Speculation: Brian Burke: Cap might be $40 million next season

[Fogelhund]

All your figures seem competent, but that's not how billionaire owners operate. They also use projections, not just a simple loss of revenue for 3-4 months of the season. I'll say it again though. It doesn't take much for these owners to cry poor and start cutting the fat.

Just look at OTT,AZ, FLA. They do a heck of a lot of budgeting and frugal business. That was long before this Pandemic.

Of course, when forward looking projections are made, they could be different than actual revenues from this year. That being said, the Revenues and Salary Caps are actuals, not projections... so whatever projections are made, are pretty irrelevant, unless they propose changes to the formula, and CBA... and good luck getting the PA to agree to that, with lowering the Cap substantially in mind.

 

[Beaumaris]

Does that mean the players are gonna have to have a roll back in their salary? That would be brutal for them.

Lol, tongue in cheek I’m guessing.

 

[Mickey Marner]

NHL Revenue in 2018/19 - 5.08 Billion Salary Cap $81.5 Billion
Expected Salary Cap for 2020/21 was between 84 to 88.2 Billion, according to Daly... used the average, about $86 Billion, to extrapolate out, expected rise in Revenues. About 5.5%

So... expected revenues rise was about 5.5% is about 5.36 Billion in revenues, that the league was on pace to make, before the virus.

Approx 1399 games in the season, 1312 in Regular season, and on average 5.82 games per playoff series, with 15 series.... 87 games... 1312+ 87 = 1399

195 games weren't played, plus 87 playoff games... .. so 20% of the season was lost... so you should surmise, that only 20% of revenues lost...

But, you could argue the playoffs are worth more, and I"m not sure how much more, but let's just go with double value of regular season game....

So, 1312 regular season + 87 games times two... is. 1486 games. 195 RS games + 87 x 2 then divided by 1486 games value... and it's 24%...

There is no way that 50% of league revenue are gone for the season, so there is no probability that the players would agree to a 50% cut.... The lost revenues are somewhere in the 20-24% in all probability.
But, keep in mind the revenue was already going up... so if we go back to the expected revenue of 5.36 Billion, and substract either 20 or 24% from it... you come up with $4.288 Billion and $4.07 Billion,,

So that's a drop of 15.6% to 19.9% from last years revenues. Where Burke would come up with 50% is of pure fantasy.

What the league, and NHLPA decides to do, is to be determined, but it's probably prudent to keep the cap as is, with a much higher escrow.

NHL is 1271 regular season games with 31 teams. 1312 once Seattle joins.

 

[BruinsBtn]

I think what they will end up doing is leaving the 'cap' at what it is now but that will be a fantasy. The real dollars will reflect a haircut last year and whatever comes out this year. Escrow will be huge.

Either that or the owners say 'ok, we'll leave the cap where it is and we'll make it up on the backend'. They'll extend the CBA for 10 years and it will include zero cap increases for the entire length of it. The PA would be selling out future players but that's often what unions do.

At the end of the day, I think fans here are way offside with stuff like compliance buyouts or owners taking all the risk here. These are some of the best businessmen in the world, they know the stands might be empty next year. They're not in this to lose money.

 

[Mess]

The cap doesnt have to be directly tied to revenue as long as both sides agree. Why lots of journalists have been speculating that theyd likely just keep the cap the same for next season to avoid complications

The whole idea of HHR (Hockey Related Revenue) and 50/50 spit of NHL to NHLPA per CBA of profit and loss is shared equally.

If you keep player salaries the same and the cap the same based on those contracts similar to last year, and then because of the virus and massive losses you're pilling all the loss of revenue on the NHL owners while the players take none of that..

Not a chance the NHL owners are taking 100% of the hit, and the players 0% when you're in a 50% equal partnership due to virus, particularly if you view the owners as Employers and the players as Employees. IMO

The NHL owners even have set up a current ~ 15% player Escrow system in CBA, where owners can legally hold back and claw back $$ from players salaries to make themselves whole and balance the 50/50 split of profit/loss when actual hockey revenue is calculated post season, verses projected revenue (ie Salary Cap) best guesstimates at start of year, when the cap is set for the new year.

Similarly in real life if you and I were 50/50 partners in a business and the Coronavirus shut us down, would you expect only 1 of us to take the full hit for the business losses, while the other equal partner remained unaffected?

 

[JT AM da real deal]

NHL is 1271 regular season games with 31 teams. 1312 once Seattle joins.

As per TSN interview with Bettman TV media deals worth around US 400-500M per season so less than 10% of overall league revenue ... confirmation it is a gate driven league with most $$$ coming from Canada supporting weak mrket US teams

 

[TruthSpitter]

People not thinking the cap will take a 40-50% hit

This is Great Depression 2.

In The Great Depression, people were eating family doggo to stay alive.

40 million for a sports game will be a godsend

 

[Wafflewhipper]

Glad to see all the CEO’s in this thread. I’ll wait and see what numbers come out haha. At a glance i think it might be close to 25% profits down the drain if they can only play game with fans 6 feet apart in arenas in say june.

I can’t even fathom the accounting it will take to figure this mess out for the Nhl through this. It can’t all be on the players to take a giant hit. Spreading the losses over a 2 or three year period maybe when they get this hashed out.

They can’t and won’t just simply strip away salaries in a foulest swoop. They’ll work together on it and cap will be adjusted to the hit that they all take as a league.

But wow they are going to lose a big pile of money

 

[Cor]

No it won’t.

See

 

[Wafflewhipper]

See

I was thinking they spread it out over years also. The look of a fight amongst all involved wouldn’t go over great. Christ we don’t even know how far reaching the effects this has on the North American household is going to be from one day to the next.

 

[ottomaddox]

See

This is just as decisive as Burke's speculation. If not worse. At least Burke is not making a statement and then retracting it.

 

[Gabriel426]

The players will have their salaries cut. Pretty sure a lot of players will come out and say we will cut salaries for the love of the game.....which will end up happening after the PA, League and Owners all agreed everyone will have to take a hit or there will be no league. Pretty sure the ones making 8mil will get more cut(20%) than the players making 800K(like 5%).
It is going to be interesting on what the they(League, Owners and NHLPA) will end up doing. I also think a lot will be determine on what NFL, MLB, NBA and even Euro Soccer is planning to do, as I don't think any of them want to look stupid compare to others.

A creative way would be having a cap number say 70mil but that cap is only for playing who is dressing for the team that night. In short, teams can have 90mil salaries tied to them but they can only ice a team at 70mil, as long as they are making the money and not asking the League for handout. Take the Leafs, they can sign Pietra for 10mil, but if they want to ice JT, AM, MM, Willie, and Pietra at the same time, it means they need to ice the rest of the team at a combine of 20mil. Of course, this restriction won't apply comes playoffs.

 

[HoweHullOrr]

I don't think it'll drop that much that soon, but it's not outlandish. No playoff ticket revenue, no food and beer being sold, minimal merch being acquired, ad rates to plummet -- the only thing that will keep the cap to where it is if there are buffers propping it up.

Ya, I doubt if the majority of team owners are keen on losing a bunch of money. Revenues will be down. We can count on that. Some kind of adjustments will be made if HRR is considerably lower.

 

[Menzinger]

NHL Revenue in 2018/19 - 5.08 Billion Salary Cap $81.5 Billion
Expected Salary Cap for 2020/21 was between 84 to 88.2 Billion, according to Daly... used the average, about $86 Billion, to extrapolate out, expected rise in Revenues. About 5.5%

So... expected revenues rise was about 5.5% is about 5.36 Billion in revenues, that the league was on pace to make, before the virus.

Approx 1399 games in the season, 1312 in Regular season, and on average 5.82 games per playoff series, with 15 series.... 87 games... 1312+ 87 = 1399

195 games weren't played, plus 87 playoff games... .. so 20% of the season was lost... so you should surmise, that only 20% of revenues lost...

But, you could argue the playoffs are worth more, and I"m not sure how much more, but let's just go with double value of regular season game....

So, 1312 regular season + 87 games times two... is. 1486 games. 195 RS games + 87 x 2 then divided by 1486 games value... and it's 24%...

There is no way that 50% of league revenue are gone for the season, so there is no probability that the players would agree to a 50% cut.... The lost revenues are somewhere in the 20-24% in all probability.
But, keep in mind the revenue was already going up... so if we go back to the expected revenue of 5.36 Billion, and substract either 20 or 24% from it... you come up with $4.288 Billion and $4.07 Billion,,

So that's a drop of 15.6% to 19.9% from last years revenues. Where Burke would come up with 50% is of pure fantasy.

What the league, and NHLPA decides to do, is to be determined, but it's probably prudent to keep the cap as is, with a much higher escrow.

Nice breakdown.

And as a reminder Burke is now paid a lot of money to be a professional hockey commentator lol

 

[Holymakinaw]

You heard it hear first.

The radio host nearly fell off his chair.

Burke thinks that revenues and revenue sharing will be totally re-structured based on this crisis.

"The cap will likely drop by 50%"

LMAO. What a blithering Idiot Burke is.

 

[cupcrazyman]

Bye Marner ! lol

 

[Legion34]

As per TSN interview with Bettman TV media deals worth around US 400-500M per season so less than 10% of overall league revenue ... confirmation it is a gate driven league with most $$$ coming from Canada supporting weak mrket US teams

they just said playoff tv and sponsorship alone are 4-500 million. So that must just be regular season

 

[BigBlu]

We're screwed/

 

[Gabriel426]

I am actually hoping for the league to just blow up as it is not a good business model when half the teams or more in the league are in the red and only a handful of teams are actually making money.
You can’t run a business like that and expect to produce a good product.

The only saving grace is the fact that due to inflation each franchise excluding Vegas is worth 5 or more times than the owners original paid for. And every time the league expand, they get a cut as well as its increase the value of their franchise. Lastly, the handout from the league is like charity.

 

[Maple Leaf]

Can we cut Marner's contract in half? In value and term

 

[selltrade]

Floor bottom 40 million not ceiling lol. Truculence

 

[TOGuy14]

If it's not next year, it will be the year after.

Are you going to sit in a crowded arena next year? Not only that, companies are hurting. All those corporate sales are going to get slashed HARD.

Might be nobody in the rinks but I would assume that drives up the value of the TV contract.

People stuck at home with nothing to do means that live entertainment / competition is at a super preimum

 

[ER89]

Hopefully they'll roll back da ticket prices as well.

Not you too acc!

 

[Mess]

I was thinking they spread it out over years also. The look of a fight amongst all involved wouldn’t go over great. Christ we don’t even know how far reaching the effects this has on the North American household is going to be from one day to the next.

Exactly, that is a key point often not factored into this .. Millions of people have lost jobs and wages and are struggling to just survive life and pay bills at present.. These same people are not going to flock back into hockey arena's and pay top $$ for entertainment events, when they're struggling to keep food on the table and pay rent/mortgage, credit card and many other bills.

We might have to see ticket price reductions to lure fans back at first, which then beyond attendance figures falling, you have lower prices both of which have direct impact on the salary cap and hockey related revenues and a declining salary cap.

That doesn't even include the fear factor where until there is an actual vaccine for the virus, that people will be hesitant to crowd and pack themselves into arenas like sardines, where social distancing is the only weapon used to defend against its impact, where live viewing is the exact opposite.

 

[Golden_Jet]

Well if you figure this season is down 20% in HRR, you have to figure conservatory next year would be also down 20%, add in the usual 10% escrow each year. I could see where Burke is coming from, so an escrow of 50% to make the owners whole over the last 2 years wouldn’t be out of the question