2024 Salary Cap and Beyond

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Don’t know. I saw something about the Reds making $60 million and they were projected to lose 20-50% of that. Reds have twice as many games. So if we are in a similar situation as the Reds with half the games, we could lose $6-15 million. Canadian teams wouldn’t be impacted. Some American teams (Rangers) own their own cable network so they aren’t directly impacted.

I would guess on the lower side of that, probably about a quarter as much as the Reds will lose (and of course we don't how much they will lose yet). I don't think our local tv money was ever that big. Hockey in general is much more gate driven, close to half of total revenue, while baseball is about a quarter.

I just looked up the Reds tv ratings and they are very high, even for baseball. 4.74% of the market. That's going to be more than double the Jackets ratings, which I remember being around a 2? So then double the number of games and if you make a simplifying assumption of even dollars for eyeballs, then the Jackets would have about 21% of the local tv revenue. The Jackets losing $2.6m-$6.3m in revenue sounds like a lot but it's small compared to the revenue they are gaining in other areas as NHL revenues boom.
 
I would guess on the lower side of that, probably about a quarter as much as the Reds will lose (and of course we don't how much they will lose yet). I don't think our local tv money was ever that big. Hockey in general is much more gate driven, close to half of total revenue, while baseball is about a quarter.

I just looked up the Reds tv ratings and they are very high, even for baseball. 4.74% of the market. That's going to be more than double the Jackets ratings, which I remember being around a 2? So then double the number of games and if you make a simplifying assumption of even dollars for eyeballs, then the Jackets would have about 21% of the local tv revenue. The Jackets losing $2.6m-$6.3m in revenue sounds like a lot but it's small compared to the revenue they are gaining in other areas as NHL revenues boom.

I wonder if we could ballpark the budget of this team as a group. It would be interesting. We have transparency into the main cost (payroll). The arena is owned by Franklin County Convention Facilities Authority so they should have some documentation. TV contracts are usually somewhat out there.
 
I wonder if we could ballpark the budget of this team as a group. It would be interesting. We have transparency into the main cost (payroll). The arena is owned by Franklin County Convention Facilities Authority so they should have some documentation. TV contracts are usually somewhat out there.
It's surprisingly hush-hush on the regional tv contract front. The most recent info was on the SJS contract and it looked to be in the $20M range annually, but that info was 3-4 years ago. My take would be that the CBJ rights are less than SJS rights given the size of the markets (not the rating percentage). I also am aware per the bankruptcy filing that a 20% reduction in rights fees was part of the deal for FSO/Bally's/Fanduel to continue to broadcast CBJ games through the season. I would imagine that the numbers might be available amidst the various bankruptcy filings (those would be "executory contracts" that the debtor must either reject or assume as part of the ongoing bankruptcy reorganization - and the debtor negotiated an assumption of the contract but at a reduced price). I'm not going to do a deep dive, but my guess is that the CBJ rights fee for regional broadcast after all is said and done is in the $10-15M range. Not insignificant but even if the revenue from the FanDuel assumption of the Bally's contract goes away, then some other party will still broadcast the games, probably at 50-70% of the prior rights fee. So CBJ loses some revenue, maybe $5-7M?

Here's the thing - if CBJ make the PO's, every home game is worth roughly $2M in ticket revenue (18,500 seats x $108 average seat price (over the entire arena), so there is $4M guaranteed per series (minimum 2 home games), without factoring concessions, gear and parking. Players do not get paid more $ for making a playoff run (except for a few with bonus incentives).

If you have a winning team out of the gate and average attendance increases at 1,000 per game (last I looked attendance was just north of 16,000 per game factoring out the 'Shoe game, so 17,000+ per game), and using a lower average game ticket price for regular season games of $80, that would create another $3,280,000 (41 games x $80 x 1,000) of incremental revenue with little incremental cost. Again, without factoring in concessions, gear and parking. And if you have a winning team, viewership goes up, and the next set of rights fees goes up (whether TV, streaming or otherwise).

If CBJ was projected to be in rebuild mode in the short- and mid-term, the regional tv rights fees might be a problem for ownership, as there would be no PO ticket or ancillary revenue and presumably no uptick in attendance to offset a loss in rights fees. But then CBJ would not be looking to spend to the cap or anywhere close to it in the beginning of said rebuild. Small market teams that are in the hunt can afford to spend closer to the cap because of the additional revenue a good team produces. When the smaller market team sucks, they usually don't spend up to the cap. Only big market teams with endless cash flow (higher ticket prices, higher attendance even in down years, higher rights fees, higher franchise values, richer owners) tend to spend up to the cap each and every year....

In short, it will work out. There may be a down year as early as next year (hope not and not expecting that). CBJ will spend even with TML when the timing is right, less than TML when its not right. Thus CBJ lows will tend to be lower than TML. But there is a cap (and a floor) in place. Otherwise small market teams would get spent out of contention - which is what you see in MLB. Money doesn't guarantee success (look at this year's CBJ and NYR), but I admit it doesn't hurt.
 
It's surprisingly hush-hush on the regional tv contract front. The most recent info was on the SJS contract and it looked to be in the $20M range annually, but that info was 3-4 years ago. My take would be that the CBJ rights are less than SJS rights given the size of the markets (not the rating percentage). I also am aware per the bankruptcy filing that a 20% reduction in rights fees was part of the deal for FSO/Bally's/Fanduel to continue to broadcast CBJ games through the season. I would imagine that the numbers might be available amidst the various bankruptcy filings (those would be "executory contracts" that the debtor must either reject or assume as part of the ongoing bankruptcy reorganization - and the debtor negotiated an assumption of the contract but at a reduced price). I'm not going to do a deep dive, but my guess is that the CBJ rights fee for regional broadcast after all is said and done is in the $10-15M range. Not insignificant but even if the revenue from the FanDuel assumption of the Bally's contract goes away, then some other party will still broadcast the games, probably at 50-70% of the prior rights fee. So CBJ loses some revenue, maybe $5-7M?

Here's the thing - if CBJ make the PO's, every home game is worth roughly $2M in ticket revenue (18,500 seats x $108 average seat price (over the entire arena), so there is $4M guaranteed per series (minimum 2 home games), without factoring concessions, gear and parking. Players do not get paid more $ for making a playoff run (except for a few with bonus incentives).

If you have a winning team out of the gate and average attendance increases at 1,000 per game (last I looked attendance was just north of 16,000 per game factoring out the 'Shoe game, so 17,000+ per game), and using a lower average game ticket price for regular season games of $80, that would create another $3,280,000 (41 games x $80 x 1,000) of incremental revenue with little incremental cost. Again, without factoring in concessions, gear and parking. And if you have a winning team, viewership goes up, and the next set of rights fees goes up (whether TV, streaming or otherwise).

If CBJ was projected to be in rebuild mode in the short- and mid-term, the regional tv rights fees might be a problem for ownership, as there would be no PO ticket or ancillary revenue and presumably no uptick in attendance to offset a loss in rights fees. But then CBJ would not be looking to spend to the cap or anywhere close to it in the beginning of said rebuild. Small market teams that are in the hunt can afford to spend closer to the cap because of the additional revenue a good team produces. When the smaller market team sucks, they usually don't spend up to the cap. Only big market teams with endless cash flow (higher ticket prices, higher attendance even in down years, higher rights fees, higher franchise values, richer owners) tend to spend up to the cap each and every year....

In short, it will work out. There may be a down year as early as next year (hope not and not expecting that). CBJ will spend even with TML when the timing is right, less than TML when its not right. Thus CBJ lows will tend to be lower than TML. But there is a cap (and a floor) in place. Otherwise small market teams would get spent out of contention - which is what you see in MLB. Money doesn't guarantee success (look at this year's CBJ and NYR), but I admit it doesn't hurt.
I recall Jay Feaster when he was the GM of Tampa saying on Sirius that teams needed to make the playoffs in order to finish in the black
Granted that was 15 or so years ago but I remember thinking that was probably pretty accurate
 

Item No. 1: Let it grow​

When general manager Don Waddell was hired by the Blue Jackets last May, there were three significant young players who needed new contracts. Center Cole Sillinger and wingers Kent Johnson and Kirill Marchenko — that’s two first-round picks and a second-round pick, respectively — were all restricted free agents.
Waddell didn’t know these players other than what he could see on a stat sheet or what he’d gleaned during scouting trips or through scouting reports with his previous club, the Carolina Hurricanes. It was made clear to agents that long-term deals were out of the question.

Now, almost a year later, Waddell has seen the Blue Jackets’ nucleus of young talent up close. He’s seen how they operate on the ice and off the ice, how they interact with teammates and how they perform at their worst and their best, in good times and tough times.

How the Blue Jackets handle contract negotiations with their young players may begin to look different as soon as this summer.

Over the course of 24 seasons, the list of Blue Jackets draft picks who signed contracts that carry them from their entry-level deals into unrestricted free agency is surprisingly short: Rick Nash and Alexander Wennberg.

There are two players — Seth Jones and Brandon Saad — who were acquired in trades while in their ELC years and were signed to deals that carried them to UFA status, but this organization has always preferred “bridge” deals that expire while the player remains an RFA.

Waddell isn’t going to start handing out eight-year contracts like parade candy, but he will not hesitate, he said, going long-term — including the NHL’s longest term, eight years — with players he sees as foundational parts of the organization.

“Every individual is different,” Waddell said. “But, 100 percent, if we’ve got a 21- or 22-year-old guy, and you can get him for eight years, you’re getting him through the prime of his career, and you don’t have to worry about it again until they’re 30 or 31 years old.

“It’s all projection. You’re not going to get one of these young guys for $4 million a year for eight years, that’s for sure. You’re going to pay more off the start and hope that by the end of the contract it evens out for both sides.”

In Carolina, Waddell signed Andrei Svechnikov to an eight-year contract in 2021 after his ELC expired. Last summer, before he joined the Blue Jackets, he laid the ground work for Seth Jarvis’ eight-year extension with the Hurricanes that was signed in August.

“The challenge, obviously, is finding that (salary and term) number that both sides can agree on,” Waddell said. “But (in Carolina), we determined that we wanted to lock those guys (and Sebastian Aho) up for eight years. I’m not afraid of doing it, that’s for sure.”
Waddell figures to have a busy summer on all fronts, but there are contracts with some of the Blue Jackets’ top young players that could be revealing.

Dmitri Voronkov is a restricted free agent this summer. Adam Fantilli, Cole Sillinger and Yegor Chinakhov won’t be RFAs until after next season, but they’re eligible to sign extensions when the NHL’s new year begins on July 1.

Waddell was certainly intrigued by the Blue Jackets’ young talent when he started interviewing with the team after the Hurricanes were bounced from the playoffs after last season.

“Our first meeting, I was asking them, ‘Where are we at with this roster?'” Waddell said. “Are we rebuilding? Retooling? I sure didn’t think we needed to rebuild, and that this point in my career, I wasn’t looking for that, either.

“This is a close group of players. They’re very much a team. I think if we do the right thing from a contract standpoint that we’ll be able to sign the guys long-term that we want to sign long-term. It doesn’t make sense for all the guys to get one, but there are a bunch of guys here I would have no trouble locking up long term.”

The Blue Jackets are hoping to make significant changes on the blue line for next season, and there could be changes among the goaltenders, too. (More on that in the coming weeks.)
But the forward group is now in the hands of the Blue Jackets’ young players. Three of those players signed deals last summer, with Waddell new on the job.

Marchenko signed a three-year deal worth $3.85 million per season. Sillinger signed a two-year deal worth $2.25 per season. Kent Johnson signed a three-year deal worth $1.8 million. All three of those deals look club-friendly after the seasons those players have had.

The next wave of contracts will hit this summer.

“We have a nucleus of young guys that we just have to keep together,” Waddell said. “The key this summer is … it’s not a heavy free-agent list, as you know, but we have to add the right guys around the edges here.”
 
Most interesting part of the above article IMO:

The Blue Jackets are hoping to make significant changes on the blue line for next season, and there could be changes among the goaltenders, too. (More on that in the coming weeks.)
This doesn’t bode well for Provorov or Fabbro staying in my opinion. And Elvis/tarasov/greaves might not be the goalies either.
 
Most interesting part of the above article IMO:


This doesn’t bode well for Provorov or Fabbro staying in my opinion. And Elvis/tarasov/greaves might not be the goalies either.


Waddell needs to sit down with the Russians and tell them to start a full court press on Gavrikov, pay him and do whatever necessary to get him to come back to Columbus.
 

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