Revenue Sharing

[John Flyers Fan]

Looking at it from a players side I certainly see why they think revenue should be shared in a miuch bigger way that the NHL is proposing. If the owner want a "partnership" with the union, the players feel that they should also have a "partnership" with each other.

That being said, lets disregard the above player vs. owner argument for right now, and lets look at owner vs. owner.

Obviously the owners of teams that generate smaller revenues would be in favor of significant revenue sharing, but is there anyway to sell the Mike Illitch's, Ed Snider's of the world on significant revenue sharing ???


IMO if I'm Ed Snider I have no problem giving Edmonton and Calgary some money. If you're an owner of a team other than Edmonton and Calgary, state your case to me why I should be giving you money.

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[Lanny MacDonald*]

Looking at it from a players side I certainly see why they think revenue should be shared in a miuch bigger way that the NHL is proposing. If the owner want a "partnership" with the union, the players feel that they should also have a "partnership" with each other.

That being said, lets disregard the above player vs. owner argument for right now, and lets look at owner vs. owner.

Obviously the owners of teams that generate smaller revenues would be in favor of significant revenue sharing, but is there anyway to sell the Mike Illitch's, Ed Snider's of the world on significant revenue sharing ???


IMO if I'm Ed Snider I have no problem giving Edmonton and Calgary some money. If you're an owner of a team other than Edmonton and Calgary, state your case to me why I should be giving you money.

I agree with what you are saying. The league is (or should act like) a partnership and should share more revenues. But the mechanism that makes the sharing possible is difficult to define. I think this also needs to be addressed by the league and hammered out. Unfortunately revenue sharing really has nothing to do with the players nor the NHLPA's desires. Revenue sharing is an internal issue for the league to deal with amongst its owners. This is another subject matter that Bettman is going to have to broach in the future, and I think it will be there, but before revenue sharing is hammered out the owners want (no, they need) to know what their fixed costs are going to be. I see this as them wanting salary to be a fixed cost that can be factored into any system that they want to implement. I mean, its common sense when you consider they are implementing a minimum salary level. This is likely where the revenue sharing will come in and that teams will get topped up to the minimum level with potential for a greater share should they exceed benchmarks put in place for minimums. But to define how this money is going to be shared, and where its coming from you need to know what your costs are.

Think about it. Would you blindly sign a mortgage, not knowing what your costs were going to be each month? Would you not make sure you knew exactly what the bills were going to be before you started signing away your life and spending your money elsewhere? I think that salaries, being the biggest chunk of money any team will spend in a season, is the most important thing for the teams to have a grasp on. Once they understand that I think the rest falls into place. Frankly, the NHL specifies in their proposal that revenue sharing will be done, but does not outline the mechanism. To me, this is enough to get a deal done. The promise is there in writing. Tweak it if you must by adding a cavet in the CBA of player agreed to representation on the committe that defines revenue sharing, but in no way should this be the roadblock that holds up hockey. It is really an internal issue of those partners in the NHL enterprise.

 

[SENSible1*]

As a gate driven league, the NHL should share revenue by splitting the gate 60-40 for all games, regular season and playoffs.

 

[John Flyers Fan]

As a gate driven league, the NHL should share revenue by splitting the gate 60-40 for all games, regular season and playoffs.

Again ... make the case to Ed Snider. Why he should share his money with other owners?

 

[SENSible1*]

Again ... make the case to Ed Snider. Why he should share his money with other owners?

Two teams on the ice.

He gets money for all his road games.

Sure it cost him some revenue, but the case for a partnership is much easier to make to the players when the owners are doing the same. In addition, a strong healthy league will increase his franchises worth, thus offsetting his revenue losses.

 

[CarlRacki]

Again ... make the case to Ed Snider. Why he should share his money with other owners?

Without getting too long-winded or going into too much detail, the argument would go like this:
The overall health of the league would improve through a revenue-sharing plan. A healthier league would make for more valuable franchises when it comes time for you or any other owner to cash in on his/her equity. A healthier league attracts better corporate sponsors and more corporate sponsorship dollars. A healthier league would lead to a better, more profitbale television deal.
The short-term losses suffered by sharing some of your gate would ultimately be outweighed by the long-term benefits of revenue sharing. The NFL learned this three decades ago. It's time we did as well.

Or something like that.

 

[John Flyers Fan]

Without getting too long-winded or going into too much detail, the argument would go like this:
The overall health of the league would improve through a revenue-sharing plan. A healthier league would make for more valuable franchises when it comes time for you or any other owner to cash in on his/her equity. A healthier league attracts better corporate sponsors and more corporate sponsorship dollars. A healthier league would lead to a better, more profitbale television deal.
The short-term losses suffered by sharing some of your gate would ultimately be outweighed by the long-term benefits of revenue sharing. The NFL learned this three decades ago. It's time we did as well.

Or something like that.

If I'm Ed Snider that's not a compelling enough argument.

 

[misterjaggers]

Revenue sharing is important, but league-wide solvency needs to be restored first by capping salaries. After all, what good is a redistribution scheme that spreads losses?

 

[CarlRacki]

If I'm Ed Snider that's not a compelling enough argument.

If you're Ed Snider, then you're just one of 30 owners and the other 29 may not give a hoot. There were many in the NFL who resisted revenue sharing as well, but the majority wanted it and the majority won out. You'd do well to remember that, Mr. Snider.

 

[SuperUnknown]

Looking at it from a players side I certainly see why they think revenue should be shared in a miuch bigger way that the NHL is proposing. If the owner want a "partnership" with the union, the players feel that they should also have a "partnership" with each other.

That being said, lets disregard the above player vs. owner argument for right now, and lets look at owner vs. owner.

Obviously the owners of teams that generate smaller revenues would be in favor of significant revenue sharing, but is there anyway to sell the Mike Illitch's, Ed Snider's of the world on significant revenue sharing ???


IMO if I'm Ed Snider I have no problem giving Edmonton and Calgary some money. If you're an owner of a team other than Edmonton and Calgary, state your case to me why I should be giving you money.

If I was a player, I would be against revenue sharing in capped environment. Why? Because revenue sharing would mean less efficiency at increasing revenues. What is a good investment without revenue sharing becomes a bad investment with revenue sharing, which means that teams will be less eager to develop new revenue streams (since they're only getting a portion of it while paying for all the costs).

If the players receive a share, then they don't want that because it will decrease their salaries (collectively).

 

[no13matssundin]

If you're Ed Snider, then you're just one of 30 owners and the other 29 may not give a hoot. There were many in the NFL who resisted revenue sharing as well, but the majority wanted it and the majority won out. You'd do well to remember that, Mr. Snider.

Very Well Said

 

[Poignant Discussion*]

Looking at it from a players side I certainly see why they think revenue should be shared in a miuch bigger way that the NHL is proposing. If the owner want a "partnership" with the union, the players feel that they should also have a "partnership" with each other.

That being said, lets disregard the above player vs. owner argument for right now, and lets look at owner vs. owner.

Obviously the owners of teams that generate smaller revenues would be in favor of significant revenue sharing, but is there anyway to sell the Mike Illitch's, Ed Snider's of the world on significant revenue sharing ???


IMO if I'm Ed Snider I have no problem giving Edmonton and Calgary some money. If you're an owner of a team other than Edmonton and Calgary, state your case to me why I should be giving you money.

John Flyers Fan is my new favorite poster

 

[shveik]

Unfortunately revenue sharing really has nothing to do with the players nor the NHLPA's desires. Revenue sharing is an internal issue for the league to deal with amongst its owners.

By the same token, the players and NHLPA should not care how much of the revenue their salary takes up, or whether the teams make profit. It would be true under former CBA. If the owners want to make players their "partners" then the revenues and the financial dealings of the NHL become NHLPA business too.

For further details, please re-read your own thread on this issue:

here

 

[thinkwild]

Lets assume we had a "strict" luxury tax. Only the rich teams could afford it. The first year it raised $185mil, and the 2nd year it raised $90mil.

How would this money be split? Which teams would get it under the 1st scenario but not the 2nd?

If it raised too much money should the tax percentage be raised? If it doesnt raise enough, should the precentage be lowered? Wouldnt this tax depend on how much money is needed to be raised, and change as that changes?

Why should revenue sharing money only go to teams who made enough money? Shouldnt it be to prop up the teams that lost money? TO cover their losses so they are solvent? Not to give them more money to spend?

Who are the teams that should be qualifting for revenue sharing?

Pittsburgh?
Carolina?
Ottawa?
Edmonton?
Boston?
St Louis?
NYR? (Hey they lost a lot of money)
Detroit?

Can we agree on who the teams that should be getting revenue sharing are and how much they need?

 

[GirardIsStupid]

If I'm Ed Snider that's not a compelling enough argument.

You accepted the expansion fee that allowed teams like Columbus, Nashville, Atlanta, Minnesota, Ottawa Senators, San Jose Sharks, and the Anaheim Mighty Ducks to enter the league. Now some of those teams are struggling and you don't want to help them out?

Further, revenue sharing would possibly create better competitive balance (although there's quite a bit now anyway) that could improve the league's marketability. This increased exposure could lead to a much better national televsion deal.

Moreover, forging an economic partnership with your owners would put the onus on your fellow governors to stop stabbing each other in the back. This unity would also make you and the rest of the teams less vulnerable to the player's association that you vehemently dislike. Greater leverage like this would more legitimately make the players realize that your league's demand for a cap is real. Such a cap would significantly increase the value of your franchise. Revenue sharing would also legitimize the notion that the small market clubs are on the brink of extinction.

In the end, the potential is there to break the union (or keep it in its place) by solidifying the health of every team in the league.

 

[Lanny MacDonald*]

By the same token, the players and NHLPA should not care how much of the revenue their salary takes up, or whether the teams make profit. It would be true under former CBA. If the owners want to make players their "partners" then the revenues and the financial dealings of the NHL become NHLPA business too.

For further details, please re-read your own thread on this issue:

here

I have no problem with the players having a say, once they become a partner in the enterprise. Until they become that partner, signing a deal that ties their earning to the revenue of the league, they can sit back and shut the hell up. They are employees at this point and have no say in what is done with the league revenues.

Do not forget that the NHL is run as a franchise agreement. To make changes such as revenue sharing would require much work to be done on the franchise agreement as well. The CBA does not cover that franchise agreement, so it is an entirely different can of worms. To make the changes suggested, the franchises have to vote and ave to pass such amendments to their agreements. The players have no say in how revenues are shared until they become partners and the clubs agree to revise the provision in their franchise agreements. That's life in the franchising game.

 

[Beukeboom Fan]

If I'm Ed Snider that's not a compelling enough argument.

Well, for every one Ed Snider, there are probably at least 3 or 4 small market owners that it makes perfect sense to!

I would say EVERYONE (owners & players) benefits from having a financially healthy league. Financially the Flyers could actually be much better off under a revenue sharing/salary cap situation. Of course they wouldn't have the advantage of being able to make some absolutely brutal contract decisions (Leclair) and not have it affect the team.

 

[Drake1588]

Perhaps just to overstate what should be obvious to those following the public discourse so far...

...but to date, the parties against revenue sharing have the upper hand among the 30 ownership groups. The league is not pursuing significant revenue sharing of regular season gate receipts, and this is an issue that has to be dealt with at CBA negotiation time, or it won't be dealt with at all. Revenue sharing has been categorically rejected by the NHL, and by extension enough owners to override the voices of those who would prefer to see it.

Make a case for revenue sharing, fine. I personally agree with the concept and would like to see implementation. The NHL isn't interested, however, and that is all that really matters in this debate.

Leaving revenue sharing off the table is the very internal compromise that is preserving ownership unity right now.

 

[John Flyers Fan]

Well, for every one Ed Snider, there are probably at least 3 or 4 small market owners that it makes perfect sense to!

Apparently not, because the NHL plan has very limited revenue sharing. The NHL revenue sharing plan is much more to the liking of the Leafs, Flyers, Red Wings etc. than the NHLPA revenue sharing proposal which is more to the liking of the smaller revenue generating teams.

 

[Jaded-Fan]

I am in favor of revenue sharing, but there would be some problems to work out. One would be compensation to an owner, say in NY, that bought a team based on a value where there was limited revenue sharing and now would have that value diminished. Significantly.

Also, revenue sharing per se would not level the playing field. Owners have teams more for ego reasons than to make money, so there always will be one or two who will gladly lose many multiples of millions just to 'win' that year.

To be honest a Cap with enough revenue sharing to allow each team to make payroll seems fairest to me. If a team in a very small revenue market earns only ten cents for its owner, why should I or even a fan in that maret care? If the owner in NY or wherever earns $100 million, fine too. The only care that I have as a fan is that the playing field is such that each fan in every city can believe that they have a legit year in year out chance and where money will not effect who you can or can not sign anymore than in any other city. This also would protect the value and investment that big city owners have in their teams.

To me that will present a strong vibrant league, even in the cities that would 'suffer' by having to compete for the first time in years evenly on a mangement level.

 

[Russian Fan]

To me the question is more related on HOW COMPETITIVE 30 teams can be with a hard cap without TOTAL REVENUE SHARING from all the franchise.

To me it's hypocretical from Bettman. They say AD NAUSEOUS that they do this to fix the game & on the other side they provide absolutely nothing in their proposal that makes every team competitive.

Also the thing is that they never talked about WHAT IS REVENu & WHAT'S NOT & to me if even the players would like to talk about a cap, it's to put specifically what is REVENU & what'S NOT !

The last proposal just put the Leafs having 30M$ of profit into 55M$ of profits because they don't give anything with the last proposal. I can understand that people does not have sympathy for the players but how can it be ok to an owner to jump from 30 to 55M$ (speculation that Toronto could go from a 60M$ salary to 36M$ meaning 24M$ + in their pocket) but it's not ok for Nicklas Lidstrom or Saku Koivu to earn 10 or 5,5M$ ?

The Leafs will increase profit & the Nashville predators will have to update their salary expense from 20-25M$ to 34M$ & if they make the playoff , they will have to split their revenue on the playoff with those who didn't make the playoff that year.

That's why if a cap can be put in some players mind, the ''owners'' or Daly-Bettman need to provide on their side that they intend to help each other.

Just my point of view.

(I put it in another thread but I just saw it would be better in this one)

 

[Guest]

IMO if I'm Ed Snider I have no problem giving Edmonton and Calgary some money. If you're an owner of a team other than Edmonton and Calgary, state your case to me why I should be giving you money.

I'm sorry to answer your question with another question, but I think it's the same arguement as why would you want to have social services in the community (Medicaid or Welfare for example)? You want these services for the benefit of the overall community, because if the poor gets too poor, it hurts you through crime or other matters.

There have been some good explanations as to the benefits of revenue sharing, and I find it incredibly hard to side with the owners due to their lack of committment to this issue. I think it'd be a start, and with a luxury tax with bite, it could provide the revenue sharing without teams agreeing on fixed percentages. I made a proposal in the past week that offered to tax all teams for players on payroll who make over the league average. It had a balanced plan of distribution and showed the benefits (per team). A good luxury tax system, maybe not the ones you see in the NBA or MLB, but a good system could balance out the league with no immediate need for a hard cap.

As previously mentioned, revenue sharing just spreads out the losses across the league, and if more teams were feeling the losses, you would see spending curbed as a result. It all depends on the system. The NHL and NHLPA are both thinking inside the box, and not even entertaining the thought to think outside the box. By placing general summaries on terms like "hard cap" or "luxury tax" and refusing to agree to anything with those names.

 

[shveik]

I have no problem with the players having a say, once they become a partner in the enterprise. Until they become that partner, signing a deal that ties their earning to the revenue of the league, they can sit back and shut the hell up. They are employees at this point and have no say in what is done with the league revenues.

Then they cannot discuss anything about the NHL proposed CBA. After all, it is all about the league revenue, and, for instance, the players share of it. Why can't they discuss the league finances in the context of accepting the proposed CBA?

Do not forget that the NHL is run as a franchise agreement. To make changes such as revenue sharing would require much work to be done on the franchise agreement as well. The CBA does not cover that franchise agreement, so it is an entirely different can of worms. To make the changes suggested, the franchises have to vote and ave to pass such amendments to their agreements. The players have no say in how revenues are shared until they become partners and the clubs agree to revise the provision in their franchise agreements. That's life in the franchising game.

It is not like we are talking about changing the US constitution here. The league has the ability to change the franchise agreement. And since the players would become "partners", the franchise structure would change, hence the change in the franchise agreement would not be out of line. Is there anything that prohibits including the changes to the franchise agreement as a part of these "partnership" negotiations?

 

[Lanny MacDonald*]

Then they cannot discuss anything about the NHL proposed CBA. After all, it is all about the league revenue, and, for instance, the players share of it. Why can't they discuss the league finances in the context of accepting the proposed CBA?

That's a catch-22 IMO. They could ask for it, but the the owners have every right to tell them to mind their own business. I could see this as a concession, but not as a primary bargaining point. They can ask, but I'm not sure it would get very far. I know if I were an owner I would politely tell them to mind their own business unless they are willing to assume some of the risk.

It is not like we are talking about changing the US constitution here. The league has the ability to change the franchise agreement. And since the players would become "partners", the franchise structure would change, hence the change in the franchise agreement would not be out of line. Is there anything that prohibits including the changes to the franchise agreement as a part of these "partnership" negotiations?

Actually, we are talking about something almost as complex as that. These owners bought in with an agreement to certain monetray systems and protections to their earnings. This is why there is no NHL team in Hamilton. The teams in that region (Toronto and Buffalo) have exclusivity. The NHL could likely negotiate with these team, but that would take time and require potential penalties from a new franchisee in Hamilton, paying restitution to Toronto and Buffalo. To go into something as complex as revenue sharing the francises would likely have to vote unanimously infavor of something like that. Or the league would have to offer a buy out of the clubs refusing to cooperate. Again, its very complex and not something you undertake while in the midst of a CBA negotiation. It is definitely something you do not tie into to the CBA without having definite plans as to how it will impact the agreement and the way business is done.

 

[RangerBoy]

As a fan of big money team,I would have no problem sharing revenue.As long as the revenue is spent on team payroll and not sticking it some owners pocket.Besides Dolan has no idea of how to spend his money so he doesn't really need it