Jets - internal salary cap?

[gojetsgo]

“We’ve been preparing for that,” he said. “This isn’t like, ‘What just happened here?’ … We know we’ve got our challenges. Like any team, you’ve got your set of realities. But our ownership group has been all in to try to win since they took the team over, and I don’t anticipate that’s going to change.”

from when asked about the raising cap

 

[jetsmooseice]

That's a amazing jump in salary cap . I know we all fear it going up too much here in Winnipeg but i haven't seen many games this season in other markets were their arena is completely full , far from it actually.

Why is growth in the salary cap accelerating so much?

The NHL is far from the NFL, where almost every market is running at damn near full speed. The reality is that the NHL is only the top dog in Canadian markets, which as we know is facing significant economic challenges not the least of which is a declining currency. And pretty well every American team takes a backseat to something else in their market, to varying degrees, so it's not like they're all fine and dandy.

So you have a situation where probably at least the entire bottom third of the league (in financial terms) would struggle to hit an increased cap. Doesn't it defeat the purpose of a salary cap if it's purely theoretical for a good chunk of the league anyway?

 

[ps241]

this is from Oct 2024

Sportico's NHL Valuations

View attachment 970939

I look at this from the base level

#1 Micro or until level economics (TNSE Winnipeg Jets)

#2 Macro league ongoing parity/competitive balance (NHL and CBA)


#1 has been pretty thoroughly discussed here. We understand that TNSE bought the Thrashers for $170 million when the Canadian dollar was at par with the USD. Since then sport properties across the board have exploded in value. For now I'll take the Sportico Jets valuation of $1.1 Billion to calculate the lift of the NHL franchise to be $900 Million USD. However that is an asset on a balance sheet and doesn't really impact the ongoing cash flow of the business day to day. Also interesting that Sportico has us listed at having $169 million in revenue in 2023-24 (I assume USD). I can't really say what the Jets financial statements would look like but boy would I love to be a fly on the wall.

#2 is much more important to me and to the health of the NHL in our market. There is really only one part that is important and the devil is in the details as per Dreger "However, to maintain competitive balance there will undoubtedly be significant adjustments made to NHL revenue sharing. For smaller markets this is a must."

The CBA would need to first adjust for USD vs CND and I am to understand it does that. Secondly, they need to make sure the bottom 15-20 teams can spend to the cap if need be and not have to lose money as the cap increases. If their revenue sharing plan manages that piece of the puzzle then the NHL will remain viable in smaller markets. Teams in the bottom half of the league need to be able to compete for the cup. Its about being able to at least have hope.

The rich teams will be the rich teams and that's business. However competitive balance is critical and as long as the NHL keeps that as their North Star, and adjusts the revenue sharing accordingly then I think the Jets will be here and the league will remain healthy.

 

[Gm0ney]

Why is growth in the salary cap accelerating so much?

The NHL is far from the NFL, where almost every market is running at damn near full speed. The reality is that the NHL is only the top dog in Canadian markets, which as we know is facing significant economic challenges not the least of which is a declining currency. And pretty well every American takes a backseat to something else in their market, to varying degrees, so it's not like they're all fine and dandy.

So you have a situation where probably at least the entire bottom third of the league (in financial terms) would struggle to hit an increased cap. Doesn't it defeat the purpose of a salary cap if it's purely theoretical for a good chunk of the league anyway?

I think gambling revenue - not sure if it's shared by the "partners" or just the deluge of advertising and sponsorships they're getting from gambling sites - has been a windfall. Also helmet ads, jersey ads, those dynamic board ads, etc.

Fanatics has spent a lot of money to build their merch monopoly. I'd imagine the NHL has a better licensing deal with them than the previous deals with Reebok or whoever it was.

The Rogers/Sportsnet deal was back loaded I believe. I imagine the US deal works the same way - more money each year. There's streaming and digital and whatever else they're able to squeeze money out of.

We've also added a couple of teams over the last few years that seem to be doing quite well financially and moved the black hole Phoenix/Arizona franchise out of their 5000 seat arena to Utah, which can't hurt either.

Some combination of the above, plus price increases across the board for tickets, concessions, etc...

 

[Jet]

I think I will wait until I see evidence of an internal cap before I start worrying about it.

I have no doubt that the Jets will spend to the cap appropriately, but not just to do it.

 

[gojetsgo]

"Mark Chipman and Kevin Cheveldayoff do an annual “State of the Union” lunch at the Manitoba Club where they do a Q&A with members.

FWIW, someone this year specifically asked about rumours of the cap soon reaching $100M+. Chipman said the cap reaching that number would not be a problem for the team, and reiterated that he expected the Jets to continue being a team spending at or near the cap so long as they were competitive.

Assuming we remain positioned to make playoff runs, I took that to mean there is no internal cap.

He also indicated that they’ve hedged against currencies years into the future, so the exchange rate at any given time isn’t as big of an issue as people think it is.

That’s my recollection of how he addressed those two points in OP’s post."

this is taken from reddit, if this is true and they will keep spending to a 100+ million cap it would be very nice for people in the media to actually do their f***ing jobs and ask before just assuming the rising cap will be a problem for the jets

 

[DRW204]

I don't think the Jets have an internal cap in overall spend.
I do think they have an internal preference of having some of their longer tenured players as the "pace setters" of how much a player can make. For example, think they'd prefer to have their top liners like KC or Scheifele the highest paid fwds, and players lower down the depth chart making less than them. That's why I'm a bit wary of the comments of acquiring EP who would ultimately be an 11.6m 2nd line fwd.

is that in usd?

Yes.

 

[King Woodballs]

I am betting the jets must have an internal cap.
This horrid exchange rate must be killing them

 

[voyageur]

I think gambling revenue - not sure if it's shared by the "partners" or just the deluge of advertising and sponsorships they're getting from gambling sites - has been a windfall. Also helmet ads, jersey ads, those dynamic board ads, etc.

Fanatics has spent a lot of money to build their merch monopoly. I'd imagine the NHL has a better licensing deal with them than the previous deals with Reebok or whoever it was.

The Rogers/Sportsnet deal was back loaded I believe. I imagine the US deal works the same way - more money each year. There's streaming and digital and whatever else they're able to squeeze money out of.

We've also added a couple of teams over the last few years that seem to be doing quite well financially and moved the black hole Phoenix/Arizona franchise out of their 5000 seat arena to Utah, which can't hurt either.

Some combination of the above, plus price increases across the board for tickets, concessions, etc...

I wonder how the sale of the Coyotes went. The NHL purchased them for a $1 billion and then sold them for $1.2 billion. That's $36 million per owner, which covers a lot of operating expenses. Now I am not sure how much debt payment was involved in that transaction. Coyotes were borrowing from the league I believe.

I'm also interested to know where the Jets rank among teams for merchandising. Seems like we would be top 20 easily if not top 15, and that's league revenues that I am sure the league keeps track of.

Amazon money is in there too.

I think based on Chipman's comments the first step the Jets would take if payroll became an issue would be cutting it. Maybe the Jets operate as a small market team under the Cap as the bigger fish pull it up. Still room to be competitive if True North spends their money right.

 

[Gm0ney]

I wonder how the sale of the Coyotes went. The NHL purchased them for a $1 billion and then sold them for $1.2 billion. That's $36 million per owner, which covers a lot of operating expenses. Now I am not sure how much debt payment was involved in that transaction. Coyotes were borrowing from the league I believe.

I'm also interested to know where the Jets rank among teams for merchandising. Seems like we would be top 20 easily if not top 15, and that's league revenues that I am sure the league keeps track of.

Amazon money is in there too.

I think based on Chipman's comments the first step the Jets would take if payroll became an issue would be cutting it. Maybe the Jets operate as a small market team under the Cap as the bigger fish pull it up. Still room to be competitive if True North spends their money right.

The profit on the Yotes (before any debt was paid off) was only $200M, so just $6.45M per team...and if it's considered HRR (I'm not sure if it counts), 50% of that goes to the players.