of the rink, regardless of the source, to be included into NHL hockey revenues.

About the books, well it's a private ownership, so I can understand why they wouldn't want to show them to non-owners. They've commissioned Levitt to do so, and he gave a public report. The sad thing is that the report should have been a starting point but it was laughed at by the PA (probably because it didn't say what they want to hear).

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05-26-2004, 11:07 PM
  #79
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Quote:
Originally Posted by Smail
Well that's something Levitt looked at. Most teams don't "pay" the rink to play in that rink. That's why when the Senators were on sale there was an investor willing to buy just the Corel center, not the team itself.

Anyway, the PA wants all the revenues of the rink, regardless of the source, to be included into NHL hockey revenues.

About the books, well it's a private ownership, so I can understand why they wouldn't want to show them to non-owners. They've commissioned Levitt to do so, and he gave a public report. The sad thing is that the report should have been a starting point but it was laughed at by the PA (probably because it didn't say what they want to hear).
There were also questions about Levitt being independent. He was hired by the owners to do the report. The union was not told a report would be done. They did not have any input into who would be doing the report and didn't cover any of the cost. Perhaps a more fair system would have been to find an auditor agreeable to both sides, paid by both sides. The system for picking one could've been similar to picking a jury in a trial.

However no matter how much teams have lost, the fact of the matter is noone is holding a gun to anyone's head to pay these outrageous salaries. These owners treat the teams like toys, and do not use common business sense to make their decisions.

Ie Mike Ilitch (Red Wings Owner, Little Caesar's Owner) has no problem giving a hockey player amongst the best in the world $8 million or more a year, but if the best pizza maker in the world told him "I am the best pizza maker in the world, I want $8 million a year or I will go to Dominoe's." Do you think he would give it to him?? No he'd say fine buddy, you may be the best, but no amount of pizza is worth $8 million; leave i'll find someone else who can do it for a fair wage. If the owners did this with hockey players and evaluated what each player was actually worth in terms of revenue gained/lost by having or not having that player they wouldn't lose money.

These teams bring in huge revenue streams. It takes a lot of poor decision making on behalf of owners and GMs to turn those huge revenues into huge losses.

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05-26-2004, 11:38 PM
  #80
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Quote:
Originally Posted by Beakermania
There were also questions about Levitt being independent. He was hired by the owners to do the report. The union was not told a report would be done. They did not have any input into who would be doing the report and didn't cover any of the cost. Perhaps a more fair system would have been to find an auditor agreeable to both sides, paid by both sides. The system for picking one could've been similar to picking a jury in a trial.
Well... the financial reports that are given to the investors are made for and paid for by the company, yet they're considered independant and that's why investors trust them.

Levitt is one of the most reknowned financial consultant out there. He was president of the SEC, which makes him the primary candidate for something like this. He was given a clear mandate and documented his work well. His report seems complete, he touches every question mark and compares with companies in other industries. We're not talking about a shady accountant here, but one of the most reputable in the US. He was independant enough so that he didn't even have to get the approval of the NHL to publish his results. I don't really see what more the NHL could have made there. Who tells you the PA would have accepted or compromised on making such a report? It was a managerial decision to produce such a report and managerial decisions don't need the approval of unions, as it has always been in industrial relations.

Also, keep in mind that negociating a CBA is a business decision. In industries where labour unions exist, the most important thing for a business is the CBA. That's what they plan to address this year. Can't fault them for doing this.

Last thing is that the NHL is not a free market and can't be compared to a pizza shop. If your team is located in Calgary, you can't move it to New York to concurrence the Rangers and have a similar salary scale due to increased revenues. However, you're still affected by the Rangers signings, since comparables (what the agents use to demand salaries) rise for your players. Next time you have to sign them at more than you would pay due to your budget or trade them at lower than their value (salary dump). If the player holds out or you need to trade them, the fans will not be happy about it and you'll lose some fanbase to boot.

In your example, there would be only a few people being able to make the pizzas. Illitch's pizza shop being reputed as the best pizza in town, if not able to provide the best pizza would lose many customers and get a big hit on his reputation. So Illitch's choice is to sign the pizza guy and make a loss or lose customers and possibly make a loss also. Illitch decides to close shop and get into a business where business opportunities are better.

Edit: the reason why players have been given this kind of money is that there is competitive pressure that pushes the owners to overspend. In theory, all teams should make a profit regardless of if they make the playoffs. The NHL is a partnership between its teams and since close to half the teams don't make the playoffs it doesn't make sense that half of the teams lose money. Competition needs to be on the ice, not in the books. However, how would Philly fans take it if the Flyers were to cut down their budgets, make no deadline trades, all for the sake of making a profit? They wouldn't take it well and it would affect the bottomline with lost fans (loss of sales and revenues).


Last edited by SuperUnknown: 05-26-2004 at 11:43 PM.
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Old
05-26-2004, 11:39 PM
  #81
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Quote:
Originally Posted by Cawz
It isnt the players fault that Gaborik and Comrie both refused their contracts and held out (for 2 examples)???
neither Gaborik or Comrie held out. They had no contract to play professional hockey and were under ZERO obligation to accept the offers made by the team.

they are not slaves, if they dont want to play hockey for x million, they dont have to.

the oil should have stayed the course. how did it help them at all to trade Comrie for picks and prospects ? the oil are too blame for the Comrie mess, not COmrie. They should have let him rot and shown him they were in control. Instead, they caved in, as usual.

until the owners grow a pair, i will support the players and if one single game is missed next season over this petty dispute, the owners deserve everything they get.

dr

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05-26-2004, 11:49 PM
  #82
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Quote:
Originally Posted by DementedReality
neither Gaborik or Comrie held out. They had no contract to play professional hockey and were under ZERO obligation to accept the offers made by the team.

they are not slaves, if they dont want to play hockey for x million, they dont have to.

the oil should have stayed the course. how did it help them at all to trade Comrie for picks and prospects ? the oil are too blame for the Comrie mess, not COmrie. They should have let him rot and shown him they were in control. Instead, they caved in, as usual.
When Comrie decided not to sign for the season, the Oilers were hurt with any further decision they'd take. First, until he was traded, Comrie was a major distraction for the team. Second, even if they let him sit 1-2-4 years, he would never be happy again to play for the Oilers. How good would that be for the Oilers to have a Comrie that doesn't want to play for them. Third, since they had no leverage, the Oilers could only trade for picks and prospects, which hurt them since with a player like Comrie the Oilers possibly get the few points they were missing to make the playoffs. Any way you look at it, the Oilers lost money over it, whether they signed him or not. With the present CBA, there's a lot of this kind of pressure on the teams, which is why salaries are pushed up and eat any profit.

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05-26-2004, 11:50 PM
  #83
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Quote:
Originally Posted by Smail
In your example, there would be only a few people being able to make the pizzas. Illitch's pizza shop being reputed as the best pizza in town, if not able to provide the best pizza would lose many customers and get a big hit on his reputation. So Illitch's choice is to sign the pizza guy and make a loss or lose customers and possibly make a loss also. Illitch decides to close shop and get into a business where business opportunities are better.

Edit: the reason why players have been given this kind of money is that there is competitive pressure that pushes the owners to overspend. In theory, all teams should make a profit regardless of if they make the playoffs. The NHL is a partnership between its teams and since close to half the teams don't make the playoffs it doesn't make sense that half of the teams lose money. Competition needs to be on the ice, not in the books. However, how would Philly fans take it if the Flyers were to cut down their budgets, make no deadline trades, all for the sake of making a profit? They wouldn't take it well and it would affect the bottomline with lost fans (loss of sales and revenues).
If competition is on the ice and not the books, why do the owners have such a hard time with revenue sharing.

Why can't the decision be the same in hockey as the pizza guy/lose customers example. Owners just need to figure out how many fans will be lost if player x leaves and then figure out what is the max i can pay player x. It works in every other business, why not sports??

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05-27-2004, 12:11 AM
  #84
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Quote:
Originally Posted by Beakermania
If competition is on the ice and not the books, why do the owners have such a hard time with revenue sharing.

Why can't the decision be the same in hockey as the pizza guy/lose customers example. Owners just need to figure out how many fans will be lost if player x leaves and then figure out what is the max i can pay player x. It works in every other business, why not sports??
The problem with shared revenue is that it isn't proven to be effective. The usual shared revenues are the national revenues. The current problem with the NHL is that they are close to non-existant (compared to the other major sports). The NHL owners could become NHL shareholders instead, but I'm not sure that would be the best for the game. As for local revenue, sharing it penalizes the teams that have better revenue streams and fan support. Also, some teams could just have the lowest payroll possible and don't care about local fans and make profits on shared revenue.

About figuring out the lost revenue, the problem is that when the moment you start having problems with a player it will hurt your bottomline regardless of what decision you'll take then. You can't just replace a player with another random player like in another business the public wouldn't even know you changed exec or wouldn't notice a difference in quality to the service.

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05-27-2004, 03:39 AM
  #85
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Quote:
Originally Posted by BlackRedGold
The key parts:
The Senators lost $15-million last season

The Corel Centre has done better. It had an $18-million profit in each of the past two years.
Interesting. First of all, that 18 million is a drop in the bucket compared to the $350 million that story says that they owed. So including all that revenue would hardly have made the slightest difference.

Next you've got the age old problem of how much of that 18 million was hockey revenue? Half? Six? The new agreement stated it would make rent 2.7 million, so presumably it was more than that previously. But maybe that had already been accounted for before the 18 million?

Regardless, some large portion of that money was completely unrelated to hockey, you can't just say all of it belongs to the hockey team as "unreported income". If he also owned a used car lot, would every vehicle sold be hockey income? Hardly.

Quote:
Team managers are employees. They can be fired.
But not by the *NHL*, as you first claimed. They have no more right to fire Leonsis and crew than they have to fire you. So, what choice do they have? The only thing they can do is change the system, to make it as good as they can.

You're implying that the only ones losing money are the insane idiot owners. And that's not the case.

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05-27-2004, 08:16 AM
  #86
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Originally Posted by PecaFan
Interesting. First of all, that 18 million is a drop in the bucket compared to the $350 million that story says that they owed. So including all that revenue would hardly have made the slightest difference.
That was debt owed by the club, not the building. And notice how half of that debt was to Bryden. How did he accumulate almost $200M of debt on a team that was purchased for $50M?

Quote:
Next you've got the age old problem of how much of that 18 million was hockey revenue? Half? Six? The new agreement stated it would make rent 2.7 million, so presumably it was more than that previously. But maybe that had already been accounted for before the 18 million?

Regardless, some large portion of that money was completely unrelated to hockey, you can't just say all of it belongs to the hockey team as "unreported income". If he also owned a used car lot, would every vehicle sold be hockey income? Hardly.
What portion was unrelated to hockey? The building drew all the revenues from the 148 suites at the Corel Centre. The building also received rent from the team for office space at a price higher then it would be in downtown Ottawa.

The building only hosts around an event a month outside of hockey. How much revenue can it really generate outside of hockey?

The building and the team are tightly integrated and it is almost impossible to split up the revenues.

Quote:
But not by the *NHL*, as you first claimed. They have no more right to fire Leonsis and crew than they have to fire you. So, what choice do they have? The only thing they can do is change the system, to make it as good as they can.

You're implying that the only ones losing money are the insane idiot owners. And that's not the case.

And who runs the NHL? That's right, the owners!

And they can revoke a franchise from an owner.

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05-27-2004, 10:50 AM
  #87
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Quote:
Originally Posted by DementedReality
neither Gaborik or Comrie held out. They had no contract to play professional hockey and were under ZERO obligation to accept the offers made by the team.

they are not slaves, if they dont want to play hockey for x million, they dont have to.

Slaves? Playing for x million? Bad choice of words.

I gave 2 examples of 2 playoff teams that had an elite player refuse to play for x million (MILLION!!) dollars because they saw what they were worth due to what other teams are paying. This is the trend that everyone is talking about. Is it the owners fault? Yes. Is it the players fault? YES! They are taking advantage of the system and holding their teams for ransom. At least some owners are trying to limit where the salaries are going.

Teams can hold their ground, but theres 2 teams that missed the playoffs (revenue) due to sticking to their guns. Now they have less to spend on players. Can you not see how everything effects everything in this league? Go back and read some of the other posts in here.

Quote:
Originally Posted by DementedReality
the oil should have stayed the course. how did it help them at all to trade Comrie for picks and prospects ? the oil are too blame for the Comrie mess, not COmrie. They should have let him rot and shown him they were in control. Instead, they caved in, as usual.

So they should have let Comrie rot? Is that what you do with an asset? Get nothing for him? He said he would never play for the Oilers again. You’d make a bad GM.


Quote:
Originally Posted by DementedReality
until the owners grow a pair, i will support the players and if one single game is missed next season over this petty dispute, the owners deserve everything they get.

The owners are growing a pair and saying next season wont happen until the system is fixed. So the owners should show that “they are in control”, but “cave” and let the season start with a faulty system? You seem to be contradicting yourself.

Oh, and if the NHL losing over $200,000,000.00 is a petty dispute, well, you have a weird grasp of reality. Straight up man, I have no idea where you are coming from. You must work for a union or something.

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05-27-2004, 10:59 AM
  #88
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Originally Posted by Beakermania
Why only give 4 books (which i'm sure the league selectively chose), why not give all 30?? Is there something to hide in the other 26. Which four are they, do the owners of the four in question also own the rinks??
Mabye thats what will have to happen. They should all get locked in a room with all the books, arbitrators, owners, union, referees etc and prove that the NHL is losing as much money as they say. In return, the PA will agree to a cap if the NHL can prove their claims. Its for the betterment of the sport and all parties involved if everyone is aware of everything and that costs are controlled.

It just seems so easy on paper.

Oh, and when you say things like "which i'm sure the league selectively chose", your argument loses some merit. Youre not sure of anything unless you are part of the barganing process. Stick to the facts.


Last edited by Cawz: 05-27-2004 at 11:06 AM.
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05-27-2004, 01:51 PM
  #89
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Originally Posted by Cawz
Oh, and when you say things like "which i'm sure the league selectively chose", your argument loses some merit. Youre not sure of anything unless you are part of the barganing process. Stick to the facts.
From what I understand, the four teams were chosen by the NHLPA. They picked which 4 teams they wanted to examine.

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05-27-2004, 03:25 PM
  #90
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IMO a salary cap while it would limit what teams can spend, it wouldn't limit what players would ask for, if a top club like the wings was 100,000 away from whatever the cap would be, yet there was still another all-star asking for 5,6,7 million, and there was a team like carolina who couldn't pay anyone else that much without screwing up their budget plan, would the canes give into what the player wanted? ... granted this allstar might bring more people into the rink, but would it be enough or for long enough to make a significant profit?, i tend to think not, right now aside from a lockout the players have the financial control IMO, and until the financial control is more evenly balanced than it is, it's going to be the same garbage year after year. bottom line, somethin HAS to be done SOON, to get this league back to half way level ground.

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05-27-2004, 04:26 PM
  #91
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Originally Posted by garry1221
bottom line, somethin HAS to be done SOON, to get this league back to half way level ground.
Twelve different conference finalists in three years isn't level ground?

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05-27-2004, 05:00 PM
  #92
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Quote:
Originally Posted by Other Dave
Twelve different conference finalists in three years isn't level ground?
it's a start, but until there's a closer gap between the jagr's/yashin's and the a.roy's/dingman's things are still going to be financially screwed and the league will still be at the bottom of the totem pole so to speak

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05-27-2004, 05:33 PM
  #93
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Quote:
Originally Posted by Other Dave
Twelve different conference finalists in three years isn't level ground?
No, it's not level ground. That just means the final 4 and the Cup winner have been rotating between four teams for the past ten years. At least one of Jersey, Detroit, Colorado and Dallas have been in that final four every year until this year, usually two or three of them, including two in '02 as part of your "changing of the guard" argument.

Oh boy, those '02 and '03 seasons were such a change from the usual, when we had the dark horse Wings and Devils lifting Lord Stanley.

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05-27-2004, 06:59 PM
  #94
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Originally Posted by garry1221
it's a start, but until there's a closer gap between the jagr's/yashin's and the a.roy's/dingman's things are still going to be financially screwed and the league will still be at the bottom of the totem pole so to speak

No. Things will be screwed when there's a closer gap between the Jagr's and the Hossa's.

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05-27-2004, 09:53 PM
  #95
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Originally Posted by PecaFan
No, it's not level ground. That just means the final 4 and the Cup winner have been rotating between four teams for the past ten years. At least one of Jersey, Detroit, Colorado and Dallas have been in that final four every year until this year, usually two or three of them, including two in '02 as part of your "changing of the guard" argument.
Damn those giant hockey markets in Denver and East Rutherford keeping the little guys like Philly and Toronto out of the final!

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05-27-2004, 10:05 PM
  #96
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The enemy could be hardline ideology. Im not sure there is any value in fans assigning one side as an enemy. Until there actually is a lockout anyway.

I would think the fans best interests would be different from both the players or owners. Yet we always seem to be choosing one side or the other hoping they will impose its will on the other. Shouldnt fans have a 3rd position? One that a true league commisioner instead of an owners commisioner might support for example

A great thing that could happen for fans for example, is having all owners sell their franchises for half their values to new owners and absorb the one time 50-100mil loss in aset value as they would in any of their other failing businesses. Current owners probably at one time have all done that in one of their businesses. And failing business, as the owners agree, due to their own mismanagement. This would be great for fans as many Senator fans will now tell you.. That our last owner took the loss and sold at bankruptcy rate helped us fans more than any salary cap could.

Shouldnt fans have different interests from owners? Doesnt sould like it to me so far.

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05-27-2004, 10:10 PM
  #97
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Quote:
Originally Posted by thinkwild
I would think the fans best interests would be different from both the players or owners.
I agree with this statement.

Quote:
Yet we always seem to be choosing one side or the other hoping they will impose its will on the other. Shouldnt fans have a 3rd position?
The third position should be hockey next season. There's nothing wrong with the sport that a new CBA will fix.

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05-27-2004, 10:26 PM
  #98
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Quote:
Originally Posted by BlackRedGold
No. Things will be screwed when there's a closer gap between the Jagr's and the Hossa's.
how would things be more screwed?... i wasn't talking about all salaries being raised to have a smaller gap, IMO no player should be making over 5 or 6 mil. if they do there better be stats or leadership qualities seen by everyone that says they're worth more money

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05-27-2004, 10:40 PM
  #99
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Originally Posted by Cawz
If you dont think its the players fault, youre naive (sorry). Its business. In business, you look out for yourselves. In business, the biggest ********* and the most successful. The players are looking out for themselves, the owners are looking out for themselves. Both groups are screwing the fans.

At least I've seen different sources showing how much money the NHL lost. I've heard the NHLPA debunk that, but I dont hear their reasoning. Just because they dont like the results, they think all the audits (LA Kings, Wall Street, Levitt...) are false.
Well, Forbes magazine's sports economist, Jerry Orzanian, was on the radio the other day with John Wells and Bob McCown and he basically called the Levitt report a total joke, so that's good enough for me since I'm pretty sure he's not affiliated with the NHL or NHLPA.

Owning a hockey team is like owning any other business.

You have to have a B U D G E T.

If I own a hardware store, I have to make a budget plan at the start of the year. Forecast expenditures and revenues to the point that I can hopefully turn a profit. I look at what my costs are (inventory, staffing, advertising, tax, etc.), adjust my prices to a workable margin, and based on whatever method I use to project revenue, I can see a blueprint for success.

There should be, in any capitalist economy, an independent check on each team's salaries. Darryl Sutter said it himself - "we *have* a Cap" - the Cap is what each team can afford.

We're not seeing small markets driven out of existence because they can't afford to pay top talent. We're seeing small markets driven out of existence because the teams haven't cultivated a true fanbase for whatever reason. Anaheim, Raleigh, Buffalo, Miami and Dallas have all seen their teams go to the Cup finals in the past few years, and with the exception of Buffalo these are non-traditional hockey markets. Tampa this year is another example. What you're saying is that a team like Carolina only sells tickets when they win, and now they suck, so they need to be able to be good in order to keep the franchise alive. To be good they need a salary cap so teams like New York and Detroit can't outspend on players.

Say another hardware store opens up across the street from me and threatens to take business from me. Say their owner has a good relationship with a big power tool supplier and gets their tools at a much lower cost than I have to pay, increasing their profit margin, allowing them to reduce prices, etc. - all this creates challenges for me.

What do I do?

I *adjust*. I strategize. I find other ways to compete. Maybe I market myself differently. Maybe I try to develop a working relationship with a paint manufacturer to draw people in for that. Nashville has been able to develop a pretty solid group of fans despite never making the playoffs until this season, having a single star player, etc. San Jose has never been a true Cup contender and they sell a lot of tickets. Minnesota lost a team and their new one is a goldmine.

Meanwhile, Stanley Cup finals games in East Rutherford, New Jersey, were at best 3/4 full. That's a team with three Cups across a tunnel from a city of roughly 10 million people. Winning isn't the only thing to bring in fans. Hell, Toronto sucked for over a decade (some would say longer) and they still sold tickets.

The point is that cost certainty assures nothing. The NBA has a hard cap, which nobody can understand including me and most NBA fans. This year Atlanta traded one of their top scorers, Glenn Robinson, in a deal where they acquired a RETIRED PLAYER (Terrell Brandon) because somehow that would give them lots of cap room after the season. I'm sure that was a great sell to Hawks fans.

"We traded our leading scorer for a retired player, but boy, NEXT season we're gonna have lots of...cap room?"

I can see it now. Forsberg retires, Colorado trades him to the Blue Jackets for Zherdev because Columbus wants the cap space after the season more than the player.

If owners want to field competitive teams, that is a CHOICE THEY HAVE. If they think that spending an extra $20 million on player salaries will relate to a corresponding increase in revenue, do it. Ask the Rangers whether having high salaried players guarantees playoff success.

Teams get good and teams get bad in professional sports. It's all cyclical. Everyone has short memories. In baseball, the two worst franchises in the 80s were the Indians and Braves while the Tigers, Royals, Blue Jays and A's were big spenders. In the NBA, the Bulls went from really good to really bad really fast once Jordan, Pippen et al left, and now they're hoping that the cycle will repeat once guys like Jamal Crawford, Eddy Curry and Kirk Hinrich develop. In the NFL there's parity by force of scheduling as much as anyone else. All the last place teams from the previous seasons play each other and all the division winners do the same, so of COURSE there will be league parity. Their cap is so hard to follow anyway that players get cut left and right. USA Today had a list of football salaries the other day. Takeo Spikes' salary for this season is about $10 million but his "cap number" for Buffalo is about $3 million. Don't ask me how that works.

Does nobody remember how AWFUL the Nordiques were to assemble all the draft picks and young players that built the Avalanche? Let me refresh your memory:

1987 - Joe Sakic - 15th overall
1989 - Mats Sundin - 1st overall - traded to bring in Wendel Clark/Claude Lemieux, Sylvain Lefebvre
1989 - Adam Foote - 22nd overall
1990 - Owen Nolan - 1st overall - traded for Sandis Ozolinsh
1991 - Eric Lindros - 1st overall - traded for Peter Forsberg, Ron Hextall, Mike Ricci, Chris Simon, Steve Duchesne, $15 million and two 1st round draft picks (one of which was Jocelyn Thibault, 10th overall in 1993, the centrepiece of the Patrick Roy trade)
1993 - Thibault (10th overall with PHI pick) and Adam Deadmarsh - 14th overall
1994 - Chris Drury - 72nd overall
1994 - Milan Hejduk - 87th overall

The Nordiques finished last in their division from 1987 through to 1992.

How about the Ottawa Senators? The worst franchise in hockey for the first several years of their existence. How were they built? With high picks and good scouting.

1992 - Alexei Yashin - 2nd overall (brought in Spezza and Chara)
1994 - Radek Bonk - 3rd overall
1995 - Bryan Berard - 1st overall (traded for Wade Redden)
1996 - Chris Phillips - 1st overall
1997 - Marian Hossa - 12th overall
1999 - Martin Havlat - 26th overall
2000 - Anton Volchenkov - 21st overall
2001 - Jason Spezza - 2nd overall

Imagine if Alexandre Daigle had turned out to be a star NHL player!

These things go in circles. Do people forget how Philadelphia was horrendous in the late 80s and early 90s? But they used Forsberg to get Lindros, they made astute trades for guys like Leclair, Recchi and Primeau, voila, a team that can contend for 10 years or so.

What will happen to Toronto in 2-3 years when Belfour, Roberts, Nieuwendyk and Leetch have retired, Sundin, Nolan and Mogilny are old men and their barren prospect system hangs its entire hat on Steen, Colaiacovo and Stajan?

How about Detroit? In a few years the likes of Yzerman, Chelios, Shanahan, Hull, Hatcher, Joseph, Lidstrom and perhaps Schneider will be done, and it will be up to Zetterberg, Datsyuk and perhaps Grigorenko to keep the franchise alive.

The Rangers spent a ton of money and didn't even get to the playoffs, and now they're relying on prospects to rebuild.

Philly will be losing Recchi, Leclair, Desjardins, Roenick and Amonte soon, but they've made astute trades and good draft picks to bring in guys like Gagne, Pitkanen, Carter, Richards, Markov, Johnsson and Handzus so maybe they'll be OK for a while longer yet.

The point is that the owners are asking the players to save them from themselves. Owners want cost certainty? Name me ONE BUSINESS ON EARTH that has absolute cost certainty. Someone explain to me how the NHL improves by limiting the ability of the players to make salaries that the market will bear. The players already have by far the most restrictive free agency system of any major sport. In the NBA, top young players could become free agents after only THREE YEARS in the league, for many that's around the age of 23-24. Losing Shaq devastated the Magic franchise. Ditto McGrady for the Raptors. Could you imagine if the Senators could potentially lose Hossa, Havlat, Redden and Spezza to UNRESTRICTED free agency this summer? The players don't get to choose the city they want to play until they're 31, unless the team that owns their rights chooses not to qualify them. That's a major concession that nobody addresses.

The owners want to say that they're a competitive industry and at the same time not-competitive. The teams compete with each other for on-ice success, fighting over the best players and draft picks and resources, and yet the whole industry has to be regulated by the EMPLOYEES? I don't think so.

 
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05-27-2004, 11:08 PM
  #100
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Quote:
Originally Posted by nordique
The point is that the owners are asking the players to save them from themselves. Owners want cost certainty? Name me ONE BUSINESS ON EARTH that has absolute cost certainty.
I skipped most of the rest because it doesn't make much sense. The NHL owners know how to run their business. The fact that they're wealthy enough to afford an NHL franchise proves it. On the other hand, what have you done to try and teach them how to run a business?

Now, about cost certainty, I'd say that all business have some degree of cost certainty. Most of the time, the problem isn't that your costs change from year to year (like the inflation in the NHL system), it's that your sales/revenues aren't what you thought they were. If you can't plan your costs (costs certainty), then you really shouldn't be in business... Why do you think there are people whose jobs are to be costs specialists? If you can't control your costs, you're in deep trouble.

Like I wrote in other messages, in industries where there are labour unions, the most important thing if you want to be competitive is to negociate a good agreement for you. Looking back the last 10 years, do you think the last CBA is a good agreement for the owners? I don't think so.

Also, while in the past it was easier to build through the draft, it ain't as easy today. Rookies under the rookie cap often make upwards of $4M each, due to bonuses. And top rookies will want the "standard" contract, with plenty of bonuses or will go back in the next draft, which somehow forces the teams to sign them.

About your "hardware store" example, it's laughable, because you don't set your price based on your costs, but based on demand. The decision you need to take is whether with the current market conditions you can operate when you look at your costs.

New Jersey, despite having their arena only 3/4 full, has one of the highest budgets and one of the higher revenues in the league. Why? Because they make more money filling the rink 3/4 full than by lowering prices and fulling it.

While you're touting Nashville, it is rumoured to be a team that could die or move to another town.

You keep talking about the Rangers, but what about the other high salary teams? Sure, the Rangers are an awful mess, but the other top spenders did pretty well those last years. Can you explain why the teams that won the Stanley Cup the past ten years were all top 5 spenders in the league?

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