My thoughts on the NHL's situation

[Tom_Benjamin]

No, it wouldn't.

California and New York are each richer than all of Canada. New York City is 1/3 the population of Canada. California has 14 million more people than Canada. Canadian teams cannot make anywhere near the potential profit that the Rangers, Kings, Blackhawks, etc can make. Hell, New Jersey is potentially more profitable than any Canadian market.

So how many hockey fans does California have? Does ten times the population translate into ten times the revenue? Do the Kings have ten times the number of tickets to sell?

Vancouver is selling out every single ticket at higher than average prices even after you convert the Canadian dollar to US funds. In addition to the National TV packages, the Canucks have a local TV deal that draws better ratings than the deal in Toronto. Heck, a Vancouver Canuck game draws three times more viewers in British Columbia than ESPN gets on a National broadcast in the US. They have 17 games they sell via pay per view. The subscriber base is now nearly 25,000 per game at $10 a pop. The pay per view games play in pubs and in movie theaters with the Canucks taking a piece of the action.

Vancouver may not be Los Angeles, but we do have corporate sponsors who want to make deals with the Canucks. There is no competition from basketball or baseball or big time football. Heck, the lottery corporation gives them $3 million a year.

They published the King's books through a fan, remember? If you don't believe the Canucks are blowing away Los Angeles in revenues - the Kings have to pay money to get the games on the radio! - then you are nuts.

Tom

 

[DownFromNJ]

I have no idea if your final fact is true or not (although it might be). Do you have a source for it?

Unfortunately, a Virus forced me to format my hard drive, so my old bookmarks are erased. But lets look at this logically.

The Devils have a higher payroll than Ottawa, Calgary and Edmonton. Calgary and Edmonton are on NHL welfare and Ottawa was recently bankrupt. Who brings in more money? The Devils. I'm sure that Montreal and Toronto bring in a lot more revenue, and so does probably Vancouver.

So how many hockey fans does California have? Does ten times the population translate into ten times the revenue? Do the Kings have ten times the number of tickets to sell?

Ten times the population translates into ten times the potential revenue. As Hockey catches on, and it is catching on, you'll see the percentage of hockey fans in the United States grow.

There are already many, many more hockey fans in the US than in Canada. 24 teams vs 6 teams.

How is New Jersey potentially more profitable than any Canadian NHL franchise when when even in a year when they are the defending cup champs they fail to make as much money as several Canadian teams?

New Jersey is a market of 9 million. Figure 5.5 million of the market goes to the Devils (3.5 million to Flyers and Rangers). New Jersey also recently surpassed Connecticut as the richest state per-capita. So, we have a potential market of 5.5 million of the richest Americans.

Thats a lot more money than even Toronto can draw upon.All the NHL needs to do is tap into it. And the Canadian dollar isn't getting any better.

 

[Licentia]

I agree that they need marquee teams to be successful. This is why a salary cap is bad for hockey. It creates total parity.

This one reason is better than all the reasons for a cap. ha.

 

[Licentia]

No leverage. Because he is not 31 years old and about to become a free agent, right?

The team offered him a contract over $2M per season to avoid arbitration where they probably feel that he would be awarded even more, and/or need to go through the same thing the next year. Or are you saying that they should have taken their chances in arbitration, and walk away if the rulling was anywhere near this $2M per season level, thus starting the dismantling of the Calgary stanley cup contending team how many seasons after they were in the finals? Oh, wait. If they simply make a wise decision drafting, they would have a D man just as good as him waiting in the wings, since good d-men are so easy to come by...

Seems to me he had a lot of leverage.

That is the correct answer!

 

[Licentia]

A Canadian market that is icing a winner will be richer by far than an American team that ices a loser. That's all that matters.
Tom

An American team that is icing a winner will be richer by far than a Canadian team that ices a winner. That's all that matters.

 

[DownFromNJ]

You have to realise, if New York iced a dynasty... wow. Thats a lot of money.

New York already probably makes more cash than everyone but Toronto in Canada with a draft lottery team. Rangers merchandise sales are through the roof, and they sell out the garden most games. TV ratings are huge too.

And I'm a Devils fan. I hate the Rags

 

[Licentia]

Lydman wouldnt have arbitration rights 2 years ago when he signed the contract. also, what basis would have Lydman been able to command that much $ from an arbitrator ? he has done nothing outstanding in his career, so i cant imagine the Flames had much risk of a large arbitration award, even if he was eleginbe.
dr

as an anti cap person, this is the one area that I can agree with. however, a cap isnt the solution to the problem. if there is only so much money from the team to pay those players, then they need to make smarter decisions.

like not giving Toni Lydman a contract for over 2m per season when he had no leverage.

dr

This is why your points don't hold water. The New York Rangers could pay Lydman 5m per season and they would still have more money to pay players than Calgary. Calgary can budget all they want and it won't make a sufficient difference.

 

[Licentia]

Thank you. I wish everyone would realize this.

If you have good management, you'll make good moves and have a good team, regardless of payroll. Some teams need to look at themselves in the mirror and take responsibility for making bad moves, instead of blaming Detroit or Colorado.

If Calgary grew the same team as Detroit has through the draft, Calgary wouldn't be as competitive because they wouldn't be able to keep players like Lidstrom at like $10m a year. Good management WILL NOT make a sufficient difference. And if a large market team has an equally good management to a small market team, then the large market team will win out any day.

 

[Licentia]

ok ... he was elegible. .... still no reason to give him a contract for that amount AND at the same time cry poverty.

what had he done to be worth over 2m per season ?

dr

Nothing. But since a larger market opposition team would be ready to throw him $2m Calgary had to step up and do the same or lose the player. Then Calgary would be less competitive and the fans would lose out.

 

[Tom_Benjamin]

An American team that is icing a winner will be richer by far than a Canadian team that ices a winner. That's all that matters.

This simply isn't true. A winner in one of the mega markets like Toronto, New York or Chicago will generate more than a winner in a smaller market team (Canadian or American), but it is a gate driven league.

If prices are the same (after currency conversion) and the team sells out, where is all the extra cash for the American team? How many American teams can turn $30-35 million in broadcast revenues liike Vancouver? Why are corporate sponsors lining up for the number one sport in Vancouver? Don't jammed luxury boxes pay in Canada? Where does Colorado get revenues Vancouver won't have if they start winning some playoff games? Out of thin air?

All the teams - even a team in Edmonton - can generate revenues to support a winner's payroll. The hard part is becoming a winner. Look at Ottawa. If Ottawa can support a $50 million payroll, anybody can.

They are doing it by selling a heck of a lot of tickets at high prices and with corporate sponsors and a tidy broadcast package. They can't generate broadcast revenues like Vancouver, but they sure don't have to bribe a radio station to carry their games like Los Angeles does. Ottawa can afford a great team. That's all that matters.

Ten times the population translates into ten times the potential revenue. As Hockey catches on, and it is catching on, you'll see the percentage of hockey fans in the United States grow.

It does not. That's ridiculous. Nobody can sell ten times the number of tickets Vancouver is selling right now. Would a winner in New York generate $300 million in broadcast revenues? Get a grip.

Besides which, potential means dick. I've heard this song about hockey in the US forever. Yawn. Wake me when it happens. I'd much rather own a team in Vancouver than in all but a handful of American markets.

Tom

 

[DownFromNJ]

If prices are the same (after currency conversion) and the team sells out, where is all the extra cash for the American team? How many American teams can turn $30-35 million in broadcast revenues liike Vancouver? Why are corporate sponsors lining up for the number one sport in Vancouver? Don't jammed luxury boxes pay in Canada? Where does Colorado get revenues Vancouver won't have if they start winning some playoff games? Out of thin air?

After currency conversion? Hate to break it to you, but the currency conversion makes Canadian clubs lose a ton of money. You don't pay 130 dollars Canadian for an American equivilant to an 80 dollar seat do you?

I don't care how you care to spin it, American clubs draw bigger corporate sponsorships than Canadian clubs. American have more money, its a fact of life.

It may be a gate driven league, but teams still make tons of money off TV and merchandise. Calgary and Edmonton may sell out every night, but they still can't support a big money franchise.

It does not. That's ridiculous. Nobody can sell ten times the number of tickets Vancouver is selling right now. Would a winner in New York generate $300 million in broadcast revenues? Get a grip.

Merchanchise and TV contracts account for a large portion of a team's revenue.

The Canucks sold 18,631 tickets per game last year.
Source: http://www.kenn.com/sports/hockey/nhl/nhl_van_attendance.html

The Rangers sold 18,081 tickets per game last year. It takes about 1.3 Canadian dollars to equal one American dollar. The Rangers may sell slightly less tickets, but they make 30% more off those tickets. Same with merchandise sales.

The Devils sell ~15,000 tickets per game on average. A Canadian club would have to sell ~19,500 tickets per game to match that. Only Toronto and Montreal sell that many tickets. Detroit sells 20,000 tickets per year. A Canadian club would have to sell 26,000 tickets to match that.

But this is all getting away from my original point:

This simply isn't true. A winner in one of the mega markets like Toronto, New York or Chicago will generate more than a winner in a smaller market team (Canadian or American), but it is a gate driven league.

The NHL does not have to be a gate driven league. Bettman's strategy is changing this, which all goes back to my original point.

 

[hockeytown9321]

If Calgary grew the same team as Detroit has through the draft, Calgary wouldn't be as competitive because they wouldn't be able to keep players like Lidstrom at like $10m a year. Good management WILL NOT make a sufficient difference. And if a large market team has an equally good management to a small market team, then the large market team will win out any day.

Is Detroit well managed? Is Calgary? Who won the series between them?

Lets say Calgary drafted two guys who became as good as Lidstrom, had enough money to sign both(as salaries will be lower with a cap, right?), but only had enough cap room for one. Now we're back where we started. Calgary can't keep the players they developed for financial reasons.

 

[Brent Burns Beard]

. American have more money, its a fact of life.
.

just for teh record, the corridor between Calgary and Edmonton ( along Highway 2) is amongst the wealthiest per capita region in all of North America.

Its called "OIL MONEY" and Alberta is gushing. The owners of CGY collectivly have more money than any ownership group in the NHL.

dr

 

[Tom_Benjamin]

After currency conversion? Hate to break it to you, but the currency conversion makes Canadian clubs lose a ton of money. You don't pay 130 dollars Canadian for an American equivilant to an 80 dollar seat do you?

Uh, yes. The average ticket price in Vancouver was a little more than that the NHL average after currency conversion. About $55 US a ticket. This currency conversion was such a bogus issue. It mattered for the first year or two when the Canadian dollar plunged to 62 cents American. The response from the Canadian teams was to moan and groan about how they have to pay American dollars out in payroll and they raised prices to compensate. Vancouverites have paid slightly more than the NHl average for prices for as long as I have been a fan.

Note that in the last year, the Canadian dollar has zoomed to 75 cents. Funny the Canucks didn't drop prices to compensate.

I don't care how you care to spin it, American clubs draw bigger corporate sponsorships than Canadian clubs. American have more money, its a fact of life.

Prove it. Why do you think the Vancouver rink is called GM Place? Even American companies like to sponsor hockey teams in Canada. It is excellent business. Forty-five per cent of Canadians call hockey their favourite sport. Four per cent of Americans do.

And guess what? Canadians have a little money. They even buy cars! GM advertises up here! If you were GM and you could spend $25 million naming a hockey rink would you spend that money in New Jersey or Vancouver?

It's a no-brainer.

It may be a gate driven league, but teams still make tons of money off TV and merchandise. Calgary and Edmonton may sell out every night, but they still can't support a big money franchise.

Merchandising money is shared. Broadcast money? It is mostly local. Revenues depend on eyeballs on the screen on both sides of the border. If you were McDonald's, would you advertise to 50,000 Devil's fans or 750,000 Vancouver fans? Why?

What kind of broadcast deal does New Jersey have?

Calgary and Edmonton both draw really well because prices are low. They wil go up with a winner. They don't do what Vancouver does in broadcast, but they will do better than most American markets. The Oilers are starting pay per view too.

Explain Ottawa. Calgary would do every bit as well. Edmonton, maybe not, but if not, Edmonton is the only Canadian city in this boat. Calgary is a great hockey town, and there is tons of money in the oil patch.

Bettman doesn't want it to be a gate driven league but that's what it is. And it's a damned good thing for the fan. To be a TV driven league we'd need New York Chicago in every Stanley Cup Final.

Tom

 

[Licentia]

Is Detroit well managed? Is Calgary? Who won the series between them?

Lets say Calgary drafted two guys who became as good as Lidstrom, had enough money to sign both(as salaries will be lower with a cap, right?), but only had enough cap room for one. Now we're back where we started. Calgary can't keep the players they developed for financial reasons.

That's being short-sighted. Compare the last 8 years between the two teams and you will understand what Bettman says. The larger market teams can compete consistently, while other teams are there one year and out of the playoffs the next.

 

[Brent Burns Beard]

That's being short-sighted. Compare the last 8 years between the two teams and you will understand what Bettman says. The larger market teams can compete consistently, while other teams are there one year and out of the playoffs the next.

look at the last 12 years of drafting and you will see CGY doesnt deserve the success that DET has had, whether they could afford it or not.

dr

 

[Licentia]

Lets say Calgary drafted two guys who became as good as Lidstrom, had enough money to sign both(as salaries will be lower with a cap, right?), but only had enough cap room for one. Now we're back where we started. Calgary can't keep the players they developed for financial reasons.

:lol lol :lol But Calgary would be on an even standing with the other teams in the league. No team would be stacking themselves while teams like Calgary suffer.

 

[Brent Burns Beard]

:lol lol :lol But Calgary would be on an even standing with the other teams in the league. No team would be stacking themselves while teams like Calgary suffer.

and thats a good thing ? so CGY, in this example, does a great job drafting and another team does a lousy job, but that lousy team is allowed to stay even with CGY ?

teams that draft poorly dont deserve the same success as teams that draft well. why should we let the poorly managed teams catch up to the well run teams ?

dr

 

[YellHockey*]

just for teh record, the corridor between Calgary and Edmonton ( along Highway 2) is amongst the wealthiest per capita region in all of North America.

And while Ottawa has one of the highest average household incomes in North America, it is also one of the most affordable major cities in North America to live in.

Senators founder Bruce Firestone wrote that Ottawa was a much better hockey market then Tampa Bay despite half the population because of the wealth and the concentration of hockey fans.

 

[Licentia]

and thats a good thing ? so CGY, in this example, does a great job drafting and another team does a lousy job, but that lousy team is allowed to stay even with CGY ?

teams that draft poorly dont deserve the same success as teams that draft well. why should we let the poorly managed teams catch up to the well run teams ?

dr

The point isn't that one team drafts better than another. The point is that even if they had both drafted equally, Detroit would have a salary advantage.

The current state of any given team in the NHL as far as how they drafted or what their standings were last year, or whatever, that is irrelevant. The point is, that if any two teams do equally well at drafting, trading, etc, the larger market team always has the advantage of having a higher payroll.

Pulling examples out of a hat isn't helping, cause we can do the same.

Let's just look at how things would be if both teams had the exact same players. Let's pretend with a hockey video game. If both teams have the exact same players and both the teams draft the exact same players, then both teams will be exactly even. We can duplicate that in a video game. But wait!! "Team A" only has a $30 million dollar budget while "Team B" has a $50 million dollar budget. Even though both teams have the same 20 players, one team will be able to continue to afford those 20 players, while another team will not. That is the reality of the NHL today, and that is why we need a cap. No matter what "Team A" does as far as spending smarter than "Team B" it will not make sufficient difference to allow "Team A" to hold on to all of those players. "Team A" will have to trade players away for second rate talent.

 

[Licentia]

and thats a good thing ? so CGY, in this example, does a great job drafting and another team does a lousy job, but that lousy team is allowed to stay even with CGY ?
dr

No, that team wouldn't be able to stay even with Calgary under a cap, because they wouldn't be able to open up their large market payroll and sign free agent after free agent. They would have to suffer until they make better choices in the draft or make better trades.

Large market teams that draft poorly shouldn't be able to compete with a good drafting team like Calgary, and under a cap they wouldn't be. It's the present system of "Oh well, let's trade for Ray Bourque and Rob Blake and they'll put us over the top." A team like Calgary would never be able to do something like that. And in a cap, neither would Colorado.

You keep contradicting yourself. Getting a good team through the draft would be more important under a cap.

 

[DownFromNJ]

T_B, you just don't get it. I'm begining to think that you never will.

Heres the gist of what I'm trying to tell you.

The NHL has reached it's max in Canada. The NHL is just begining to grow in the United States. The United States is infinitely larger and richer than Canada. US teams can pump more money into the NHL than Canada can. The NHL has made a smart long term business decision and is putting hockey in places it traditionally never was. By doing this, they are expanding their market from the ground up. Currently the NHL cannot make much money off TV contracts because it cannot keep up with Baseball, Football, and Basketball. That is changing and will continue to change as the grass roots effort continues. In addition, hockey will continue to develope in non-traditional markets, and the number of fans in the United States will continue to rise every year.

 

[garry1221]

T_B, you just don't get it. I'm begining to think that you never will.

Heres the gist of what I'm trying to tell you.

The NHL has reached it's max in Canada. The NHL is just begining to grow in the United States. The United States is infinitely larger and richer than Canada. US teams can pump more money into the NHL than Canada can. The NHL has made a smart long term business decision and is putting hockey in places it traditionally never was. By doing this, they are expanding their market from the ground up. Currently the NHL cannot make much money off TV contracts because it cannot keep up with Baseball, Football, and Basketball. That is changing and will continue to change as the grass roots effort continues. In addition, hockey will continue to develope in non-traditional markets, and the number of fans in the United States will continue to rise every year.

while i see what you're saying i also agree w/ tom here, no matter how big hockey gets here in the US, it'll never be as big as it is in canada and in many markets, will never draw as well, maybe in 10 - 15 years yes, but present day, not even close, hell even 10-15 years is cutting it close, probably be more than that, the nhl cannot make big tv revenue here because it's not as big of a sport, plain and simple, whether it'll change or not still has yet to be seen, and it'll all determine on what happens over the next few years with the cba. frankly if the financial aspect of the league gets taken care of and leveled out more you could see 2 more teams pop back up in canada IMO, it doesnt' matter how many markets the nhl puts in non traditional places here in the US, if the places don't support the team, then what's it matter how many teams we have down south, what matters is how many fans can be drawn in those non traditional markets, if the teams don't get fan support then they don't get the revenue generated by merchandise/ticket sales, therefore have less to work with, that can only last so long before the franchise folds, and THAT is what's gotta be taken care of

 

[Tom_Benjamin]

Pulling examples out of a hat isn't helping, cause we can do the same.

Well, let's see you pull real examples out of the hat then. If there really was a competitive balance problem in the NHL you would be able to show it by using real examples. If you want to show that there is no competitive balance issue in the NHL you use real examples. Ottawa, Tampa, Calgary, Vancouver, Colorado.

Let's just look at how things would be if both teams had the exact same players. Let's pretend with a hockey video game. If both teams have the exact same players and both the teams draft the exact same players, then both teams will be exactly even. We can duplicate that in a video game. But wait!! "Team A" only has a $30 million dollar budget while "Team B" has a $50 million dollar budget.

So why does Team A have a $30 million budget and Team B have a $50 million budget? If the teams are both good, both will have good revenues and both will have a $50 million budget. If they both suck, they will both have a $30 million budget. Unless, of course, one of the teams decides they will try to buy a winner like the Rangers. If Team B is the Rangers they will spend the money and still suck.

Even the hypotheticals can't show that the small markets in the NHL are disadvantaged.

Tom

 

[Brent Burns Beard]

The NHL has made a smart long term business decision

ok, good point. so then they should shut up about the losses when its really an investment in their long term business.

i agree with you and this whole cap issue is a sham.

dr