Cap problems in Buffalo ?

GSC2k2*

Guest
Perhaps the words from the proverbial horse's mouth might demonstrate how some people here might conclude Golisano is worried about the CBA-featuring a cap:





You know, every way I read this, Golisano is saying he's uncomfortable (generous description) with the cap going up and what it means for several teams-- all of whom wanted this CBA and had a role in designing how the cap was calculated. He is part of the "they" he refers to here. He knows the formula for the cap. He knew there was a significant revenue gap between the haves and have nots.... Now he's saying it's just like the old days, right?
Fugu, that is a bit disingenuous, don't you think? He is saying nothing of the kind.
 

Fugu

Guest
Fugu, that is a bit disingenuous, don't you think? He is saying nothing of the kind.


All I did was pull out every single quote from Golisano in the article.

Are you upset that I found Golisano's comments and posted them?


Argue with him and what he was quoted as saying. You're targeting me for having the audacity to find Golisano's own comments on the CBA. Refute his claim, or refute the reporter's work in quoting him. I'm not in a mood to get shot as the messenger today.... :D
 

Fugu

Guest
Hehe, when you have to bold certain things while leaving out key phrases like "would it"...nah. Not disingenuous at all methinks :sarcasm:.



Would you feel better, happier, more secure.... safe in your own reality.... if I did not bold his comments? I only did that because an earlier poster had trouble finding where it was exactly that Golisono sounded like he was complaining (whining was the word) about the CBA.

Again........ tell me Golisano did not say that. I don't mind taking out the bolded part. It will still mean the same thing.
 

GSC2k2*

Guest
All I did was pull out every single quote from Golisano in the article.

Are you upset that I found Golisano's comments and posted them?


Argue with him and what he was quoted as saying. You're targeting me for having the audacity to find Golisano's own comments on the CBA. Refute his claim, or refute the reporter's work in quoting him. I'm not in a mood to get shot as the messenger today.... :D
Fugu, I won't argue with him and what he is quoted as saying. In fact, I would agree with him, as I am sure you would. In fact, I would go further and say that everything he says about the cap not being a cure-all would have been agreeable to both of us before and during the lockout. Only the more half-witted or inexperienced observers would have suggested anything to the contrary. The very nature of a payroll range (instead of a specific number that is equal for all teams) dictates that there will be an advantage to having higher revenue. That is in fact EXACTLY WHAT THAT SYSTEM IS DESIGNED TO DO. The reasons for that are clear; in exchange for revenue-sharing, the system has a built-in incentive to make all teams want to increase their revenue. If you do not, you will be stuck at or below the midpoint and sustain some competitive disadvantage (but not too much - hence the range). One of the overlooked aspects of this CBA is its impressive chacks and balances and its means of incentivizing certain behaviours.

I would, however, argue with the words that you are putting into his mouth, specifically:

Now he's saying it's just like the old days,

As I said, he said nothing of the kind. If you are going to be "the messenger", then please avoid the garbled transmission issues. ;)
 

Fugu

Guest
Fugu, I won't argue with him and what he is quoted as saying. In fact, I would agree with him, as I am sure you would. In fact, I would go further and say that everything he says about the cap not being a cure-all would have been agreeable to both of us before and during the lockout. Only the more half-witted or inexperienced observers would have suggested anything to the contrary. The very nature of a payroll range (instead of a specific number that is equal for all teams) dictates that there will be an advantage to having higher revenue. That is in fact EXACTLY WHAT THAT SYSTEM IS DESIGNED TO DO. The reasons for that are clear; in exchange for revenue-sharing, the system has a built-in incentive to make all teams want to increase their revenue. If you do not, you will be stuck at or below the midpoint and sustain some competitive disadvantage (but not too much - hence the range). One of the overlooked aspects of this CBA is its impressive chacks and balances and its means of incentivizing certain behaviours.

Hmmm. Hate it when I have to agree with you, mostly. I do think the system was designed to offer predictability (in this case, cost certainty), but as a protective measure, the incentive to grow revenue was also added. Having a payroll range may also be a feasibility issue, given where teams were before the lockout along with how the system should work.

Of course, if you are in a market where growth isn't possible (for whatever economic or local conditions, e.g., the Preds)... the revenue sharing plan may be the best you'll ever be able to do. If you know that spending more to stay competitive will not achieve the desired result (on ice success not equaling financial success), the answer may be to get as much as you can out of it. I know Leonsis is committed to the Capitals, but might not this scenario apply to them at some point? I don't know really, but it is worth considering.




I would, however, argue with the words that you are putting into his mouth, specifically:

What GC highlighted Fugu saying:

Quote:
Now he's saying it's just like the old days,

As I said, he said nothing of the kind. If you are going to be "the messenger", then please avoid the garbled transmission issues. ;)


What I in fact did say:


Originally Posted by Fugu View Post
....

He knew there was a significant revenue gap between the haves and have nots.... Now he's saying it's just like the old days, right?



The "right, ?" does imply a bit of sarcasm on my right, no? The oft used justification for the lockout was to rid the league of the haves and have nots, parity.... or in my old age am I forgetting how it was presented? I think I'm at least as old as you so maybe we can't trust each other! :)

I'll say you can win this round on the "technicality" but I stand by the assertion that the CBA was presented in the PR wars as something that would result in parity. Golisano himself invokes the have/have not argument, not me.
 

joshjull

Registered User
Aug 2, 2005
78,463
39,917
Hamburg,NY
Here's the thing, and I actually like the Sabres....

Zero corporate sales is less than the Preds have, and look how their owner cited that as an issue. The model for success in the NHL says you need at least 60% corporate STH support. Why does Buffalo get to be different?
The reasons you cite are also the reason Canadian teams get shot down [on this board].... lack - potentially - of corporate support and ticket prices that are too low for the NHL.

Are you saying that it is okay for fans in bigger markets to get price gouged, to not be "Average Joe Fan" friendly so that Buffalo can survive by selling to Joe Fan? Why is the Buffalo fan entitled to lower ticket prices at the expense of Detroit, Toronto, St. Louis or Colorado fans.... for example?

The Sabre don't have zero corporate support. I know your not asserting that just responding to that claim. It obviously isn't on par with some bigger cities but its hardly non-existant. The Sabres have a season ticket base capped at about 14,900 and a waitng list of 3,000 for ST. They also have all their suites sold out. What percentage is corporate I don't know.

But the premise of this thread is completely false and misleading. Cap problems implies they are losing money and are struggling to stay in the payroll range. All the Sabres owner and general partner have said is this. The league should be vigilant in regards to the rising cap number and its effects. They have also said due to the revenue realities in Buffalo they will not spend to the upper cap limit. They plan on spending somewhere in the lower 40mil area. Or about only 5mil-ish below the upper limit. How this translates into Buffalo having Cap "problems" is beyond me. Considering the Sabres lost money the year prior to the lockout ( about 8mil) with a 33mil payroll. This past season with a payroll of 40+ mil they made a little money prior to the playoffs. So its fairly obvious they are in much better shape now than they were before the lockout. The point of the CBA was to try and make all teams economically viable. Obviously in some cases that hasn't happened but in the Sabres case they are very much a viable franchise.

All the piling on in this thread is based on ignorance of the realities here. The franchise isn't in trouble nor is it not viable. As for Bettman lying and being full of **** at times in regards to the CBA. I don't disagree agree with that. But its one thing for an owner to state concerns about the direction the league is going. Its quite another for the original poster to then make the gigantic leap that the Sabres franchise is on the rocks or in bad shape. Thats far from the reality.
 
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Fugu

Guest
The Sabre don't have zero corporate support. I know your not asserting that just responding to that claim. It obviously isn't on par with some bigger cities but its hardly non-existant. The Sabres have a season ticket base capped at about 14,900 and a waitng list of 3,000 for ST. They also have all their suites sold out. What percentage is corporate I don't know.

Thank you for reading through the posts and seeing that I did not make the original claim. The coverage on the Sabres' financial issues has been pretty good so I'd be surprised if a breakdown didn't exist somewhere. I may try to dig it up if I have time....



But the premise of this thread is completely false and misleading. Cap problems implies they are losing money and are struggling to stay in the payroll range. All the Sabres owner and general partner have said is this. The league should be vigilant in regards to the rising cap number and its effects. They have also said due to the revenue realities in Buffalo they will not spend to the upper cap limit. They plan on spending somewhere in the lower 40mil area. Or about only 5mil-ish below the upper limit. How this translates into Buffalo having Cap "problems" is beyond me. Considering the Sabres lost money the year prior to the lockout ( about 8mil) with a 33mil payroll. This past season with a payroll of 40+ mil they made a little money prior to the playoffs. So its fairly obvious they are in much better shape now than they were before the lockout. The point of the CBA was to try and make all teams economically viable. Obviously in some cases that hasn't happened but in the Sabres case they are very much a viable franchise.

I highlighted the part that I believe is most relevant. There is little the league can do about the cap at this stage, thus how Golisano expects "them" to be vigilant is beyond me. He is part to the "them" he references (as a member of the BOG). Bettman works for the BOG, not the other way around. Bettman may have negotiated the agreement, but the BOG had to approve it on behalf of the NHL. However.... the cap is set by an agreed to formula as stipulated in the CBA. There is some discretion in applying an otherwise "automatic" factor of 5% to take inflation into account, so at the very least - w/o any other revenue growth - it would go up by at least this amount.

How can the league be vigilant with regard to the cap at this stage?



Furthermore, I think Golisano was pointing out that the Sabres were only profitable because they went deep in the playoffs and received revenue sharing. He's trying to point out that they have done all the other things-- sold out the arena, huge interest in the team, waiting list for season tickets, etc. That's the grim reality for many small market teams, that in spite of their on ice success, or in Buffalo's case on- and off ice 'success'... it could still be very difficult, and only works if there's a playoff run. [In the Preds' case, maybe not even then.]

I know there are some posters here who've discussed how the huge revenue gap skews the cap to a very high point thanks in part to such a large part of the total revenue being concentrated in the top third of the NHL. The average NHL team revenue would ~$75 MM, where 54% of that is $40 MM. However if there are 6-7 teams that are above $90 MM, 2 of at an est. $104 and $119. On the flip side, it seems that half of the league is $70 MM or less... Last year the cap was at $44 MM, while this coming season it may be in the $47-50 MM range...
 

SJeasy

Registered User
Feb 3, 2005
12,538
3
San Jose
I know there are some posters here who've discussed how the huge revenue gap skews the cap to a very high point thanks in part to such a large part of the total revenue being concentrated in the top third of the NHL. The average NHL team revenue would ~$75 MM, where 54% of that is $40 MM. However if there are 6-7 teams that are above $90 MM, 2 of at an est. $104 and $119. On the flip side, it seems that half of the league is $70 MM or less... Last year the cap was at $44 MM, while this coming season it may be in the $47-50 MM range...
Thank you all for a good discussion.

Instead of addressing the issue through the cap, might the BOG address it through the rev. sharing formula? I would assume that if the monumental revs are concentrated in a few teams that a vote would favor the "have-nots". In terms of vigilance with the potential for change, it might not mean that he means the cap be adjusted, just the way revs are distributed.

Any educated guesses as to what might happen if the system continues as is? The magnet effect of the cap is evident. Will the mid-market teams adjust their spending habits or will they continue and seek other adjustments in the system?
 

thinkwild

Veni Vidi Toga
Jul 29, 2003
10,815
1,468
Ottawa
I think if things continue, the alleged magnet effect of the cap will become less and less visible. I believe in order to qualify for certain revenue sharing, the team must show growth comparable to or greater than the league average. Otherwise the other teams throw that market under the bus.

Its interesting the line about having to reach the 2nd round to make a profit. That is one ottawa fans heard a lot. Then they paid off the interchange taxes, lowered Sens property tax by 3 quarters, gota a triple cap with linkage, and you know Sens will hear when the cap brings us back to the pack ..

Really, when you think about it, for some teams, losing money unless they get past the 2nd round is probably a good and normal thing.
 

MLH

Registered User
Feb 6, 2003
5,328
0
Thank you for reading through the posts and seeing that I did not make the original claim. The coverage on the Sabres' financial issues has been pretty good so I'd be surprised if a breakdown didn't exist somewhere. I may try to dig it up if I have time....

Larry Quinn has stated on WGR a few times that Buffalo has the largest "average joe" fanbase (percentage wise) in the NHL. Whether or not that's hyperbole I don't know, but Buffalo's economic troubles are well documented and it's not exactly a corporate hub. Even many of the suites are purchased by small local businesses. I have season's in the lower bowl an there aren't any seats near me where I see suits rotate every game.
 

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