one example why the players dont TRUST

[Brent Burns Beard]

Here is one example why the players dont want to tie their salaries to the owners revenues.

This particular owner has proven in his other business to prop up revenue to suit his needs. Why wouldnt he "reduce" revenues to suit his needs.

http://www.tsn.ca/nhl/news_story.asp?id=101116

"Biovail has come under fire from investors over weaker financial results and accounting practices that critics say inflated the company's profits in recent years"

dr

Click to read more...

 

[dawgbone]

And how much revenue hiding can an individual owner do?

We'll say at most, $10 million... I think it would be tough to do much more than that.

Factoring in 30 teams doing it (not every team will, but some may try and hide more than $10mil), and it's a total of $300mil. Figuring the league wants to cap salaries at 60% (maybe a little high, but whatever), we are talking about $180mil. There are about 700 NHL players, so we are talking $250k per player... most of that will be coming out of the upper and middle range guys.

And that $300mil, means on average, the teams break even... according to the losses they have posted over the years. Shouldn't the league, on a whole, be profitable?

 

[Russian Fan]

And that $300mil, means on average, the teams break even... according to the losses they have posted over the years. Shouldn't the league, on a whole, be profitable?

Being profitable is not & SHOULD NEVER be GUARANTEED like the owners want. Being profitable mean you manage your business the way it should be or the way you want it to be. Some teams loss money because THEY CHOOSE TO & that's mostly the thing that the FANS don't understand.

Fan are relating CAP vs BETTER TICKET PRICE & that's why they stick to the owner. And to show you how much the owner to their LYING job perfectly, Pierre Boivin told the press that even if they REACH the 31M$ cap the TICKET PRICE would not be LOWERED !!!!

How's that for a fan ? You say go go go for the owners & they will take all this money in their POCKETS while you will still have to pay 100$/ticket for the good seats.

People just don't understand why they stick with the owners. They just wish the owners will not think with their wallets at the end & do something for the REAL FANS & not for the suits who buy tickets. They show no sympathy for players making millions for playing hockey but they feel sad that billionnaires loss money in an hockey franchise while still making millions with their other businesses. That's just insane how much the OWNERS did this P.R. SO WELL !!

 

[SuperUnknown]

Here is one example why the players dont want to tie their salaries to the owners revenues.

This particular owner has proven in his other business to prop up revenue to suit his needs. Why wouldnt he "reduce" revenues to suit his needs.

http://www.tsn.ca/nhl/news_story.asp?id=101116

"Biovail has come under fire from investors over weaker financial results and accounting practices that critics say inflated the company's profits in recent years"

dr

There are two things that jump out. First, it's easier to artificially raise revenues than to lower them (you just have to capitalize spendings which makes them assets instead and then they don't count against your revenues). Also, the accounting practices were "weak", something which an audit such as the Levitt one can find out.

 

[ceber]

They show no sympathy for players making millions for playing hockey but they feel sad that billionnaires loss money in an hockey franchise while still making millions with their other businesses. That's just insane how much the OWNERS did this P.R. SO WELL !!

Something pretty awful is going to have to happen to a guy who makes millions playing hockey before I feel sympathy for his financial situation. Even the 4th liners. Those poor, poor guys.
As far as the other side, I don't feel sad that owners are losing money on hockey teams. I generally have no sympathy for rich people when it comes to financial problems. Boo hoo hoo.. pour yourself another glass of 60-year old Macallan.
I do feel worried that they'll decide to stop running the teams because they're losing money. That's a lot different than having sympathy for one side or the other.
I don't understand the opinion that owners shouldn't care about one business losing money just because other ones they own are making money. When I've done contract work on the side, I don't take a job that will lose me money just because I've got income coming in from the other job. When I want to give away money, I'll give it to a valid charity.

 

[dawgbone]

Being profitable is not & SHOULD NEVER be GUARANTEED like the owners want. Being profitable mean you manage your business the way it should be or the way you want it to be. Some teams loss money because THEY CHOOSE TO & that's mostly the thing that the FANS don't understand.

And why do they choose to?

If one team has $80mil in revenues, and lets 60% of it go to salaries ($48mil), that means it's tough for a team who only has $50mil in revenues keep their players, mostly because all the players look at the team who is spending $48 mil, and wants to get paid like them. You have 2 choices really... let your players go all the time, and suffer in the standings, or give them the money they want, and hope they can get you deep into the playoffs.

Not much of a choice, is it?

Fan are relating CAP vs BETTER TICKET PRICE & that's why they stick to the owner. And to show you how much the owner to their LYING job perfectly, Pierre Boivin told the press that even if they REACH the 31M$ cap the TICKET PRICE would not be LOWERED !!!!

The team I cheer for has the lowest ticket prices in the league. I am pulling for the owners so the team I have cheered for my entire life stays in the city it belongs in. I don't care about 29 other teams, I care about my own team, which is why I chose the side I did, and which is why I am willing to sit around with no hockey for as long as I am.

And which fans are relating cap to better ticket prices? Which team has even implied that? Teams are setting prices as high as they can for the markets they are in... it's simple economics... only someone with little to no understanding of business would think they would lower ticket prices.

If the markets change, and no one wants to go to a game, the team will have to lower ticket prices... but as long as people are willing to go to games, the ticket prices will stay the same.

And while the cap may not help lower ticket prices, it sure might keep them around the same price in most locations. If a team doesn't have to try and raise ticket prices to pay for a raise for a player because another owner gave his comparable player $2mil more, aren't we as fans better off?

It's too late to lower ticket prices now... revenue generation dictates that these are prices that maximize revenue.

How's that for a fan ? You say go go go for the owners & they will take all this money in their POCKETS while you will still have to pay 100$/ticket for the good seats.

So they are supposed to lose money so you can go to a hockey game? Does that make sense?

They are in the business to make money. They are also in the business to keep their fans happy by putting out a competetive team. Alot of franchises simply cannot do both right now, because of the huge discrepancy between the haves and have nots.

People just don't understand why they stick with the owners. They just wish the owners will not think with their wallets at the end & do something for the REAL FANS & not for the suits who buy tickets. They show no sympathy for players making millions for playing hockey but they feel sad that billionnaires loss money in an hockey franchise while still making millions with their other businesses. That's just insane how much the OWNERS did this P.R. SO WELL !!

You don't give people a lot of credit. Some people actually do have reasons, and some people actually have done some research.

The team I cheer for cannot remain competetive the way the NHL is heading. You're problem is that you expect these billionaire owners to lose their own money on a hockey franchise, only for the reason they make money in other areas. Why is that? Shouldn't the owners, if they practice smart business, be able to make money as well?

It's next to impossible to practice smart business in the current NHL. Fans usually won't go to games unless the team is winning, and in order to win, you have to be able to keep your better players... and in order to do that, you have to pay them the same amount as players who play for teams who make double your revenues...

It's impossible. Sure it works for short periods of times (Tampa Bay is a good example), but will they be able to pay guys like St. Louis, Richards and Lecavalier all $6+mil per season (because that is where they are headed)? Maybe if they make the finals all the time, but those 3 will be getting paid the amount they are because teams like Toronto, Detroit, NYR, etc... all pay guys who aren't as good as those 3 much more than that.

There is the problem. Right now, the CBA is catered to teams with large incoming revenues, making it hard for the smaller markets to compete. The goal is to make the CBA cater to the smaller market teams.

Some teams certainly still will lose money, but for the most part, a team with a good scouting system in place, and a good GM, will be able to make money. Right now, that isn't the case.

 

[rwilson99]

There are two things that jump out. First, it's easier to artificially raise revenues than to lower them (you just have to capitalize spendings which makes them assets instead and then they don't count against your revenues). Also, the accounting practices were "weak", something which an audit such as the Levitt one can find out.

Actually it's not. Revenue and Expenses can always be spun off into other companies.

Example:

NHL Team X outsources all sponsorships, TV and Radio contracting to XYZ Company (owned by the owner of Team X).

ABC Company pays NHL Team X 1 Million in guaranteed revenue for the rights to all Sponsorship, TV and Radio revenue. Sponsorship, TV and Radio revenue is $10 Million dollars, but is not TEAM REVENUE because of the arrangement.

If you think I'm full of it.... ask yourself how the Florida Panthers lost $64 million on a $30 Million Dollar Payroll. Then ask yourself how teams in the Panthers position will become viable or profitbale with a $31M salary cap.

 

[SuperUnknown]

Actually it's not. Revenue and Expenses can always be spun off into other companies.

Example:

NHL Team X outsources all sponsorships, TV and Radio contracting to XYZ Company (owned by the owner of Team X).

ABC Company pays NHL Team X 1 Million in guaranteed revenue for the rights to all Sponsorship, TV and Radio revenue. Sponsorship, TV and Radio revenue is $10 Million dollars, but is not TEAM REVENUE because of the arrangement.

If you think I'm full of it.... ask yourself how the Florida Panthers lost $64 million on a $30 Million Dollar Payroll. Then ask yourself how teams in the Panthers position will become viable or profitbale with a $31M salary cap.

Once again, this would clearly show in an audit. Also, this is a specific situation that can only happen with companies that are both private, with the owner divulging results to the fisc as one entity. If one of the companies is traded on the stock market, then that scenario is not possible, as "trades" such as this have to be done at the market value (and thus would be rejected by an audit). As for the Florida Panthers, I'd have to take a look at their books to find out why they're losing that much, but there can be tons of reasons.

 

[Tom_Benjamin]

Once again, this would clearly show in an audit.

None of the issues are about audits. They are about splitting revenue. Let us suppose a hockey team signs a deal with a corporate sponsor that totals, say, $5 million. The agreement involves buying advertisements on the radio broadcasts, a luxury box and board advertisements. The owner of the hockey team also owns the rink and he holds a minority position at the radio station.

How much of the $5 million is hockey revenue? There is no correct answer. All of it? 90%? 40%?

Suppose the owner also owns a basketball team that sucks. The hockey team is great. A corporate sponsor comes to the hockey team with $5 million. Instead of doing the deal, the sponsor signs the same contract with the rink. How much of that $5 million is now hockey revenue? What if the basketball team is great and the hockey team sucks? How do you split the revenues? Is it okay to give the basketball team a piece of the board revenues even though the boards aren't seen by a basketball fan?

How many different ways are there to reasonably split the revenue among the rink, the basketball team, the hockey team and the radio station? Dozens of them.

The NHL wants the NHLPA to sit down and negotiate a split of hockey revenues when it is impossible to accurately define hockey revenues. Levitt did the impossible by insisting on the same formula for splitting the revenues for teams in vastly different circumstance. If the rink is subsidizing the team as is the case in Nashville, the team actually gets a much larger share of the revenues than Levitt's formula declares. If the hockey team is the sole tenant as in Vancouver, the rink share is also probably too large under Levitt. If a basketball team is also involved, the real team share of the pooled revenues probably depends on the relative popularity of the teams. Levitt's formula may overstate or understate revenues in that case.

Exactly the same kinds of problems are involved on the broadcast side and the real estate side of these businesses. And all 30 businesses are different. How do you decide what are hockey revenues? I don't even think this is really a trust issue. The players could trust the owners implicitly and they still would not know how to negotiate a fair definition of hockey revenue. What's fair?

I think the kind of thing that really blows the players horn on the trust issue is when the likes of Eugene Melnyk declare that hockey is a lousy business because the players make too much money.

Melnyk's base salary as CEO of Biovail is about $650,000 a year plus stock options. He didn't cash any options in 2003, but in 2002 he "earned" $41.3 million and in 2001 he made $78.6 million over his base salary. In the past three years, Melnyk has made more than all of the Ottawa Senators combined. And that doesn't count Senator earnings or capital gains in Biovail stock or the return on his other investments!

These are the guys who have managed to paint the players as the greedy ones in this dispute. If I was a player, I'd resent that very much. Maybe being the CEO of Biovail is worth four times what the highest paid player in the NHL made. I don't know. I do know that Melnyk is fighting over the amount of my money that ends up in his wallet and the amount that ends up in the player's wallet.

And the players are the greedy ones? The players feel like plowing Bettman. What does Gary do that is worth millions a year? Why should he make so much more than the average player?

Ultimately that is why the owners have so badly miscalculated. The owners see this as business and logic. The players see it as a game and an emotional fight. To the owners it is about money, the bottom line and forcing the players to take a deal that is better than anything they can get playing anywhere else. To the players, it is about winning and the players will do anything to win. They'll take the league down the tubes to win.

As for the Florida Panthers, I'd have to take a look at their books to find out why they're losing that much, but there can be tons of reasons.

They took a one time paper loss, devaluing the franchise. They may have restated their profit and loss because they announced the loss as $69 million when they did it. Their operating losses happen because they aren't selling any tickets.

Tom

 

[SuperUnknown]

None of the issues are about audits. They are about splitting revenue. Let us suppose a hockey team signs a deal with a corporate sponsor that totals, say, $5 million. The agreement involves buying advertisements on the radio broadcasts, a luxury box and board advertisements. The owner of the hockey team also owns the rink and he holds a minority position at the radio station.

And what exactly do you think accounting is about? It's about splitting revenues...

Seriously, when you do an audit, you have to verify that transactions (even between affiliated companies) are done at market value, that's part of the job. Why? Because revenues have to be tied to the products (and the expenses tied to the product). That's a basic accounting principle.

If you check the Levitt report, that's particularly one of the thing he has looked at: the value of agreement and such, to make sure that the claimed revenues are the real revenues.

The "easy" way to overstate revenues (like Melnyk did), is to capitalize expenses (ie: by saying that the expenses will bring revenues over "x" years, thus you need to spread those expenses over the years). It's harder to "audit", since expected revenues are difficult to evaluate and can play into the companies's strategy (although usually the auditing firm has been lax in Biovail's case, since they allowed "weak" accounting principles to go through).

 

[Sotnos]

You don't give people a lot of credit. Some people actually do have reasons, and some people actually have done some research.

Indeed. Some of the more fanatical NHLPA supporters here seem to like to put words into other people's mouths and assume a lot of things that no one here has said.

Some teams certainly still will lose money, but for the most part, a team with a good scouting system in place, and a good GM, will be able to make money.

Hopefully, that's what we end up with, though in my book, just breaking even would be OK too.

 

[Buffaloed]

I would think that as part of a new CBA they'll need to define what constitutes revenue and an arbitrator agreed upon by both sides would be put in place to resolve any disputes.

 

[mr gib]

I would think that as part of a new CBA they'll need to define what constitutes revenue and an arbitrator agreed upon by both sides would be put in place to resolve any disputes.

wow what a nice dream

 

[quat]

Being profitable is not & SHOULD NEVER be GUARANTEED like the owners want. Being profitable mean you manage your business the way it should be or the way you want it to be. Some teams loss money because THEY CHOOSE TO & that's mostly the thing that the FANS don't understand.

Fan are relating CAP vs BETTER TICKET PRICE & that's why they stick to the owner. And to show you how much the owner to their LYING job perfectly, Pierre Boivin told the press that even if they REACH the 31M$ cap the TICKET PRICE would not be LOWERED !!!!

How's that for a fan ? You say go go go for the owners & they will take all this money in their POCKETS while you will still have to pay 100$/ticket for the good seats.

People just don't understand why they stick with the owners. They just wish the owners will not think with their wallets at the end & do something for the REAL FANS & not for the suits who buy tickets. They show no sympathy for players making millions for playing hockey but they feel sad that billionnaires loss money in an hockey franchise while still making millions with their other businesses. That's just insane how much the OWNERS did this P.R. SO WELL !!

How does some kind of cap guarantee profit? All it does is help define operation costs. Teams can still lose big sums of money if they aren't run well...

And you are mistaken if you think all fans are only siding with the owners because they've been duped into thinking they will lower prices. It sounds like hyperbole you've invented.

Plus your comments at the end really show how ignorant you are over the reasons fans are siding with the owners. There have been a slew of intelligent posters defining their opinions and all you come up with is this kind of yak. Dude, people care about the game of hockey, not a bunch of owners. You seem to be in love with players to a degree where you ignore what most see as the reality facing the league. Stop it, stop it now I say. lol.

 

[I in the Eye]

How does some kind of cap guarantee profit? All it does is help define operation costs. Teams can still lose big sums of money if they aren't run well...

Profits cannot be guaranteed, because demand cannot be guaranteed... He's assuming guaranteed demand... Pretty big assumption...

If no one shows up to the games, a team will lose money regardless of how costs are defined and determined...

 

[quat]

Profits cannot be guaranteed, because demand cannot be guaranteed... He's assuming guaranteed demand... Pretty big assumption...

If no one shows up to the games, a team will lose money regardless of how costs are defined and determined...

Exazacktly !

 

[A Good Flying Bird*]

Once again, this would clearly show in an audit.

As it did, the last time the NHLPA got a look at the books of a few teams and caught tens of millions in hidden revenue.
As it would today if the league would open its books, which it will not.

Also, this is a specific situation that can only happen with companies that are both private, with the owner divulging results to the fisc as one entity. If one of the companies is traded on the stock market, then that scenario is not possible, as "trades" such as this have to be done at the market value (and thus would be rejected by an audit). As for the Florida Panthers, I'd have to take a look at their books to find out why they're losing that much, but there can be tons of reasons.

One reason is this: Some owners WANT to lose money.
They make so much money elsewhere that they need to balance it for tax purposes.

 

[mr gib]

And how much revenue hiding can an individual owner do?

We'll say at most, $10 million... I think it would be tough to do much more than that.

Factoring in 30 teams doing it (not every team will, but some may try and hide more than $10mil), and it's a total of $300mil. Figuring the league wants to cap salaries at 60% (maybe a little high, but whatever), we are talking about $180mil. There are about 700 NHL players, so we are talking $250k per player... most of that will be coming out of the upper and middle range guys.

And that $300mil, means on average, the teams break even... according to the losses they have posted over the years. Shouldn't the league, on a whole, be profitable?

hiding revenue? - flyers - rangers - dallas - tampa - should i go on? -

all these owners and more have multi - layered entertainment operations - you don't think if the piston's made money and the lightning lost money he wouldn't transfer some money over to pay the bills? - simple but if you dig deep - tax write-offs etc - can't you SEE

 

[djhn579]

hiding revenue - flyers - rangers - dallas - tampa - should i go on? -

all these owners and more have multi - layered entertainment operations -

Do you have proof that these teams are hiding money? If so could you post it so the rest of us can see the facts?

Just because they have "multi - layered entertainment operations ", it does not prove they are hiding revenue...

 

[Brent Burns Beard]

Just because they have "multi - layered entertainment operations ", it does not prove they are hiding revenue...

of course you are right, but thats part of the point i am making, the players have no way to know either way, and hence dont want to tie their income to such an unknown.

dr

 

[mr gib]

Do you have proof that these teams are hiding money? If so could you post it so the rest of us can see the facts?

Just because they have "multi - layered entertainment operations ", it does not prove they are hiding revenue...

look thru some of the past posts - dr and tom have had some links - re: the flyers - i saw ray ferraro with my own eyes on the vicki fat chick show here in vancouver state that daly in new york slipped up last week and said - its better for cablevision - who owns the rangers - if the rangers lose money - do some homework - harold ballard was busted in the 70's for having 200 extra seats in maple leaf gardens that no-one knew about -

 

[mr gib]

thanks dr - i'm gonna have to quit this message board thing - some people call themselves hockey fans and they know freaking nothing about the workings of the game

its so frustrating - in canada fans flip over salaries - in america when tiger woods made - 100 mil in 02 and 71 mil in 03 - shaq 30 mil - kevin garnett - 27 mil - david beckham - 65 no one is outraged by the high numbers - a partnership exists - thats all the players want - its maddening that post ted lindsay - and that freak eagleson - that bettman can't come clean and wipe the slate and start fresh - the players have been screwed and will continue to get screwed - remember in 94 - the consensus was the players lost big time - look what happened - a cap is gonna screw things up again - bettman has proved he just can't do it -

 

[djhn579]

of course you are right, but thats part of the point i am making, the players have no way to know either way, and hence dont want to tie their income to such an unknown.

dr

If the players and the owners are ever going to be "partners", there will have to be some agreement on what is and is not hockey revenue. This agreement can also include limits on what is shared between these other businesses.

The players choose not to come to any agreement because once they do, they will no longer have a strong case when they claim the owners are lying to them and hiding revenue.

It will also no longer be "Us" against "them", so the union will no longer be able to claim they need higher dues from union members to fight the owners attempts to steal from the players.


But, this is all just my opinion. I have no idea what the union dues are, it is just my experience that they always go up...

 

[mr gib]

If the players and the owners are ever going to be "partners", there will have to be some agreement on what is and is not hockey revenue. This agreement can also include limits on what is shared between these other businesses.

The players choose not to come to any agreement because once they do, they will no longer have a strong case when they claim the owners are lying to them and hiding revenue.

It will also no longer be "Us" against "them", so the union will no longer be able to claim they need higher dues from union members to fight the owners attempts to steal from the players.


But, this is all just my opinion. I have no idea what the union dues are, it is just my experience that they always go up...

union dues - there was a check floating around the internet about 5 years ago - sandis whats his face - every two weeks the players have a deduction on their checks that goes to the pa - he was making about 65 k each pay period - the dues if i can remember were around 2400 bux - so its a percentage - i also saw a jose canseco check - he made about 100 k - the dues were taken off that check too - tom you are so right - all the union wants is to work this out - bettman won't move -

 

[djhn579]

look thru some of the past posts - dr and tom have had some links - re: the flyers - i saw ray ferraro with my own eyes on the vicki fat chick show here in vancouver state that daly in new york slipped up last week and said - its better for cablevision - who owns the rangers - if the rangers lose money - do some homework - harold ballard was busted in the 70's for having 200 extra seats in maple leaf gardens that no-one knew about -

I'm looking for something that will stand up in a court of law, not hear say, and not something that is over 25 years old...

I've seen people compare Forbes' numbers to Levitt's numbers, even though Levitt saw the books and Forbes' numbers are compiled from public information, not from the actual books. It would be impossible for these numbers to match up, so this is not proof either.

If someone has better information on where Forbes get's their numbers, please correct me. Everything I have seen on their site makes me believe that they just research information available in the public domain (articles, financial statements from public companies...).