dpetri2000 said:I take this with a HUGE grain of salt...there's a lot of crafty stuff that the SVSE ownership group can do to claim that they're losing money. I suggest everyone go read the book May The Best Team Win...it's about baseball economics but it relates directly back to the NHL.....teams that are owned by groups like the Sharks are with SVSE can really doctor books creatively. Things such as concession/merchandise sales and revenue from parking can all be marked as gains for the group SVSE, but don't have to be written down as profits for the TEAM. SVSE makes lots of money by getting preformers like Andrea Bocelli and other events like WWE to come to the Tank, but those don't go down as profits for the SJ Sharks. Many baseball teams have done this and do do this...it's not illegal it's just creative accounting. I bet if all of SVSE's gains were compared to their expendatures they would be not be in the red.
Claiming a net loss and raising ticket prices even though you technically made a profit.Northern Dancer said:And what exactly is the purpose of this gymnastic accounting ?
Patrick Bateman said:Claiming a net loss and raising ticket prices even though you technically made a profit.
acr said:That's what they get for adding salary from the Thornton deal
dpetri2000 said:I take this with a HUGE grain of salt...there's a lot of crafty stuff that the SVSE ownership group can do to claim that they're losing money. I suggest everyone go read the book May The Best Team Win...it's about baseball economics but it relates directly back to the NHL.....teams that are owned by groups like the Sharks are with SVSE can really doctor books creatively. Things such as concession/merchandise sales and revenue from parking can all be marked as gains for the group SVSE, but don't have to be written down as profits for the TEAM. SVSE makes lots of money by getting preformers like Andrea Bocelli and other events like WWE to come to the Tank, but those don't go down as profits for the SJ Sharks. Many baseball teams have done this and do do this...it's not illegal it's just creative accounting. I bet if all of SVSE's gains were compared to their expendatures they would be not be in the red.
BigE said:These were old tactics that teams frequently used, and probably the biggest reason why the lockout took as long as it did.
The new CBA has defined exactly what revenue is and is not, and for better or worse they've closed a great many of these accounting loopholes.
Yes, indeed, it's a sad day for all bean counters.
kdb209 said:All true, but so was the original point - SVSE can lose money on the Sharks, but still turn a profit from the other events at the HP Pavilion.
And how SVSE spins the revenues in a Murky News piece doesn't necessarily have to jibe with the CBA HRR definitions.
BigE said:I agree, although for whatever reason I didn't read the original point as such. Especially when you consider the article frequently mentioned revenue sharing as a possibility for the club.
Nielsen Media Research Local Universe Estimates* (US)
*Estimates used throughout the 2005-2006 television season which starts on September 24, 2005
RANK Designated Market Area (DMA) TV Homes % of US
1 New York 7,375,530 6.692
2 Los Angeles 5,536,430 5.023
3 Chicago 3,430,790 3.113
4 Philadelphia 2,925,560 2.654
5 Boston (Manchester) 2,375,310 2.155
6 San Francisco-Oak-San Jose 2,355,740 2.137
7 Dallas-Ft. Worth 2,336,140 2.120
8 Washington, DC (Hagrstwn) 2,252,550 2.044
9 Atlanta 2,097,220 1.903
10 Houston 1,938,670 1.759
The Sharks' precise deficit can't be determined because all revenue has not yet been calculated, Jamison said. The league's new collective bargaining agreement, for example, provides for limited revenue sharing between the haves and the have-nots. But Jamison said the Sharks don't know yet whether they will be drawing from -- or contributing to -- that fund.
There are two batches of revenue sharing:
First batch - equal to 4.5% of league revenues (estimated to be $78 mill. this season); this batch aims to allow clubs to afford payrolls of $4 mill. below the midpoint; it is funded by league media revenue, playoff gate receipts, escrow funds, and top-grossing clubs
Second batch - designed to help clubs get to the midpoint but not over it; funded by excess escrow funds, if available
Any leftover escrow funds are to be distributed evenly between all 30 NHL clubs.
An example: a club has revenue of $50 mill. in a season when the midpoint is set at $32 mill. They would be able to afford a payroll of only $27 mill. (54% of their revenue) "in the league's eyes." They would receive, as the first batch of revenue sharing, $1 mill. from the league to get to within $4 mill. of the $32 mill. midpoint. The second batch (if they are eligible--see below), would provide up to an additional $4 mill., bringing them to the $32 mill. midpoint.
Rules:
Any club in the bottom half of revenues is eligible for the first batch (regardless of payroll amount)
Any club spending over the midpoint on player salaries is not eligible for the second batch
Clubs in markets with more than 2.5 mill. TV households are ineligible for revenue sharing
By the third year of the deal, clubs will have to grow revenues faster than the league avg. and have attendance of 75% of capacity to be eligible for their full revenue-sharing allotment
By the fourth year, the required attendace capacity increases to 80%
That's essentially the article. It doesn't answer every question but hopefully is a start at understanding this complex agreement.
Jerky Leclerc said:The Ducks lost over 15 million dollars this past season. According to Brian Burke, the Ducks gave a portion of their revenues from the playoffs back to the league.
dpetri2000 said:exactly. Especially if there is revenue sharing with regards to TV contracts and such...teams that make less get more...so it's almost a good idea to trim your profits.
I believe that the city owns the arena and the Sharks are in charge of managing it including all other events in addition to hockey.Northern Dancer said:I am unfamiliar with the Sharks ownership, does the group that owns the arena also own the Sharks. If so, there is no point to creative accounting to make one entity appear to be losing money while the other coins it.
The bottom line for ticket prices is economics, suppply and demand. If people do not like the new prices just don't go to the games. All this accounting justification is total nonsense.
Northern Dancer said:I am unfamiliar with the Sharks ownership, does the group that owns the arena also own the Sharks. If so, there is no point to creative accounting to make one entity appear to be losing money while the other coins it.
The bottom line for ticket prices is economics, suppply and demand. If people do not like the new prices just don't go to the games. All this accounting justification is total nonsense.
The teams can't hide their profits. They've audited to ensure the league revenue numbers (on which the cap is based) are accurate.dpetri2000 said:exactly. Especially if there is revenue sharing with regards to TV contracts and such...teams that make less get more...so it's almost a good idea to trim your profits.
Originally Posted by Jerky Leclerc
The Ducks lost over 15 million dollars this past season. According to Brian Burke, the Ducks gave a portion of their revenues from the playoffs back to the league.
go kim johnsson 514 said:What the hell? How does all of this happen?
At the same time, Burke said the Ducks lost "somewhat north of $15 million" under first-year owners Henry and Susan Samueli.
The NHL's new collective bargaining agreement requires a portion of revenue from playoff games be returned to the league, he said.
"Every time we played a home game, the net to us was significantly, significantly, significantly lower to us than in years past," Burke said, adding that the Ducks were losing more money before the Samuelis bought the franchise from The Walt Disney Co.