Would the owners accept their own offer?

[Weary]

9/54, 9:54? what's the difference?

I think you used 9/54 for your calculation. But with a 9:54 relationship it should be 9/63 for the owners and 54/63 for the players.

 

[The Old Master]

what happens if they lose money?

 

[Weary]

Guess I'll give my house to First Nations, but keep making the mortgage payments on it.

If you believe that the owners should be given a CBA that will ensure teams recoup their losses over the past decade, then yes you should.

 

[LordHelmet]

Are you kidding? Two NHL franchises bankrupt, tow more with "goiing concern" letters from their auditors, many on the market for months without buyers. Molson looking to divest their portion of the Habs for far less than the price that Gillett bought it for (proportionally). But to answer your question: Anaheim.

Bankrupt & going concerns <> loss of investment. I'm not familiar with the Habs situation, and the Quackers sold for $75MM right? What were they bought for, and when? I would be interested to see current valuations of NHL teams in comparison to the owners' stake in each of them. I'm sure the annual return (from capital appreciation) is in line with the amount of risk assumed.

I agree that it is generally a small fraction of owners' assets. That goes to the materiality of the loss, not whether there is risk in the investment or not. As a stand-alone investment, it is risky. That is how a businessman looks at an investment - not whether he will survive if it busts, but if it has merit standing on its own (or with otehr synergies for his other businesses, of course).

I would say that most pro-sports owners are well aware that the nature of this business is not so much profitability as it is satisfying your competitiveness, being involved with a sport you love, and/or having a hobby. This frame of mind is factored into the risk/reward of owning a team.

 

[AM]

thank you for

Not trying to write a CBA, just trying to broaden the perspective of the owner-lovers.

The owner side wants to base player profits (salaries) on revenues. They call it a 'fair' deal. If it's fair, then they should be willing to base their profits on revenues as well..

The league offered a version this with their 50/50 profit sharing plan, and in my opinion the new CBA we see will have something along these lines in it.


- They also receive 100% of the capital appreciation of their franchises.

- Owning a franchise in one of the big four sports leagues isn't all that risky from the standpoint of appreciation. When was the last NBA, NHL, NFL, or MLB franchise to completely shut it's doors and cease to exist? When was the last time one sold for less than it was purchased for?

- The 'risk' of these franchises is relatively small when compared to the overall size of most owners' assets. In other words, Jeremy Jacobs isn't exactly going to be holding up a piece of cardboard on the street corner if the Bruins fold.


The math works. Do you really want me to go through it?

expanding our minds.

Profit sharing has already been offered.

It's the players contention that they could never accept such a situation because, "we dont trust the owners".

In fact, whole days of discussion here have revolved around that concept.

 

[kdb209]

Sorry, but the owners should be expected to lose money until it equals the profits they earned while ripping off the players in the prior decades. (Time-value adjusted, of course.)

So owners who didn't own teams during those prior decades whould pay money to players who weren't even playing (hell who weren't even born) back then.

Would you like them to pay reparations for slavery too while you're at it.

 

[me2]

In that case, the players should given a cut of the profit made whenever a franchise is sold (or contribute to cover the difference if a franchise is sold at a loss).

Good idea. Money could be taken from the players salaries could be used to pay out the owners if the owners wanted to close 6 franchises. Food for thought.

 

[Weary]

So owners who didn't own teams during those prior decades whould pay money to players who weren't even playing (hell who weren't even born) back then.

Would you like them to pay reparations for slavery too while you're at it.

If the owners expect a CBA that covers their losses during the last CBA, then yes.

 

[SENSible1*]

Profit sharing is an excellent idea that was largely ignored by the PA and their apologists here.

Just another in the lengthy list of mistakes by Bobby.

 

[kdb209]

Originally Posted by kdb209
So owners who didn't own teams during those prior decades whould pay money to players who weren't even playing (hell who weren't even born) back then.

Would you like them to pay reparations for slavery too while you're at it.

If the owners expect a CBA that covers their losses during the last CBA, then yes.

Bull****.

The difference is that all of the current owners (minus 1) and all the current players played under the last CBA. Very few of the owners and none of the players played in the Eagleson era or before.

So pray tell which current players have been "ripped off in prior decades", and why in the hell should any of the current owners owe them anything?

I'm all for the owners making some contributions to enhance the pensions of past players, but I doubt the PA would go for that - they want all the $$$s for current members.

 

[Mess]

Profit sharing is an excellent idea that was largely ignored by the PA and their apologists here.

Just another in the lengthy list of mistakes by Bobby.

Now you really are lost ..

The NHLPA has asked for meaningful revenue sharing from Day 1.. Go back and read the 24% rollback proposal its in there .. and it was proposed in the form of a luxury tax to put a drag on Salaries. How those fines where dispursed among the owners and at what rate has NOTHING to do with NHLPA .

Also the NHLPA has no control nor say on the matter .. Revenue sharing is the partnership between the 30 owners and how to balance out markets ..

Nothing Bobby G can do but ask for it , and it intention is clear .. Rich teams give money to poor teams to spend specifically on player salaries ..

In fact Brian Burke has stated many times the Revenue Sharing is not even a part of the CBA in fact .. and until recently the NHL has not wanted to address the issue ..

Don't you remember Bettman making special visits to the leafs and flyers to talk to them about Revenue Sharing ..

The best the Owners have ever agreed to to date is splitting Playoffs revenues, not regular season revenue and in the last NHL proposal in fact it had Playoff Revenue sharing beginning in year 1 and it declined each year so that by year 6 of the CBA it was down to Zero ..

Blaming this on the NHLPA shows your understading level of the subject ..

 

[GSC2k2*]

the Quackers sold for $75MM right? What were they bought for, and when? I would be interested to see current valuations of NHL teams in comparison to the owners' stake in each of them. I'm sure the annual return (from capital appreciation) is in line with the amount of risk assumed.

My information was the Ducks sold for $50 million. I believe the expansion fees were $75 or $85 million. And then there are the operating losses.

I would say that most pro-sports owners are well aware that the nature of this business is not so much profitability as it is satisfying your competitiveness, being involved with a sport you love, and/or having a hobby. This frame of mind is factored into the risk/reward of owning a team.

For some, yes; for others, it is an attempt to gather synergy for their other businesses (real estate, broadcasting, etc). I won't deny that this synergy is the one aspect that no one is able to fully analyze on the outside.

 

[Mess]

Bull****.

The difference is that all of the current owners (minus 1) and all the current players played under the last CBA. .

Two Owners to be correct in fact Vancouver and Anaheim have changed management during the Lockout ..

 

[GSC2k2*]

Now you really are lost ..

The NHLPA has asked for meaningful revenue sharing from Day 1.. Go back and read the 24% rollback proposal its in there .. and it was proposed in the form of a luxury tax to put a drag on Salaries. How those fines where dispursed among the owners and at what rate has NOTHING to do with NHLPA .

Also the NHLPA has no control nor say on the matter .. Revenue sharing is the partnership between the 30 owners and how to balance out markets ..

Nothing Bobby G can do but ask for it , and it intention is clear .. Rich teams give money to poor teams to spend specifically on player salaries ..

In fact Brian Burke has stated many times the Revenue Sharing is not even a part of the CBA in fact .. and until recently the NHL has not wanted to address the issue ..

Don't you remember Bettman making special visits to the leafs and flyers to talk to them about Revenue Sharing ..

The best the Owners have ever agreed to to date is splitting Playoffs revenues, not regular season revenue and in the last NHL proposal in fact it had Playoff Revenue sharing beginning in year 1 and it declined each year so that by year 6 of the CBA it was down to Zero ..

Blaming this on the NHLPA shows your understading level of the subject ..

Once and for all ... the issue of revenue sharing from the PA's perspective is nothing more or less than an attempt to deflect the league's problems from them back to the owners. Every dollar transferred from rich teams to poor teams is one less dollar that has to be transferred from the players' pockets.

 

[GSC2k2*]

Which does not tie their profits to revenues. As revenues increase, profits increase at a much higher rate. So, the simple answer is NO.

The players earnings are directly tied to revenues. The owners earnings are not. Let's say the owners make a profit $115 million on revenues of $2B. The next year revenues increase to $2.5B with fixed costs remaining the same. The players would receive 36% more money. The owners would receive 100% more money

I am not sure how math is done where you come from, Weary, but around here it goes as follows:

Assume at $2 billion revenue, profit = $115 million

Increase of $500 million in revenue.

Assume other fixed costs remain the same (as you stated).

Player compensation increase is: $500 million x 54% = $270 million.

Player profit sharing increase is: ($500 million - $270 million) x 50% = $115 million

Total player compensation increase = $270 million + $115 million = $385 million

Total ownership increase in profits = $500 million - $385 million = $115 million.

Accordingly, out of the $500 million increase in revenues, the players would get 77% of the increase. The owners would get 23%.

Now, in real life, with a $500 million increase in revenues, there would be some increase in variable costs (i.e. marketing expenses) to attain that level of revenue, but these are still high-margin revenues. Let's say it costs $50 million in additional costs to obtain the $500 million in revenues. It then goes like this:

Player compensation increase = $500 million x 54% = $270 million.

Net profit increase = ($500 million - $270 million) - $50 million = $180 million

Player profit share = $180 million x 50% = $90 million

Owner share = $90 million.

So, players would get $360 million (72% of the incremental revenues), and owners would get $90 million (18%). 10% went to the incremental costs.

You are probably thinking "That CAN'T be right. Why would the PA ignore it?" Well, the answer of course is that, at the time, the PA strategy was "the numbers can't be verified. No linkage, ever." With that misguided strategy, the PA could not consider the option without doing an about-face on their strategy. They painted themselves into a corner, keeping themselves from even being able to negotiate a potentially lucrative option (see above).

You are suggesting that it is inequitable that the owner's smaller share goes up at a higher percentage. Well, that is what happens when the other side gets the bigger chunk right off the bat. As you can see above, the player's incrementlal share still dwarfs the owner's incremental share, both in raw dollars and percentages.

If you and I have $5 between the two of us and you get $4 and I get $1, if we each get another dollar I have doubled my money and you have increased yours only 25%. You know what? I would still rather be the guy starting with $4, especially if you are never going to catch up to me.

 

[Mess]

Once and for all ... the issue of revenue sharing from the PA's perspective is nothing more or less than an attempt to deflect the league's problems from them back to the owners. Every dollar transferred from rich teams to poor teams is one less dollar that has to be transferred from the players' pockets.

Yup that is exactly what the Job Description on a Good Union leader entails.

Since you noticed clearly Bobby G is doing his job ..

Just like I said in my post " and its intention is clear .. Rich teams give money to poor teams to spend specifically on player salaries".

Not much different then the way I put but I guess it doesn't hurt repeating so there isn't any miscommunication issues .. The poster I responded to originally thought the PA didn't want Revenue Sharing ..

 

[GSC2k2*]

Yup that is exactly what the Job Description on a Good Union leader entails.

Since you noticed clearly Bobby G is doing his job ..

Well, that establishes you as clearly someone with absolutely zero experience in the business world. The sad part is you have no real idea what I am talking about with that statement, yet you continue to display your ignorance post after post.

Not much different then the way I put but I guess it doesn't hurt repeating so there isn't any miscommunication issues .. The poster I responded to originally thought the PA didn't want Revenue Sharing ..

[/QUOTE]

Not much to say about that. Any poster who said that is mistaken.

 

[Weary]

Bull****.

The difference is that all of the current owners (minus 1) and all the current players played under the last CBA. Very few of the owners and none of the players played in the Eagleson era or before.

So pray tell which current players have been "ripped off in prior decades", and why in the hell should any of the current owners owe them anything?

I'm all for the owners making some contributions to enhance the pensions of past players, but I doubt the PA would go for that - they want all the $$$s for current members.

It makes no sense to go back and correct the past for either side. The new CBA is to set the system going forward -- not to correct the inequities of the past. Those who believe that this CBA should compensate for the past should be in favor of compensation over the life of the league -- not just the last ten years.

 

[Weary]

I am not sure how math is done where you come from, Weary, but around here it goes as follows:

Assume at $2 billion revenue, profit = $115 million

At this point the owners' income = $115 million.
The players' income = $2 billion x 54% = $1.08 billion

Increase of $500 million in revenue.

Assume other fixed costs remain the same (as you stated).

Player compensation increase is: $500 million x 54% = $270 million.

Player profit sharing increase is: ($500 million - $270 million) x 50% = $115 million

Total player compensation increase = $270 million + $115 million = $385 million

Total ownership increase in profits = $500 million - $385 million = $115 million.

Now the owners' income is $115 million + $115 million = $230 million

Now the players income is $1.08 billion + 385 million = $1.464 billion

Accordingly, out of the $500 million increase in revenues, the players would get 77% of the increase. The owners would get 23%.

OK, but the owners income increases 100% while the players income increases %36.

Now, in real life, with a $500 million increase in revenues, there would be some increase in variable costs (i.e. marketing expenses) to attain that level of revenue, but these are still high-margin revenues. Let's say it costs $50 million in additional costs to obtain the $500 million in revenues. It then goes like this:
Player compensation increase = $500 million x 54% = $270 million.

Net profit increase = ($500 million - $270 million) - $50 million = $180 million

Player profit share = $180 million x 50% = $90 million

Owner share = $90 million.

So, players would get $360 million (72% of the incremental revenues), and owners would get $90 million (18%). 10% went to the incremental costs.

Which is a 33% increase in player income and a 78% increase in owner income.

You are suggesting that it is inequitable that the owner's smaller share goes up at a higher percentage. Well, that is what happens when the other side gets the bigger chunk right off the bat. As you can see above, the player's incrementlal share still dwarfs the owner's incremental share, both in raw dollars and percentages.

It wasn't my intention to pass judgement on the equitability of the deal. There are myriad of ways to split the pie. The fairness of the deal depends on the expectations of both sides. I was just pointing out that the 50-50 profit sharing offer did not mean that the owners had "accepted their own deal."

 

[SENSible1*]

Profit sharing is an excellent idea that was largely ignored by the PA and their apologists here.

Just another in the lengthy list of mistakes by Bobby.

Messenger,

Please make note of the key word which you obviously missed the first time you read my post.

The NHL offered PROFIT sharing and Bobby (along with his fanatical supporters here) ignored the potential positives it presented.

Just another in the lengthy list of mistakes for BG.

 

[Mess]

Messenger,

Please make note of the key word which you obviously missed the first time you read my post.

The NHL offered PROFIT sharing and Bobby (along with his fanatical supporters here) ignored the potential positives it presented.

Just another in the lengthy list of mistakes for BG.

You do know that Profit Sharing is tied to linkage of 54% and based on Total league Revenue numbers provided by the Levitt report, and the amount will be based on what the final CBA was intended to look like. It is intended to GIVE EXTRA MONEY to the players..

and as you can see in the NHL's offer it is not defined in the pre-season cancelling proposal ..

PROFIT SHARING


-- The parties agree that the objective of the new CBA is to make the National Hockey League, as a whole, healthy and profitable through the establishment of an economic partnership with its Players.

-- Profit Sharing with the Players on a 50 (Players)/50 (Clubs) basis over and above a League-wide profit threshold to be negotiated.

http://www.nhlcbanews.com/news/nhlproposal020205.html

Here is Daly's response from a Q&A

Q. Can you talk about the 50/50 profit sharing? What are your projections, say, for the first four years of this deal for how much money might be split between the players and the League?

BILL DALY: Well, that's a good question, obviously, and that's something that we've shared with the Players' Association across the table in terms of different modeling.

It is going to depend obviously on what the shape of the final deal looks like. We have used different -- as we've increased our offer on a monetary basis, obviously the projected League-wide profit has come down. So that's something that really is going to have to be negotiated with the union as to what's fair on a profit-sharing basis, but more importantly, the profit-sharing is in there to show the players a real willingness on the part of the League and the clubs to form a partnership where we share in the upside. They'll share on the upside both on revenues, on a 54 or 55 percent basis, based on our latest offer; and to the extent the revenues grow to such an extent that our profitability is increased, they will share in our profits. That's in our mind a true partnership.

http://www.nhlcbanews.com/transcripts/daly020205.html

So what are you saying ??

That the owners want to share the profits of the NHL as the business grows and you feel Goodenow and the NHLPA would be against this ??

 

[GSC2k2*]

Quote:
Originally Posted by gscarpenter2002
I am not sure how math is done where you come from, Weary, but around here it goes as follows:

Assume at $2 billion revenue, profit = $115 million


At this point the owners' income = $115 million.
The players' income = $2 billion x 54% = $1.08 billion


Quote:
Increase of $500 million in revenue.

Assume other fixed costs remain the same (as you stated).

Player compensation increase is: $500 million x 54% = $270 million.

Player profit sharing increase is: ($500 million - $270 million) x 50% = $115 million

Total player compensation increase = $270 million + $115 million = $385 million

Total ownership increase in profits = $500 million - $385 million = $115 million.


Now the owners' income is $115 million + $115 million = $230 million

Now the players income is $1.08 billion + 385 million = $1.464 billion


Quote:
Accordingly, out of the $500 million increase in revenues, the players would get 77% of the increase. The owners would get 23%.


OK, but the owners income increases 100% while the players income increases %36.


Quote:
Now, in real life, with a $500 million increase in revenues, there would be some increase in variable costs (i.e. marketing expenses) to attain that level of revenue, but these are still high-margin revenues. Let's say it costs $50 million in additional costs to obtain the $500 million in revenues. It then goes like this:
Player compensation increase = $500 million x 54% = $270 million.

Net profit increase = ($500 million - $270 million) - $50 million = $180 million

Player profit share = $180 million x 50% = $90 million

Owner share = $90 million.

So, players would get $360 million (72% of the incremental revenues), and owners would get $90 million (18%). 10% went to the incremental costs.


Which is a 33% increase in player income and a 78% increase in owner income.



Quote:
You are suggesting that it is inequitable that the owner's smaller share goes up at a higher percentage. Well, that is what happens when the other side gets the bigger chunk right off the bat. As you can see above, the player's incrementlal share still dwarfs the owner's incremental share, both in raw dollars and percentages.

It wasn't my intention to pass judgement on the equitability of the deal. There are myriad of ways to split the pie. The fairness of the deal depends on the expectations of both sides. I was just pointing out that the 50-50 profit sharing offer did not mean that the owners had "accepted their own deal."

Well, in quoting skewed percentages, you clearly were making an implication aboutt he equity of the deal.

I guarantee you that the owners would gladly switch positions with the players with respect to the initial percentages.

Are you suggesting that, if one side starts with 90% of the income and theother starts with 10%, their rate of increase should be the same? To do so would mean that the profit-sharing scheme should be approximately 80/20 in favour of the players...

Oh, what's the use...

 

[Weary]

Well, in quoting skewed percentages, you clearly were making an implication aboutt he equity of the deal.

Nothing was skewed. All the math works.

I guarantee you that the owners would gladly switch positions with the players with respect to the initial percentages.

Perhaps.

Are you suggesting that, if one side starts with 90% of the income and theother starts with 10%, their rate of increase should be the same? To do so would mean that the profit-sharing scheme should be approximately 80/20 in favour of the players...

Of course the rate of increase should be the same. In the owners' escrow plans, do they have each player contributing the same amount or different amounts based on the amount of their income? Under the owners plan each player's income rises and falls at the same rate as every other player. In order to satisfy the condition that the owners "accepted their own deal," each owner's income should rise and fall at that same rate.

Oh, what's the use...

Sometimes I wonder.

 

[GSC2k2*]

Quote:
Originally Posted by gscarpenter2002
Well, in quoting skewed percentages, you clearly were making an implication aboutt he equity of the deal.

Nothing was skewed. All the math works.


Quote:
I guarantee you that the owners would gladly switch positions with the players with respect to the initial percentages.

Perhaps.


Quote:
Are you suggesting that, if one side starts with 90% of the income and theother starts with 10%, their rate of increase should be the same? To do so would mean that the profit-sharing scheme should be approximately 80/20 in favour of the players...

Of course the rate of increase should be the same. In the owners' escrow plans, do they have each player contributing the same amount or different amounts based on the amount of their income? Under the owners plan each player's income rises and falls at the same rate as every other player. In order to satisfy the condition that the owners "accepted their own deal," each owner's income should rise and fall at that same rate.


Quote:
Oh, what's the use...

Sometimes I wonder.

Ridiculous. Comparing rates of escrow contribution to rates of profit sharing????! It's like comparing apples to toasters. If I hear one more ridiculous comparison of completely unrelated items, I will either laugh or scream.

It's a shame there is not a pro-player shill with at least the intellectual wattage to have an honest exchange of views.

And if you don't understand why the two things above do not correlate ... well, I can't help you. Perhaps you will when you get your Grade Ten.

 

[SENSible1*]

You do know that Profit Sharing is tied to linkage of 54% and based on Total league Revenue numbers provided by the Levitt report, and the amount will be based on what the final CBA was intended to look like. It is intended to GIVE EXTRA MONEY to the players..

and as you can see in the NHL's offer it is not defined in the pre-season cancelling proposal ..
That the owners want to share the profits of the NHL as the business grows and you feel Goodenow and the NHLPA would be against this ??

I'm well aware how profit sharing works and that it favours the PA, effectively upping their percetage of the take as revenues rise.

I'm pointing out that this major concession was largely ignored by the PA and their supporters.

Just another act of stupidity from the PA and their supporters.