Confirmed with Link: Lockout continues Part V - Hockey cancelled till January 14th

[ULF_55]

Is there a chart showing all revenue sharing for the last CBA?

It would interesting to see how much has gone where.

For contraction purposes you could probably use those funds to reduce the amount returned to the owner.

Something like:
Franchise Fee - Welfare Payments = Contraction Fee

 

[Smif]

Unless they become contenders and start consistently making deep playoff runs, getting trounced in the first round doesn't generate all that much revenue (just ask the Sens). You also can't rely on playoffs being the determining factor of profitability. Only half of the teams make the playoffs any given year. Playoff revenue should be the icing on the cake for the owners, for making the right decisions.

Now you're just guessing. One playoff game with zero player and management expenses is a huge payday for any team. Why do you think Leafs ownership ONLY care about making the playoffs, I think I heard a while ago one playoff game for the Leafs NETS them over a million, and I think I heard that about 10 years ago before the newest CBA deal.

 

[ACC1224]

Now you're just guessing. One playoff game with zero player and management expenses is a huge payday for any team. Why do you think Leafs ownership ONLY care about making the playoffs, I think I heard a while ago one playoff game for the Leafs NETS them over a million, and I think I heard that about 10 years ago before the newest CBA deal.

Yep, it would be considerably more than that now.

 

[Anthrax442]

People overstate the capabilities of KHL.

 

[Mess]

Is there a chart showing all revenue sharing for the last CBA?

It would interesting to see how much has gone where.

For contraction purposes you could probably use those funds to reduce the amount returned to the owner.

Something like:
Franchise Fee - Welfare Payments = Contraction Fee

Well the way the current Revenue sharing model works is that the 10 largest market most profitable teams pay into Revenue sharing pool and the 10 smallest market lowest revenue teams are the benefactors with the 10 NHL teams in the middle neither paying nor receiving.

Its been reported that MLSE pays between $12-15 mil into an annual $150 mil current revenue pot. Well 10 teams and $150 = $15 mil revenue sharing/per team.

I don't believe the NHL reports which welfare teams get the money and how much.

Problem is the Owners of those 10 biggest/richest teams don't want to pay their welfare partners in the business and Fehr and PA have to instigate increased Revenue sharing demands to help all 30 NHL teams survive, during this lockout..

If Bettman weren't so stubborn he would allow bad market poor hockey location teams to relocate to better markets to help Owners turn a profit not believe a 12% salary reduction is going to fill the Phoenix Arena that is 1/2 empty each game. Shane Doan -12% salary reduction is not = to full Area in Phoenix (despite Coyotes on welfare going to the final 4 of the playoffs).

 

[Budsfan]

Well the way the current Revenue sharing model works is that the 10 largest market most profitable teams pay into Revenue sharing pool and the 10 smallest market lowest revenue teams are the benefactors with the 10 NHL teams in the middle neither paying nor receiving.

Its been reported that MLSE pays between $12-15 mil into an annual $150 mil current revenue pot. Well 10 teams and $150 = $15 mil revenue sharing/per team.

I don't believe the NHL reports which welfare teams get the money and how much.

Problem is the Owners of those 10 biggest/richest teams don't want to pay their welfare partners in the business and Fehr and PA have to instigate increased Revenue sharing demands to help all 30 NHL teams survive, during this lockout..

If Bettman weren't so stubborn he would allow bad market poor hockey location teams to relocate to better markets to help Owners turn a profit not believe a 12% salary reduction is going to fill the Phoenix Arena that is 1/2 empty each game. Shane Doan -12% salary reduction is not = to full Area in Phoenix (despite Coyotes on welfare going to the final 4 of the playoffs).

That probably doesn't include TV revenue, generated in the 10 biggest and richest team's, marketing protected areas.

 

[4evaBlue]

Now you're just guessing. One playoff game with zero player and management expenses is a huge payday for any team. Why do you think Leafs ownership ONLY care about making the playoffs, I think I heard a while ago one playoff game for the Leafs NETS them over a million, and I think I heard that about 10 years ago before the newest CBA deal.

The Leafs management can afford to charge Pejorative Slured amount for playoff tickets. The same cannot be said for the majority of the teams.

Squeaking into the playoffs (3 home games), and getting eliminated in the first round wouldn't net you all that much. Let's assume a full house (20k ticket sales), a bit over the double the regular season ticket prices ($120 on avg), and an additional $30 spent per fan at the concession stands. Those very optimistic estimates gross $3M, subtract whatever operating expenses there are to hosting a playoff game, and you're likely looking at south of $2M net per game. An extra $6M isn't going to turn a franchise barely breaking even into some cash cow.

Stumbled onto this article just now, and found it a pretty interesting read.

Additional big hockey markets had small operating incomes in 2010. The Philadelphia Flyers had an operating income of $3.2 million. The Boston Bruins had an operating income of $2.7 million. Both teams’ had high stadium capacity percentages of 101.1% (PHI) and 100% (BOS), respectively. They ranked 3rd and 16th in league attendance. Even though their operating income weren’t in the red, those are pretty low incomes for an NHL franchise, especially when you consider the huge hockey markets that make up Philadelphia and Boston.

So why is the operating income shrinking across the board from small markets to big markets? Clearly most franchises are doing a good job of selling their product to the fans, so what’s the issue? Labor costs. The salary cap, and required revenue to operate at a profit are not in sync, and during the next CBA negotiations, the NHL and NHLPA will have to decide how to split revenue. Most businesses handle high labor costs by cutting jobs within the corporation, or outsourcing these jobs.

 

[legendinblue]

People overstate the capabilities of KHL.

I agree. At the same time I believe people overrate the NHL's power.

The NHL =/= hockey.

 

[Budsfan]

I understand why play-offs in some areas would really give them a boost but just think of all the extra revenue that would be produced if Toronto was in the play-offs and everyone benifitted from the proceeds, TV revenues would be off the scale.

 

[Smif]

The Leafs management can afford to charge Pejorative Slured amount for playoff tickets. The same cannot be said for the majority of the teams.

Squeaking into the playoffs (3 home games), and getting eliminated in the first round wouldn't net you all that much. Let's assume a full house (20k ticket sales), a bit over the double the regular season ticket prices ($120 on avg), and an additional $30 spent per fan at the concession stands. Those very optimistic estimates gross $3M, subtract whatever operating expenses there are to hosting a playoff game, and you're likely looking at south of $2M net per game. An extra $6M isn't going to turn a franchise barely breaking even into some cash cow.

Stumbled onto this article just now, and found it a pretty interesting read.

This is a more current list of team's operating income:

http://www.forbes.com/nhl-valuations/list/

 

[4evaBlue]

This is a more current list of team's operating income:

http://www.forbes.com/nhl-valuations/list/

Yes, I'm well aware, and have used that link in my previous posts as well. The article, however was written in February, when the most current list didn't exist yet. Some of the points he raises are pretty valid. You take a look at the Flyers, and the Bruins, even on last season's chart, they aren't doing all that well (~$10M profit). They're big hockey markets, and contending teams, who regularly make the playoffs, yet even they're having a hard time staying profitable.

It's not just the 4 or so well documented bust franchises that should be a cause for concern, but every other franchise outside the top 4 most profitable teams (Leafs, Rags, Habs, Canucks).

The fact that even the lowest paid player makes more than over 1/3rd of the owners is pretty laughable.

 

[htpwn]

Stumbled onto this article just now, and found it a pretty interesting read.

Just another article that relies on incorrect financials and has little idea of how the NHL works.

Forbes is a cool site to look at, but consists of educated guesses based on the very limited amount of publicly available data. Numerous team executives have questioned and even sharply criticized the publication, including Capitals owner Ted Leonisis and MLSE CEO Tom Anselmi. I highly, highly doubt that the likes of the Penguins and Capitals are losing money and that the Bruins and Flyers are only making slight profits.

Further, the article does not seem to grasp how the NHL salary cap works. It is tied to revenue. When league revenue goes up, the cap goes up proportionally. If league revenue were to drop, the cap would drop. The problem, then, is not labour costs. They not much different, proportionally than in 2005-2006 (53/47 split then, 57/50 now). Disparity is what hinders the league, something that was predicted on the BoH board as soon as the last CBA was signed. The league's growth is top heavy. The Canadian teams plus large market American ones grew their revenues a lot faster than small and mid-market American teams, thus resulting in a higher salary structure (cap/floor) which these teams could not afford.

The one solution to this problem, aside from a massive American TV contract like the MLB or NFL, is increased revenue sharing. Taking the players share down to 50% will help in the short-term but will not solve the problem as the author implies.

 

[4evaBlue]

Just another article that relies on incorrect financials and has little idea of how the NHL works.

Forbes is a cool site to look at, but consists of educated guesses based on the very limited amount of publicly available data. Numerous team executives have questioned and even sharply criticized the publication, including Capitals owner Ted Leonisis and MLSE CEO Tom Anselmi. I highly, highly doubt that the likes of the Penguins and Capitals are losing money and that the Bruins and Flyers are only making slight profits.

Further, the article does not seem to grasp how the NHL salary cap works. It is tied to revenue. When league revenue goes up, the cap goes up proportionally. If league revenue were to drop, the cap would drop. The problem, then, is not labour costs. They not much different, proportionally than in 2005-2006 (53/47 split then, 57/50 now). Disparity is what hinders the league, something that was predicted on the BoH board as soon as the last CBA was signed. The league's growth is top heavy. The Canadian teams plus large market American ones grew their revenues a lot faster than small and mid-market American teams, thus resulting in a higher salary structure (cap/floor) which these teams could not afford.

The one solution to this problem, aside from a massive American TV contract like the MLB or NFL, is increased revenue sharing. Taking the players share down to 50% will help in the short-term but will not solve the problem as the author implies.

Increased revenue sharing is a patchwork solution that will only result in more and more revenue needing to be shared with the same struggling teams as the cap (and floor) keep rising. How do you see revenue sharing as a permanent fix to the problem?

Revenue sharing is increased --> profitable teams make adjustments to maintain their profitability --> the league looks more healthy, as the overall revenue goes up (because of the profitable teams) --> cap and ceiling go up --> welfare teams have trouble with cap min/max --> revenue sharing is increased --> ...

Reducing the share both reduces the expenses, and increases revenues. Can you elaborate on why you think this would only help temporarily?

Edit: I fully understand why the Union supports the radical increase in revenue sharing. It is a surefire way that the cap will continue to rise at the rate it has been (resulting in escalating salaries), as the Leafs/Habs/Rags/Canucks fans try to offset the losses incurred by the struggling franchises.

 

[Smif]

Yes, I'm well aware, and have used that link in my previous posts as well. The article, however was written in February, when the most current list didn't exist yet. Some of the points he raises are pretty valid. You take a look at the Flyers, and the Bruins, even on last season's chart, they aren't doing all that well (~$10M profit). They're big hockey markets, and contending teams, who regularly make the playoffs, yet even they're having a hard time staying profitable.

It's not just the 4 or so well documented bust franchises that should be a cause for concern, but every other franchise outside the top 4 most profitable teams (Leafs, Rags, Habs, Canucks).

The fact that even the lowest paid player makes more than over 1/3rd of the owners is pretty laughable.

You can't be serious. You should know that 10 out of the 30 owners are billionaires...

 

[htpwn]

Increased revenue sharing is a patchwork solution that will only result in more and more revenue needing to be shared with the same struggling teams as the cap (and floor) keep rising. How do you see revenue sharing as a permanent fix to the problem?

Revenue sharing is increased --> profitable teams make adjustments to maintain their profitability --> the league looks more healthy, as the overall revenue goes up (because of the profitable teams) --> cap and ceiling go up --> welfare teams have trouble with cap min/max --> revenue sharing is increased --> ...

Revenue sharing is not a whole number. It is a percentage of league and individual team revenue:

The NHL has proposed to increase the Revenue Sharing pool for 2012/13 to $200 million (assuming League-wide revenues of $3.303 Billion), representing an approximately 33% increase over the amount that will be distributed on account of 2011/12. This enhanced amount is at least comparable to the levels of revenue sharing in the NBA and MLB, and will be adjusted proportionately upward or downward based on Actual HRR results in future seasons.

http://www.nhl.com/ice/news.htm?id=643572

If league and team revenue rises, so does the amount of revenue sharing, thus offsetting a portion (at the very least) of the increases in payroll tied to HRR.

Reducing the share both reduces the expenses, and increases revenues. Can you elaborate on why you think this would only help temporarily?

Edit: I fully understand why the Union supports the radical increase in revenue sharing. It is a surefire way that the cap will continue to rise at the rate it has been (resulting in escalating salaries), as the Leafs/Habs/Rags/Canucks fans try to offset the losses incurred by the struggling franchises.

How exactly does it increase revenue? Revenue is money brought in. Just because expenses are reduced, does not necessarily mean that revenue increases.

I've already explained why it would only be a temporary fix: It does not address the real problem with the league, which is economic disparity, not payroll costs.

The league's growth is top-heavy. The top revenue generating clubs not only bring in the majority of money but are growing their revenues at a much faster pace than those at the bottom. The cap and floor are tied to that revenue growth. As the top clubs drive HRR upwards, they are also driving the cap and floor upwards. Bottom-tier clubs who cannot grow their revenues as fast are then left with higher salary costs which they cannot afford.

The only way to solve this problem is a redistribution of the wealth. A 50/50 split would cut costs in the short-term but would face the same escalating cap as has happened in the last seven years.

 

[4evaBlue]

Revenue sharing is not a whole number. It is a percentage of league and individual team revenue:

http://www.nhl.com/ice/news.htm?id=643572

If league and team revenue rises, so does the amount of revenue sharing, thus offsetting a portion (at the very least) of the increases in payroll tied to HRR.

How exactly does it increase revenue? Revenue is money brought in. Just because expenses are reduced, does not necessarily mean that revenue increases.

I've already explained why it would only be a temporary fix: It does not address the real problem with the league, which is economic disparity, not payroll costs.

The league's growth is top-heavy. The top revenue generating clubs not only bring in the majority of money but are growing their revenues at a much faster pace than those at the bottom. The cap and floor are tied to that revenue growth. As the top clubs drive HRR upwards, they are also driving the cap and floor upwards. Bottom-tier clubs who cannot grow their revenues as fast are then left with higher salary costs which they cannot afford.

The only way to solve this problem is a redistribution of the wealth. A 50/50 split would cut costs in the short-term but would face the same escalating cap as has happened in the last seven years.

Hmmm, we're essentially saying the same thing, except the solutions are the opposite. You seem to believe that top teams keeping bankrupt teams on life support indefinitely is the way to correct it long term, while I think setting the owners' expenses and incomes to where more of the teams can start standing on their own feet is the better approach.

The "top loaded" owners will remain just that, even if they get pressed for more and more shared revenue. They'll just keep raising their ticket prices. We know the corporate sector in TO/MTL will still be able to afford it.

 

[4evaBlue]

You can't be serious. You should know that 10 out of the 30 owners are billionaires...

What the owners do on the side is irrelevant when discussing the NHL as a business. Just like any advertising incomes players may or may not have.

 

[ULF_55]

An easy way to aleviate some team problems is to make the gap between floor and cap wider.

Don't force teams who don't have fans to spend as much as they have been.

Those teams are just there so the league can have 30 teams, not to service some fictitious fan base.

Let them spend what they can afford.

NHLPA wouldn't like it, but these teams could just be feeder systems until they, if ever, grow a fanbase.

 

[Anthrax442]

Those teams are just there so the league can have 30 teams, not to service some fictitious fan base.
.

I thought they are there for vacationing Leaf fans.

 

[ULF_55]

I thought they are there for vacationing Leaf fans.

Well, you could probably buy a season ticket there, and pay for your vacation and have money left over compared to half a Leafs' season ticket.

 

[MapleLeafGardens*]

 

[Jerkini]

An easy way to aleviate some team problems is to make the gap between floor and cap wider.

Don't force teams who don't have fans to spend as much as they have been.

Those teams are just there so the league can have 30 teams, not to service some fictitious fan base.

Let them spend what they can afford.

NHLPA wouldn't like it, but these teams could just be feeder systems until they, if ever, grow a fanbase.

But then the three fans of those feeder teams would complain the arena is empty because they can't ice a competitive team.

 

[charliolemieux]

But then the three fans of those feeder teams would complain the arena is empty because they can't ice a competitive team.

THat is when they bite the bullet, become a development team for the league and hope that every 5 or so years they have 1 or 2 years of catching lightning in a bottle where the young stars(ELC's) make an impact before the older guys(25-27) have to be traded away.

Over time if they can build a fan base to fill the building then they will be able to keep players longer.

BUt I'm with you, I don't have much sympathy for teams with empty buildings and dime store ticket prices.

 

[mix1home]

I read tsn and couple of forums.
When lookout started I think there was a sympathy for players, but now I would say at least 2/3 of fans back Bettman and owners.

I liked couple of points there:

- last NHL offer was good enough
- players should have called the vote on that one
- there is no significant difference between 10 years CBA and 8 years; do players really want to go though this again in 6 years?
- contract length should be fixed in CBA so that there is no collusion allegations by NHLPA later and 5 years as good as any. There is enough of length there and it will end retirement contracts hoax.

 

[mix1home]

Also read the article today discussing salaries of Tretiak, Larionov and other USSR hockey stars. They got on average 600 rubles per month, which was about double of what trade person made in USSR.

Not to mention that they did not have the same sport facilities, sport medicine, or equipment and spend many months away from families in looked sport camps with strict minute-by-minute regime.