Ultimate Contraction: Small Market Teams should just fold

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Munchausen

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Other Dave said:
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.

And how do you figure Ottawa could keep his best players? Are you implying Melnyk owes it to the fans to lose money in order to keep the product intact? Under the previous CBA, Ottawa would have rose near Dallas' numbers in less than 5 years if they tried to keep the core intact. No way that happens, Ottawa doesn't have that kind of revenues.

According to your logic, there's about half that teams that are "bush league".
 

Other Dave

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Munchausen said:
And how do you figure Ottawa could keep his best players?

The same way they did it down in East Rutherford: Win lots, keep developing, dump any and everyone who asks for too much money. Jersey lost an all-star roster's worth of guys in the same period they won three Cups.

Are you implying Melnyk owes it to the fans to lose money in order to keep the product intact?

Not this foolish old canard again. NHL owners have only ever spent money for business reasons, not just for the sake of winning or for the love of the fans.

Under the previous CBA, Ottawa would have rose near Dallas' numbers in less than 5 years if they tried to keep the core intact. No way that happens, Ottawa doesn't have that kind of revenues.

Ottawa's playoff runs have been disappointing. If they continue to be disappointing over the next five years, then their players are bums who can't get it done and should be traded for prospects. If they sniff success, then that success translates directly into dollars for both profit and higher salaries for the stars.

That's the way it's worked for other teams in the league, win or lose. Ottawa's nothing special in that context.

According to your logic, there's about half that teams that are "bush league".

Not my logic, Melnyk's logic. I've always maintained that unde the old CBA, Ottawa could have had East Rutherford revenues if they could achieve Devils'-like success. If they can't they don't belong in the bigs.
 

wazee

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MrMackey said:
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.


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.

Why do you think the bottom 23 teams would allow the top 7 to have the Stanley Cup? Why would they be allowed to keep the name 'NHL'? Your answer...For 10M bucks.

Just curious why you think that small a number would do it? I think you would have to start with at least 100M for each franchise you want to demote...and you would end up paying a lot more if it went to the courts.

It is pretty amazing that you think the owners of 23 teams who paid for an NHL franchise would be even consider allowing their property to be devalued by demotion to a 2nd tier league for a mere 10M. What do you think the franchise value of a 2nd tier team would be in comparison to a NHL team? 50%? Highly doubtful. 20%? Maybe. What is an AHL franchise worth?
 

MarkZackKarl

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Other Dave said:
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.


I guess that would make 21 other teams bushleague, since Ottawa generated the 9th highest revenues in the league last season, according to Mlakar.
 

snakepliskin

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i have to admit this is definitely the most rediculous thread i've read on these boards yet!!!!!!!!! dreaming that owners would fold teams that have values of 80 mill and up or moving them to markets where teams have previously failed or take their major league franchise down to triple A--sheeeeeesh-besides why would an owner move his team to another market under a new bargaining agreement before he would give his team a chance to succeed in it's current market under the same new system? this is a wish list thread :dunce:
 

me2

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Other Dave said:
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.


It wouldn't work very well if you have arbitration working between the upper league and lower league. Goodenow would just love it if minor league teams got first crack at all of the prospect talent and could lock up young stars until they are 31 without having to pay upper league arbitration prices.
 

MrMackey

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wazee:

I admit, its a pretty far-fetched idea, but I'm just throwing it out there.

To answer a couple of your questions:

wazee said:
Why do you think the bottom 23 teams would allow the top 7 to have the Stanley Cup? Why would they be allowed to keep the name 'NHL'? Your answer...For 10M bucks.
No, not for $10M. The 23 teams would let the 7 teams keep the name "NHL" basically to get rid of the PA. The NHL deals with the NHLPA.

The NHL would get to keep the Stanley Cup because the top players in the world would play in that league. It makes sense to me.

I'm no lawyer, but my idea may allow the teams that were no longer part of the NHL to pretty much institute whatever CBA they want without having to declare an impasse, or deal with the NHLPA.

wazee said:
Just curious why you think that small a number would do it? I think you would have to start with at least 100M for each franchise you want to demote...and you would end up paying a lot more if it went to the courts.
To me its pretty obvious why a small number would do it. You're not actually selling your franchise... you're accepting a payment to do all the things that you'd want to as far as collective bargaining. The $10M is basically compensation for the risk of losing a couple of your top players, and losing association with an established league and the best trophy in sports.

However, when you look at what the teams keep, $10M should be more than sufficient, and easily digestible by the NHL hold-overs. The NHL is a gate driven league, and gate reciepts should not be affected too negatively over the long term. Fans in Edmonton will still pay to see NHL2 games... even without the Leafs and Rangers. The team may lose Ryan Smyth, Brewer and Hemsky... but the rest of the team will probably still be intact.

wazee said:
It is pretty amazing that you think the owners of 23 teams who paid for an NHL franchise would be even consider allowing their property to be devalued by demotion to a 2nd tier league for a mere 10M.
Its pretty amazing that you think that the franchises would be devalued:

1. Your #1 competing league is paying your startup costs.
2. You have an established fan base, sponsors, and local tv contracts
3. A new CBA with cost certainty (read: linkage at maybe 50%) will almost guarantee profitablity, even in small markets
4. Some of the best tv markets and highest growth markets are in NHL2

wazee said:
What do you think the franchise value of a 2nd tier team would be in comparison to a NHL team? 50%? Highly doubtful. 20%? Maybe. What is an AHL franchise worth?
Why don't you do the math yourself.
If you're to believe Brook's article, the top 7 teams make a collective $661M in revenue (averaging $94.4M/year). That means the other 23 teams earn, on average $62.57M/yr.

So lets say a new CBA has linkage at 50% ($31M/yr), and whatever else they feel would basically guarantee profits.

Why don't you grab a pen and some paper, write down the 7 teams, project who'll play on those teams and what the player budget will be. Then take last year's rosters for the remaining 23 teams, subtract the players that went to the "new NHL", and add prospects and players cut from the top 7 teams. Then try and grasp that the payroll is $31M or less and revenues are around $50-65M.

Then see if the product is really that bad, and answer for yourself whether these cities can fill their buildings.

Then realize that there are still 2 teams in NY, 8 teams in Canada (3 in Ontario), and in some of the hottest tv markets south of the border. You will certainly compete with the NHL in their markets, but they're unlikely to enter your markets with their "free-market" CBA.

Then project 5 years out. Is there room for revenue growth? If so, then the salary cap will rise. This means that NHL2 will be more competitive in signing top players away from the NHL.

Sometimes you have to take one step back to take two steps forward. Eventually the NHL2 may be the stronger league, and absorb the franchises from the NHL... making a 30 team league again.
 

myrocketsgotcracked

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go kim johnsson said:
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.
really? from the way chelios and walker talk about contraction, it seems like they are volenteering to reduce jobs.
 

Other Dave

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me2 said:
It wouldn't work very well if you have arbitration working between the upper league and lower league. Goodenow would just love it if minor league teams got first crack at all of the prospect talent and could lock up young stars until they are 31 without having to pay upper league arbitration prices.

Haven't you been reading this board? According to most posters, arbitration has a much more powerful effect on salaries than restricted free agency. In this tiered league, arbitration would ensure that the star talent would eventually price themselves out of the 'B' league and end up among the contenders, where they belong.
 

me2

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Other Dave said:
Haven't you been reading this board? According to most posters, arbitration has a much more powerful effect on salaries than restricted free agency. In this tiered league, arbitration would ensure that the star talent would eventually price themselves out of the 'B' league and end up among the contenders, where they belong.

But the tier 2 owners would want to be exempt from the tier 1 salaries. They could lock Crosby up until he's 31 on $2m/y. :handclap:
 

MacDaddy TLC*

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Other Dave said:
The same way they did it down in East Rutherford: Win lots, keep developing, dump any and everyone who asks for too much money. Jersey lost an all-star roster's worth of guys in the same period they won three Cups.
OR they may turn out like the Edmonton Pilers: battling it out for a sniff of the playoffs year after year and heartbreak after heartbreak. There's only one Lou Lamoriello, but hundreds of Mucklers.
 

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Other Dave said:
The same way they did it down in East Rutherford: Win lots, keep developing, dump any and everyone who asks for too much money. Jersey lost an all-star roster's worth of guys in the same period they won three Cups.

...

Not my logic, Melnyk's logic. I've always maintained that unde the old CBA, Ottawa could have had East Rutherford revenues if they could achieve Devils'-like success. If they can't they don't belong in the bigs.
Don't get me wrong, Lamoriello deserves a lot of respect for what he's done, but NJ consistently has a payroll in the top 10-12 in the league, and they play a stiffling defense. Having a high payroll allows you to replace quality players with quality players.

They don't dump everyone and everyone who asks for too much money. Despite having a top ten payroll, they've been very lucky (just like OTT has) to have some great players tied in at ridiculously low entry-level contracts. IMO, they've been more generous than the average team when giving out new deals... which basically has forced them to lose one or two players per year. Its not because Sykora or Arnott is asking too much necessarily, its because they can only afford so many raises. The Devils are a lot like other teams in that they let some good players go when they can't fit them in to their budget.

If the NHL were to have played this year, the Devils would have a payroll of over $60M (not including Hale or other players in the AHL). And if the new CBA was imposed, they'd be one of only 3 or 4 teams with a payroll over $45M.

They've been lucky enough to have had playoff success the year previous to when many players like Elias, Rafalski, Gomez, etc. have been due for big raises. If they had one or two rough years in the same way that Ottawa had, they'd be dumping a lot more players than they had, and their playoff success would not continue in the same way.

IMHO, NJ did quite well in the last CBA, but they had their fair share of good luck as well. But I think OTT has done an equally great job, if not better, having been caught in a vicious circle of playoff disappointments.

The old CBA guarantees that 26 teams are not going to reap the economic benefits of making it to the quarter-finals... you can't have more than four teams benefit from this economic reality with any regularity. Achieving "Devil's-like success" is not all that easy, therefore its a little ridiculous to build a budget on the presumption that you will achieve that success & earn East Rutherford revenues.
 

Jason MacIsaac

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MrMackey said:
Don't get me wrong, Lamoriello deserves a lot of respect for what he's done, but NJ consistently has a payroll in the top 10-12 in the league, and they play a stiffling defense. Having a high payroll allows you to replace quality players with quality players.

They don't dump everyone and everyone who asks for too much money. Despite having a top ten payroll, they've been very lucky (just like OTT has) to have some great players tied in at ridiculously low entry-level contracts. IMO, they've been more generous than the average team when giving out new deals... which basically has forced them to lose one or two players per year. Its not because Sykora or Arnott is asking too much necessarily, its because they can only afford so many raises. The Devils are a lot like other teams in that they let some good players go when they can't fit them in to their budget.

If the NHL were to have played this year, the Devils would have a payroll of over $60M (not including Hale or other players in the AHL). And if the new CBA was imposed, they'd be one of only 3 or 4 teams with a payroll over $45M.

They've been lucky enough to have had playoff success the year previous to when many players like Elias, Rafalski, Gomez, etc. have been due for big raises. If they had one or two rough years in the same way that Ottawa had, they'd be dumping a lot more players than they had, and their playoff success would not continue in the same way.

IMHO, NJ did quite well in the last CBA, but they had their fair share of good luck as well. But I think OTT has done an equally great job, if not better, having been caught in a vicious circle of playoff disappointments.

The old CBA guarantees that 26 teams are not going to reap the economic benefits of making it to the quarter-finals... you can't have more than four teams benefit from this economic reality with any regularity. Achieving "Devil's-like success" is not all that easy, therefore its a little ridiculous to build a budget on the presumption that you will achieve that success & earn East Rutherford revenues.
Ottawa has done as good a job as New Jersey? Last time I checked the count was at:

New Jersey 3 cups
Ottawa Senators - 0 cups

I would say NJ has done the better job.
 

PredsFan77*

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Jason MacIsaac said:
Ottawa has done as good a job as New Jersey? Last time I checked the count was at:

New Jersey 3 cups
Ottawa Senators - 0 cups

I would say NJ has done the better job.

welcome back, old topic
 

Jason MacIsaac

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PredsFan77 said:
welcome back, old topic
It deserved to be relived since I missed that utterly stupid comment about Ottawa doing as good a job as the Devils who own 3 cups during that period.
 
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garry1221

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MrMackey said:
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.

change i would make: take one team out of the 'a' league and move it to the 'b' league. a new 6. b) you'd need 2 drafts, one for the a league, one for the b league. if after two years teams can show they can stay financially viable they have the option of moving to the a league, but only 2 at a time (keeping even number of teams in each league), also forget the toronto 2 and the philly 2 as both cities have their farm teams playing in the same city. IMO 3 teams per city, no matter how big and hockey crazy is just nuts. frankly i doubt the new teams would get support from the cities.
 

me2

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garry1221 said:
change i would make: take one team out of the 'a' league and move it to the 'b' league. a new 6. b) you'd need 2 drafts, one for the a league, one for the b league. if after two years teams can show they can stay financially viable they have the option of moving to the a league, but only 2 at a time (keeping even number of teams in each league), also forget the toronto 2 and the philly 2 as both cities have their farm teams playing in the same city. IMO 3 teams per city, no matter how big and hockey crazy is just nuts. frankly i doubt the new teams would get support from the cities.

Why not just have 4 conferences

Conf 1 (7/8 rich teams)
Conf 2 (22/23 poorer teams)

Each conference plays off amoungst itself. Poor conference gets 3 semi finalists, rich conference gets 1. Overall winner get the SC.
 

SuperUnknown

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MrMackey said:
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.

I'm fairly certain that in this scenario, NHL2 would be more popular than NHL1.
 

mr gib

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Buffaloed said:
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.
unfortunately right now i think everyone is stuck - they're gonna have to fix gary's mistake's - the think the player's 24 percent and a luxury tax was a good place to start - after all this crap i don't think contraction is the answer - perhaps after a couple year's of a new system and it still wasn't working moving team's would be better -
 

Slats432

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Bad idea...this is a profitability issue. Let's just fold the 15 teams that lost the most money last year....

Colorado Avalanche -1.1
New York Rangers -3.3
Florida Panthers -3.7
Philadelphia Flyers -4.1
Ottawa Senators -5.0
Los Angeles Kings -5.3
Phoenix Coyotes -7.8
New York Islanders -9.5
Buffalo Sabres -10.5
New Jersey Devils -13.9
Washington Capitals -14.7
Detroit Red Wings -16.4
Carolina Hurricanes -18.2
Mighty Ducks Anaheim -22.4
St Louis Blues -28.8
 

txpd

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wazee said:
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?

Yea, the other part that kills the two tier system, other than that players with a choice would never sign in the 2nd tier because its not a stanley cup league, is that Calgary and Tampa Bay would both have been in the 2nd tier and last year's playoffs kind of kills that idea. Unless of course those with the two tier idea thought that a Calgary/TB final should be avoided at all costs by making them ineligible.
 

Icey

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Jan 23, 2005
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slats432 said:
Bad idea...this is a profitability issue. Let's just fold the 15 teams that lost the most money last year....

Colorado Avalanche -1.1
New York Rangers -3.3
Florida Panthers -3.7
Philadelphia Flyers -4.1
Ottawa Senators -5.0
Los Angeles Kings -5.3
Phoenix Coyotes -7.8
New York Islanders -9.5
Buffalo Sabres -10.5
New Jersey Devils -13.9
Washington Capitals -14.7
Detroit Red Wings -16.4
Carolina Hurricanes -18.2
Mighty Ducks Anaheim -22.4
St Louis Blues -28.8

Not sure where you got your numbers from, but last season Phoenix lost over $20M according to the Coyotes and Wayne, yet you list them as $7.8? Philadelphia lose money? Not likely.
 
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