Melnyk to PA: Look for yourselves

Discussion in 'The Business of Hockey' started by ColoradoHockeyFan, Feb 22, 2005.

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  1. ColoradoHockeyFan

    ColoradoHockeyFan Registered User

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  2. chiavsfan

    chiavsfan Registered User

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    Even if they did, they would still claim some going on and tom-foolery. Remember, the owners all hide money that dosen't show up in the books.... :teach:
     
  3. TexSen

    TexSen Registered User

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    Loved the PA's response...."we've already looked at the books when Bryden owned the team."

    I would put that at at least two years ago and back then the team was in danger of folding.

    What is the PA so afraid of?

    I'll tell ya: The truth. It's far easier to keep your membership in line when you have them convinced they are negotiating with the boogeyman.
     
  4. BLONG7

    BLONG7 Registered User

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    Any wealthy person can hide money...they hire an accountant and have he or she do their finances so that they as little or no taxes at all...so the players do this with their personal waelth, and the owners would do it in their personal wealth...and if I had more money I would throw money into RRSP's and pay next to nothing in taxes...everyone can hide money...There has to be a way to stop the owners and players fromnot trusting one another...this stuff is killing the NHL!
     
    Last edited: Feb 22, 2005
  5. pacde

    pacde Registered User

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    I heard somewhere that Saskin said that he would be happy to take Melnyk up on this if he could also see the books for the Corel Center which Melnyk also apparently owns.

    I understand that some money might be hidden there, but if you look at the Senators books, you should be able to see what they pay in venue costs and what they get and you should be able to tell if thats reasonable or not. I dont know what Saskin is thinking here, maybe he wants to know the beer count within +/- 10 or so
     
  6. misterjaggers

    misterjaggers Registered User

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    The PA could bring in forsenic accountants who are specially trained to uncover hidden assets etc.
     
  7. chiavsfan

    chiavsfan Registered User

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    They have tons and tons of options...so why don't they just go ahead and do it? It's been offered
     
  8. Jaded-Fan

    Jaded-Fan Registered User

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    Exactly . . . I have a CPA in my office that I use as a forensic accountant in divorce cases. The NHLPA would of course want a team of auditors who are familiar with much larger businesses than we deal with, but in the end the principle is the same. It is not that easy to hide revenue streams to those who have full access and know what questions to ask and where to look. These guys, if good at what they do, can make an IRS audit seem pleasant by comparison. In my divorces actually more often than not the other side can not stand the CPA much more than they dislike me.
     
  9. CMUMike

    CMUMike Registered User

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    Believe it or not, there are people who have made a living out of auditing firms for this type of activity. Are there unethical ways to beat the system? Sure, but the scrutiny of a yearly, independent audit would go a long way in curtailing this type of behavior.

    The NHLPA's stance of not investigating this opportunity shows an incredible amount of ignorance. You would be hard-pressed to find another private firm that made an offer to open their books to employees.

    The biggest problem in this entire ordeal is that the league arrives at its figures through a business model designed to create a profitable enterprise and the PA's figures are simply arbitrarily selected numbers.
     
  10. Jaded-Fan

    Jaded-Fan Registered User

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    Hiding revenue, playing with the books, is very very hard to do if someone is auditing the books. Remember how many ties there are to payroll, taxes owed, etc, etc. The reason some get away with it for a while is that the government who oversees these things is hard pressed as far as people to do the auditing. You are actually less likely to be audited if incorporated, did you know that? Why? Because it takes a specially trained IRS agent to audit a corporation and those are few and far between, one for maybe every 50 regular IRS agents. So they are spread very thin. No, it is not easy to hide money if someone is looking. Just getting people to look is the hard part.
     
  11. DuklaNation

    DuklaNation Registered User

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    As an ex-auditor, I can tell you that there are limited ways of manipulating their books. LEvitt's $273M loss figure is an operating loss not a net loss. As any financial analyst will tell, operating loss/income is harder to manipulate.

    Sports franchises have a basic financial structure. I could perform a rudimentary audit on any team in 1 day. The most complex are banks with their derivative departments.

    Bottom line, the PA is using the "cook the books" line as a negotiating ploy. Any informed financial professional knows this to be true.
     
  12. SENSible1*

    SENSible1* Guest

    The offer was for them to examine the books from both the team and the Corel Centre.

    From the article
     
  13. Jester

    Jester Registered User

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    the NFL has worked out a way to do this so that everyone is happy... so can the NHL. the NHLPA needs to grow up.
     
  14. Hoek

    Hoek 001

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    Bingo. Even if they looked at the books they would whine about wanting to include all sorts of extraneous revenues as hockey revenues. Nonsense. Hockey should be profitable or at least hover near breaking even on its own, not subsidized by all the other things the owner is doing with his arena and property surrounding it.
     
  15. Beukeboom Fan

    Beukeboom Fan Registered User

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    "Cooking the books" is very difficult if there are even remotely intellegent people that have access to the information and know what questions to ask. Like others, I am a CPA and have my background in forensic accounting.

    What is difficult is "peeling the onion" to determine what is really hockey revenue, and make sure that transaction with related parties are reasonable. Example: Bill Wirtz owns the vast majority of the parking lots around the United Center. However, he had to invest substantial money to purchase the land, and money to improve it is as well. What portion of the parking revenue is "hockey revenue" for the Hawks, and is that fair if (let's just say) that the ownership group in EDM doesn't get any cut of the parking $'s (because they never invested the money to purchase the land). This get's REALLY tricky when some teams own their building, and other just lease them. Same thing with TV rights, especially when the cable company owns the team (NYR, PHI).

    Rules would have to be established on "Fair Values" for those expenses/revenues, which is difficult to do initially, but relatively easy to audit going forward.

    I think the PA just trots this out as a easy out, and the individual players don't have the business savvy to seperate the truth from their own propaganda.
     
  16. SENSible1*

    SENSible1* Guest

    And yet somehow the NFLPA and NBAPA are capable of finding brilliant individual capable of examing the books of their owners. Miraculous.
     
  17. DuklaNation

    DuklaNation Registered User

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    That is true but with a sports team, you know all the sources of income related to hockey. I'm sure the season tickets are sold here not in the Cayman Islands.
     
  18. Wow, the players are idiots? We never could have guessed that up until now. :speechles
     
  19. NYFAN

    NYFAN Registered User

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    I've been trying to look at it from the players side, but no matter which side you look at it from, it plain old suxx for us fans. I don't believe either side is truly honest or gives a crap about the fans, although they talk a good game. They should both be ashamed, we deserve better. If they were willing to make Wayne and Mario look like fools, they have no consciences at all! The owners like to talk about us fans, lets see what they do to appease us when the game starts up again! I am totally disgusted with the whole situation!
     
  20. me2

    me2 Calling out the crap

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    Its easier to eat steak when you don't have to face up to where it comes from. The players want more steak but don't want to go to the slaughterhouse and see how its made.
     
  21. Beukeboom Fan

    Beukeboom Fan Registered User

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    Can you give me some examples?

    How hard is it to see who controls the parking and concessions at the arena's? That's about as easy as it gets. Same thing for skybox revenue, advertising, and all of the other stuff the players always ***** about.

    What is difficult is determining what is "fair market value" if transactions are with related parties. What should the Rangers get from MSG for the TV rights to their games? How about the Flyers with Comcast? Same thing with arena costs to teams that own their facilities?

    And even if those facilities are owned by the same owner, shouldn't they be allowed to make money on investment in the hundreds of millions of dollars? Same thing with parking revenue. Theoritically speaking, if MSG owns parking in downtown NY, why should the players get a cut of that when MSG had to pony up HUGE $'s to own that land? That's what makes it tough, not where the skybox or concession revenue goes.
     
  22. SuperUnknown

    SuperUnknown Registered User

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    That's not hidden money, that's using the loopholes in our system created for the rich people. You don't have to hide money to pay little to no tax. You just need to have a lot of money, cause the small people can't "buy" the tax reductions.
     
  23. SuperUnknown

    SuperUnknown Registered User

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    Fair market value is not that hard to determine as long as there is a "market" for what's being assessed. For a tv deal, look at the ratings (and the timezones) and compare it to other shows (or sports, or whatever, I'm not a tv guru), ask marketing companies, independant firms, etc. In the end, you should be able to get a pretty accurate ballpark for the fair market value of said good. The problem the players may be facing is if those deals are higher than the market value (say MSG subsidies the Rangers through the TV deal), then the contracts have to be revised at a lower price. In a league where the trend is revenues going downwards, especially with the lockout, I'm not so sure the players would be so fond of finding everything's market value, which I think is the main reason why the players don't want to look at the books.
     
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