cap stuff

[tsanuri]

There has been much talk about the cap within thread so figure lets get a place to talk about it.
Right now the prelim HHR is +3.5% right now.

@renlavoietva · 15h 15 hours ago The NHL HRR preliminary forecast for this season is an increase of 3.5%. Players will have to pay 14% of escrow for Q1. #tvasports

It is just a tweet but it is still the latest and best info we have where the cap is going for now. Even if it is and early number.
And I am thinking they are going so low because of the CDN$ falling.

http://www.ibtimes.co.uk/canadian-d...-low-crude-oil-decline-ahead-cpi-data-1470350

The Canadian dollar is headed for its second straight monthly loss and is down more than 6.2% since June.

Notice this is just from June when many of the other articles were written saying the cap was going to go much higher.
So lets look at where exactly that puts the cap with only the 3.5% increase. We need to remember that half the 200M from the TV contract was already added meaning only 100M can be. And that deal is in CDN$. Which means every drop in the CDN$ to the US$ cuts the cap.
http://www.nhl.com/ice/news.htm?id=693152

The 12-year agreement, announced jointly by the NHL and Rogers in a Tuesday morning press conference, is for $5.232 billion (Canadian).

Current HHR was 3.62B
3,620,000,000*1.035=3,746,700,000+100,000,000(TV deal)
3,846,700,000(HHR)/2=1,923,350,000-120,000,000(benefits) using same as last year.
1,803,350,000/30=60,111,667(midpoint)*1.05(escalator of 5%)
63,117,250(adjusted mid point)*1.15(cap is 15% of midpoint)
72,584,837

So that is the number as of now that the NHL is estimating the cap will be. That assumes that the players use the full escalator, which they didn't this year. And that the projected HHR increase doesn't include the other half of the TV money. If it does then the numbers get much worse and in real numbers the HHR is only projected to go up 26M dollars total. And that would mean basically a stagnant cap for this next year.
But either way as of right now we are only looking at approx a 3M cap raise. The season is early and numbers can change. But unless the CDN$ starts taking an upturn it will really hurt the cap next year.

Click to read more...

 

[driller1]

Couple of questions…

1) For the new TV deal $5.232 / 12yrs = $436million/year. If you take half of that, you get $218million. Is this to be used interchangeably with the $200 million you keep referring to?
2) I wasn't paying attention during the summer, but I didn't realize that the players accelerated $100 million of that amount to this years cap. Do you have a link or somewhere that I can read up on it?

 

[tsanuri]

Couple of questions…

1) For the new TV deal $5.232 / 12yrs = $436million/year. If you take half of that, you get $218million. Is this to be used interchangeably with the $200 million you keep referring to?
2) I wasn't paying attention during the summer, but I didn't realize that the players accelerated $100 million of that amount to this years cap. Do you have a link or somewhere that I can read up on it?

The 200M was the increase in the number vs the old deal.
http://www.theglobeandmail.com/spor...ry-cap-got-set-at-69-million/article19387905/

Of that new money, there was roughly $100-million for next season alone that was above and beyond the previous Canadian TV contract.

Including all of that TV revenue growth would have boosted the cap $2-million to $70-million, which is what the league pushed for.

The NHLPA’s resistance, however, led to them including only half of the Rogers cash for 2014-15, which is how they settled on a $69-million cap and $51-million floor.

 

[tsanuri]

Here's on that mentions the old deal amount and the starting amount of the new deal.
http://www.businessinsider.com/nhls-new-monster-tv-deal-shuts-out-tsn-and-espn-in-canada-2013-11

The deal also is also a huge increase from their previous Canadian rights deal with TSN, which paid the NHL $100 million annually. That deal expires after this season. ESPN, who was outbid for NHL games in the U.S., owns 20% of TSN.

The new deal with Rogers Sportsnet will pay the NHL $150 million up front and will start with an annual payment of $300 million, gradually increasing to $500 million in the final year of the contract.

 

[driller1]

Thanks. Very helpful…


What are the drivers of the revenue increase outside of the Canadian TV deal? It seems to me like going from 6 outdoor games to 2 games would negatively impact HRR.

It seems like on the negative side of the ledger we have less outdoor games and a declining Canadian dollar.

On the positive side of the ledger, we have higher ticket prices (it's a positive for HRR, not for the fans) assuming they are on average higher than last year. We have a new Canadian TV deal. What am I missing?

 

[Herby]

If crude oil prices continue to tumble, the Loonie will go down with it. Something to keep an eye on.