Location: LA 2, ANA 1, CGY 1, SJ 0, VAN 0, PHX 0, EDM who cares Joined: 08.02.2011
Sep 16 @ 2:01 AM ET
I wanted to post this here, it's been an ongoing debate between myself and another poster here. I thought I'd share why, although the players need to go down from 57% to 50%, the owners also need to include an actual revenue sharing plan, not the sham it has now.
TL;DR
The increase of $7.46 million dollars per team going from 57% to 50% (or from 43% to 50%, however you want to look at it) will disproportionately be distributed to the teams making more money and not towards the smaller market teams, leaving the same problem as before. I'm all for 50%, but if the owners don't include revenue sharing, we will be continuing this same cycle next time around.
Fix the problems, don't duct tape them.
Story
Well, each team would only get a hypothetical 7.46 million increase if it went to 50-50.
Under the current 43% for the owners, the owners received around 283 mil profit for this last year in total. Divide that by 30 teams, you get around $9,433,333 profit per team.
If we use the owners current 54% percent number, that leaves the owners with roughly 635 million in profit. Divide that by 30 teams, you get around $21,166,666 profit per team.
Now at 50%, league profits would be $507 million. Divide that by 30 teams, you get around $16,900,000 profit per team.
So from the system they had in place at 57%, each team theoretically had $9,433,333 in profit for this last year. Under the 50% proposal (which I am in favor of), each team would get around $16,900,000 profit per team. Subtract 9 from 16 and you get an increase of $7,466,667.
Now, while that 7 million sounds like a good number, we have to realize that that increase will almost certainly go towards the select few teams who have a high revenue (profit) stream. That money will barely trickle down to the other clubs.
So let's say we move a couple teams and they become profitable. The problem is, as you stated, 18 teams lost money. So even if you move four teams, that leaves 14 teams who still will lose money and will continue to lose money because they don't have an adequate profit sharing system in place. So the problem never really gets solved.
You and I agree on a majority of this, I just don't think you see how revenue sharing, coupled with the 50-50, is what will really help to fix the problem the NHL and its owners face. If there was revenue sharing, the smaller market teams would get that $7.4 million, maybe more if revenue sharing helps only the teams losing money.
Up to about a week ago, I was 100% blaming the owners. But then Fehr hinted that taking on the salary cap was not off the table if things progressed past a certain point, and I realize now that both sides are to blame. The owners still haven't shown anything to justify their takeback, but the players haven't shown anything to justify why they should get 57% when neither NFL nor NBA players have gotten that. Plain greed on both sides.
Whoever is MORE to blame (I still think it's the owners, but as I say it's a grey area at best) they deserve whatever damage they get from this, and more. I want them to be punished, and I think they will be if it is anything near the length of the last one (for instance, if they lose close to a year again, all the momentum they regained in the US is gone and I don't think it will EVER come back.)
Players will lose a lot more from this lockout than they will from a roll back in wages.
good for them. - robin_steele264
Now they are going to take a roll back and lose who knows how much of this years salary...just seems so pointless. Regardless of what they seem to believe the owners will outlast them.
Now they are going to take a roll back and lose who knows how much of this years salary...just seems so pointless. Regardless of what they seem to believe the owners will outlast them. - themizer
I agree generally, but what's troubling is that they have more unity this time (by all accounts). Plus from what I can tell, NHL players don't tend to spend money as stupidly as players in some other sports (could be completely wrong about this, but I don't hear about as many NHL players going broke after retirement, for instance)
I agree generally, but what's troubling is that they have more unity this time (by all accounts). Plus from what I can tell, NHL players don't tend to spend money as stupidly as players in some other sports (could be completely wrong about this, but I don't hear about as many NHL players going broke after retirement, for instance) - S Kaspar Rollins
They will never ever get back anything close to what they will lose if the lockout goes for an extended period of time. Think of a player like Iginla, over his career he will have lost well over $10 million because of lockouts. Did the deal they got get him any of it back? Will this one? The players need to minimize their losses out of this but are far too stubborn and short-sighted to see it.
You know the worse thing... 18 teams (60% of owners) lost money last season. The owners are idiots for continuing to throw out huge contracts, but the players are also idiots if they refuse to lower their percentage of the revenue. 57% is laughable... It should be 50/50. - laughs2907
They will never ever get back anything close to what they will lose if the lockout goes for an extended period of time. Think of a player like Iginla, over his career he will have lost well over $10 million because of lockouts. Did the deal they got get him any of it back? Will this one? The players need to minimize their losses out of this but are far too stubborn and short-sighted to see it. - themizer
I think (like most people) it will end up around 50-50 still but why they aren't anywhere near that point is beyond me.
I think there's a lot of uncertainty right now about whether a new deal will actually be worse or better for players in the long run - this is clearly embodied in how many players have signed extensions in the last week. I mean, I don't care what anyone says, the owners at least THOUGHT they won the last deal (I think the fact the union took a couple years to recover internally from their collapse is fairly strong evidence) so it's difficult to forecast.
it's odd the NHL hasn't made a bigger deal out of explicitly publicizing them, aside from that one "leaked" unofficial report. - S Kaspar Rollins
Forbes is considered one of the most reliable sources for financial information. Bettman probably doesn't want to admit that he's doing a sh1tty job at growing the sport in newer markets. Sure revenue is at an all time high, but that's because of 4-5 traditional markets going bat-sh1t crazy over the product.
OK, my question: Why can't we have a cap ceiling and a cap floor for ticket prices? Since we have fans in Toronto, paying about 10 times the amount for their tickets, then a fan in Florida, where is the equality here? Revenue sharing has not helped this league, to the extent that the players have believed. The top 10 teams have been bailing out the bottom 10 teams for far too long now. A franchise should only get a two or three year window on turning their franchise around. If in that period of time, they can't make a go of it, then they should be forced to move or fold. As a Leafs fan, I'm sick of paying welfare to these deadbeat teams and want an end to the constant increases to the cost of going to a game in my home arena. I believe that a cap on ticket prices would help keep costs down, in some of these markets. It may not allow for a huge increase in league revenues, but there would be equality and price certainty, in all markets. - PrinceLH
That's socialism at its finest right there. It's a business, they can charge whatever people are willing to pay. Paragraphs are your friend.
Bettman probably doesn't want to admit that he's doing a sh1tty job at growing the sport in new markets. Sure revenue is at an all time high, but that's because of 4-5 traditional markets going bat-sh1t crazy over the product. - laughs2907
That's a good point, even if we take the numbers at face value, it can be quickly countered when people point out that a lot of those teams are in stupid markets that have been questioned from the start.
On an unrelated note, according to Forbes the Oilers made $17M last year??? Am I reading that right?
That's a good point, even if we take the numbers at face value, it can be quickly countered when people point out that a lot of those teams are in stupid markets that have been questioned from the start.
On an unrelated note, according to Forbes the Oilers made $17M last year??? Am I reading that right? - S Kaspar Rollins
Yeah, they do very well with attendance, and ticket prices are high... Not to mention, Hall, Eberle, and RNH probably helped out a lot. I bet merchandise was flying off the shelves.
Yeah, they do very well with attendance, and ticket prices are high... Not to mention, Hall, Eberle, and RNH probably helped out a lot. I bet merchandise was flying off the shelves. - laughs2907
I suppose it's good that they're financially healthy, but not a whole lot of incentive to speed up the rebuild, no?
Also interesting: the Flames only made $1.1M last year, further supporting my theory about why they refuse to rebuild (that number will dip as they continue to suck but will really nosedive if they're at the bottom of the league)
Ek is being sarcastic with this blog title I'm pretty sure. I know it can get confusing because I don't bother reading the blog 90% of the time anyway.
Location: LA 2, ANA 1, CGY 1, SJ 0, VAN 0, PHX 0, EDM who cares Joined: 08.02.2011
Sep 16 @ 2:43 AM ET
There is also quite a bit of money that the owners actually get to keep that isn't included in HRR (and thus, isn't included in the numbers).
For example, while 100% of parking revenue is included in HRR, you can deduct direct costs up to 30% of the revenue.
100% of concession revenues on game night count for HRR, but you can deduct up to 54% of the revenue.
So, just 70% of parking revenue and 46% of concession revenue actually go against HRR.
Also, if a public authority pays a team a certain amount to stay in a city, that all counts towards HRR. But, if a public authority builds the stadium, the owner gets to keep 100% of the benefit from the wealth transfer.
Another thing, only 65% of box lease revenue and club/premium seat revenue count towards HRR, while 100% of regular seats count towards HRR.
So the owners do get more money than they are reporting. Some teams may not be profitable in a pure HRR sense, but make their money up elsewhere.
Similar to how Amazon early on didn't make money on their books, but through selling books at cost, they made more money selling all their other stuff. Simple business practices.
I suppose it's good that they're financially healthy, but not a whole lot of incentive to speed up the rebuild, no?
Also interesting: the Flames only made $1.1M last year, further supporting my theory about why they refuse to rebuild (that number will dip as they continue to suck but will really nosedive if they're at the bottom of the league) - S Kaspar Rollins
I think if the Flames decide to blow it up, and end up getting Mckinnon next year at the draft, it would do wonders for their operating income. Everyone would want a McKinnon jersey.
Location: Corner of Kirk Maclean's Toe and Robert Reichel's face. Joined: 01.09.2006
Sep 16 @ 2:45 AM ET
Ek is being sarcastic with this blog title I'm pretty sure. I know it can get confusing because I don't bother reading the blog 90% of the time anyway. - S Kaspar Rollins
I actually read this one... I don;t thjink sarcasm was there....
Give a listen --- AND NO MERCH... it is our only thing we can do.
I think if the Flames decide to blow it up, and end up getting Mckinnon next year at the draft, it would do wonders for their operating income. Everyone would want a McKinnon jersey. - laughs2907
I'm intrigued at the possibility of a shortened season (this is also me being optimistic - I still refuse to believe another year will be lost until I see it.) I'm not sure if less games would make it more or less likely that they could make the playoffs. Either way, I don't think they're bad enough yet to be in that position, but if they get off to a bad start and have to make up a lot of ground in less games, who knows? It's almost a win win.
Am I reading that right? 
