Leonsis comments on Caps profitability

Sotnos

Registered User
Jul 8, 2002
10,885
1
Not here
www.boltprospects.com
Here is Ted Leonsis' quote from the article:

"The goal is to have the asset appreciate more than you are losing money," he said. "That wasn't happening pre-lockout"
You're assuming that he meant "the goal of the lockout and new CBA was..." when in my interpretation he's saying "the goal (or maybe "my goal") of owning a pro NHL team is..." He could also be speaking in generalities about his ownership philosophy or whatever. We see what we want to see, and you are looking for deception whether it's there or not.

Change the title of the thread to whatever anybody wants. Change it to "hockeytown9321 is an ******* who only cares about letting his Red Wings' continue to buy Stanley Cups", I don't care.
Would that be a more accurate title? ;)

It doesn't change the fact that the NHL misrepresented its reason's for the lockout.
I don't mean to get all snarky here, but you haven't proven that yet. No one thought the main goal was to decrease ticket prices but you, so far as I can tell.
 

SuperUnknown

Registered User
Mar 14, 2002
4,890
0
Visit site
Here is Ted Leonsis' quote from the article:

"The goal is to have the asset appreciate more than you are losing money," he said. "That wasn't happening pre-lockout"

Change the title of the thread to whatever anybody wants. Change it to "hockeytown9321 is an ******* who only cares about letting his Red Wings' continue to buy Stanley Cups", I don't care. It doesn't change the fact that the NHL misrepresented its reason's for the lockout.

To me it reads like the goal was set so that owners don't lose money long term, which was stated again and again during the lockout. The owners wanted to cut down the bleeding.

Also, what Leonsis said was that basically if he loses money yearly, he'll get that money back in franchise value. That also means that if he doesn't lose money yearly, he'd be okay with the franchise not taking any value.

As to keeping teams together, it's just the new rhetoric the GMs are using. Take Ottawa, even if there was no cap, I don't think they could have kept their whole team together anyway. IMO, the cap is a great tool that will make good management shine. It's about making the good choices, not stacking up everything in the hope half of them work out. It helps teams like Anaheim, Nashville, Edmonton and Calgary compete and sign the missing parts.
 

hockeytown9321

Registered User
Jun 18, 2004
2,358
0
I don't mean to get all snarky here, but you haven't proven that yet. No one thought the main goal was to decrease ticket prices but you, so far as I can tell.

I never thought it was a goal, not did I think it would happen. I always include that because so many here told me I was an idiot because I said ticket prices were based on supply and demand.
 

Pepper

Registered User
Aug 30, 2004
14,693
269
"Ultimately, I don't care what the real reasons are for the cap, it benefits me as a fan because my team can keep players and compete, I like it."

That comes from small market fan Ogopogo earlier in the thread.

Errr point being...? Fans of small market teams have every reason to be happy about the new CBA.

I've never said anything remotely close to that about my team. I've always been very clear why I think a salary cap is not the correct system: it will tear apart well built teams, and the salary cap does not address the huge revenue disparities between big markets and small markets.

1) Well-built teams will keep being successfull under the new CBA. In the old CBA a 'well-built team' meant good drafting, smart trading, good asset management and lots of cash to buy UFAs/to-be-UFAs. Under the new CBA, the only change is the last part, having lots of cash (meaning big payroll a la pre-lockout Red Wings) doesn't mean that much thanks to salary cap. In the old CBA, only big teams were able to keep their teams together, now it's roughly the same for every team in the league.

2) Huge revenue disparencies don't mean anything under the salary cap, on-ice performance wise atleast. Some markets will generate bigger profits than others, that's all. Salary cap and revenue disparencies have very little to do with each other anyway, revenue sharing is the tool for that problem. Level of revenues only affect the salary cap number, not the fundamental aspect of salary cap which is more equal playing field.

Here is Ted Leonsis' quote from the article:

"The goal is to have the asset appreciate more than you are losing money," he said. "That wasn't happening pre-lockout"

Change the title of the thread to whatever anybody wants. Change it to "hockeytown9321 is an ******* who only cares about letting his Red Wings' continue to buy Stanley Cups", I don't care. It doesn't change the fact that the NHL misrepresented its reason's for the lockout.

Don't get so melodramatic here, it doesn't work. The goal of EVERY normal business is to generate money for the shareholders, it's no different in the NHL. It seems to me that Leonsis is talking about the 'bigger picture', where the new CBA is only one tool to achieve the situation he's talking about.

NHL didn't misrepresent anything, the owners wanted an environment where EVERY team in the league has a chance to be financially stabile. Being financially stabile makes the asset more valuable.
 

hockeytown9321

Registered User
Jun 18, 2004
2,358
0
Errr point being...? Fans of small market teams have every reason to be happy about the new CBA.

Point is that I'm characterized as selfish becuase I happen to be a fan of a big amrket team. Being a selfish fan of a small market team is more noble, I guess.



1) Well-built teams will keep being successfull under the new CBA. In the old CBA a 'well-built team' meant good drafting, smart trading, good asset management and lots of cash to buy UFAs/to-be-UFAs. Under the new CBA, the only change is the last part, having lots of cash (meaning big payroll a la pre-lockout Red Wings) doesn't mean that much thanks to salary cap. In the old CBA, only big teams were able to keep their teams together, now it's roughly the same for every team in the league.

I agree that a team like Detroit did have an advantage in being able to keep their players. There might've been a solution out there to let everybody keep their players and still be financially stable. No one from the NHL ever considered a different solution.

2) Huge revenue disparencies don't mean anything under the salary cap, on-ice performance wise atleast. Some markets will generate bigger profits than others, that's all. Salary cap and revenue disparencies have very little to do with each other anyway, revenue sharing is the tool for that problem. Level of revenues only affect the salary cap number, not the fundamental aspect of salary cap which is more equal playing field.

Yes revenue sharing is the tool to fix revenue diparities. I don't think this CBA addresses that problem enough. Everyone talks about what a great and successul league the NFL is. The NFL's stability is the result of massive revenue sharing instituted in the early days of the league, not the cap.

The extra $5 or $6M in revenue sharing helps the small markets, but how much better off are they when they've had to increase thier payroll by close to the same amount to get to the floor? It doesn't matter how low your costs are if you aren't generating any revenue.

A combination of the NBA's soft cap and luxury tax and an escrow system that capped salaries on a league wide basis would've addressed everyone's needs much better.
 

Atlas

Registered User
Sep 7, 2004
3,355
1
3 years ago, the owners had NO reason to spend $40 million, because someone else would just spend $60 million or $80 million and buy themselves a contender (or the NYR, but that's another story :D ).
Now, if the Oilers raise ticket prices $5 each across the board, I don't mind. Why? Because I know that with a $40 million roster, we can be competitive, which is all I (and most other fans) have ever wanted. Hell, raise prices another $3 next year and go for a $44 million roster, if they're winning on the ice, I'll gladly pay it.


Well said! :clap:


Some people believe owners should provide NHL teams as a public service to the community. As if it's a duty. They believe that making money is a bad thing. But, when done honestly, making money is a very noble thing. It is the motivation that makes the NHL (and this website) possible.
 

Pepper

Registered User
Aug 30, 2004
14,693
269
Point is that I'm characterized as selfish becuase I happen to be a fan of a big amrket team. Being a selfish fan of a small market team is more noble, I guess.

I don't think you're getting the point.

Small market fans wanted more equal playing field and they got it. Is that being selfish? No.

Some big market fans didn't want a more equal playing field because it would take away their advantage. Is that being selfish? Hell yes.

I agree that a team like Detroit did have an advantage in being able to keep their players. There might've been a solution out there to let everybody keep their players and still be financially stable. No one from the NHL ever considered a different solution.

There 'might' have been such solution? Please share it with us then, I for one haven't heard a single solution that would be accepted both by PA and the league.

One solution would have been a very low salary cap (say 20M) and allow teams to go over it when signing players they have drafted themselves. PA would have never accepted that.

Yes revenue sharing is the tool to fix revenue diparities. I don't think this CBA addresses that problem enough. Everyone talks about what a great and successul league the NFL is. The NFL's stability is the result of massive revenue sharing instituted in the early days of the league, not the cap.

1) Your problem is not with the salary cap, you should be talking about revenue sharing. Don't blame the cap for revenue disparencies.

2) NFL is totally different beast thanks to their massive TV-deals. If NHL had the same deals, there would have been totally different CBA. Stop comparing NHL and NFL, it's apples and oranges.

The extra $5 or $6M in revenue sharing helps the small markets, but how much better off are they when they've had to increase thier payroll by close to the same amount to get to the floor? It doesn't matter how low your costs are if you aren't generating any revenue.

Again you're missing the whole point of salary cap. Small market teams are able to compete better even with smaller payroll, that makes them more competitiev on ice and thus attract more fans which in turn means more revenues.

A combination of the NBA's soft cap and luxury tax and an escrow system that capped salaries on a league wide basis would've addressed everyone's needs much better.

Well I totally disagree, just look at the payroll range of NBA, big teams have 100M+ payrolls while small teams have ~40M payrolls. That's like NHL before the lockout.

That can't possibly create a level playing field.
 

PDO

Registered User
Jan 12, 2005
11,227
2
Edmonton
I agree that a team like Detroit did have an advantage in being able to keep their players. There might've been a solution out there to let everybody keep their players and still be financially stable. No one from the NHL ever considered a different solution.

And what would this magical solution be?

Please, calling small-market fans "selfish" because they wanted a level playing field?

What terrible, terrible people.

As Pepper alluded to above me, the difference is that small-market fans didn't want to be put at a massive disadvantage. That's not selfish. You wanting to maintain a massive advantage is selfish.
 

thinkwild

Veni Vidi Toga
Jul 29, 2003
10,815
1,468
Ottawa
Hey hockeytown9321, i too remember the polls where the 80% said ticket prices would be lower because of the cap, or that Chicago and Anaheim attendence would go up, that there would be more parity (d0 the math, there isnt), that there will still be great teams and dynasties, that small markets like Ottawa wont lose all their stars with a cap. None are going to admit to being one of that 80% now. They all knew along.

As Kasten and others admitted, the cap was designed to try and help large markets finally start winning because big markets didnt have an advantage under the old cba, it was all these excellently run medium markets like Denver, Motown, and Rutherford that had built great teams and kept winning. If New York, LA, and Chicago were to start having playoff success, there will be more playoff money made for redistribution


Leonsis said that is not true.
"That is inaccurate. They said we were going to make money this year, and we're going to lose money. They said we are worth $125 million, and we are probably worth $180 million. I read it, and you just go.
"They weren't close on the numbers,"

I guess he is confirming that all Forbes guesses on franchise values were wrong. They were about $60mil higher than Forbes thought during the lockout. Shame on Forbes

"The goal is to have the asset appreciate more than you are losing money," he said. "That wasn't happening pre-lockout. You would lose $30 million and the team would appreciate $5 million

Now im just a poor frozen caveman lawyer not understanding the ways of your big cities, but this is really cool eh. The franchise is hemorrhaging money and increasing in value! Now that things are stable, it is increasing much more. Imagine when they do well! Of course during the time franchise values went from $8mil to $300mil, the owners have always claimed they were losing money. And we always believe them. Baaaa
 

Pepper

Registered User
Aug 30, 2004
14,693
269
Hey hockeytown9321, i too remember the polls where the 80% said ticket prices would be lower because of the cap, or that Chicago and Anaheim attendence would go up, that there would be more parity (d0 the math, there isnt), that there will still be great teams and dynasties, that small markets like Ottawa wont lose all their stars with a cap. None are going to admit to being one of that 80% now. They all knew along.

Heh, this is too funny.

Nobody said ticket prices would be lower, those who believed it probably send money to nigerian scam e-mail senders as well.

Ducks attendance was up after the lock-out.

There is more parity, every team has roughly the same playing field. Buffalo and Anaheim are the league leaders.

There are great teams.

Dynasties? Too early to tell.

Ottawa didn't lose all their stars. They still have Spezza, Heatleay, Alfrdesson, Redden etc.

Those 80% pretty much got it right.
 

thinkwild

Veni Vidi Toga
Jul 29, 2003
10,815
1,468
Ottawa
So no one said ticket prices would be lower, or they were right to say ticket prices would be lower?
 

hockeytown9321

Registered User
Jun 18, 2004
2,358
0
There 'might' have been such solution? Please share it with us then, I for one haven't heard a single solution that would be accepted both by PA and the league.

One solution would have been a very low salary cap (say 20M) and allow teams to go over it when signing players they have drafted themselves. PA would have never accepted that.

Like I said, and like I explained in detail here 2 years ago, a soft cap which allows teams a Larry Bird like exception, an extremely stiff luxury tax, and a 54 or 55 or whatever pecent the league wanted celing on player salary league wide. This addresses my concern about teams being torn apart, provides much more revenue sharing money for the small markets, and provides cost certainty.

My other solution was that every cent generated by every team goes into a community account. At the end of the year, they divide it equally 30 ways. That would hurt my team more than most. But I'm the selfish one.

Who knows what the PA would've accepted. The NHL never offered them anything but a hard cap. Yeah the PA handled the negotiations terribly too. Neither side should be absolved for their refusal consider anything different. To the PA's credit, they never once proposed to keep the old system. I don't recall any fans suggesting that either.



1) Your problem is not with the salary cap, you should be talking about revenue sharing. Don't blame the cap for revenue disparencies.

My problem with the cap is it has not, and will not, accomplish what we were told it would without meaningful revenue sharing. I don't blame the cap for the disparities, I blame the league for not addressing them.


2) NFL is totally different beast thanks to their massive TV-deals.

Yes, thank you. Thye didn't have those TV deals in the 60's and 70's. But they had revenue sharing. That was the foundation.
 

thinkwild

Veni Vidi Toga
Jul 29, 2003
10,815
1,468
Ottawa
Why was it necessary to lower the ufa age to 25? Surely no one is going to say because the PA wouldnt sign without it? The impotent players association? What were they going to do - go on strike? I dont remember them ever once putting forth an offer that requested it. Obviously it was the owners that wanted that so that there would be more player movement. Because that was a primary complaint of the old system - teams were stuck with the same players for too long
 

hockeytown9321

Registered User
Jun 18, 2004
2,358
0
Heh, this is too funny.

Nobody said ticket prices would be lower,

http://www.cbc.ca/national/news/nhl/bettman.html
Gary mentions lower ticket prices half a dozen times at least in this interview.

http://www.nhlfa.com/news/nr07_03_05.asp
"I believe with the right economic system, many, many, if not most of our teams, will actually lower ticket prices. I believe we owe it to our fans to have affordable ticket prices. . . . More than a majority of our teams would use the opportunity of economic stability to lower their ticket prices"

http://www.nhlcbanews.com/transcripts/pressConfSep15.html
"I stand here today to say that we owe it to hockey's fans to achieve an economic system that will result in affordable ticket prices

http://www.nhl.com/fancentral/livechat/transcripts/bettman101304.html
"We believe that a partnership is critical for the future of our game. A partnership will ensure 30 healthy and competitive franchises with affordable ticket prices. This is a goal that we will not abandon."

Need more?

Once again, I have to ask: If he felt the need to mislead the people on ticket prices during his PR campaign, what else did he mislead them on? And if he didn't mislead us on anything else, why weren't the other goals he mentioned noble enough to stand on their own?

You mentioned the Ducks' attendance specifically. Going by ESPN's numbers, Anaheim was 23rd in attendance the year before the lockout with an average of 14,987, 24th last year with an average of 15,106, and are currently 21st with an average of 14,881 and are in 1st place. So if losing a season was worth a one year boost of 119 fans per game and having a drop off once the team is competitive, I guess the system is working great.

In fact, of the teams in the bottom half of the NHL in attendance in 2003-04, only Calgary and Buffalo moved into the top half in 2005-06.
 
Last edited:

Pepper

Registered User
Aug 30, 2004
14,693
269
So no one said ticket prices would be lower, or they were right to say ticket prices would be lower?

Owners will always try to maximize the revenue, regardless of payroll. If there's extra demand, the prices will go up and vice versa.

I'm sure some people thought prices would go down (and they did drop last season!) but those more familiar with NHL business knew better than that.
 

Pepper

Registered User
Aug 30, 2004
14,693
269
Because that wouldn't be in the self interest of small-market fans, right?

Doh, this shouldn't be so hard.

One group wanted an equal playing field, the other group wanted their teams to keep huge advantage over other teams.

Now which group was being selfish?
 

Pepper

Registered User
Aug 30, 2004
14,693
269
Why was it necessary to lower the ufa age to 25? Surely no one is going to say because the PA wouldnt sign without it? The impotent players association? What were they going to do - go on strike? I dont remember them ever once putting forth an offer that requested it. Obviously it was the owners that wanted that so that there would be more player movement.

Someone please tell me this guy is kidding here. Owners wanted more player movement and thus lowered the UFA age? Good one :biglaugh: Remember which side has always wanted to lower the UFA age? Hint: it wasn't the owners.

Because that was a primary complaint of the old system - teams were stuck with the same players for too long

What??? Primary complaint? Ok now I really think you're just joking here.
 

Pepper

Registered User
Aug 30, 2004
14,693
269
http://www.cbc.ca/national/news/nhl/bettman.html
Gary mentions lower ticket prices half a dozen times at least in this interview.

http://www.nhlfa.com/news/nr07_03_05.asp
"I believe with the right economic system, many, many, if not most of our teams, will actually lower ticket prices. I believe we owe it to our fans to have affordable ticket prices. . . . More than a majority of our teams would use the opportunity of economic stability to lower their ticket prices"

http://www.nhlcbanews.com/transcripts/pressConfSep15.html
"I stand here today to say that we owe it to hockey's fans to achieve an economic system that will result in affordable ticket prices

http://www.nhl.com/fancentral/livechat/transcripts/bettman101304.html
"We believe that a partnership is critical for the future of our game. A partnership will ensure 30 healthy and competitive franchises with affordable ticket prices. This is a goal that we will not abandon."

Need more?

First of all, he said most teams will lower ticket prices and that's what actually happened.

His main point is this (copied from above): "A partnership will ensure 30 healthy and competitive franchises with affordable ticket prices"

"I stand here today to say that we owe it to hockey's fans to achieve an economic system that will result in affordable ticket prices"

Affordable is not the same as lowered ticket prices. Semantics but still true nonetheless.
 

CapitalsCupReality

It’s Go Time!!
Feb 27, 2002
64,388
19,091
There might've been a solution out there to let everybody keep their players and still be financially stable. No one from the NHL ever considered a different solution.

I sure wasn't privy to the negotiations and I'm doubt you were either, to be making a statement like this. I feel certain that the NHLPA probably considered and proposed many alternative solutions to the NHL during negotiations.

All you have to do is look at the NFL and the NBA as prime examples of wildly successful leagues who are profiting because of salary caps and revenue sharing. The owners are making tons of $$ on their investments and each team can turn around a bad team by making the right free agent moves, and they can do it fairly quickly if they want to spend up to the cap, or they can still be competitive and build the old fashioned way, through the draft. The Caps are doing it right now.

I can understand that as a Wings fan you're upset that you can no longer flex your financial muscles to field a payroll that only a handful of teams can compete with. Yankees fans would feel the same way if they had to deal with a hard cap. Hopefully you can see past the desire and realize it's best for the league in the long run.
 

me2

Go ahead foot
Jun 28, 2002
37,903
5,595
Make my day.
Hey hockeytown9321, i too remember the polls where the 80% said ticket prices would be lower because of the cap

http://www.teammarketing.com/fci.cfm?page=fci_nhl_05-06.cfm

or that Chicago and Anaheim attendence would go up,

Chicago's will when they start winning again. Suckage is their main problem.

that there would be more parity (d0 the math, there isnt), that there will still be great teams and dynasties

We are seeing lots of parity due to the cap and trading/drafting provides nice variation.


that small markets like Ottawa wont lose all their stars with a cap.

They didn't.

As Kasten and others admitted, the cap was designed to try and help large markets finally start winning because big markets didnt have an advantage under the old cba,

Lol, so what advantage do they have now?
 

bladoww

Team of the Future
Jan 13, 2005
1,553
4
http://www.cbc.ca/national/news/nhl/bettman.html
Gary mentions lower ticket prices half a dozen times at least in this interview.

http://www.nhlfa.com/news/nr07_03_05.asp
"I believe with the right economic system, many, many, if not most of our teams, will actually lower ticket prices. I believe we owe it to our fans to have affordable ticket prices. . . . More than a majority of our teams would use the opportunity of economic stability to lower their ticket prices"

http://www.nhlcbanews.com/transcripts/pressConfSep15.html
"I stand here today to say that we owe it to hockey's fans to achieve an economic system that will result in affordable ticket prices

http://www.nhl.com/fancentral/livechat/transcripts/bettman101304.html
"We believe that a partnership is critical for the future of our game. A partnership will ensure 30 healthy and competitive franchises with affordable ticket prices. This is a goal that we will not abandon."

Need more?

Once again, I have to ask: If he felt the need to mislead the people on ticket prices during his PR campaign, what else did he mislead them on? And if he didn't mislead us on anything else, why weren't the other goals he mentioned noble enough to stand on their own?

You mentioned the Ducks' attendance specifically. Going by ESPN's numbers, Anaheim was 23rd in attendance the year before the lockout with an average of 14,987, 24th last year with an average of 15,106, and are currently 21st with an average of 14,881 and are in 1st place. So if losing a season was worth a one year boost of 119 fans per game and having a drop off once the team is competitive, I guess the system is working great.

In fact, of the teams in the bottom half of the NHL in attendance in 2003-04, only Calgary and Buffalo moved into the top half in 2005-06.

Alright since I don't have all the time in the world to read those links, can you tell me if anywhere in there it says that teams will lower their ticket prices within the first two seasons following the end of the lockout? As a fan of course I would like to pay a lot less for tickets but I know that there are probably some residual effects of the old way inhibiting pricing - atleast at this point. Big changes dont happen overnight. And two seasons is too soon IMO to be screaming about the prices not going down.

Secondly, I'm a small market fan. My team was the worst of the worst for years until they managed to win the cup. In the OLD system. They finally built the team to a championship level, won the cup, and then were forced to lose key guys because of the new CBA. That being said, a 'level playing field' is something I've always wanted. I got SO tired of hearing about the friggin Wings and other teams winning because I knew they could spend whatever the hell they wanted (not to undermine coaching staff or hard work anything, still takes lots of effort to get to be a top caliber team). Same thing right now with baseball. I don't really watch it but I get real sick of hearing about the Yankees this and the Red Sox that.

Make it a level playing field. Thats the only fair thing. Baseball's next - you watch. I wanna play devils advocate though. Why is the old NHL better for all fans?
 

Ad

Upcoming events

Ad

Ad

-->