mouser
Business of Hockey
Where are you getting this number from? 2005-06 revenue (when the cap was introduced) was ~$2.03B while 2018-19 revenue (final pre-covid year) was ~$4.61B.
That's a compound annual growth rate of 6.5%.
Collapse of Regional Sports Networks (Diamond Sports Group files bankruptcy, Warner-Discovery looking to leave business, Xfinity drops Bally)
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Where are you getting this number from? 2005-06 revenue (when the cap was introduced) was ~$2.03B while 2018-19 revenue (final pre-covid year) was ~$4.61B.
That's a compound annual growth rate of 6.5%.
LadyStanley
Registered User
Nope. Expansion is a "one time" thing. And does not impact HRR. (Players get no benefit)
I'd expect more advertising (on jerseys, ice) if anything.
KevFu
Registered User
The problem the leagues are facing with the collapse of RSNs is that streaming is taking away a source of revenue they can't get back.
You can sell direct to consumer to the people with cable still and the people without cable via streaming packages; but the people who cut cable who didn't watch the sports networks WERE paying monthly for it, and now they won't.
You can sell direct to consumer to the people with cable still and the people without cable via streaming packages; but the people who cut cable who didn't watch the sports networks WERE paying monthly for it, and now they won't.
Thinking about it more, I don’t see the next step as being pure selling direct to consumer. It probably moves to a more pre-cable environment of local over the air affiliates from the various ”independents“ (non-abc, nbc, cbs and fox) picking up a large chuck of games. Teams will need some sort of broad distribution in order to statists sponsorships and to drive fan growth. The local affiliates can probably pay more than fully DTC through advertising and retransmission fees (which will be less than RSNs get). There are already reports of nextstar and scripps gearing up for this.
Now probably not every game gets scooped up with this, and maybe teams adopt a localized version of the MLS model with a DTC pass with every game, but many also simulcast.
Teams would have to take a haircut, but maybe saves them from the 70% haircut and prevents knock on effects.
Now probably not every game gets scooped up with this, and maybe teams adopt a localized version of the MLS model with a DTC pass with every game, but many also simulcast.
Teams would have to take a haircut, but maybe saves them from the 70% haircut and prevents knock on effects.
KevFu
Registered User
Oh, I thought that was always assumed. The streaming would be available from the league (instead of from the RSNs), but the TV in local markets would be the leagues selling the games direct to cable companies, or other networks, bypassing the RSN.
The league could offer any local affiliate (but they only get so many "pre-empting national programming" dates per year), but more likely, the cable company directly.
The cable company can take an open channel number, put a graphic up on the screen saying "Stay tuned for MLB/NHL/NBA game" and that channel shows the game with ads and then goes back to a blank screen.
Kev:
the open channel capacity on some cable systems are gone.... not with the availability of CI being broadcasted on the digital tier (which is split between MLB/NBA/MLS Depending on season....
Charter aka Spectrum used to do that with the overflow channels.... which then morphed into NESN + as a separate channel in New England.... Spectrum doesn't have that community channel in all markets.... unless you replace Great Falls TV IN Central Maine..... some markets in our state have more than one community channel...
KevFu
Registered User
I don't understand. I don't know the technical side of "how cable providers collect the feeds from networks, assign channel numbers, and then push that out to people's houses" so my view, admittedly in total ignorance, is:
"any open number on the cable system" could carry the league-provided feed instead of having the RSN-provided feed.
What limits the cable company? The numbers on most systems go from 1-999 (or 1000-1999) so if they don't already have 1000 channels assigned...? (and in that situation, they'd surely pick local sports networks over SOMETHING. But I don't think anyone actually HAS 1000 different networks!)
But even if there's a technical reason why that can't happen... they have the spot(s) the RSN WAS taking!
Ballys Sports Arizona was channel 34 on Cox in PHX, and channel 73 was BSA "Extra" (if two teams were playing at the same time). So the leagues sell Cox the feeds of the games, the games go on 34 and 73, and when they're not playing the games, the screen is black.
What's the problem?
Not all cable systems can open or add channels to accomodate what you're proposing, Kev.... even if the same cable provider serves an entire state.... Spectrum here inherited two of the three markets here and our channel capacity has not increased because consumers have to request a channel not offered to be added, if they are added it's not always a channel available to everyone....
Start TV/Circle is offered in our market but you, as the consumer, must call the cable operator to turn those channels.... the only one Spectrum has added that's not on a separate tier is CHIME TV, which is the Asian/American owned network.
that is why NESN + was created so the 2 franchises who operate it don't get shafted and it is highly publicized when seasons overlap/collide and 2 games start at the same time
rsteen
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Golden_Jet
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Byrddog
Lifer
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That number came from Bettmans explanation how how the cap would grow overtime when the salary cap was initiated. And your number is correct the annual growth rate 6.5 projected. However this was front loaded. Bettman projected larger increases in the cap starting the second year after the year long lockout took place. Most years his early projection was around 5 % . And guess what if you go to cap friendly they are projecting a little over 5% next year and 4.7% the next year.
I do not have that skill to bring links into the HF board but I’m sure you can find that in cap friendly for the next two years.
To be honest Bettman has always over projected numbers. And I did not believe that 120 mil cap was attainable. We will not see that in our lifetime especially me.
Most professional sports are experiencing a drop in attendance . People want to point out how the cap is calculated it is not that I do not understand that. The bottom line is it is all connected to revenue the year before the pandemic was a record year a little over 5 billion the revenue has not rebounded to that number this season and the shortage combined with money owed to the players it will be interesting when end of the team PL’s come out.
The cap increase being triggered by total revenue as explained by the pages the other poster put up is problematic in the long run. If revenues increase strong it’s not a issue but raising the cap 1 mil for a 3 billion dollar league year is not sustainable.
The current elephant in the room broadcasting revenue is unstable. It has been unstable for a number of years . I am not going to look it up but I feel pretty confident that the league received or was scheduled to recieve over 1 billion in broadcast fees from TV Canada and in the states combined with radio. That represents 20% of total revenue if the league does 5 billion, 25% if the revenue is closed set to 4 billion. I do not care if under the current formula or not it may not hurt the million dollar increase in the cap but it sure effects the bottom line. Now if someone is comfortable that the broadcasting revenue can but settled before the he new season starts great. I’m not sure that Bally will even be thru the courts by then. I also fully expect the other contracts will look at restructuring there deals as well. Monkey see monkey do.
So many are going to be comfortable if there is a minimal cap increase this year followed by flat cap for more years.
What I would like to see is a plan for league revenue to get back to pre-pandemic levels . And some signs of growth in the near future. If not there are going to be real issues.
PCSPounder
Stadium Groupie
Depends on which younger generation... or in this case, which SIDE of the younger generation you're talking about.
Most people were tired of paying for ESPN and other sports properties in a cable bundle, were continually told that this accounted for a substantial percentage of that bill, and wanted at least something a la carte. Streaming provides that.
Younger generations who want sports were usually the ones who were comfortable with the status quo, and I can show you where that's breaking down at nearly every level.
Of course, I can also show you the piraters (I think you've met a couple here already) who also have a very important message. It is ALWAYS vital to have checks and balances on the super-greedy.
rsteen
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The salary cap is designed to be directly linked to revenue. If revenues increase, the players' 50% share increases. What are you expecting to happen, for the cap to stay flat even if the covid debt was paid off and revenues were increasing?
It was back at pre-covid revenue levels in 2021-22:
NHL Revenues Rebound to $5.2 Billion on TV Deals and a Full Schedule
National Hockey League hockey-related revenues are back to pre-pandemic levels and are expected to exceed $5.2 billion, commissioner Gary Bettman said during his pre-Stanley Cup Final media conference at Denver’s Ball Arena Wednesday. “Although I got an email about it an hour ago from our CFO...
sports.yahoo.com
It was on track to hit 6 billion this season:
Given where we are in the season and that Bally hasn't missed any payments to date, the hit to revenue this year won't be huge - I'd expect it to still be well over 5 billion. And the covid escrow is so close to being paid back that they were discussing transitioning back to the HRR-tied cap as soon as next season (I don't expect this to happen any more since the Bally news unless it's 100% paid off).
Byrddog
Lifer
- Nov 23, 2007
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The salary cap is designed to be directly linked to revenue. If revenues increase, the players' 50% share increases. What are you expecting to happen, for the cap to stay flat even if the covid debt was paid off and revenues were increasing?
It was back at pre-covid revenue levels in 2021-22:
NHL Revenues Rebound to $5.2 Billion on TV Deals and a Full Schedule
National Hockey League hockey-related revenues are back to pre-pandemic levels and are expected to exceed $5.2 billion, commissioner Gary Bettman said during his pre-Stanley Cup Final media conference at Denver’s Ball Arena Wednesday. “Although I got an email about it an hour ago from our CFO...
It was on track to hit 6 billion this season:
Given where we are in the season and that Bally hasn't missed any payments to date, the hit to revenue this year won't be huge - I'd expect it to still be well over 5 billion. And the covid escrow is so close to being paid back that they were discussing transitioning back to the HRR-tied cap as soon as next season (I don't expect this to happen any more since the Bally news unless it's 100% paid off).
That article is from last June and if the revenue had met those projections the 4 mil increase in cap would have happened. Thing is it has not. And again from the CBA that was posted a 3 billion dollar trigger for 1 million increase is what is maybe going to happen. Now this I question was revenue really at 3 billion or was the payback to the players subtracted lowering the number? But according to the contract that payback should not be discounted according to the formula for cap increase. That would tell me that the that the 5 plus billion was missed by a significant amount either way. I think the Bally news was just added issues correct me if I’m wrong but the Bally contract was for 300 million but the moss in revenue was close to 2 billion. From 5 to 3 that triggered the 1 million increase.
rsteen
Registered User
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I think that Bettman can make a pretty close prediction of 2021-22 revenues in the middle of June 2022, when the vast majority of the revenue is already with the teams/league. Here's an article from your trusty Forbes that says they actually exceeded Bettman's projection:
NHL Team Values 2022: New York Rangers On Top At $2.2 Billion
Hockey team owners are scoring big, with the average NHL team value now at $1.03 billion, topping $1 billion for the first time and 19% more than a year ago.
www.forbes.com
Why do you think the cap would have gone up by 4 million if revenues exceeded 5 billion? From the MOU as linked earlier in the thread:
1 million increases only until the covid escrow is paid off. That's why the cap increased to 82.5M for 2022-23 and will increase another 1M for 23-24 unless the league and the PA negotiate something else. There is no 2 billion revenue loss once they got out from under covid restrictions.
What's your source for 300M for the total Bally deals? I'd expect the Bally deals to include the lower end of the RSN deals given Bally has all the small market USA teams, but that does seem reasonable.
If I remember correctly, the New York Yankees sold some of their regional games to Amazon. They air on Amazon Prime Video and are available only in the New York Yankees TV territory. What is the possibility that regional team rights continue and are sold to streaming services instead of regional sports networks?
mouser
Business of Hockey
You're not making any sense. (bolded emphasis mine)
You said:
I replied:
You replied:
If I'm understanding properly you're claiming Bettman said the revenue or the cap would grow at 1.14% per year average? But then contradicting yourself that Bettman projected 5% growth in other years.
How exactly did you come up with 1.14% per year average growth over the last 20 years?
You said:
I replied:
You replied:
If I'm understanding properly you're claiming Bettman said the revenue or the cap would grow at 1.14% per year average? But then contradicting yourself that Bettman projected 5% growth in other years.
How exactly did you come up with 1.14% per year average growth over the last 20 years?
That's the white knight question will Amazon/Apple come riding in to save the day. So far they both seem shrewd in the money they'll pay. Apple dropped out of the NFL Sunday Ticket deal because it wasn't beneficial enough for them to make money. I could seem them being interested only if it makes sense financially aka...I wouldn't expect them to pick up the overpayment of the RSNs but instead offer a lower amount while providing a top quality production viewer experience. See MLB & MLS.
Amazon they seem like they just wanted a big fish to compliment their service. Amazons been very selective in their sports league acquisitions not as aggressive to date a Apple has been. I see Apple as more likely they have two leagues already and will be a player. Could set up a business relationship having MLB already imagine if they do a deal with NBA. NBA/MLB/NBA could do a partner where they have the available local market tesms pair in on Apple.
The hitch up could be fee distribution how do you decide how much one team gets over the other. Potential solution would be for escalators put in for markets similar to Apples MLS deal. When subs hit a certain amount revenue sharing would occur with Apple and the leagues.
Well, my suggestion was simply that the major streaming services could become the regional broadcasters and each team would make an appropriate deal with the streaming service that offers the most -- just like current regional deals. I wasn't suggest that one streaming service would buy all the regional rights.
rsteen
Registered User
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I don't think the streaming services are interested in actually producing live sports so the teams probably need to hire someone (current RSN employees probably) to do that.
mouser
Business of Hockey
I think many of the teams are already handling their own broadcast production. Or at least a significant portion of the broadcast.
In NYC if YES went kaput, the Yankees games could theoretically get picked up the MSG's or SNY. Do the 15 teams being impacted have another RSN in their market that could do the same?
I say go back to OTA's!
I say go back to OTA's!
IU Hawks fan
They call me IU
I think the Kings & Ducks are the only ones that would have the potential to move to the Dodgers & Lakers Time Warner networks, all the others are in single RSN markets.
