Ultimate Contraction: Small Market Teams should just fold

Discussion in 'The Business of Hockey' started by Buffaloed, Mar 2, 2005.

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  1. Buffaloed

    Buffaloed webmaster

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    With such a disparity in team revenues and an unwillingness to meaningfully share it, even the NHL's own proposals don't look that promising for small market teams. The small market teams should just announce they are folding, or give a deadline if a CBA isn't negotiated that they can live with. The remaining NHL would have 8-14 teams with their $50 million cap or whatever they manage to negotiate.

    The folded teams could start their own league. All teams would be owned by a single public corporation that fans, players, and former owners could invest in and be rewarded through dividends and stock appreciation. General Managers would be elected by the shareholders and would receive bonuses based on performance. All players would be employed by the corporation so salaries could be set with no question of collusion. Salaries would be tied to profits and players would receive stock benefits as bonuses. And with the continued existance of a smaller NHL, there could be no question of restraint of trade. There would be room for cities like Winnipeg, Quebec, Hamilton, and Hartford in such a new league. If a franchise became highly successful it could even be sold to a private owner to join the NHL, with the profits benefiting everyone.

    Some people may think the NHLPA's ability to decertify is the hammer. The possibility of 16-22 NHL teams folding represents a far bigger hammer.
     
  2. Weary

    Weary Registered User

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    Why even fold the teams? The NHL should follow the European example and have upper and lower leagues. That would give teams a chance to restrict their spending while building for the future. Have relegation and promotion at the end of the season. All upper league teams, save the relegated ones, enter the Stanley Cup playoffs. The promoted teams get to play for the Cup as well.
     
  3. FLYLine27*

    FLYLine27* BUCH

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    The small market teams should fold. But I think there would be at least 20 NHL teams still around. With the 6-10 teams that fold...how about find a city willing to have a team..a city where hockey is big (another Canadian team, a team a Maine) I know growing the league is pretty much what killed it..but putting teams where fans will show up every night is where they should be.
     
  4. futurcorerock

    futurcorerock Registered User

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    So I take it that Columbus and Minnesota are caught in this crossfire too?
     
  5. Mr Sakich

    Mr Sakich Registered User

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    since Buffalo has just recently emerged from bankruptcy, I think they would be the first to fold. Hey buffaloed, you can always go catch some leaf games.
     
  6. NYIsles1*

    NYIsles1* Guest

    If the so-called large markets are mostly claiming losses and producing poor television ratings they should be the ones folding because they are the minority.

    They could not sell hockey to the public or make enought revenue with all the advantages they had all these years no matter how much money they spent and the sport was still reduced to secondary status. Hard to ask James Dolan to share his 85.3 million in revenue when he claims 40.9 million in losses in a market that only has 60,000 homes on avg watching Ranger hockey.

    Keep teams spending more only to lose more? They should keep their revenue and their losses and just be folded, the NHL struggled with them and can only do as poorly without them.

    The 25-26 remaining teams will likely bring us a competitive and better product with the right revenue parameters where the business can profit and will not need any revenue sharing.
     
  7. Motown Beatdown

    Motown Beatdown Need a slump buster

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    How do you determine small market? Are we talking about revenue or population. I mean Phoenix is a much bigger market than Denver, yet the Avs revenues are much greater.
     
  8. Buffaloed

    Buffaloed webmaster

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    The NHL can't do that without the NHLPA's consent. Otherwise it's subject to anti-trust action. There's no way Goodenow would go along with it. Personally I wouldn't want Bettman and company to have anything to do with the new league. I don't have any faith that they have the integrity or competence to run it successfully.
     
  9. oh yea, canada can definitly support another team, seeing how the jets and nordiques had to relocate not too long ago and the flames and oilers claiming to have so much trouble surviving (unless you make a deep playoff run like the flames did last year)
     
  10. JR#9*

    JR#9* Guest

    :lol: :lol :help:

    Sounds like the best idea I've heard on these boards.....

    Fold up NY, Philly, Detroit, the Toronto Maple Leafs and the Avs the it would surely be smooth sailing for the rest of remaining teams!!! :dunce:

    Why didn't somebody think of this before? :banghead:
     
  11. Other Dave

    Other Dave Registered User

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    Absent collusion among teams on personnel budgets, how does a tiered league per se violate antitrust action? Teams at either level could simply budget accordingly, and justify that budget to fans based on their short term goals (are we going to compete in the 'B' pool this year, try to stave off relegation, go for the big jump into the 'A' pool, etc).

    BTW given Melnyk's comments during this lockout, it's pretty clear that Ottawa has no business in the major leagues. The Sens would fit right in to this lower-level league though.
     
  12. jeffbear

    jeffbear Registered User

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    Here we go again ...

    There's one VERY simply concept that proponents of contraction consistently ignore on message boards. Those franchises that you guys want to do away with have value. Unless some owner is stupid enough to fold a franchise without recouping it's book value, then the league is going to have to PAY fair market value to contract teams. Even if you went lowball and called the value about $50 million per team (remember that the Ducks just sod for far more than that), then you're looking at a boatload of money ... money that just doesn't exist.

    So ... is a twenty team league worth a $ 5 BILLION dollar price tag before they even dropped a puck?
     
  13. mooseOAK*

    mooseOAK* Guest

    Exactly, the financial and legal implications would be extensive because it isn't just the value of the franchise but lease agreements with the arenas, cities may ask for repayment of tax breaks given and for infrastructure built to support the arena, and plenty more.
     
  14. Gee Wally

    Gee Wally Grumpy

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    good post..this amongst other things like a need for exposure is why I'm opposed to contraction.

    Now if you want to talk roster size reduction...I'm all for that !
     
  15. GKJ

    GKJ Global Moderator

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    Contraction nor roster size reduction will never happen because if the PA is going to concede most of the stuff they already had, they're sure not going to let their jobs get taken as well.
     
  16. mooseOAK*

    mooseOAK* Guest

    Was roster size a part of the previous CBA? I believe that there were teams not at the max over the course of previous seasons.
     
  17. Gee Wally

    Gee Wally Grumpy

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    never say never .....

    If it makes financial sense to those in the majority....anything is possible.
    This has nothing to do with solidarity on either side..It has to do wiith money.

    The owners would screw each other at the drop of a hat...so , ultimately will the players too.
     
  18. wazee

    wazee Registered User

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    I am sure ticket sales would jump through the roof when an owner says they are going to compete in the 'B' pool.

    Demoting a team to the 2nd tier league is a self-fulfilling prophesy. The team will soon become 2nd class in every way. Which will, of course, allow those who favor the 2 tier system to say 'See, we were right all along.', when, in reality, they have set up the system so the deck is stacked against the 2nd tier teams.

    Wonder how many of those advocating a 2-tier league would be doing so if their favorite team would be one of those demoted to the 2nd tier?

    Wonder how many of the 2-tier system advocates will come clean and name their hometown and their favorite team?
     
  19. s7ark

    s7ark Bouch

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    Might want to recheck your math. $50 million /team X 10 teams = $500 million, not $5 billion.

    Still a very valid point... Good job. :D
     
  20. Buffaloed

    Buffaloed webmaster

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    The individual owners would decide that based on their interpretation of their market. Teams that fold wouldn't retain the franchise name or arena rights. The NHL would hold the rights to the name, and arena deals would have to be renegotiated. If Bill Wirtz or Jeremy Jacobs wanted to put a 2nd tier team in a market the NHL believes can support one of their teams, they'd simply revive the NHL franchise under new ownership. Ultimately the new league could surpass the NHL in revenues and become the dominant league. Unlike the NHL, everyone would be working towards the same goal, and the more one part succeeds the more the entire league succeeds.
     
  21. MrMackey

    MrMackey Registered User

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    I suggested something like a super league on the Oilers board. How about a process something like this:

    Step 1: The league's seven top revenue earners (TOR, DAL, DET, COL, PHI, NYR and MON according to Larry Brooks) retain the rights to the league name, the Stanley Cup, national tv rights and all of their roster players. They also get to have a dispersal draft to choose players off the remaining 23 teams. All 30 teams retain all branding, farm teams, management and staff, their share of the remaining lockout slush fund, rights to negotiate with all players under contract or RFA under previous CBA, and all local sponsorship and tv contracts. The remaining 23 teams get an additional $10M each for their troubles ($230M).

    Step 2: NHL holds dispersal draft, signs players to contracts and sets up whatever CBA they want to negotiate with the PA. There would be approximately 175 players in the NHL, and they would be represented by the NHLPA.

    Step 3: Remaining 23 teams start new league (lets call it NHL2). $230M goes in to setup and marketing. League imposes its own CBA and the approximately 575 roster players would set up new representation.

    Step4: NHL2 moves 5 teams (lets say CAR, FLA, ANH, NSH, PIT) to new markets: Winnipeg, Toronto, Windsor, Philadelphia, Quebec City. So new leagues would look like:

    NHL
    TOR
    DAL
    DET
    COL
    PHI
    NYR
    MON


    NHL2:
    East:
    OTT
    TOR2
    Windsor
    QC
    PHI2
    ATL
    BOS
    TB
    NJ
    NYI
    BUF
    WSH

    West:
    EDM
    CGY
    VCR
    WPG
    CHI
    MIN
    CLB
    STL
    LA
    PHO
    SJ

    Conclusion: NHL would have the best money earners, the Cup, the best players and would be great hockey. NHL2 would be about competitive balance, have 8 CDN franchises, players' calibre would be about the bottom 575 players in the current NHL (not the best, but still pretty good), can institute any rules they want.
     
  22. Munchausen

    Munchausen Guest

    Then again, the PA also said they would never accept a cap...
     
  23. PredsFan77*

    PredsFan77* Guest

    :nopity:
     
  24. jeffbear

    jeffbear Registered User

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    Thanks ... I did that while I was on the phone. NEVER type and talk at the same time.
     
  25. Other Dave

    Other Dave Registered User

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    I had been a fan of the Senators from day 1, and laboring under the misapprehension that Ottawa, one of the smallest of the small markets, could compete in the big leagues.

    But what do I know? The current owner of the Sens insists that he can't make a go of it under the old system. He'd rather screw his investment up and dash the hopes of his fans by supporting this lockout than advocate for a system that allows to keep his good young players until they are at or past their expiry date.

    Who am I to argue with him? Ottawa's clearly bush league, might as well make it official.
     
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