Discussion in 'Fugu's Business of Hockey Forum' started by nomorekids, Nov 23, 2004.
Another issue the NHLPA doesn't bring up is the sunk costs from restructured teams such as Ottawa, Pittsburgh, Buffalo, etc. Previous owners wrote off expenses that will likely never be recovered. Therefore, the current annual losses of teams like that are severely understated. Thats an undisputable fact.
I thought there were supposed to be a RISK of losing money in hockey business like in any other business, even all of your investment + some, in the capitalist system.
But no sir, NHL doesn't want that, the only people losing money should be the fans, taxpayers and hockey players, not the poor billionaire owners.
Their NHL expenses are NIL, their NHL incomes are NIL. No proft and no loss. They are breaking even despite the lockout. Nobody has asked the players to lose money (NHLPA and its 5% rollback is the closest). So not even in the lockout are the players losing money, they just aren't making any.
I thought Dukla Nation was talking about previous owners, which I was referring to with my comment.
The fans have the largest net outlay of money; owners are mostly up, players are all up. How many players have lost money (excluding opportunity cost)? Only failed juniors have actually booked a net loss. Virtually everyone else has made off well. Ever look at some useless AHL vets who make US$400K per year?
The point I was trying to make is that certain teams that have undergone financial restructuring look more profitable than they should. Take a look at the new version of MCI/Worldcom. Is that a true reflection of its costs? I don't think so.
I heard that someone from Forbes was on TSN last week and stated that their formula for determining a team's worth is simply revenues x 2 - a little crude and weak if you ask me...
Forbes simply does not have the time to spend all the hours needed to go through the books of all the teams.
Either way, even if you believe Forbes' numbers, the end result is the same - the current system is not working (there is still a net loss) and it needs fixing.
Forbes has all the time in the world to study books, the problem is that they don't have any access to the books so their estimation is extremely shaky, both in theory and practice (as shown by the actual prices of sold franchises).
Anybody who uses Forbes' report as some kind of evidence is, well, extremely naive at best and downright stupid at worst.
sure, there's a chance to lose
But smart business owners setup their businesses to make money. WHICH is exactly where we are at with the lockout.
Any team could make money in the NHL, some do and make a lot of money. The problem the NHL has is they have owners willing to lose money for the chance at the Cup. Some teams like the Wings count playoff revenue before they've even made the playoffs. Thats why they have been losing money over the past two years because the team did not go as far in the playoff as they projected. Who's fault is that? Cant blame that one on the players. The old saying is dont count your chickens before they hatch and several teams are playing with fire. If a team would set their budgets on expected regular season revenue only they would be in better shape. Maybe the NHL should have set up the old CBA were as all playoff revenue is pooled and disturbed to all 30 teams.
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