Vincent Damphouse to blame

[mooseOAK*]

The NHL has NEVER offered to let the NHLPA examine all the team books let alone all the books of the related corporate entities as has been done in the other sports. The URO's are the best that has been offered along with a restricted look at four teams.

The NHLPA went over the four teams' (Boston, Montreal, La and Buffalo) reports (not the books) in 1999 and 2000 and found what they claim is $52 million in undeclared hockey revenue. They did some of their own digging much like was done with the Forbes review of Levitt.

In September 2004 Bill Daly was quoted as saying he was frustrated with the NHLPA continuing to ask for the same financial inmformation that had been seeking for the past 5 years. Well, duh Bill - is that not the issue if you wanted to link revenues to salaries???

In Goodenow's rersponse to the release of the Levitt Report he said the NHLPA would be prepared to comment once they were finally given access to all the books and he referred to the earlier four team review.

The NHLPA was given access to all 30 teams and only chose to do 4 of them. Bettman's side of it is that the NHLPA quit when the numbers they saw were not to their liking but Goodenow says that there was $52 million in unreported revenue.

On Goodenow's side if there was all this extra cash floating around for 4 teams why not do all 30 teams and come up with a colossal number to use against the owners? And, what did the $52 million consist of?

 

[SuperUnknown]

So the NHL hires Levitt the "watchdog" who did not catch on to Enron, World. com, Sunbeam, Waste Management, Arthur Andersen, et al while at the SEC

Looks like the NHL chose the right guy.

The SEC doesn't counter verify each audit that's made by an accounting firm. This would be ridiculous.

 

[me2]

It all depends upon who you believe. The players do not believe the NHL and Levitt.

Forbes Magazine was able to cut the losses back to $96 million and that was very conservative based on publicly available financial information they were able to dig out. Forbes had the Canucks at a profit of $1.7 million for 2003-04 while the Canucks have been reported to have made an actual profit of about $30 million.

So we know Forbes can be out by at least $30m per team. Not a convincing arguement for Forbes accuracy. So Forbes figure of $96m is 100% accurate give or take $900+m.

 

[me2]

The NHLPA was given access to all 30 teams and only chose to do 4 of them. Bettman's side of it is that the NHLPA quit when the numbers they saw were not to their liking but Goodenow says that there was $52 million in unreported revenue.

On Goodenow's side if there was all this extra cash floating around for 4 teams why not do all 30 teams and come up with a colossal number to use against the owners? And, what did the $52 million consist of?

That is what I'd love to know. You keep hearing $52m, you never actually see the details.

 

[Wetcoaster]

The NHLPA was given access to all 30 teams and only chose to do 4 of them. Bettman's side of it is that the NHLPA quit when the numbers they saw were not to their liking but Goodenow says that there was $52 million in unreported revenue.

On Goodenow's side if there was all this extra cash floating around for 4 teams why not do all 30 teams and come up with a colossal number to use against the owners? And, what did the $52 million consist of?

No they were only given partial access to four selected teams as agreed and it was only a review not an audit. They were not given unfettered access to those teams. Also the NHLPA was under fairly stringent non-disclosure agreements so they cannot speak with any specificity other than in a general way as to what was found during the review.

The NHLPA did not do the other 26 teams because they were not allowed access.

 

[Wetcoaster]

That is what I'd love to know. You keep hearing $52m, you never actually see the details.

Because the NHLPA is prohibited from giving those details under the terms of the non-disclosure agreements they signed before they conducted the review.

it is those same type of agreements that prevent them from going to the NBAPA to compare notes on teams that are co-owned.

 

[mooseOAK*]

No they were only given partial access to four selected teams as agreed and it was only a review not an audit. They were not given unfettered access to those teams. Also the NHLPA was under fairly stringent non-disclosure agreements so they cannot speak with any specificity other than in a general way as to what was found during the review.

The NHLPA did not do the other 26 teams because they were not allowed access.

Not according to Bettman, he said that it was all 30 teams. Does Goodenow say otherwise?

 

[me2]

Because the NHLPA is prohibited from giving those details under the terms of the non-disclosure agreements they signed before they conducted the review.

it is those same type of agreements that prevent them from going to the NBAPA to compare notes on teams that are co-owned.

Sounds like a pretty handy excuse to me. They could say its $152m and then fall back on the "we can't tell you what" excuse. Why not lump 4 teams together and say

$2m is player salaries
$15m in general hockey related revenue, tickets, gate, TV
$30m in associated enterprises (malls, increase to realestate values, etc)

I don't buy that they can say $52m by lumping 4 teams together, but can't be even a little more specific in detailing the general areas.

 

[Wetcoaster]

Sounds like a pretty handy excuse to me. They could say its $152m and then fall back on the "we can't tell you what" excuse. Why not lump 4 teams together and say

$2m is player salaries
$15m in general hockey related revenue, tickets, gate, TV
$30m in associated enterprises (malls, increase to realestate values, etc)

I don't buy that they can say $52m by lumping 4 teams together, but can't be even a little more specific in detailing the general areas.

Non-disclosure agreements are not excuses they are binding contracts usually with very onerous penalty and forfeiture clauses. I am sure the NHLPA has gone as far as they can without running the risk of breach. They gave some general details and that is the best they can do.

Now if the NHL offered to waive reliance on the agreements I am sure the NHLPA would be happy to publish the details. However i suspect that will not be happening anytime soon.

 

[Wetcoaster]

Not according to Bettman, he said that it was all 30 teams. Does Goodenow say otherwise?

Yes both Goodenow and Saskin have said otherwise.

The only offer for all 30 teams was to review the URO's which was the same offer Levitt made. The NHLPA already knows from its four team review that the URO's are not accurate.

 

[me2]

Non-disclosure agreements are not excuses they are binding contracts usually with very onerous penalty and forfeiture clauses. I am sure the NHLPA has gone as far as they can without running the risk of breach. They gave some general details and that is the best they can do.

It still smacks of a PR stunt. Bob can say whatever his like and doesn't have to back it up.

Now if the NHL offered to waive reliance on the agreements I am sure the NHLPA would be happy to publish the details. However i suspect that will not be happening anytime soon.

I wonder if we'll see teams push for non-disclosure agreements in players contracts?

 

[mooseOAK*]

Yes both Goodenow and Saskin have said otherwise.

The only offer for all 30 teams was to review the URO's which was the same offer Levitt made. The NHLPA already knows from its four team review that the URO's are not accurate.

So do it anyway and publicize that the owners are hiding millions of numbers. That's what I would do if the majority of people are calling my side the greedy ones.

If they get the salary cap indexed to revenues as they requested, how are they going to be able to track that?

 

[Wetcoaster]

It still smacks of a PR stunt. Bob can say whatever his like and doesn't have to back it up.

I wonder if we'll see teams push for non-disclosure agreements in players contracts?

Then you would be wrong. Non-disclosure agreements are the norm. The PA's in all the sports have to sign them. SOP. When you review the financials of a private company (such as the sale of the Canucks recently), these agreements are used.

The NHL had non-disclosure of salaries for years and backed it up with sizeable fines - that is how they were able to pay Howe so little when he was the best player in the game. Howe only found out from Bobby Baun and Carl Brewer when they joined the Wings and they told him what they were being paid.

Salary disclosure is one of the first things Goodenow did when he took over the NHLPA.

CFO (Chief Financial Officer) Magazine did a piece on the NHL's figures at the time of the lock out. The magazine is the leading US financial publication for financial executives.

They interviewed Rodney Fort,a sports-business expert and professor of economics at Washington State University who while he repects Levitt personally does not find the report persuasive.

"The truth is that we still don't have an accurate picture of the league's finances," agrees Fort. Most likely, he says, teams gave Levitt only the data that would back up their argument that they are losing money. Critics complained, too, that the report didn't contain any detailed information on individual teams. "The results can't be verified independently," maintains Fort.

Here is what CFO had to say about the Philadelphia Flyers and the Levitt Report:

The Red or the Black?

The Philadelphia Flyers wear orange and black on the ice. But financially, are they in the red or the black? Apparently, it depends on whom you ask.

In May, three months after former SEC chairman Arthur Levitt's report on league finances was issued, Ed Snider, chairman of the Flyers, told reporters that the team was 1 of the 19 that were losing money — despite having one of the highest attendance records in the league and making it to the playoffs in the 2002-03 season. At the same time, team president Ron Ryan told reporters that the Flyers were not one of the teams losing money. His explanation did little to clear up the contradiction: "Where it becomes confusing is that it sounds like there are two sets of books," Ryan told the Philadelphia Inquirer in May. "The difference is that the report we make to the league, as directed by the [NHL] Players' Association, is different from our own internal audited statement, which we view as the more accurate statement. So we were talking about two different reports," he said. Ryan's explanation seems to indicate that the team considers its own financial statements to be more accurate than those reported to the league and then to Levitt.

Here how CFO sees the issue of accounting and disclosure:

It's common for labor and management to hold differing views of a company's financial health during contract negotiations. General Motors Corp. and the United Auto Workers, for example, constantly bicker over how profitable the automaker really is. Labor disputes can even lead companies to profess extreme pessimism as they try to win concessions from unions. US Airways Group Inc., which recently reported a profit for the second quarter of 2004, was quick to point out that the airline expects future losses, and that another bankruptcy is a distinct possibility.

But large, publicly held airlines and auto companies release audited financial statements that are difficult to dispute. Most hockey teams--and most sports franchises, for that matter--are privately owned and are not compelled to release such documents. Teams that are owned by publicly held entities, such as The Walt Disney Co.'s Anaheim Mighty Ducks, are too small a part of their company's overall operations to show up in segmented reporting. In other words, when teams say they are doing poorly, players are asked to take management's word for it.

Each year, the NHL issues a Unified Report of Operations (URO) that includes aggregated revenues, costs, and--for the past few years--losses. But the players' union dismisses those numbers as inaccurate and too derivative to verify independently. The players claim that teams manage sales figures down and don't use uniform methods to account for varying types of revenue. "They offer selective disclosure," says Saskin. "If they want to claim poverty, they should open up the books and give full disclosure."

Two of the most respected US financial magazines back up the criticisms by the NHLPA and others about the Levitt report.

 

[Wetcoaster]

So do it anyway and publicize that the owners are hiding millions of numbers. That's what I would do if the majority of people are calling my side the greedy ones.

?????????????????????

You do not breach non-disclosure agreements - that is an idiotic suggestion and most likely incredibly expensive with a massive liquidated damages clause.

 

[MrMackey]

You do realize Goodenow is a Harvard law graduate and former player agent and that Bettman is a Cornell law graduate who worked for the NBA right?

I didn't know where they specifically graduated from, but I figured something close... that was part of my point.

Also, you'll notice I listed more than one question.

 

[mooseOAK*]

?????????????????????

You do not breach non-disclosure agreements - that is an idiotic suggestion and most likely incredibly expensive with a massive liquidated damages clause.

They already told us $52 million from the teams that they did audit, you wrote that yourself. Confused, again.

 

[Wetcoaster]

You do realize Goodenow is a Harvard law graduate and former player agent and that Bettman is a Cornell law graduate who worked for the NBA right?

Actually Goodenow has his law degree from the University of Detroit. He has his undergraduate degree from Harvard where he played and captained the NCAA Harvard hockey team. He played two years pro hockey for the Flint Generals of the IHL until returning to get university to get his law degree. While in law school helped research and prepare Dale McCourt's antittrust case against the NHL to prevent McCourt being awarded by an arbitrator to LA as compensation for the Wings signing Rogie Vachon.

He was a management labour lawyer for Unisys and did some fairly heavy duty labour law work - one of the Teamsters' union executives has called him a union buster for his activities.

Goodenow later became a player agent and he and Brian Burke worked together for aperiod of time until Burke joined Pat Quinn in Vancouver and Goodenow joined the NHLPA. Prior to taking over, he provided a great deal of information and documents along with player rep Andy Moog to journalist Russ Conway that would be instrumental in the criminal charges against "Honest Al the Owners' Pal".

 

[me2]

Then you would be wrong.

Why?

We have no idea whether or not the NHLPA found the extra $52m they claims to have.

We have not idea what it supposedly relates to.

We don't even know what teams were supposedly hiding what amount revenue.

We don't know how high the associated expenses were for these supposed missing revenue streams.

We don't know whether he plucked it from the air or not.

We have Goodenow's word for it and nothing more. The question to be answered is why is Goodenow not prepared to look at teams books if great $52m chunks of revenue are floating around. If they is as much undeclared revenue as he suggests he'll make a killing by tying salaries to revenue.

 

[Wetcoaster]

They already told us $52 million from the teams that they did audit, you wrote that yourself. Confused, again.

Yes, you seem to be confused yet again.

And that did not breach the disclosure agreement as has been noted. They could even list some of the categories that were problematical but they could not identify the teams or attribute specific dollar amounts under the terms of the agreement.

You obviously know virtually nothing about business.

 

[me2]

Yes, you seem to be confused yet again.

And that did not breach the disclosure agreement as has been noted. They could even list some of the categories that were problematical but they could not identify the teams or attribute specific dollar amounts under the terms of the agreement.

You obviously know virtually nothing about business.

You just mentioned they could broadly attribute revenue to categories so long as obscured the sources (by combining data). So what were these categories they could list, and how much in each (a ballpark figure will be fine)?

That's what I want to know. Ticket revenue, merchandise, real estate?

 

[SPARTAKUS*]

Your sense of humour ... does not make much sense.

What concessions has the NHL granted from the last CBA?

The players has to realize that they have to accept the best deal possible. And right now for an insane reason they seem to think that they can still have a better deal down the road. At one point you have to be man enough to accept defeat and say we gave it our best shot, now it's time to make a deal and go back to work.

 

[Wetcoaster]

You just mentioned they could broadly attribute revenue to categories so long as obscured the sources (by combining data). So what were these categories they could list, and how much in each (a ballpark figure will be fine)?

That's what I want to know. Ticket revenue, merchandise, real estate?

That is what the NHLPA cannot say under pain of severe financial penalties.

Here is what was said by Ted Saskin on the review of the four teams:

"We went and requested further information that spoke to a lot of the related entities and disclosed a lot of revenue sources that clearly were not being counted in the URO process," NHLPA senior director Ted Saskin told The Sporting News. "Just on those four teams alone, we saw a swing of $52 million toward profitability. That's only on four out of 30 teams.

Here is what Goodenow had to say:

"We were given access to the UROs for 30 clubs, but were only able to conduct a thorough review of four NHL clubs. On those four clubs alone we found just over $52 million in hockey related revenues and benefits not reported in the League's voluntary and unaudited URO process."

Here is Saskin on the problems with URO's:

"The financial reporting you get from the National Hockey League is only as good as the information they get from each team in what is an unaudited and voluntary submission. And the old adage 'Garbage in, garbage out' is unfortunately an apt description of the current system they have in place. We have numerous examples of teams simply putting down 'zero' for luxury suites, concessions and other items. You can't take that kind of reporting seriously."

As I said the NHLPA is severely constrained on what it can say pursuant to the terms of the non-disclosure agreements it has to sign.

However when you have two of the pre-eminent financial magazines criticizing the Levitt Report which was based on the suspect URO's then the union has additional evidence of their reasons to be concerned. "Trust us" by these owners based on their history will not get it done.

It is the owners who have blocked full disclosure. The union cannot get access to the books without the owners' cooperation as these are private businesses.

 

[Wetcoaster]

Why?

We have no idea whether or not the NHLPA found the extra $52m they claims to have.

We have not idea what it supposedly relates to.

We don't even know what teams were supposedly hiding what amount revenue.

We don't know how high the associated expenses were for these supposed missing revenue streams.

We don't know whether he plucked it from the air or not.

We have Goodenow's word for it and nothing more. The question to be answered is why is Goodenow not prepared to look at teams books if great $52m chunks of revenue are floating around. If they is as much undeclared revenue as he suggests he'll make a killing by tying salaries to revenue.

As I have pointed out a global figure is about all the terms of the non-disclosure agreements allow the NHLPA to speak about. Anything more specific would invoke the penalty clauses and result in damages as well as no chance that the NHL would ever allow any access in future.

The NHL has not disputed the figure to my knowledge and it has been repeated by the NHLPA on various ocassions in various interviews and in press releases. On everything else where there is any difference of opinion with the NHLPA, the NHL seems to have no difficulty in getting out its version but not here.

The NHLPA has said it is prepared to look at the books if the NHL is prepared to make full disclosure of all the team books and those of related corporate entities. That is is the norm in the NFL, NBA and MLB. Just going over the URO's one more time is not a useful exercise since the NHLPA has already discovered they are not an accurate depiction of the financial situation of the teams.

Goodenow noted that in his response to the Levitt report.

 

[Wetcoaster]

The players has to realize that they have to accept the best deal possible. And right now for an insane reason they seem to think that they can still have a better deal down the road. At one point you have to be man enough to accept defeat and say we gave it our best shot, now it's time to make a deal and go back to work.

Apparently the players have a different opinion.

 

[me2]

As I have pointed out a global figure is about all the terms of the non-disclosure agreements allow the NHLPA to speak about. Anything more specific would invoke the penalty clauses and result in damages as well as no chance that the NHL would ever allow any access in future.

The NHL has not disputed the figure to my knowledge and it has been repeated by the NHLPA on various ocassions in various interviews and in press releases. On everything else where there is any difference of opinion with the NHLPA, the NHL seems to have no difficulty in getting out its version but not here.

The NHLPA has said it is prepared to look at the books if the NHL is prepared to make full disclosure of all the team books and those of related corporate entities. That is is the norm in the NFL, NBA and MLB. Just going over the URO's one more time is not a useful exercise since the NHLPA has already discovered they are not an accurate depiction of the financial situation of the teams.

Goodenow noted that in his response to the Levitt report.

This seems to be going in circles the owners keep offering to show him the books. The NHLPA keep refusing until the can see the real books not the UROs. One or both sides are being rather pighead and obstructionist.