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Small market myth

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Old
11-22-2003, 03:05 PM
  #1
OlliMackBjugStud
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Small market myth

With the signing of Oates to a 2million dollar deal and a 7m extension to career journeyman Staios, I dont want to hear how the NHL small markets are in trouble.

Either the Oil managment are stupid or they dont believe the small market myth.

I have no problem with what they have done, I just dont want to hear how the small markets are on their death bed. If they truly are on their death bed, they have no business handing out those two contracts.

So lets cut the crap that the current CBA doesnt work, it clearly does and EDM proves they have the resources when they choose to use them. Otherwise, someone tell me who made them give Staois 2m per season and Oates a UFA deal ?

DR

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Old
11-22-2003, 05:18 PM
  #2
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Quote:
Originally Posted by DementedReality
So lets cut the crap that the current CBA doesnt work, it clearly does and EDM proves they have the resources when they choose to use them. Otherwise, someone tell me who made them give Staois 2m per season and Oates a UFA deal ?

DR
Umm, first off, the Oilers have done just about everything right and yet this is the first year that they even have a shot at breaking even. And that is assuming they make the playoffs.

Oates was signed to replace Comrie, that's it. They aren't adding salary, they are just choosing to pay Oates 2 Million instead of Mike Comrie(who made well over 3Million last year).

In terms of Staois, he's their best defensemen. He has been for the last couple of years. He used to be a journeyman, he's not now, he's the Oilers top dman. 7 Million over 3 years for your best defensemen when he is about to become UFA is very reasonable.

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11-22-2003, 05:39 PM
  #3
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Quote:
Originally Posted by elphy101
Umm, first off, the Oilers have done just about everything right and yet this is the first year that they even have a shot at breaking even. And that is assuming they make the playoffs.
Done everything right? They couldn't draft worth a damn in the 90's.

And that's pretty much the most important thing a team can do.

They seem to be doing a better job drafting under Lowe, as opposed to Sather, but only time will tell.

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Old
11-22-2003, 05:43 PM
  #4
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Quote:
Originally Posted by elphy101
Umm, first off, the Oilers have done just about everything right and yet this is the first year that they even have a shot at breaking even. And that is assuming they make the playoffs.

Oates was signed to replace Comrie, that's it. They aren't adding salary, they are just choosing to pay Oates 2 Million instead of Mike Comrie(who made well over 3Million last year).

In terms of Staois, he's their best defensemen. He has been for the last couple of years. He used to be a journeyman, he's not now, he's the Oilers top dman. 7 Million over 3 years for your best defensemen when he is about to become UFA is very reasonable.
thats my point .. they are doing things right and they arent going under. if they did things right and still couldnt replace Comrie or extend their "best" dman, then the prrof the CBA doesnt work would be there. the fact is the Oil were able to do this and used the CBA to make it happen.

thats my point.

dr

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Old
11-22-2003, 06:19 PM
  #5
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Quote:
Originally Posted by leafssuck
The fact Staois is their best dman is proof the CBA doesn't work.
explain ? the fact anyone is anyone is because of what they do, not because of their contract.

dr

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Old
11-22-2003, 06:22 PM
  #6
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Quote:
Originally Posted by elphy101
Umm, first off, the Oilers have done just about everything right and yet this is the first year that they even have a shot at breaking even. And that is assuming they make the playoffs.

Oates was signed to replace Comrie, that's it. They aren't adding salary, they are just choosing to pay Oates 2 Million instead of Mike Comrie(who made well over 3Million last year).
Not even that much. Here's a blurb from ESPN:

Quote:
The Edmonton Oilers have a nice little setup with Adam Oates. He signed with Edmonton this week for about $1.95 million prorated, but he doesn't actually get paid until he plays. Since he hadn't been working out through the summer or even at the start of the season, he'll need time to get in shape. By the time he does get on the ice the Oilers are expecting they'll be paying him about $1.4 million for the season.
Less than half the price of Comrie. Oh those wheelin dealin Oilers.

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11-22-2003, 06:43 PM
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How can you say it's a myth:

Do you think we traded off Doug Weight, Bill Guerin, Anson Carter, Janne Niinimaa (not to mention lose Todd Marchant in free-agency) because they underacheived or were in the doghouse?

Hell no.

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Old
11-22-2003, 07:16 PM
  #8
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Quote:
Originally Posted by DementedReality
With the signing of Oates to a 2million dollar deal and a 7m extension to career journeyman Staios, I dont want to hear how the NHL small markets are in trouble.

Either the Oil managment are stupid or they dont believe the small market myth.

I have no problem with what they have done, I just dont want to hear how the small markets are on their death bed. If they truly are on their death bed, they have no business handing out those two contracts.

So lets cut the crap that the current CBA doesnt work, it clearly does and EDM proves they have the resources when they choose to use them. Otherwise, someone tell me who made them give Staois 2m per season and Oates a UFA deal ?

DR

Do you want to know the problem with the current cba? Do you want to know why it most definately does not work? The problem is, that if you don't have a top ten payroll, you don't have a chance at the cup (I know there might be one or two exceptions, but by in large that is true). This creates two problems: 1) things get boring because the same teams are on top every year-primarily Detroit, Colorado, Dallas, and New Jersey. Those teams have been trading the cup amongst themselves for almost 10 years now. 2) Most of the teams in the league have no chance at winning the cup. This creates fan apathy, creating bigger financial problems for the already cash-strapped franchises.
Of course, so far I've only touched on the problems the c.b.a creates for competitiveness. The other big issue is the financial picture. The league is losing tons of money, and its hard to argue that the cba isn't to blame. In the current cba, a team is forced to give a player a raise of 10%, or if the player made over the league average, the team must give him atleast what he made the previous year. This has two consequences. First, if you overpay a player on one contract, you'll have to overpay him on all following contracts. Second, an individual player's salary, whether he deserves it or not, can only go up. Thus, an individual player's salary inevitably increases substantially as he moves from his first contract to when he becomes 31. Once higher salary standards have been established, youger players ask for even more money, and you have a situation in which salaries are perpetually rising. Then comes free agency. With 30 teams, there is a large number of competitors for free agents. Odds are, at least one team will grossly overvalue a player and pay him too much. The proof is in the numbers. The league is losing a ton of money, and spends 75% of its money on player salaries.
How can anyone possibly say that the oates and staios deals mean that small market problems are a myth? If you add Oates' salary to staios' salary, you get under 5 million dollars a year. In one summer, the new york rangers gave a combined 14 million dollars a year to two players (Kasparitis and Holik). The difference is astronomical. The oilers payed Comrie 4.5 million last year, which they now save. The oilers also will recieve 2 million from the heritage classic. That is why they started this modest spending spree. And calling Staios a career journeyman is beyond ridiculous. Either you haven't seen him play the last two years (in which case you shouldn't be passing judgement) or you have absolutely zero hockey knowledge. Ask any oiler fan, Staios is absolutely indespensible, a rock in an otherwise problematic group of defenders.

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Old
11-23-2003, 06:15 AM
  #9
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Quote:
Originally Posted by DementedReality
thats my point .. they are doing things right and they arent going under.
No, they aren't going under if they make the playoffs. They are bordering between red and black ink, and goes directly against your point. They are struggling to survive.

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Old
11-23-2003, 06:38 AM
  #10
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Quote:
Originally Posted by coolguy3650
Do you want to know the problem with the current cba? Do you want to know why it most definately does not work? The problem is, that if you don't have a top ten payroll, you don't have a chance at the cup (I know there might be one or two exceptions, but by in large that is true).
What about the Ducks making the Cup finals last year or the Wild and Senators making the Conference finals last year? Or the Hurricanes making the finals the year before that?

But why shouldn't the best teams be the best paid teams? Since they have more talent shouldn't they get paid more?

Quote:
This creates two problems: 1) things get boring because the same teams are on top every year-primarily Detroit, Colorado, Dallas, and New Jersey. Those teams have been trading the cup amongst themselves for almost 10 years now.
And those teams were terrible for the ten years before that. Things run in cycles in the NHL.

Quote:
2) Most of the teams in the league have no chance at winning the cup. This creates fan apathy, creating bigger financial problems for the already cash-strapped franchises.
Why do you feel they have no chance? Maybe they don't have a chance this year but if they rebuild smartly by drafting and trading well, why can't they have a chance in the future?

Quote:
Of course, so far I've only touched on the problems the c.b.a creates for competitiveness. The other big issue is the financial picture. The league is losing tons of money, and its hard to argue that the cba isn't to blame. In the current cba, a team is forced to give a player a raise of 10%, or if the player made over the league average, the team must give him atleast what he made the previous year.
Teams aren't forced to do either of these things. Lots of players don't get qualified. If the team doesn't think the player is worth the money he doesn't get qualified. Look at Kariya last year.

Quote:
This has two consequences. First, if you overpay a player on one contract, you'll have to overpay him on all following contracts. Second, an individual player's salary, whether he deserves it or not, can only go up. Thus, an individual player's salary inevitably increases substantially as he moves from his first contract to when he becomes 31. Once higher salary standards have been established, youger players ask for even more money, and you have a situation in which salaries are perpetually rising.
NHL teams don't have to overpay. If they don't want to pay the money, they don't qualify the players and the open market decides his contract.

Salaries aren't perpetually rising. In fact, I suspect salaries will be lower this year then last year. Paul Kariya thought this was possible. That's why he signed for $1.2M, instead of closer to the ~$1.7M average league salary last year, because he wanted to make sure he was under the league average.

Quote:
Then comes free agency. With 30 teams, there is a large number of competitors for free agents. Odds are, at least one team will grossly overvalue a player and pay him too much. The proof is in the numbers. The league is losing a ton of money, and spends 75% of its money on player salaries.
So you don't believe that players should get paid what the market wants to pay them? It's unfortunate for you that the Soviet Union no longer exists because you'd probably embrace communism.

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Old
11-23-2003, 07:31 AM
  #11
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Quote:
Originally Posted by BigDaddyMeatWhistle
What about the Ducks making the Cup finals last year or the Wild and Senators making the Conference finals last year? Or the Hurricanes making the finals the year before that?

But why shouldn't the best teams be the best paid teams? Since they have more talent shouldn't they get paid more?



And those teams were terrible for the ten years before that. Things run in cycles in the NHL.



Why do you feel they have no chance? Maybe they don't have a chance this year but if they rebuild smartly by drafting and trading well, why can't they have a chance in the future?



Teams aren't forced to do either of these things. Lots of players don't get qualified. If the team doesn't think the player is worth the money he doesn't get qualified. Look at Kariya last year.



NHL teams don't have to overpay. If they don't want to pay the money, they don't qualify the players and the open market decides his contract.

Salaries aren't perpetually rising. In fact, I suspect salaries will be lower this year then last year. Paul Kariya thought this was possible. That's why he signed for $1.2M, instead of closer to the ~$1.7M average league salary last year, because he wanted to make sure he was under the league average.



So you don't believe that players should get paid what the market wants to pay them? It's unfortunate for you that the Soviet Union no longer exists because you'd probably embrace communism.

The wild, the ducks, and the huuricanes had no chance at the cup despite the fact that they had solid runs. I'm not saying the best teams shouldn't be the best paid teams, just that if the best teams are always in the same markets, things get boring. Yes those teams I mentioned were terrible before, but you'll notice that those bad years were under a different cba. Small market team have no chance not because of poor drafting or trading but because they don't have the money to compete. Take the Ottawa Senators. They have done a better job than anyone in building their team, but if they didn't have a billionare appear out of no where to save them, they would have had to dismantle this past offseason. Most small market teams aren't lucky enough to suddenly find a sugar daddy. Teams aren't forced to qualify restricted free agents in theory, but in practice, it would be suicide not qualify most of your players. If players are allowed to leave for nothing en masse, the fans would revolt and trouble franchises would be finished. Yes, the open market decides contracts. But there are just too many possible suitors for a given player. Excessive competition leads to excessive salaries. You seem to be so wrapped up in the ideals of capitalism, that you don't realize that teams are not competitors in the sense that businesses like pepsi and coke are competitors. Teams need each other. The leafs can't play against themselves every night. The competitors of the nhl are the nba, the nfl and other entertainment organizations. The nhl should be considered an individual entity in of itself. The health of one team affects the health of the other teams. Salaries might be lower this year, but only because of fear of the next cba, not because of the current cba. Would I embrace communism? I think I'll settle for a business model closer to that of the nba, which allows great teams to stay together, but also gives some hope to the small markets like San Antonio. The only changes I would make is a minimum slary threshold, so teams couldn't run themselves like the Clippers.

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Old
11-23-2003, 08:41 AM
  #12
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I would have to agree dementedreality. And a corollary perhaps is the curse of the large market. Doomed to do as the fans demand - buy that final missing piece UFA - year, after year, after year. Instead of doing the proper thing like Edmonton.


Quote:
Originally Posted by coolguy3650
The problem is, that if you don't have a top ten payroll, you don't have a chance at the cup (I know there might be one or two exceptions, but by in large that is true).
IF youve won the cup, you will keep, attract, and be able to afford players capable of winning it. To beat a team like this, you cant spend on lesser players to beat them. You cant even try and outspend on better players. You must develop better ones. The first new champ, will be cheaper and younger than the old one. Current champs have to spend to stay that way. Since they an afford it, it works out fair. New champs need a young core ready to become elite. Young players arent the most expensive. Which makes it fair for teams who havent enjoyed playoff success yet.

This is why the current CBA is such a great business model, it allows great teams to stay together, but also gives some hope to small markets like Ottawa.

You will never be to build a team like the last Oilers or Isles dynasty unless you do this. And after all, those are the glory days we want to return too.

Quote:
Originally Posted by coolguy3650
The league is losing tons of money, and its hard to argue that the cba isn't to blame.
Its easy to argue it isnt to blame. Its hard to get the majority of hockey fans to take the larger perspective necesary to see it. Creating a healthy player market is a good thing for the league. Maximizing owner revenues is not.


If you intend on winning the cup, you are going to have to build a core of players who are in the top half of the league. I hope we could agree that if you could regularly win a cup with a payroll in the bottom half of the league, perhaps there is an element of luck in winning it. Or star player exploitation. Its meaningfulness would be lessened.

To win the cup, and keep it awhile, you must build the best team in the league. Rightfully, this is very hard. And cant be bought. Yet. It would seem to go without saying, the champs would have some of the best players in the league. It would therefore follow that this team would likely have a payroll at least in the top third of the league. That seems normal, healthy, and a result of competitive environment If your players start becoming good, you will be paying for good players, not average ones.

To win the cup the first time, you need a core primarily under 30. By definition, a core that cant be bought on the free agent market where money can provide an advantage. The UFA additions to a core, like Grant Marshall, Mike Keane, arent the most expensive players in the league usually. If you try to buy your core like getting Weight, Yashin, Jagr, Selanne, Nolan, it inevitably fails. In fact, what you often find is that the poor disadvantaged team forced to salary dump their expensive star, actually improves in the long run, while the acquiring team gets worse, or at least still does not advance. As it turns out the feared disadvantage, is in fact a wise mans strategy to improve. And the alleged advantage is no advantage at all, but a curse. Its not intuitive though.

I hear Poti and Carter are being shopped for being too soft. And the Isles may trade Janne. But dont say that too loud, because Edmonton needs people to think of those as unfortunate salary dumps they were victimized by.

Weight and Guerin were tough. My heart wept. The Oil seemed so close. If only they could of added Nolan, Amonte, Svehla, they would of won for sure. errr. Hey, my heart bleeds, but like SJ, that team didnt have enough of a core to build around, they were trying to build around UFAs. No one won their first cup with a core of UFAs. If they were rich, they would have had the luxury of doing what NYR, Toronto, and in the past Philadelphia do. But that is wrong, and luckily for Edmonton fans, Lowe and company are a lot smarter and braver than I would have been. They boldly took the chance to rebuild. To do it right. And they have a lot of potentials fighting to become their new core. And it looks like a good one. You cant fix things in one summer of UFA signings. It takes several years of developing prospects, finding the right people, and creating a young core that can be built into first time champs before they become UFAs. One of the reasons the cup has value, is that most teams trying, will fail. This is a good thing for a great league of athletic competition.. Not a faairness problem for TV that needs to be corrected in order to maximize revenue.

Edmonton is doing it right. The problem with this CBA, is that no one wants to stand up and say the Weight trade was a tough love decision. Certainly not Oiler management with a million and one of their contractual and lease agreements all set to be renewed at the same time as the CBA. Renewed, im sure hopefully from Edmontons owners position, by a team dangling on the precipice of extinction, desperately requiring any business measure that could help them stay in business. Perhaps a slightly lower arena lease. More favourable concession revenue. Maybe even money from non hockey events. Which of course wont be counted in league revenue because its not hockey related. Lower taxes and perhaps some govt infusion even. Also not likely to be counted.



Quote:
Originally Posted by coolguy3650
Take the Ottawa Senators. They have done a better job than anyone in building their team, but if they didn't have a billionare appear out of no where to save them, they would have had to dismantle this past offseason. Most small market teams aren't lucky enough to suddenly find a sugar daddy.
When the owner had all the revenue tied up in paying off the credit cards used to buy the arena wsa replaced with an owner who paid cash, the same revenue allowed a 33% increase in payroll. Not coming from the onwers pocket. Coming from the money the team generates. Sugar Daddy had nothing to do with it, proper ownership did.

If all owners currently losing money, sold their teams for the best price they could get this year, the new owners would be able to run the league much better than the current owners with an artificial market.

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Old
11-23-2003, 09:20 AM
  #13
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Quote:
Originally Posted by DementedReality
With the signing of Oates to a 2million dollar deal and a 7m extension to career journeyman Staios, I dont want to hear how the NHL small markets are in trouble.

Either the Oil managment are stupid or they dont believe the small market myth.

I have no problem with what they have done, I just dont want to hear how the small markets are on their death bed. If they truly are on their death bed, they have no business handing out those two contracts.

So lets cut the crap that the current CBA doesnt work, it clearly does and EDM proves they have the resources when they choose to use them. Otherwise, someone tell me who made them give Staois 2m per season and Oates a UFA deal ?

DR

This startling display of largesse by the Oilers this past week... let's break it down. The Oates contract, as somebody mentioned, is $1.95m for the season, but will come to about $1.5m or so because the season is already 1/4 over. The Staios contract extension is an $800k signing bonus paid right now, and upcoming seasons at $1.9m, $2.15m, $2.15m. So in terms of his existing contract, the new contract is an $800k raise this season and next season and a $1m raise in the final seasons. In terms of *new* money (as in, money outside the current salary structure) committed to Staios, $3.6m over the life of the contract.

In terms of increases to the existing salary structure, the two contracts the Oilers signed last week break down to about $2.3 million this season, $800k next season, and $1.0m in the two seasons after. Where did the Oilers get $2.3m to spend this season? It's the money they'd allocated to Mike Comrie. Finding money to keep Steve Staios around for 3 seasons beyond this one is a piece of cake- it's becoming increasingly obvious that the Oilers will not pick up their $4 million option on Tommy Salo. Spending some of that on Steve Staios is a no-brainer.

If you want to go the career-journeyman Steve Staios route, go ahead, but he's become a key player for the Oilers. His ice-time alone is a testament to his importance to the team.

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11-23-2003, 09:24 AM
  #14
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I know its a waste of time responding to these comments but I could use a good laugh so lets keep it coming.

Quote:
Originally Posted by DementedReality
So lets cut the crap that the current CBA doesnt work, it clearly does and EDM proves they have the resources when they choose to use them. Otherwise, someone tell me who made them give Staois 2m per season and Oates a UFA deal ?
You are absolutely right. Edmonton is trading away its players because it is too cheap to pay them. Matter of fact all small market teams are doing the same thing. Especially the Pens. Man Mario comes back and they couldnt wait to dump all their good players. They couldnt understand why anyone would want to see Mario and Jagr tear up the league.

Quote:
Originally Posted by BigDaddyMeatWhistle
So you don't believe that players should get paid what the market wants to pay them? It's unfortunate for you that the Soviet Union no longer exists because you'd probably embrace communism.
I love how people make this suggestion. The NFL by your definition would be a communist system. Well gee isnt that the best run, and most popular sports league in the US? Those darned commies.

Why oh why cant people understand the teams are only in competition on the ice. The league as a whole is the business and the teams are franchises. The goal is not to put the other teams out of business. The teams have to be competitive for the league to be succesful. So yes they should be sharing revenue and keeping players salaries at a reasonable level. Thats not communism thats common sense.

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11-23-2003, 11:32 AM
  #15
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Quote:
Originally Posted by thinkwild
I would have to agree dementedreality. And a corollary perhaps is the curse of the large market. Doomed to do as the fans demand - buy that final missing piece UFA - year, after year, after year. Instead of doing the proper thing like Edmonton.




IF youve won the cup, you will keep, attract, and be able to afford players capable of winning it. To beat a team like this, you cant spend on lesser players to beat them. You cant even try and outspend on better players. You must develop better ones. The first new champ, will be cheaper and younger than the old one. Current champs have to spend to stay that way. Since they an afford it, it works out fair. New champs need a young core ready to become elite. Young players arent the most expensive. Which makes it fair for teams who havent enjoyed playoff success yet.

This is why the current CBA is such a great business model, it allows great teams to stay together, but also gives some hope to small markets like Ottawa.

You will never be to build a team like the last Oilers or Isles dynasty unless you do this. And after all, those are the glory days we want to return too.



Its easy to argue it isnt to blame. Its hard to get the majority of hockey fans to take the larger perspective necesary to see it. Creating a healthy player market is a good thing for the league. Maximizing owner revenues is not.


If you intend on winning the cup, you are going to have to build a core of players who are in the top half of the league. I hope we could agree that if you could regularly win a cup with a payroll in the bottom half of the league, perhaps there is an element of luck in winning it. Or star player exploitation. Its meaningfulness would be lessened.

To win the cup, and keep it awhile, you must build the best team in the league. Rightfully, this is very hard. And cant be bought. Yet. It would seem to go without saying, the champs would have some of the best players in the league. It would therefore follow that this team would likely have a payroll at least in the top third of the league. That seems normal, healthy, and a result of competitive environment If your players start becoming good, you will be paying for good players, not average ones.

To win the cup the first time, you need a core primarily under 30. By definition, a core that cant be bought on the free agent market where money can provide an advantage. The UFA additions to a core, like Grant Marshall, Mike Keane, arent the most expensive players in the league usually. If you try to buy your core like getting Weight, Yashin, Jagr, Selanne, Nolan, it inevitably fails. In fact, what you often find is that the poor disadvantaged team forced to salary dump their expensive star, actually improves in the long run, while the acquiring team gets worse, or at least still does not advance. As it turns out the feared disadvantage, is in fact a wise mans strategy to improve. And the alleged advantage is no advantage at all, but a curse. Its not intuitive though.

I hear Poti and Carter are being shopped for being too soft. And the Isles may trade Janne. But dont say that too loud, because Edmonton needs people to think of those as unfortunate salary dumps they were victimized by.

Weight and Guerin were tough. My heart wept. The Oil seemed so close. If only they could of added Nolan, Amonte, Svehla, they would of won for sure. errr. Hey, my heart bleeds, but like SJ, that team didnt have enough of a core to build around, they were trying to build around UFAs. No one won their first cup with a core of UFAs. If they were rich, they would have had the luxury of doing what NYR, Toronto, and in the past Philadelphia do. But that is wrong, and luckily for Edmonton fans, Lowe and company are a lot smarter and braver than I would have been. They boldly took the chance to rebuild. To do it right. And they have a lot of potentials fighting to become their new core. And it looks like a good one. You cant fix things in one summer of UFA signings. It takes several years of developing prospects, finding the right people, and creating a young core that can be built into first time champs before they become UFAs. One of the reasons the cup has value, is that most teams trying, will fail. This is a good thing for a great league of athletic competition.. Not a faairness problem for TV that needs to be corrected in order to maximize revenue.

Edmonton is doing it right. The problem with this CBA, is that no one wants to stand up and say the Weight trade was a tough love decision. Certainly not Oiler management with a million and one of their contractual and lease agreements all set to be renewed at the same time as the CBA. Renewed, im sure hopefully from Edmontons owners position, by a team dangling on the precipice of extinction, desperately requiring any business measure that could help them stay in business. Perhaps a slightly lower arena lease. More favourable concession revenue. Maybe even money from non hockey events. Which of course wont be counted in league revenue because its not hockey related. Lower taxes and perhaps some govt infusion even. Also not likely to be counted.





When the owner had all the revenue tied up in paying off the credit cards used to buy the arena wsa replaced with an owner who paid cash, the same revenue allowed a 33% increase in payroll. Not coming from the onwers pocket. Coming from the money the team generates. Sugar Daddy had nothing to do with it, proper ownership did.

If all owners currently losing money, sold their teams for the best price they could get this year, the new owners would be able to run the league much better than the current owners with an artificial market.

You make some great points. I'll admit, better teams will undoubtedly have better payrolls, so it was foolish of me to imply that championship team payrolls shouldn't be at the top of the league. However, I wasn't saying that owner revenue should be maximized. I was trying to say that if the owners aren't making any money at all, the league is in a very unhealthy state. For all the rhetoric in the world, it's clear that current nhl players are being payed too much. In terms of interest, the nhl is far from a top four sport (just look at the ratings, its more like a number 10 sport). However, the players are being paid top four sport money. To sustain this, the league has had to bleed their hardcore fans dry. The league has already surpassed the point of critical mass, and is begining to lose tremendous amounts of money. Those losses will only increase as fans become dissilussioned by high ticket prices and low quality games. You make a great point about how dumping players can be beneficial (Seattle Mariners anyone?). However, if you want to become a good team, you eventually have to be able to hold on to your players, you can't keep dumping them. As for ottawa's situation, the reason why the new owner doesn't have to pay bank loans was because the team claimed bancrupcy, which I don't think is an acceptable course of action. Also, I'm willing to wager that the senators are still losing money this year.

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11-23-2003, 11:37 AM
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This startling display of largesse by the Oilers this past week... let's break it down. The Oates contract, as somebody mentioned, is $1.95m for the season, but will come to about $1.5m or so because the season is already 1/4 over. The Staios contract extension is an $800k signing bonus paid right now, and upcoming seasons at $1.9m, $2.15m, $2.15m. So in terms of his existing contract, the new contract is an $800k raise this season and next season and a $1m raise in the final seasons. In terms of *new* money (as in, money outside the current salary structure) committed to Staios, $3.6m over the life of the contract.

In terms of increases to the existing salary structure, the two contracts the Oilers signed last week break down to about $2.3 million this season, $800k next season, and $1.0m in the two seasons after. Where did the Oilers get $2.3m to spend this season? It's the money they'd allocated to Mike Comrie. Finding money to keep Steve Staios around for 3 seasons beyond this one is a piece of cake- it's becoming increasingly obvious that the Oilers will not pick up their $4 million option on Tommy Salo. Spending some of that on Steve Staios is a no-brainer.

If you want to go the career-journeyman Steve Staios route, go ahead, but he's become a key player for the Oilers. His ice-time alone is a testament to his importance to the team.
all good points. all agreeing with what i am saying that the Oil as an example, with good business decisions and strategy can do fine under the current model.

i was just tired of all the "sky is falling" people who claim teams like EDM are doomed without a new CBA. The proof, as you described quite well, is clear.

DR

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11-23-2003, 11:41 AM
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I love how people make this suggestion. The NFL by your definition would be a communist system. Well gee isnt that the best run, and most popular sports league in the US? Those darned commies.

Why oh why cant people understand the teams are only in competition on the ice. The league as a whole is the business and the teams are franchises. The goal is not to put the other teams out of business. The teams have to be competitive for the league to be succesful. So yes they should be sharing revenue and keeping players salaries at a reasonable level. Thats not communism thats common sense.
Great post. I don't understand why people keep trying to apply free market rules to the nhl. The nhl is a single entity with a single cba and shared revenue streams (like television). Teams don't compete in the true business sense, as, for the most part, their customer bases are mutally exclusive. Why should the nhl, as a single entity, set up a free market system within itself? As anyone whith business sense knows, internal competition is a recipe for disaster.
That communist comment really angered me. Some people see things in black or white. Either I should aggresively agree with the free market system or I'm a communist? Never once did I say the nhl should discard free agency completely, or that players, regardless of talent, whould all be payed the same. I was simply pointing out how the nhl's current business model was leading to escalating costs, resulting in an unsustainable league.

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11-23-2003, 11:49 AM
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all good points. all agreeing with what i am saying that the Oil as an example, with good business decisions and strategy can do fine under the current model.

i was just tired of all the "sky is falling" people who claim teams like EDM are doomed without a new CBA. The proof, as you described quite well, is clear.

DR
What you fail to realize is that the edmonton oilers have completely banked on the new cba. If significant change does not occur, there will be no team in edmonton. For example, the owners are losing millions of dollars, and recently had a 14 million dollar cash call. You have to keep in mind that the oiler owners, although well to do, are only millionaires, and can not sustain these losses. Also, northlands has allowed the oilers to use the Rexall Place rent free until 2004, with the intention that they will gain their money back after that point. The city has also pumped money into the team, money that is slated to stop coming in when the current cba expires. City hall is currently in a bit of a financial crisis (despite the wealth at the provincial level) and they will not continue this arrangement after 2004.

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11-23-2003, 03:12 PM
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What you fail to realize is that the edmonton oilers have completely banked on the new cba. If significant change does not occur, there will be no team in edmonton. For example, the owners are losing millions of dollars, and recently had a 14 million dollar cash call. You have to keep in mind that the oiler owners, although well to do, are only millionaires, and can not sustain these losses. Also, northlands has allowed the oilers to use the Rexall Place rent free until 2004, with the intention that they will gain their money back after that point. The city has also pumped money into the team, money that is slated to stop coming in when the current cba expires. City hall is currently in a bit of a financial crisis (despite the wealth at the provincial level) and they will not continue this arrangement after 2004.
if they are in financial trouble, they should have not spent the money on Oates and Staios. either they are in trouble and they are stupid or its not as bleak as you think.

so what is it ? another poor business decision by NHL owners ?

DR

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11-23-2003, 03:54 PM
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if they are in financial trouble, they should have not spent the money on Oates and Staios. either they are in trouble and they are stupid or its not as bleak as you think.

so what is it ? another poor business decision by NHL owners ?

DR
The money spent on oates and the signing bonus for staios came from a one time only event, the heritage classic. The oilers were able to spend on players now, but they won't be able to spend in the future. And if you played closer attention, you would have notcied that my main point was that the oilers have current revenue streams that won't exist after this season (eg. money from the city). So they might be alright now, but problems will arise if a new cba isn't put into place.

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11-23-2003, 03:59 PM
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Originally Posted by DementedReality
if they are in financial trouble, they should have not spent the money on Oates and Staios. either they are in trouble and they are stupid or its not as bleak as you think.

so what is it ? another poor business decision by NHL owners ?

DR
The Staios signing can be argued, but the Oates signing was to improve the team to try to get to the playoffs, where more money is made to keep the team afloat.

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11-23-2003, 04:24 PM
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The Staios signing can be argued, but the Oates signing was to improve the team to try to get to the playoffs, where more money is made to keep the team afloat.
and..... my point remains.

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11-23-2003, 04:40 PM
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and..... my point remains.

dr
Your point (well, one of them) was that they shouldn't have made the signings. If they go on to the playoffs with Oates, then mission accomplished, and they should have made the signing.

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11-23-2003, 04:47 PM
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Your point (well, one of them) was that they shouldn't have made the signings. If they go on to the playoffs with Oates, then mission accomplished, and they should have made the signing.
no my point was that they Oil were able to afford to make this business decision within the framework of hte current CBA.

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11-23-2003, 05:16 PM
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no my point was that they Oil were able to afford to make this business decision within the framework of hte current CBA.

dr

They wouldn't have been able to afford the deal last year, and they wouldn't be able to afford it next year. It was a special one time occurance and says nothing about general trends. And how does the oiler's making a modest contract signing enforce the belief that the current cba works? I think the sea of red ink the league is in right now is far better evidence to the contrary.

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