The owners have been saying the players don't get the way sports economics works, and yesterday came the first play by the NHL to try to get the fans to understand their side of this when word trickled down that during this CBA Revenues have increased more than 50% but players salaries have increases over 90%.

Can the owners explain sport economics to us fans, all they are trying to say players need to make less money. Why? So they can keep increasing ticket prices and lower salaries to make a larger profit.

So you think that the casual observer actually understands the complexity of collective bargaining?
- mlindsay

no. I don't think they understand 90% of it. Yet they still have opinions.

Can the owners explain sport economics to us fans, all they are trying to say players need to make less money. Why? So they can keep increasing ticket prices and lower salaries to make a larger profit.
- roenick

well said.

no. I don't think they understand 90% of it. Yet they still have opinions.
- Eklund

then maybe your blog could be a little more educational than emotional.

Here too. They will sell out every game still. So why would the owners care about starting the season on time? People just don't seem to get that if you do what you've always done you will get what you've always gotten or you can revolt against things you don't believe in. The only thing the owners see is dollars and cents. People can affect change.
- Pierceme69

Ya. Good luck convincing people is all I'm saying. When teams still sell out when their club has NO chance at playoffs (see TO and MTL last season). I doubt anyone would give up their tix for a protest. Not to mention season tix are paid well in advance, so the owners already got their cash there.

no. I don't think they understand 90% of it. Yet they still have opinions.
- Eklund

I think 90% is being nice considering some of the responses I read here; I'd say they understand maybe 1%

The owners have been saying the players don't get the way sports economics works, and yesterday came the first play by the NHL to try to get the fans to understand their side of this when word trickled down that during this CBA Revenues have increased more than 50% but players salaries have increases over 90%.


I love this. Exactly whose fault is it that salaries have out stripped revenues? The fans? The players?

Bettman is not the problem on this one. He needs to get all the owners (who pay him) to agree.

This is the problem.

He has the support of the majority of owners, the owners all agree that they have to have an expanded market to make more revenue, but many of the markets they hold are not equitable. The richest clubs are tired of being tied down by that fact and want an edge based on their market share and the amount that they contribute to keeping the rest of the league afloat. They got a salary cap to control salaries, then spent the entire CBA finding ways to get around their control. They need market shares and parity to keep enough market share to warrant their TV deals, but they are competitive and want to win.

The players union want to keep as many players employed, and want are willing to tweek the current agreement and salaries to do so, knowing that the owners will still try and manouver around any rules that they put in place and drive up salaries again. With this process we are going to start to see a larger middle class in the NHL as salaries go up then get retracted. So the players are for it.

The delay here is for the owners and not the players, the players and the PA are merely a misdirection, of the larger problem. Seeing as the larger portion of the owners would welcome a lockout for a few months to lower losses, it will most likely happen. The players will help this by digging in a little this time around.

don't expect business as usual because it is in everyone's best interest to wait a few months to start the season.

So you think that the casual observer actually understands the complexity of collective bargaining?
- mlindsay

Based on some of the ideas I've seen lobbed out [repeatedly], I'm convinced most people barely understand the complexity of the CBA. Asking them to then understand collective bargaining is just way too much.

I love this. Exactly whose fault is it that salaries have out stripped revenues? The fans? The players?
- PeteM

It's not that salaries outstrip revenues across the board; it's that they take out more than 57% of revenues for some teams - and over time, more and more teams will have this problem if they don't grow revenues faster than the high-revenue teams that are driving a sizeable part of the increase in the cap. If you want to blame the owners for that, fine - but instead of blaming someone for something, I'd prefer to find a long-term solution.

Can the owners explain sport economics to us fans, all they are trying to say players need to make less money. Why? So they can keep increasing ticket prices and lower salaries to make a larger profit.
- roenick

The owners pay all expenses with their portion of the profit. Flights, hotels, on ice equipment, practice facilties, marketing, hydro, utilities, community support events, and lease agreements. That is why smaller market teams can not operate under the current split percentage. Revenue is ticket sales, but mostly merchandise, and tv revenue.

The owners of the teams making money are perfectly fine, with the split now, because of their shear volume.

imagine making 100 million dollars and your salary payout is 60 million, then your lease is another 20 million, and your other expenses are 20 million or more. You have just lost money or broke even for all the time and energy you put in.

Now a team like the Leafs make 500 million, salary is 70 million and expenses relatively the same. All the salary cap has done is allow the successful teams greater profit to share with the rest of the (have nots) league.

That's sport economics

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

If this could help...

Bettman sucks. Worst Commish in all of sports.


If there is a third lockout...he needs to be fired. End of story
- meduser

Judging by the way the NHL has increased it's revenue since the last lockout....you couldn't be more wrong.

It has many holes, due to competition laws etc, but here is my fix.

You take the league and turn it into a corporation, with all the current ownership groups forming a partnership. The partnership percentage (shares) are then based on the current revenue level of that club. Profits are then split over that basis, which would collectively bring the owners together.

We then offer performance profit pools for Winning to keep competition levels up. We also offer business profit pools for running the club above or below their current status. Each team's management would be separate but they would answer to the league as the owner role would then change.

can't picture this happening but it is the only way to get the owners to see eye to eye.

Can the owners explain sport economics to us fans, all they are trying to say players need to make less money. Why? So they can keep increasing ticket prices and lower salaries to make a larger profit.
- roenick

Neither the NHL nor the Players want the league to drop to a 25 or 26 team league. Which will happen if something doesn't change.
Most other sports have a 50-50 split in revenue. I don't think that's asking too much for the players to accept IMHO.

Neither the NHL nor the Players want the league to drop to a 25 or 26 team league. Which will happen if something doesn't change.
Most other sports have a 50-50 split in revenue. I don't think that's asking too much for the players to accept IMHO.
- stormey

when the players proposed their deal 2 weeks ago, didn't it have a 50-50 split? i thought the owners shot that down.

It has many holes, due to competition laws etc, but here is my fix.

You take the league and turn it into a corporation, with all the current ownership groups forming a partnership. The partnership percentage (shares) are then based on the current revenue level of that club. Profits are then split over that basis, which would collectively bring the owners together.

We then offer performance profit pools for Winning to keep competition levels up. We also offer business profit pools for running the club above or below their current status. Each team's management would be separate but they would answer to the league as the owner role would then change.

can't picture this happening but it is the only way to get the owners to see eye to eye.
- stevecarpetman

This gets back to the basic disagreement between the haves and the have-nots: why should one group give up its profits to subsidize the other group? At the same time, if the haves are going to have a greater ability to spend to be competitve and challenge for a title, who's more likely to get those performance bonuses - and why would the have-nots agree to a system that potentially sees the haves suck in even more money? If profits are split on ownership shares and those distributions are still insufficient to help the have-nots break even [and there's no longer any other revenue sharing, which is likely given the model you propose], who's more likely to get payouts from the business profit pools?

when the players proposed their deal 2 weeks ago, didn't it have a 50-50 split? i thought the owners shot that down.
- blacksheep1

It was an initial 50-50 split [with the deferred money going toward revenue sharing], but that grew over time in favor of the players [as revenues increased, that increase accrued more to them and less to the owners] and then kicked back in at 57-43 for the players in the 4th year.

when the players proposed their deal 2 weeks ago, didn't it have a 50-50 split? i thought the owners shot that down.
- blacksheep1

I don't think it was as cut and dry as that.

It has many holes, due to competition laws etc, but here is my fix.

You take the league and turn it into a corporation, with all the current ownership groups forming a partnership. The partnership percentage (shares) are then based on the current revenue level of that club. Profits are then split over that basis, which would collectively bring the owners together.

We then offer performance profit pools for Winning to keep competition levels up. We also offer business profit pools for running the club above or below their current status. Each team's management would be separate but they would answer to the league as the owner role would then change.

can't picture this happening but it is the only way to get the owners to see eye to eye.
- stevecarpetman

Bettman would actually have the power that people think he has under this scenario. Bettman now is only the voice and mediator of 30 owners who primarily see their own interst first. They love him because he plays lightning rod sooo well, and takes the brunt of the public off the owners and their bad decisions.

Balsillie is a perfect example. Everyone blames Bettman and his feud with him as the reason he could not get a team. Bettmen was merely doing what the owners wanted by keeping him out. Balsillie was a loose cannon who wanted to make his own rules, another person that would fight tooth and nail for his own interest in the already volatile owners forum. The owners didn't need more of this and recognized the disruption he provided. Bettman needed his money and gusto for ownership to bail out some of his clubs but the owners did not agree. That was why Bettman had him involved in many different clubs ownership changes, but he had to prove he would play along. He ultimately undid that with his legal action, and therefore banished himself from the league's future by becoming a Lone Wolf. Owners have to be prepared to take losses for the greater good of the league, some have a hard time with that over time as happened in Phoenix. Bettman did not hate Balsillie but, he most likely was pissed that Balsillie made him look like a fool to the other owners in the end.

This gets back to the basic disagreement between the haves and the have-nots: why should one group give up its profits to subsidize the other group? At the same time, if the haves are going to have a greater ability to spend to be competitve and challenge for a title, who's more likely to get those performance bonuses - and why would the have-nots agree to a system that potentially sees the haves suck in even more money? If profits are split on ownership shares and those distributions are still insufficient to help the have-nots break even
- Irish Blues[and there's no longer any other revenue sharing, which is likely given the model you propose], who's more likely to get payouts from the business profit pools?

The league would split profit and expenses as a whole. This is revenue shairing but without losses. The current owner share percentage based on the revenue percentage at time of incorporation. There would no longer be loss just less profit. It would support the league's success.

The owners pay all expenses with their portion of the profit. Flights, hotels, on ice equipment, practice facilties, marketing, hydro, utilities, community support events, and lease agreements. That is why smaller market teams can not operate under the current split percentage. Revenue is ticket sales, but mostly merchandise, and tv revenue.

The owners of the teams making money are perfectly fine, with the split now, because of their shear volume.

imagine making 100 million dollars and your salary payout is 60 million, then your lease is another 20 million, and your other expenses are 20 million or more. You have just lost money or broke even for all the time and energy you put in.

Now a team like the Leafs make 500 million, salary is 70 million and expenses relatively the same. All the salary cap has done is allow the successful teams greater profit to share with the rest of the (have nots) league.

That's sport economics
- stevecarpetman

Location, location, location... you do not buy a $100,000 fixer-upper house and expect to live like Trump and that is what owners of small markets do. In the end, it is bad management by the owners from the early days, the problem has grown and people have made a lot of money but putting a $50,000 kitchen in a $100,000 house is not a good idea, just like throughing a $100,000,000 at a hockey player in a small market is not a good idea but in the end it is the owner and not the player who puts the rubber stamp on it, yes the players can ask for it but if you can not afford it as an owner, SAY NO...

I don't think it was as cut and dry as that.
- stormey

i kow it wasn't, the players didn't want to reduce salaries, want to play out current cba for another 4 years, etc.

Wahh Wahh Wahh...I'm paying you too much money but here Shea/Ryan/Zach have $100M each. No sympathy here for the owners. You have set a standard market value each year with your big contracts that you give out. You made your bed, now sleep in it. I want hockey god dammit.

Bettman sucks. Worst Commish in all of sports.


If there is a third lockout...he needs to be fired. End of story
- meduser

Bettman is doing exactly what the owners want him to do.