... and your nominees are ...

[Wildman]

I agree on this idea as well.

Matt,

I had suggested this in prior years but was never implemented. I also had the bank should be reset at $900M which is what we started with. If the 30 teams total is below than we add and if the total is above than we deduct.

 

[Toronto_AGM_Adil]

did some math guys, here's the result of summing up the finance pages...

[B]For 05-06:[/B]
Team	EOY Funds	Payroll	Game Revenue	Expenses
Avalanche	 $9,177,659 	 $13,085,000 	 $499,326 	 $167,931 
Blackhawks	 $13,628,031 	 $36,831,250 	 $926,785 	 $466,869 
Blues	 $51,583,628 	 $47,045,625 	 $1,219,770 	 $579,785 
Bruins	 $25,795,242 	 $42,806,000 	 $1,125,305 	 $531,867 
Canadiens	 $10,086,776 	 $29,740,820 	 $887,346 	 $374,265 
Canucks	 $23,498,315 	 $29,904,224 	 $637,248 	 $377,334 
Capitals	 $29,781,281 	 $32,937,575 	 $831,449 	 $402,611 
Coyotes	 $6,963,229 	 $15,052,120 	 $538,394 	 $191,005 
Devils	 $15,515,557 	 $43,037,500 	 $872,568 	 $541,492 
Ducks	 $14,354,786 	 $29,556,825 	 $713,843 	 $376,431 
Flames	 $7,787,659 	 $25,268,125 	 $682,030 	 $327,613 
Flyers	 $4,238,234 	 $36,213,935 	 $774,559 	 $452,765 
Hurricanes	 $16,044,841 	 $27,218,250 	 $604,629 	 $342,822 
Islanders	 $19,932,247 	 $41,450,000 	 $994,729 	 $516,500 
Jackets	 $4,460,886 	 $39,590,625 	 $841,816 	 $490,706 
Kings	 $50,936,746 	 $20,446,875 	 $774,869 	 $262,664 
Leafs	 $14,835,688 	 $13,405,125 	 $573,168 	 $180,846 
Lightning	 $15,963,002 	 $29,388,250 	 $692,426 	 $361,152 
Oilers	 $36,576,582 	 $32,600,000 	 $773,040 	 $408,099 
Panthers	 $12,277,971 	 $26,097,180 	 $675,446 	 $323,839 
Penguins	 $15,462,129 	 $16,880,936 	 $559,566 	 $214,060 
Predators	 $36,612,156 	 $13,937,500 	 $527,980 	 $180,591 
Rangers	 $9,683,849 	 $20,126,250 	 $587,531 	 $255,180 
Red	 $43,225,118 	 $29,106,250 	 $806,743 	 $364,723 
Sabres	 $24,807,831 	 $17,951,250 	 $760,449 	 $228,811 
Senators	 $13,010,140 	 $36,320,000 	 $1,050,122 	 $451,294 
Sharks	 $14,082,525 	 $34,677,500 	 $1,065,206 	 $437,920 
Stars	 $12,522,782 	 $19,745,000 	 $597,885 	 $242,659 
Thrashers	 $4,909,146 	 $22,133,195 	 $591,545 	 $277,368 
Wild	 $8,625,079 	 $35,991,250 	 $771,713 	 $447,069 
				
[B]Totals 	 $566,379,115 	 $858,544,435 	 $22,957,486	 $10,776,271 [/B]

[B] For 06/07:[/B]
Team	EOY Funds	Payroll	Game Revenue	Expenses
Avalanche	 $1,552,068 	 $45,046,250 	 $786,887 	 $560,498 
Blackhawks	 $3,160,472 	 $38,350,000 	 $707,897 	 $481,232 
Blues	 $61,810,497 	 $40,321,875 	 $987,101 	 $497,248 
Bruins	 $21,695,855 	 $40,965,000 	 $734,233 	 $506,494 
Canadiens	 $(751,528)	 $34,840,000 	 $648,433 	 $436,479 
Canucks	 $12,675,335 	 $39,397,040 	 $631,331 	 $496,025 
Capitals	 $29,286,344 	 $30,446,009 	 $571,661 	 $372,805 
Coyotes	 $5,522,924 	 $28,327,500 	 $537,153 	 $371,756 
Devils	 $16,067,825 	 $37,590,000 	 $783,628 	 $475,216 
Ducks	 $10,092,020 	 $32,661,250 	 $603,847 	 $414,363 
Flames	 $656,301 	 $36,211,250 	 $663,977 	 $457,308 
Flyers	 $13,206,266 	 $46,850,000 	 $831,271 	 $578,860 
Hurricanes	 $8,200,203 	 $46,463,750 	 $743,610 	 $577,016 
Islanders	 $23,089,788 	 $21,937,500 	 $567,702 	 $279,512 
Jackets	 $26,395,136 	 $25,868,125 	 $675,405 	 $323,447 
Kings	 $45,231,193 	 $25,753,125 	 $490,748 	 $326,922 
Leafs	 $7,356,761 	 $39,611,500 	 $795,206 	 $499,439 
Lightning	 $16,589,446 	 $41,358,750 	 $668,517 	 $510,345 
Oilers	 $36,127,488 	 $36,650,000 	 $657,532 	 $455,445 
Panthers	 $5,176,530 	 $24,205,930 	 $509,676 	 $307,777 
Penguins	 $20,503,193 	 $23,373,928 	 $699,975 	 $294,133 
Predators	 $34,289,310 	 $20,208,750 	 $470,128 	 $254,857 
Rangers	 $3,950,675 	 $31,717,500 	 $674,992 	 $401,409 
Red	 $37,608,874 	 $50,506,250 	 $795,588 	 $629,602 
Sabres	 $23,582,659 	 $40,906,250 	 $818,114 	 $506,655 
Senators	 $1,563,525 	 $36,593,750 	 $627,910 	 $457,308 
Sharks	 $25,469,830 	 $39,362,500 	 $821,386 	 $489,064 
Stars	 $2,041,706 	 $39,242,500 	 $675,311 	 $482,341 
Thrashers	 $(138,076)	 $19,875,000 	 $466,120 	 $259,482 
Wild	 $12,479,830 	 $28,396,250 	 $537,629 	 $353,235 

[B]Totals	 $504,492,450 	 $1,043,037,532 	 $20,182,968 	 $13,056,273 [/B]

So, Matt you are right, the league did loose money form 05/06 to 06/07, about 62M... incedentily, payrolls went up by 200M as well in that time period.

 

[MatthewFlames]

Matt,

I had suggested this in prior years but was never implemented. I also had the bank should be reset at $900M which is what we started with. If the 30 teams total is below than we add and if the total is above than we deduct.

Well, if at the end of 06/07 the league had a value of 504 million and we started at 900 million then we've lost quite a bit of value - almost 400 million, which is almost 45 percent.

Thats around 57 million per season. Which almost matches the value from the 05/06 to 06/07 number from Adil's calculations (62 million.)

I dont think we want to go back to the 900 million number though - that's 13 million per team. Is that too much? I would say yes, even if it was a one time correction. If we do agree to do that then we should do it over a couple of seasons.

One thing we don't want to do is alienate those long term GM's who have been financially responsible and built good solid financial situations with there team.

 

[MatthewFlames]

maybe we can align HFNHL payroll's with NHL payrolls...

Well, I think that the cap should do that naturally... although we're a year behind.

Keep in mind, every year the NHL grows, we need to show revenue growth as well...

Well this is one area that I pushed for in the past but I think I was wrong. We're never going to duplicate the NHL financial system for dozens of reasons - so we need to just develop one that works for us and is stable and promotes competition, rewards financial responsibility and punishes any irresponsibility - survival of the fittest so to speak - because that will keep the league competitive and challenging.

 

[SPG]

Well, I think that the cap should do that naturally... although we're a year behind.



Well this is one area that I pushed for in the past but I think I was wrong. We're never going to duplicate the NHL financial system for dozens of reasons - so we need to just develop one that works for us and is stable and promotes competition, rewards financial responsibility and punishes any irresponsibility - survival of the fittest so to speak - because that will keep the league competitive and challenging.

The addition of the "TV Revenue" money last year somewhat accomplishes this (what Adil was referring to in his last post). As the NHL grows, the NHL Salary Cap goes up, and so has ours. The TV Revenue number was 10% of the Salary Cap. Certainly not a flawless system, but it helps.

 

[MatthewFlames]

So, Matt you are right, the league did loose money form 05/06 to 06/07, about 62M... incedentily, payrolls went up by 200M as well in that time period.

And right there in a nutshell is why we are in the situation we are in. A 200M payroll jump in one season. It's crazy (and I know I'm partly to blame... see Iginlas 8 mil )...

It's funny because we put the cap in place to help control the salary situation but in fact what happened was that everyone just suddenly thought they could spend 40 million a year on players (including me) without really doing the math, so what's happened is that we've made things worse (in the short term for some teams.)

And don't worry - if we have another TV revenue bump or correction - and we go to a 50 million dollar cap - we're gonna see it again... Yikes...

 

[MatthewFlames]

Another interesting figure:

$504,492,450 $1,043,037,532

Our accounts payable to the players is double the league assets. Let's hope the fans keep coming to games...

 

[Wildman]

Well, if at the end of 06/07 the league had a value of 504 million and we started at 900 million then we've lost quite a bit of value - almost 400 million, which is almost 45 percent.

Thats around 57 million per season. Which almost matches the value from the 05/06 to 06/07 number from Adil's calculations (62 million.)

I dont think we want to go back to the 900 million number though - that's 13 million per team. Is that too much? I would say yes, even if it was a one time correction. If we do agree to do that then we should do it over a couple of seasons.

One thing we don't want to do is alienate those long term GM's who have been financially responsible and built good solid financial situations with there team.

If we go to $50M cap next season than $10M would be the injection since we projected our revenue to be $40M. So what we are left with is $3M additional to come back to $900M for the league.

This formula would also take care of the financially responsible team as the more they have the less will be distributed to the rest of the league.

For example, if St Louis wins the Stanley Cup and his bank balances reaches $100M than there will be less for distribution. But we all know that this will never happen

 

[MatthewFlames]

If we go to $50M cap next season than $10M would be the injection since we projected our revenue to be $40M. So what we are left with is $3M additional to come back to $900M for the league.

This formula would also take care of the financially responsible team as the more they have the less will be distributed to the rest of the league.

For example, if St Louis wins the Stanley Cup and his bank balances reaches $100M than there will be less for distribution. But we all know that this will never happen

Would it be 10 million, or 10% of the cap and therefore 5 million?

And I wouldn't count out those Blues... Whatever system we do put in place shouldn't punish teams like that... so, I don't think we should never get into any re-balancing, where we deduct from rich teams and give to poor teams. As you can tell, I'm a capitalist! Now, if some major magazine would only buy my article on how it's capitalism and not democracy that will save the world.

 

[Toronto_AGM_Adil]

And right there in a nutshell is why we are in the situation we are in. A 200M payroll jump in one season. It's crazy (and I know I'm partly to blame... see Iginlas 8 mil )...

It's funny because we put the cap in place to help control the salary situation but in fact what happened was that everyone just suddenly thought they could spend 40 million a year on players (including me) without really doing the math, so what's happened is that we've made things worse (in the short term for some teams.)

You know it's not just the GM's that are at fault with the payroll increase... keep in mind that salaries are somewhat comparable to the NHL salaries. NHL salaries have been going up as well, and most NHL teams are very close to the salary cap.

I think abandoning the Sim's financial system and using the salary cap as the finiancial part of the game would be a huge mistake... I'm sure everyone agrees with this. However, unless we decide to eliminate parity between NHL salaries and HFNHL salaries, payrolls will continue to increase and the league total avialable funds will decrease. If we do decide to keep parity, then revenues will have to adjusted as Hasnain has suggested.

 

[Wildman]

According the previous Admin group. They calculated that teams at the higher end can achieve $40M in revenues and as a result they distributed $4M the previous year to make up for the cap increase in the NHL to $44M. Now the new cap is $50M so we will be short by $10M as our salary are negotiated based on NHL salary.

 

[Hossa]

Okay, I like the idea of dynamically adjusting revenues based on the year-end result as compared to the previous years. My only suggestion is rather then adjust revenue based on the previous HFNHL season, maybe we should look to adjust revenue as it relates to the NHL... I know you can't do that interms of profit, however you could do it in terms of payroll expenses... maybe we can align HFNHL payroll's with NHL payrolls...

Keep in mind, every year the NHL grows, we need to show revenue growth as well...

I agree with this as well. If you're going to tie contracts for free agents to NHL contracts, our revenues need to be tied to NHL revenues as well. Our cap keeps going up to match the NHL cap, but how do we ensure revenues rise as well?

 

[Toronto_AGM_Adil]

I agree with this as well. If you're going to tie contracts for free agents to NHL contracts, our revenues need to be tied to NHL revenues as well. Our cap keeps going up to match the NHL cap, but how do we ensure revenues rise as well?

It would be nice to tie in the $10M lump sum (or whatever we decide) into the endorsement structure today... not sure how you do it so that the low end teams still have a good opportunity to make that money but it would be better then just giving it away and we could use the 10M to promote good GM activity... anyone have any ideas?

 

[The old geezer]

I can make 2 + 2 = 5 for an argument too. These numbers are very misleading. The game expemses and payroll numbers on financials never looks right as it only represents what a team's payroll was when the last game was played it does not reflect true expenses over the year and the revenue in this equation conviently ignores endorsement and playoff revenue.

Look for a completely different proposal(s) for financial restructuring from me either later today or over the weekened that doesn't involve throwing more money at teams.

One of these days I'm going to cut the ties and remember I'm not Admin anymore

 

[Brock]

What's the latest on this and the voting?

 

[SirSamofHouseBennett]

... Now, if some major magazine would only buy my article on how it's capitalism and not democracy that will save the world.

id like to read it!

 

[MatthewFlames]

id like to read it!

Actually - I tried The Economist - but they told me they had a similar article already lined up - although when I just read it in the Jan 26th issue it was more about how the world is better off as globalism spreads and how the poor are especially better off because of it. Some stats in it though are pretty memorable. Not a direct quote but in the early 70's over 25% of the world lived on a dollar a day, and today its less than 10% living on the same amount despite a huge population growth in the world in that same time.

It is The Economist though - which obviously has a very "developed world" point of view.

 

[Dr.Sens(e)]

For example, if St Louis wins the Stanley Cup and his bank balances reaches $100M than there will be less for distribution. But we all know that this will never happen

I sense some positive Karma out of this.

Aside from additional steps taken to add more cash into the league, i think an important thing to do going forward is to let the poor teams die - but when we do and we replace the GM, we top up the bank reserves to $30 million under the assumption the new owner has injected this cash. This will be a natural form of cash infusion.

For the quality GM's who end up getting fired, they can certainly rejoin the league wiht a different team through the application process. Certainly some of the GM's on teh verge of the chopping block right now are excellent and I for one would want to see them stay, even if it means a change of address.

But really, we need some precedent for fiscal responsibility. A negative cash balance means the team's players aren't getting paid. I suppose teams that could demonstrate they have some solid receivables based on endorsements already met or the likelihood of a playoff run could get some flexibility, but short of that, we can't keep allowing teams to dip below zero $.

Plus, this would make Darwin proud.

 

[SPG]

I sense some positive Karma out of this.

Aside from additional steps taken to add more cash into the league, i think an important thing to do going forward is to let the poor teams die - but when we do and we replace the GM, we top up the bank reserves to $30 million under the assumption the new owner has injected this cash. This will be a natural form of cash infusion.

For the quality GM's who end up getting fired, they can certainly rejoin the league wiht a different team through the application process. Certainly some of the GM's on teh verge of the chopping block right now are excellent and I for one would want to see them stay, even if it means a change of address.

But really, we need some precedent for fiscal responsibility. A negative cash balance means the team's players aren't getting paid. I suppose teams that could demonstrate they have some solid receivables based on endorsements already met or the likelihood of a playoff run could get some flexibility, but short of that, we can't keep allowing teams to dip below zero $.

Plus, this would make Darwin proud.

Agree completely. That's something I have been pushing for years.

 

[Toronto_AGM_Adil]

I sense some positive Karma out of this.

Aside from additional steps taken to add more cash into the league, i think an important thing to do going forward is to let the poor teams die - but when we do and we replace the GM, we top up the bank reserves to $30 million under the assumption the new owner has injected this cash. This will be a natural form of cash infusion.

For the quality GM's who end up getting fired, they can certainly rejoin the league wiht a different team through the application process. Certainly some of the GM's on teh verge of the chopping block right now are excellent and I for one would want to see them stay, even if it means a change of address.

But really, we need some precedent for fiscal responsibility. A negative cash balance means the team's players aren't getting paid. I suppose teams that could demonstrate they have some solid receivables based on endorsements already met or the likelihood of a playoff run could get some flexibility, but short of that, we can't keep allowing teams to dip below zero $.

Plus, this would make Darwin proud.

I for one would never argue against Darwin... one thing though regarding the "survival of the fittest" method is the definition of "fit" in this case is restricted to financial solvency which is only one of the reasons why a GM in the NHL gets fired. There are other reason's such as poor track records or lack of progress...

 

[SirSamofHouseBennett]

Agree completely. That's something I have been pushing for years.

although how is this fair to those GM's who inherited teams and didnt get a top up?

 

[Chuzwazza]

I'm in favour of giving existing Gm's who have taken over poor financial teams in the last year or two a chance to make a claim for cash (maybe up to 10million). I know there are some who have succeeded (Cohen had to slash a 70M payroll lose most of his drawcard players and was almost bankrupt but managed to keep the team in the black, but he did have that huge playoff run to help).

I've been pushing for giving new GM's new bankrolls for years, and id be happy to not penalise those that have taken over teams in the last year or so either if they can make a good argument. Maybe not to 30M but a 5-10M increase would help a lot of the poorer clubs who's GM's had little to do with their financial struggles.

 

[Dr.Sens(e)]

although how is this fair to those GM's who inherited teams and didnt get a top up?

It's not.

But it just makes sense, and not doing it because others didn't get the benefit in past years isn't really a good reason not to fix the rule.

For those GM's who did take over a team in brutal financial shape in past years, they have been given a lot of slack when it comes to managing their finances given it wasn't their bed per se. In the above scenario, the slack would basically be the $30 million. Even $20 million would be ok.

 

[Toronto_AGM_Adil]

It's not.

But it just makes sense, and not doing it because others didn't get the benefit in past years isn't really a good reason not to fix the rule.

For those GM's who did take over a team in brutal financial shape in past years, they have been given a lot of slack when it comes to managing their finances given it wasn't their bed per se. In the above scenario, the slack would basically be the $30 million. Even $20 million would be ok.

When we took over the Leafs it would have been nice to have that kind of cash infusion but I think we managed to cope without it... that being said I wouldn't resent another team getting that kind of boost just because we didn't.

 

[SPG]

although how is this fair to those GM's who inherited teams and didnt get a top up?

Like Nick said: unfortunately, it's really not... but because it's been a problem in the past doesn't mean we shouldn't be addressing it going forward.