Excellent Article about Lockout

Discussion in 'The Business of Hockey' started by cbjfan, Jan 8, 2005.

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  1. cbjfan

    cbjfan Registered User

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  2. CarlRacki

    CarlRacki Registered User

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    Very good article. Critical of both sides for the right reasons. But the key sentence for me was this one:

    If the players don't like what they could get now, they need to understand it will only get worse next year. And they will each have lost at least a year's worth of salary they will never get back.
     
  3. SuperUnknown

    SuperUnknown Registered User

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    This is exactly why, despite anyone's stance (pro-owner/pro-player), we should all agree that the NHLPA has to do the next step. If they don't they lose out a bit more everyday.

    For the owners, hockey or no hockey, it's statu quo for their overall bottomline.

    The only way this conflict ever resolves is when the players are going to be willing to make cost certainty compromises. Whether you or I agree about it or not... :dunno:
     
  4. Brent Burns Beard

    Brent Burns Beard DontTouchMyDonskoi!

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    i disagree. Since it is the owners who want to drastically alter the business, it is up to them to come up with a workable solution. since they initiated and created this mess, the owners OWE it to the fans to find a way to make it work without cancelling the season.

    once they have propose a framework that the players can agree to, then they can start negotiating.

    dr
     
  5. arnie

    arnie Registered User

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    In fact, it was a rather idiotic article, like most everything else written about the lockout.

    For example: "In the last few months, many players have lashed out at Bettman. They point out that Bettman was the one who approved franchises in non-traditional markets; that Bettman is barely budging on his demands; that Bettman has been in office for 12 years and must take responsibility for the state of the game.


    In many respects, they are correct. For much of the last decade, hockey owners cashed in on big expansion fees with little thought about how it would affect the game in the long term. That's a big reason hockey is where it is.
     
  6. arnie

    arnie Registered User

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    In fact, it was a rather idiotic article, like most everything else written about the lockout.

    For example: "In the last few months, many players have lashed out at Bettman. They point out that Bettman was the one who approved franchises in non-traditional markets; that Bettman is barely budging on his demands; that Bettman has been in office for 12 years and must take responsibility for the state of the game.

    In many respects, they are correct. For much of the last decade, hockey owners cashed in on big expansion fees with little thought about how it would affect the game in the long term. That's a big reason hockey is where it is."

    This is plain stupid. The owners brought Bettman in to oversee expansion whose primary aim was to obtain a US national TV contract. It is not Bettman's fault, or the owners for that matter, they few Americans have any real interest in hockey. That's just the way it is.
     
  7. SuperUnknown

    SuperUnknown Registered User

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    In their opinion, the owners have provided a workable solution. And they know that eventually, they will be able to operate again whether the players agree or not. Since in the meantime, their bottomline isn't really affected, they can sit on that offer as long as they want. Why would they propose a framework that the players can agree to? They don't care that the players don't agree to it. :dunno:

    The players, however, are losing money daily and being worse of as every day go by. In other words, it is in their SELF interest to get an agreement that is the best that they can get. Sitting out and waiting for an NHL proposal is the dumbest thing they could do. What if the NHL doesn't propose anything before 2007? They'll just sit and see their collective revenues tumble now AND then? Sounds really stupid to me.
     
  8. They have. Take it or leave it. Play for what they are offering or go find yourself another league to play in where you will be guaranteed a million dollar salary. There aren't any out there. Personally I think the owners have been very generous. I would put the players balls in a vice and not stop until I get the last drop of blood out them. The more the players whine and complain the harder I were squeeze.
     
  9. Brent Burns Beard

    Brent Burns Beard DontTouchMyDonskoi!

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    if it was deemed workable by the other party, they would be neogtiating right now. the owners are obliged to try another tactic.

    my suggestion ? an ounce of sugar. the owners have taken a conforntational approach with a group of people who are succesful because of their stubborn pride and determination to win. hockey players will break their face to stop a puck when they are determined to win.

    if the owners goal is to have hockey back in a more logical economic model, then they should get their heads together and figure out how to get the PA on board asap.

    if the owners goal is to crush the union, they should do nothing at this stage.

    dr
     
  10. Brent Burns Beard

    Brent Burns Beard DontTouchMyDonskoi!

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    and this would gain you what ?

    dr
     
  11. Satisfaction. Next question.
     
  12. CarlRacki

    CarlRacki Registered User

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    The owners aren't obliged to do anything. This is where the PA has failed drastically. They're working under a theory that the owners need the games more than the players do. We know this isn't true. Some teams are undoubtedly hurt by the lockout, but that fact is several others lose less by not playing. And nearly every team has been setting aside money for years to withstand a protracted lockout. Why should those teams be in a hurry to accede to the PA's wishes?
     
  13. Buffaloed

    Buffaloed webmaster

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    The owners don't owe us anything other than refunds for our season tickets. If there's never another NHL game played, the owners will still be very rich men able to pursue whatever new interests tickle their fancy. The owners don't need the NHL. In fact they need it less than any other party that's interested in seeing the lockout end. Throw morals and ethics out the window. It might fly in philosophy class, but the owners could care less. In the real world the next move is up to those whose economic survival depends on it.
     
  14. struckmatch

    struckmatch Registered User

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    Exactly. The bottom line is, if DR and all the rest of us want to see hockey, we'd all better hope that the PA folds like a cheap chinese bicycle, because thats the only way we're going to see hockey anytime soon.
     
  15. John Flyers Fan

    John Flyers Fan Registered User

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    There are teams an owners that are being hurt in a big way by this lockout.

    The Flyers announced that if the season is a complete wipeout they will lose $15 million, and they are far from the only team in that situation.

    Yes there are some teams that will lose less with no hockey, but a whole bunch of teams that will lose more.

    That doesn't even take into account the fact of possible future fan apathy, loss in ticket sales/overall slowing or reversing of revenue growth.
     
  16. Steve L*

    Steve L* Registered User

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    The Flyers will lose $15m, the players will lose hundreds of millions, now who do think will cave first?
     
  17. John Flyers Fan

    John Flyers Fan Registered User

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    History tells us the owners.
     
  18. Big Cat Davo

    Big Cat Davo Registered User

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    Really Quite simple.

    I can't believe how many people think that the NHLPA can win the war of attrition with the Owners. of the 30 owners how many do you think have an NHL franchise as their sole source of income. How many do you think list NHL Franchise Owner as their "Job" title. Easy question. Zero. Of the people represented by the NHLPA how many do you think rely only on their income generater from the NHL. I really could not give you an exact number, but I would venture a guess it is higher than 50%. Substantially higher. So how exactly, are the players going to win the long and drawn out battle. Who is really getting hurt here? So the Flyers are going to lose 15 million . . . to Mr. Sneider that is what 10% of his yearly income. Players may only be losing 100,000 or 1.5 million or even 8 million. But it is in most cases, 100% of their income. Especially the ones earning the league minimum.

    Dave
     
  19. SENSible1*

    SENSible1* Guest

    History doesn't always repeat itself, especially when one side is smart enough to learn from their mistakes.
     
  20. SuperUnknown

    SuperUnknown Registered User

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    The big difference this time is that the owners aren't expecting an increase in the revenues the next few years that could *tackle* the raise in salaries like they did in 1994 (Expansion money, tv deal, raise in popularity, etc).
     
  21. SuperUnknown

    SuperUnknown Registered User

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    I said "overall" bottomline and I meant it. With hockey, owners collectively lost something like $300M per year (excluding interests and amortization). Add to that the franchise value that is lower (overall) when the league isn't making profits to that. If there's no hockey, the teams will lose collectively about the same amount.

    To top it off, if they keep a similar structure, the owners think they would lose $300M this year, then the next one, the year after the next one, etc. If they can put a stop gap, then they will likely make profits (and tremendously increase their collective franchise value).

    Overall, they don't stand to lose much by sitting out. Surely, some individual franchises will lose more than others. At the same time, if a cap gets implemented, those franchises stand to win even more though, so it's a situation they're probably willing to accept.

    Now, let's assume a worst case scenario where every year of a lockout means the owners lose $200M more than they would if they were operating (really high figure). They would lose $400M over two years. That's probably money they'll be able to get back with the next cba if they implement the one they want. In other words, the loss from the owners during the lockout is sustainable. And while on the long term I don't think it's sound business, the owners can have planned to used the lockout losses as tax shelters, so they aren't even "losing" that amount.

    On the other hand, you have the players collectively losing revenues over $1B this year, and then next year too. After two years, it's probably about $2.5B that they will have lost. I just can't see that as a sustainable loss, they'll never get gains over the next CBA that will compensate them for the lost revenues. Even more, if they get to finally agree to a cap (in %), then their collective revenues will suffer from the loss of fanbase, since the overall revenues will be lower as every day of this lockout goes by. Which means that for the players, the clock is ticking. Not only are they losing revenues that they have no chance to earn back in the next cba, but when they sign to a form of cost certainty, their revenues will be lower as the fanbase erodes while the league is not operating.

    To me, when you look at it this way, I just can't see why the owners would cave in before the players do. The players have everything to lose and the owners everything to gain from the lockout. The bargaining strenght this time is with the owners, while in 1994 it was with the players (because the owners were afraid to lose expansion money, national tv money and expected rise in revenues while the players salaries weren't that high collectively back then).
     
  22. Digger12

    Digger12 Gold Fever

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    For all those franchises that stand to lose money during this lockout, isn't that what the $300M war chest was built for?

    If Goodenow lets this mentality override these particular negotiations, then he has failed miserably to represent his clients' best interests. His mandate is to get the best deal POSSIBLE for his membership, stubborness and personal feelings be damned. Being in the right or in the wrong should not come into play here.

    Like it or not (and personally I think more than a few are being a pack of weasels about it), the owners will not have another NHL game until they get the restructuring that they want. The only thing that can throw a serious wrench into their plans is if a viable, financially comparable alternative to the NHL, preferably in North America, rises up...and those chances look to be very slim.

    If the NHLPA lets hotheadedness rule the day here, they deserve what they get.
     
  23. SENSible1*

    SENSible1* Guest

    Excellent post.

    No one is denying that the PA can damage the game, but they do far worse damage to their own interests in continuing a fight they can't win.

    Goodenow's job is to ensure that he gets the best deal possible, even if it is one he hates.
     
  24. fan mao rong

    fan mao rong Registered User

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    Seems to me, this statement has been misread since the 1st time it saw print. To me, the 15 million is what it costs to maintain all of the property and commitments while the game is shut down, and not the windfall profit they would get if they played and now will not get if the game is shut down. I believe all owners would pay around 15 million just to maintain property and commitments while the game is shut down.
     
  25. djhn579

    djhn579 Registered User

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    History tells us that ~22 current owners were not involved in the last lockout...
     
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