Question for pro-owner fans

Discussion in 'The Business of Hockey' started by reckoning, Jul 1, 2005.

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  1. reckoning

    reckoning Registered User

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    Remember back in February when the owners said they were willing to accept the NHLPA`s offer under the condition that if any one of four "triggers" that the owners named were exceeded then the players offer would be terminated and the CBA would automatically switch to the owners terms. The NHLPA rejected the idea and were immediately blasted by pro-owner fans on hockey boards everywhere:

    "Brilliant. They rejected their own proposal"

    "This proves the NHLPA knows their proposal is bad for the league`s health."

    "God bless Jeremy Jacobs and Bill Wirtz!!"

    Etc. etc.

    The players stance was that the league`s "triggers" wouldn`t necessarily prove the CBA wasn`t working. Even Joe Sakic, one of the most respected players around, said on TSN that Bettman`s triggers were a joke.

    One of the triggers was as follows:

    "That the average payroll of the top three teams couldn`t exceed the average payroll of the bottom three teams by more than 33%"

    All the pro-owner fans agreed with this. "If the top three were more than 33% higher than the bottom three then that would make parity and competitive balance non-existent. The difference has to be under 33%. This is all about helping the teams at the bottom." One poster even stated that he thought 33% was too high and the trigger should have been set lower.

    Fast forward to present time. It looks like there`s a new CBA under the owners terms. The details are not yet official but from all accounts it looks like there will be a floor of $22M and a cap of $34-$36M. All the pro-owner fans love this deal.

    BUT WAIT!!!!

    By those numbers; the difference between the top three and bottom three could be from 50%-64%. I thought anything over 34% would prove the league wasn`t healthy. Please explain the math.

    This was supposed to be about helping the teams at the bottom, right?
     
  2. mooseOAK*

    mooseOAK* Guest

    No it was about developing a system that will make the entire league financially viable.
     
  3. WC Handy*

    WC Handy* Guest

    Before responding, could you please provide with all those accounts that are reporting $22M and $34-36M?

    Because all the accounts that I've read say $26M and $36-$40M.
     
  4. Tiki

    Tiki Registered User

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    Well, before the bottom teams were about 20 mill and the top teams around or above 70. Thats a 50 mill difference. Now the max difference is only 14 mill.

    Working off percentages is all nice and fine, but if you look at the numbers you clearly see how much better this will be IMO. There will only be a few teams at most around the floor number, many will be toward the cap side of it (if the 36 mill number is correct).

    A much better situation than a few teams around 20 mill, a few around 30, several around 40 and a few around 70.
     
  5. me2

    me2 Calling out the crap

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    That lower floor must be a win for the players then.
     
  6. Steve L*

    Steve L* Registered User

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    I dont think there are any pro owner fans. I like to think Im pro NHL and that is I want whats best for the owners, players and fans because you need all 3 for a workable league.

    I dont think many people are dancing in the street going "great, the owners fleeced the players and now Comcast or the Ontatio teachers fund can line their pockets."

    We just wanted the league to survive and that clearly wouldnt have happened if the players got their way.
     
  7. reckoning

    reckoning Registered User

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    But the percentages is exactly what the league spelled out as one of their triggers, not dollar amounts. The NHL and pro-owner fans are wholeheartedly supporting a scenario that they insisted in February would`ve been unacceptable.

    I also think there will be more than a few teams at the floor. It`s not like Nasville and Carolina are going to increase their revenues just because there`s a cap.
     
  8. Nich

    Nich Registered User

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    can we change the term "pro-owners" to "those with common business sense"?
     
  9. GSC2k2*

    GSC2k2* Guest

    Well, this is a silly thread i did not want to post in, but I could not resist.

    As for how many teams will be at the floor, I suggest you take the opportunity to look at previous payroll figures to see what teams spent historically before you render further opinions. In the last year played, Carolina's payroll was over $37 million. Nashville was $23.2. The fact is that the reported floor (which is $22 million INCLUDING benefits - making it $19.8 million in salaries). No team spent within $3 million of that figure.

    Secondly, those teams WILL ultimately increase their revenues because there will be revenue sharing.

    Thirdly, no one suggested that 33% was a magic number. In fact, the NHL expressly stated after the deal was summarily rejected that they were prepared to negotiate it AND had so informed the PA and were disappointed that the PA did not even want to take them up on that offer.

    Fourthly, since the 33% was in a non-capped world, you are talking 33% (or whatever figure) of a larger number. For the mathematically challenged, 33% of $50 or $60 million is more than 33% of $36-38 million. THe currently rumored deal has a tighter range.

    I hope this cleared up this little non-existent "discrepancy" for you.
     
  10. barnburner

    barnburner Registered User

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    Exactly. I want a healthy nhl, with exciting, hard hitting play, reasonable ticket prices, better tv broadcasts, and a system that allows every team thru good management to be able to compete for the Cup without going broke in the process. If the neighborhood wino has the plan to make that happen - then I am pro-wino.
     
  11. Jester

    Jester Registered User

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    to dispute this i will merely say...

    what the trigger was set to show was that the disparity in payroll was GROWING and when it hit a certain threshold they would stop it. the issue isn't what % the disparity is at, the issue is that what would have been happening is that the disparity was GROWING towards the situation we are supposedly leaving behind.

    not to mention the NHL has GUARANTEED 54% of league revenues to the players, why they didn't buy into this immediately is beyond me.
     
  12. Pepper

    Pepper Registered User

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    The problem with the topic starter's math is this:

    In february we were talking about much bigger numbers, thus %-wise the 33% would have been many more millions of USD than it's currently.

    So yes, in theory it could be that percentage wise the gap is bigger than the 33 mentioned by Bettman but in actual dollars it's much smaller.
     
  13. Haj

    Haj #CatsAreComing

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    Suppose 36 million dollars is the Salary cap and 22 million dollars is the salary floor. Then assume that the the three bottom teams payroll average is equal to the salary floor, and the top three teams payroll average is equal to the salary cap.

    36 million dollars corresponds to 100 percent of the cap being used.

    22 million dollars corresponds to 61 percent of the cap being used.

    The difference between the two is 39 percent, which is much less than the 50 - 64 percent that you have posted. Its still higher than 33 percent but its unrealistic to assume that the payroll average of the bottom three teams is going to be 22 million. If we increase the average of the bottom teams to 25 million and leave the average of the top teams at 36 million then the difference is only 30 percent.
     
  14. LordHelmet

    LordHelmet Registered User

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    psst... you might want to figure the rollback into those numbers.. Nashville's $23.2M rolled back by 24% is $17.632M...
     
  15. LordHelmet

    LordHelmet Registered User

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    OMG... Remedial math. Try it..

    The difference between 36 and 22 is 14.
    14 is 63% of 22.

    A team with a 22M payroll would have to increase their spending by 63% to match a team with a 36M payroll..

    If a team at 22M increased their spending by 39%.. they would be at $30.58M..
     
  16. reckoning

    reckoning Registered User

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    Just a few days later the league made a take it or leave it offer and emphasized that there was no time left to negotiate. So, the "the triggers were negotiable" argument might hold up if it were made in November or December, but not February.

    Exactly what are the new revenue-sharing details. How much will the lower-end teams get from this?
     
  17. GSC2k2*

    GSC2k2* Guest

    Point taken about Nashville. My bad, albeit by a mere $2.2 million. Although that is not to say their salary was not going to increase, since that is now two years ago.

    THat being said, my other points continue to be true. To take but one example, the original assumption of the other poster about Carolina was appallingly incorrect.
     
  18. mooseOAK*

    mooseOAK* Guest

    If you already know about what the caps and floors are then you should know this also, I imagine.
     
  19. Tiki

    Tiki Registered User

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    Psst.... you may want to open your eyes and realize that his point was Nashville was already spending above the proposed floor of the cap.
     
  20. Mess

    Mess Global Moderator

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    Someone also needs to explani to him that .....

    He should also figure in profitability in to his reasoning which he never does.

    Sure Carolina spent $ 37 mil .. but according to Forbes in doing so they LOST < $18.2 MIL > in the process ..

    Carolina needed to spend on salary only ( $37 mil - $18.2 mil ) = $18.8 mil so they would have BROKEN EVEN on the year.

    They should have spent even less then $18.8 mil if they wanted to record a PROFIT, which is the goal of all businesses..

    By showing us the spending habits of Carolina, only proves how poorly run that organization is by using the $37 mil as an example.

    This new CBA may lower players salaries but its intended to correct and control Owners spending habits by locking it in at 54% max spending per team and preventing the above from ever occuring again.

    Under the new CBA Carolina will be no where near the $37 mil in spending, even with some healthy Revenue Sharing kicking in.. In fact after the 24% rollback on salaries and the damage done as a result of the lockout Carolina will struggle to get to the floor of $22 mil without assistance from the other teams ..
     
  21. GSC2k2*

    GSC2k2* Guest

    It does hold up. THe NHL expressly so stated. I qoute from Bettman's news conference at the time:

    Revenue sharing details are not known, but it is well known that there is revenue sharing. With the rumored luxury tax at $29 million, that in itself creates substantial sharing.
     
  22. reckoning

    reckoning Registered User

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    Every article has mentioned possible caps and floors, while specific details on how much revenue sharing there will be are still sketchy. That`s why I asked the question. Please educate me.

    If there`s going to be revenue sharing at the same level of the NFL, then that might help the lower end teams. But I doubt it will be that high.
     
  23. GSC2k2*

    GSC2k2* Guest

    The Mummy SPEAKS!!!!!!! Too bad you still don't have the stones to address me directly, since i have already figured out what you are all about...

    As for locking in spending to what a team's individual revenues are, there are conflicting reports about that. Some say it is lague wide, some say it is team by team, some (like me) think it is both.

    THe point, genius, was not that Carolina would spend $37 million, but rather that they would have no trouble with $19.8 plus benefits.

    Regarding Carolina, they have 7 players under contract for 05-06 at the post-rollback salary of $11,886,400, with QO's for 10 more at $8.5 million. After signing 16 players even at the $400k new minimum, they would be at $19.2 million. They are already effectively at the floor. So (more or less) is Nashville, with $10.3 million for 9 players, $8.7 million in QO's, and a mimimum additional commitment of $5.6 million for their 14 more players.

    And you quote FORBES???? Who were not even provided access to the books? :biglaugh: :biglaugh:

    Oh, and how well or poorly run Carolina is was about as far from the point as you could get. A pitiful attempt to change the subject. :biglaugh:
     
  24. thinkwild

    thinkwild Veni Vidi Toga

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    It is an interesting question reckoning. I was going to start a thread about defining benchmarks to determine if the cap system is working. Can we define the measures now that in a few years we can look back on and say, yes, the benchmarks were met, the system did work. Can we define the measure so that we can say, if this happens, there is more competitive balance. How can we know, other than intuitively, if it is true?

    The 4 triggers, deemed essential to the leagues existence by fans when the league proposed them, will be interesting to monitor. What else?

    The system worked if:

    - no team misses the playoffs for 4 years?
    - no team moves?
    - no team fails to meet the minimum requirements Bettman mentioned to qualify for revenue sharing assistance?
    - no teams lose their best players because of money?
    - big markets dont get all the stars?

    What are the measures that if met we can say - it worked?
     
  25. mooseOAK*

    mooseOAK* Guest

    You certainly can't deal in absolutes like no and never.

    The system worked if all teams are able to maintain their core group of players and build around them and not have to worry about them being snatched away by teams with unlimited bank accounts.
     
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