Bob Goodenow on CBC

[kurt]

What a mess!

Quick lesson in business:

****

NHL franchises charge as much as they possibly can for their tickets, in an effort to maximize revenues, as much have you have said, and many others somehow fail to understand. This concept is COMPLETELY independent of the salaries of players.

If Toronto can sell out their home games at $200.00 a pop, why on earth would they drop prices to $150? Guess what, they wouldn't. If you were the club owner, you wouldn't. You would be crazy to.

The same goes for a club like Carolina. If they can sell tickets for $150 and get 45% attendance, or sell tickets for $100 and get 55% attendance? What do you think they would sell their tickets for? It's a no-brainer.

****

I'm in the midst of watching the Goodenow interview on CBC, and I wished I was able to watch all of yesterday's forum with Bettman.

One specitfic commentary I would like to hilight is Goodenow's response to a fan's desire for a fixed cost structure. Goodenow emphasized that teams of various salary levels have achieved at a high level in the NHL, particularly Tampa and Calgary last season. Hey keyed on the fact that the root of success in the NHL is the development of skilled hockey players, and recognizing a club's needs and effectively and efficiently addressing them.

Obviously, operating in a stronger market provides a significant advantage in this management funcion, as it provides additional available funds for player salaries. However, savvy management groups have been able to remain highly competitive with lower salary structures.

Finally, many fans have said that they're "sick and tired of spoiled players whining," and all sorts of other garbage. To those people, I ask you, if you're going to talk the talk, start walking the walk. Please, NHL fans of the world, recognize this: we, as fans, set the market value of these players. We buy the tickets, the merchandise, etc, etc. We watch the games on TV, we come onto HFBoards and spill our guts daily about how much we love this game.

Fans want to be involved in the negotiation process. Jeez, people! We're more involved than Goodenow and Bettman put together. We are the market. Without fans, there is no bloody NHL.

 

[jpsharkfan]

in 03 tiger woods made - 100 mil - david beckham made - 65 - and michael shumacher made 35 -

shaq makes 30 - a rod makes 40 k per at bat

The differance being that all of the above have bigger markets/marketing possibilities to support the $ paid.

 

[kurt]

Which teams would those be? Every season the teams that you could call crappy change. Part of the reason for this is teams cannot afford to keep their own talent and they are required to give qualifing offers at either 100 percent or 110 percent of current salary regardless of performance or lack there of. If they do not qualify a player than they have to let a player walk with no return on investment at all.

That is only considering the fact that the player is deemed to be worth more money by other players in the market. There's all kinds of players that sign for less, not all players find greener pastures.

This is the beauty of the free market, these guys are able to go to the firm that pays them what they're worth.

 

[garry1221]

I agree. I hope that that is not what will happen. Low end salaries should not have to change much (regardless; it is still a tremendous salary compared to non pro sports pay scales). It is the high end salaries that are killing the league. Can any player be worth 8 million a year? When you look at an 82 game season that is just under 100 grand per game! That is indecent.
Doesnt that put it all in perspective. Hockey players are incredible athletes. In my opinion the most talented toughest etc, etc, in professional sports. Their sport does not have a huge fan base and yet in todays NHL the average players salary of $1.8 million equates to $21,951.22 per regular season game played. That is a ridiculous pay check per game from a league that can no longer get a decent TV contract because ratings are so low.

take your numbers one step further, it's 365.85 per minute, and that's just if you were a goalie playing all 60 minutes of the game, sickening... yes their world class athletes, but when you make on average 6.10 per second.... hell, if i were payed like that i'd have already made around 80 bucks..... now where's that contract :

 

[Jack Canuck]

take your numbers one step further, it's 365.85 per minute, and that's just if you were a goalie playing all 60 minutes of the game, sickening... yes their world class athletes, but when you make on average 6.10 per second.... hell, if i were payed like that i'd have already made around 80 bucks..... now where's that contract :

If we are going to really break it down we should consider all the behind the scenes time. The training, practice and whatnot . But i'm sure they still do alright.

 

[kurt]

take your numbers one step further, it's 365.85 per minute, and that's just if you were a goalie playing all 60 minutes of the game, sickening... yes their world class athletes, but when you make on average 6.10 per second.... hell, if i were payed like that i'd have already made around 80 bucks..... now where's that contract :

Maybe we should take those numbers another step? How about we evaluate the time these players spent from about the age of 10, playing rep hockey, attending elite camps, leaving their families at 15-16 years of age to play junior, spending countless off-seasons training, giving up opportunities for education, all in favour of an almost impossible dream of playing in the NHL. Let's not forget the minutes lost from family life, highschool friends, childhood experiences, etc, etc. I wonder how the earnings-per-minute compute in that framework.

Talking about the magnitude of their salaries is unproductive. It has nothing to do with the source of the conflict. The fact is, under one system, the players will earn their value. Under the other, their ability to earn will be handicapped, artificially propping up the earnings of the rich teams in the league.

 

[garry1221]

Quick lesson in business:

****

NHL franchises charge as much as they possibly can for their tickets, in an effort to maximize revenues, as much have you have said, and many others somehow fail to understand. This concept is COMPLETELY independent of the salaries of players.

so if ticket prices are completely independant of salaries then when your team over the off season signs one player for 8 mil then another for 4 mil then in turn bumps up ticket prices 20 bucks per ticket that's not related to salaries?, fact is if salaries were lower across the board most fans wouldn't pay out their keister for tickets if the prices stayed where they are now, then as someone mentioned earlier the situation in washington, the owners WOULD be forced to lower prices or arenas would be awfully empty

If Toronto can sell out their home games at $200.00 a pop, why on earth would they drop prices to $150? Guess what, they wouldn't. If you were the club owner, you wouldn't. You would be crazy to.

see above example, i know diff. circumstances in toronto, but unless the fans were THAT insane to pay much, then every team in the nhl would want to knwo what's in the water up there

The same goes for a club like Carolina. If they can sell tickets for $150 and get 45% attendance, or sell tickets for $100 and get 55% attendance? What do you think they would sell their tickets for? It's a no-brainer.

45% att. @ 150 = $1,266,502.50 55% att @100 = $1,031,965
sure less people in attendance may boost ticket sales, but you forget to factor in concessions and merchandise sales which would equal, if not surpass the $234,537 gap between prices on ticket sales alone, more people means more money coming in, yeah less people may look like the better financial choice alone, you'd have less concessions/merchandise as well, not to mention which looks better, an arena 45% full or 55% full.... answer there is obvious

****

I'm in the midst of watching the Goodenow interview on CBC, and I wished I was able to watch all of yesterday's forum with Bettman.

One specitfic commentary I would like to hilight is Goodenow's response to a fan's desire for a fixed cost structure. Goodenow emphasized that teams of various salary levels have achieved at a high level in the NHL, particularly Tampa and Calgary last season. Hey keyed on the fact that the root of success in the NHL is the development of skilled hockey players, and recognizing a club's needs and effectively and efficiently addressing them.

Obviously, operating in a stronger market provides a significant advantage in this management funcion, as it provides additional available funds for player salaries. However, savvy management groups have been able to remain highly competitive with lower salary structures.

Finally, many fans have said that they're "sick and tired of spoiled players whining," and all sorts of other garbage. To those people, I ask you, if you're going to talk the talk, start walking the walk. Please, NHL fans of the world, recognize this: we, as fans, set the market value of these players. We buy the tickets, the merchandise, etc, etc. We watch the games on TV, we come onto HFBoards and spill our guts daily about how much we love this game.

we as the fans do NOT set the market value of these players, they don't get paid more because they're more popular w/ the fans... if they did detroit's grind line would be making 6,7, maybe even 8 million a piece.
the discussion on 'the market' has been argued and argued about, we all know it's broken and it's going to take both sides to be fixed, if goodenow wants to act like a spoiled rich girl who doesn't know what it means to be financially responsible then so be it

Fans want to be involved in the negotiation process. Jeez, people! We're more involved than Goodenow and Bettman put together. We are the market. Without fans, there is no bloody NHL.
see above... WE are not the market, if we're the market then that means we, the fans, decide how much to pay each player, if WE were involved in the negotiation process then this mess would be settled by now and training camps would be beginning right now

..

 

[kurt]

Obviously, with the Carolina statement, I didn't factor in food/drink/merchandise revenue, I guess I oversimplified to make a point. Clearly though, there is a maximum potential each club can make through their ticket price, and they tweak their prices to make the maximum amount.

With regard to the ticket prices, you have failed to illustrate how these ticket prices are tied to salary. What you have done, is help me make my point. Ticket prices are directly related to demand, and the ability to maximize profit.

Here's an example. If you took 8 million and were able to bring a marquee player into Detroit, ticket prices will increase, as the demand is higher. However, what if they spend the big bucks to get a player like Holik? Would a player like Holik command enough market demand to allow management to raise prices on tickets? That's more doubtful.

Let's look at it from another perspective. Say, a player like Henrik Zetterberg emerges as a dominating player in the league. His performance results in an increased demand for tickets, and as a result there's a hike in ticket prices. However, the kid is only making $650,000.

Finally, you commented about the market value of players being set by fans. If you fail to understand this pretty fundamental concept, unfortunately I don't know how to respond, other than to say this. Fans everywhere are saying that one of the biggest problems with the NHL is that there isn't enough offense, there's too much obstruction, etc. Do you truly believe that the grind line is, overall, the most popular line on the Wings? That's purely insane. Fans appreciate skill first and foremost, and the ability a player has to increase the chance of a franchise's success.

 

[me2]

Not really. Indirectly higher ticket prices lead to higher salaries but the converse is not at all true. Ticket prices are not based upon player salaries and anyone with any knowledge of economics will tell you the same.

Or do you think that tickets to the NCAA basketball final four would be more expensive if the athletes were paid?

If salaries go up ticket prices go or teams go broke. The league is gate driven, its a direct link. If they need more money to pay players they have to get it from the gate revenue. If salaries hadn't hyperinflated during the CBA ticket prices could be 20% cheaper. If salaries go down there is no guarantee the ticket prices will follow. There will be pockets of cheap tickets were teams suck and they aren't hockey markets (Dallas) and pockets of ripoff merchants (Chicago).

 

[me2]

Quick lesson in business:

****

NHL franchises charge as much as they possibly can for their tickets, in an effort to maximize revenues, as much have you have said, and many others somehow fail to understand. This concept is COMPLETELY independent of the salaries of players.

There is no guarantee prices will come down if salary drops. There is no guarantee teams won't try and screw more money from the fans than they need if they can get away with.


However if payroll is greater budget then teams have to slash payroll/increase revenue/go broke. There is a guarantee ticket prices will go up. If teams can't afford payroll they go bankrupt, the only way to get enough money is charge more for tickets because the other sources of revenue for the NHL are much smaller. We've already seen teams doing this quite a bit over the last 10 years. Fans are happier to pay more if they know the team has to charge more to pay increasing payroll. Vancouvers tickets have gone from $36 (maybe even $36 Can?) to US$53 and the team budget went from the mid $25m to mid $45m.

 

[Chayos]

Not really. Indirectly higher ticket prices lead to higher salaries but the converse is not at all true. Ticket prices are not based upon player salaries and anyone with any knowledge of economics will tell you the same.

Or do you think that tickets to the NCAA basketball final four would be more expensive if the athletes were paid?

the NHL is a gate driven economy. the highest percentage of revenue is from tickets. so Salary is a direct f=reflection of ticket prices

 

[Jack Canuck]

Obviously, with the Carolina statement, I didn't factor in food/drink/merchandise revenue, I guess I oversimplified to make a point. Clearly though, there is a maximum potential each club can make through their ticket price, and they tweak their prices to make the maximum amount.

With regard to the ticket prices, you have failed to illustrate how these ticket prices are tied to salary. What you have done, is help me make my point. Ticket prices are directly related to demand, and the ability to maximize profit.

Here's an example. If you took 8 million and were able to bring a marquee player into Detroit, ticket prices will increase, as the demand is higher. However, what if they spend the big bucks to get a player like Holik? Would a player like Holik command enough market demand to allow management to raise prices on tickets? That's more doubtful.

Let's look at it from another perspective. Say, a player like Henrik Zetterberg emerges as a dominating player in the league. His performance results in an increased demand for tickets, and as a result there's a hike in ticket prices. However, the kid is only making $650,000.

Finally, you commented about the market value of players being set by fans. If you fail to understand this pretty fundamental concept, unfortunately I don't know how to respond, other than to say this. Fans everywhere are saying that one of the biggest problems with the NHL is that there isn't enough offense, there's too much obstruction, etc. Do you truly believe that the grind line is, overall, the most popular line on the Wings? That's purely insane. Fans appreciate skill first and foremost, and the ability a player has to increase the chance of a franchise's success.

Exacty! I think we need to hand out some basic economics books to get it through to people. I don't think it can be simplified any further.

 

[Jack Canuck]

There is no guarantee prices will come down if salary drops. There is no guarantee teams won't try and screw more money from the fans than they need if they can get away with.


However if payroll is greater budget then teams have to slash payroll/increase revenue/go broke. There is a guarantee ticket prices will go up. If teams can't afford payroll they go bankrupt, the only way to get enough money is charge more for tickets because the other sources of revenue for the NHL are much smaller. We've already seen teams doing this quite a bit over the last 10 years. Fans are happier to pay more if they know the team has to charge more to pay increasing payroll. Vancouvers tickets have gone from $36 (maybe even $36 Can?) to US$53 and the team budget went from the mid $25m to mid $45m.

Actually there is a guarantee. The team will try to make as much as possible no matter what that is a guarantee! Why would they make tickets cheap? How does that help them?

You were right before when you said that if players salaries go up the teams would go broke. However, raising ticket prices will not solve anything because less fans will come, and less profits will be made from the sales that take place once you get them in the door.

The simple fact is that if the players salary goes up too much they have two choices. #1 move the expensive players to bring payroll down, or #2 run in the red.

 

[kurt]

*sigh*

Exacty! I think we need to hand out some basic economics books to get it through to people. I don't think it can be simplified any further.

Thanks for the vote of confidence... Clarifying the concepts seems to be an uphill battle. I'm glad it's getting through to some people.

 

[Biggest Canuck Fan]

All ticket prices do is increase revenue.

The Leafs, Rangers and the sort have higher ticket prices and because of their markets get more money from larger corporate revenue.

It is this revenue that set the Rangers salary, the Leafs, Stars, Wings, Avs... these big boys still make moocho moola!! And it is this corporate Dollar that the Canucks, Oilers, Canes and the like simply cannot match.

Ticket prices are in a little way linked to players salaries. They contribute, but are not the sole link.

 

[Jack Canuck]

How can you demonstrate that they are linked?

 

[struckmatch]

Obviously, with the Carolina statement, I didn't factor in food/drink/merchandise revenue, I guess I oversimplified to make a point. Clearly though, there is a maximum potential each club can make through their ticket price, and they tweak their prices to make the maximum amount.

With regard to the ticket prices, you have failed to illustrate how these ticket prices are tied to salary. What you have done, is help me make my point. Ticket prices are directly related to demand, and the ability to maximize profit.

Here's an example. If you took 8 million and were able to bring a marquee player into Detroit, ticket prices will increase, as the demand is higher. However, what if they spend the big bucks to get a player like Holik? Would a player like Holik command enough market demand to allow management to raise prices on tickets? That's more doubtful.

Let's look at it from another perspective. Say, a player like Henrik Zetterberg emerges as a dominating player in the league. His performance results in an increased demand for tickets, and as a result there's a hike in ticket prices. However, the kid is only making $650,000.

Finally, you commented about the market value of players being set by fans. If you fail to understand this pretty fundamental concept, unfortunately I don't know how to respond, other than to say this. Fans everywhere are saying that one of the biggest problems with the NHL is that there isn't enough offense, there's too much obstruction, etc. Do you truly believe that the grind line is, overall, the most popular line on the Wings? That's purely insane. Fans appreciate skill first and foremost, and the ability a player has to increase the chance of a franchise's success.

In today's NHL, ticket sales are not to maximize profits, they are to limit losses. How do you explain the correlation between the inflation of player salaries, and the inflation of ticket prices then? They have both happened within the last 10 - 12 years.

You're saying inflation of ticket prices has to do with the demand, so if ticket prices have only started to rise within the last 10 years, then you're saying the demand is greater now for hockey then 10 years ago? You and I know that isn't true.

There is a DIRECT relationship between player salaries, and ticket prices. The fact is, ticket revenue is the main revenue generator that pays the players salaries, meaning if they are the main component of the players wages, that in turn means there is in fact a direct relationship between the two objects. It's ridiculous to state otherwise, Bob Goodenow demonstrated today that he thinks the fans are morons. If he honestly thinks we'll believe his spin-doctored jargon, then he's an even bigger moron than Glen Sather, and that's saying a lot.

Right now, I don't see the players having a distinct argument. They deny the league's numbers because if they were to admit to the league's losses, then their case is ruined, and cries of "then why isn't the NHLPA doing anything about the losses then?" would ring across North America. Therefore the players, for the sake of their position, ARE OBLIGATED to deny the league's numbers. It's just a pathetic negotiating tactic.

Another issue I have is, the players saying the owners are the "sole creators" of the league's financial woes at the moment, when really this is a collective problem created by owners/players/agents/general managers. The owners for the past 5 - 6 years have been backed into a difficult corner. Goodenow and the players say that the owners "never had to pay the players as much as they did" when realistically, they know that the owners were in a tough spot, if owners refuse to pay arbitrated salaries, and "free-market value" salaries then the player leaves the organisation and goes somewhere else, meaning the owners are left with two choices, either they could refuse to sign the player, therefore losing him via Free Agency, or being forced to trade the player, which hurts the organisation, or giving into the players demands and signing them for their inflated price, putting the owners deeper into the red.

It's just a ridiculous display of issue dodging by the NHLPA and Goodenow. He was asked several questions on CBC tonight, and he dodged 95% of them. When the 9 year old child addressed him regarding how the NHLPA plays a sport they love for a living, and how he or anyone would take their job in an instant, Goodenow responded with legal mumbo jumbo that the poor 9 year old couldn't even relate to. At that moment, it assured me that Goodenow and the players couldn't care less what the fans thought.

Goodenow could take a million different questions regarding the CBA negotiations, and his answers would be:

1. The players want to play, the owners have locked us out.
2. We're willing to compromise.
3. The players are interested in a Free Market System that has worked for a long time.

That's all he said tonight, over and over again. The owners will break the union, the reason is this; Players like Joe Sakic, Niklas Lidstrom, Chris Pronger, Keith Tkachuk, Jeremy Roenick etc. are not going to feel the financial effects of not receiving significant paycheques, however, players like Matt Cooke, Shean Donovan, the Sedins, Scott Thornton, Ethan Moreau, and other 3rd and 4th line players that don't make millions upon millions every season are going to be the players that start putting pressure on Goodenow to accept a salary cap. Especially when the NHL declares an impasse, and the lower paid players in the league jump at the opportunity to play again in the NHL and replace the high paid stars that will soon after follow suit and force the NHLPA into accepting a CBA in favor of the owners.

Basically, all the players are doing is prolonging a lose-lose situation for themselves, the owners have never been more determined, and they have better resources, more power, the public support, and the overall advantage in negotiations.

 

[garry1221]

How can you demonstrate that they are linked?

average nhl player's salary '93 - '94 season: $572,161
average nhl player's salary '03 - '04 season: 1.79 mil
a difference of: $1,217,839
equals out to an increase of: 310.9% roughly

http://www.andrewsstarspage.com/7-20cba.htm ^^^

interesting site i discovered, might try calculating things out later

in '94 costs of going to a game: http://www.teammarketing.com/fci.cfm?page=fci_nhl_94-95.cfm

in '04 costs of going to a game: http://www.teammarketing.com/fci.cfm?page=fci_nhl_03-04.cfm

definite increases, just thought this was interesting after the carolina debate

 

[quat]

Quick lesson in business:

****

NHL franchises charge as much as they possibly can for their tickets, in an effort to maximize revenues, as much have you have said, and many others somehow fail to understand. This concept is COMPLETELY independent of the salaries of players.

.

Well, I think I'll get my business advise from someone with a little more to teach than yourself.

It's safe to say that ticket prices aren't based only on players salaries, but they certainly do have an effect. Saying that the costs of running your team is independant of how you set your revenue is simply bizarre.

 

[quat]

That is only considering the fact that the player is deemed to be worth more money by other players in the market. There's all kinds of players that sign for less, not all players find greener pastures.

This is the beauty of the free market, these guys are able to go to the firm that pays them what they're worth.

You do understand that without a league these guys have no market? It's in their best interest to make certain that market is healthy long term. Just grabbing what you can seems insincere and selfish concidering all those that came before them and are waiting in the wings to play as well.

There is no "free market" for players... or atheletes.

 

[me2]

You were right before when you said that if players salaries go up the teams would go broke. However, raising ticket prices will not solve anything because less fans will come, and less profits will be made from the sales that take place once you get them in the door.

The simple fact is that if the players salary goes up too much they have two choices. #1 move the expensive players to bring payroll down, or #2 run in the red.

3. they put up ticket prices. They've done it before, they'll do it again. They'll tell the fans they'll relocate or fold or trade their talent.

 

[Whakahere]

Maybe we should take those numbers another step? How about we evaluate the time these players spent from about the age of 10, playing rep hockey, attending elite camps, leaving their families at 15-16 years of age to play junior, spending countless off-seasons training, giving up opportunities for education, all in favour of an almost impossible dream of playing in the NHL. Let's not forget the minutes lost from family life, highschool friends, childhood experiences, etc, etc. I wonder how the earnings-per-minute compute in that framework.

Talking about the magnitude of their salaries is unproductive. It has nothing to do with the source of the conflict. The fact is, under one system, the players will earn their value. Under the other, their ability to earn will be handicapped, artificially propping up the earnings of the rich teams in the league.

OKay you could have a good point but think this. when I was young I wanted a good job. What did do? I studied. Now I also wanted to keep fit and enjoy the social side of my life. I played sport.

When I grew up I: went to school, came home and studied and four to five times a week I played (incluing practice) sport. I then went to college where I studied damn hard for 6 years. By the time I have finished my study I was 24 and yet to earn anything (apart from the part time jobs that just got me by). Now I am 27 and earn $35,000 per year. Now if you broke my income to amount of time I have put in you would start thinking the players don´t have it so bad.

The players make great money and it doesn´t matter how you break up.

 

[me2]

How can you demonstrate that they are linked?

Inflation since 1994 to 2004 is between 22 and 28% (1994 $1 buys 2004 $1.28).

Salaries have risen MUCH MUCH faster than inflation (270% compared to inflations 28%). If salaries are unrelated to ticket prices then one could expect ticket prices to raise at normal inflationary rates (perhaps magrinally above).Ticket prices have risen MUCH faster than inflation, about half way been general inflation and salary inflation. Dragged up by payroll.

If payroll and salary are unrelated why are most of the low ticket price teams low payroll? Reverse at the top end of the market.

 

[YellHockey*]

How can you demonstrate that they are linked?

The link is that as revenues grow from increased ticket prices, player salaries grow because owners have more money to pay the players.

But the converse is absolutely false. Player salaries have no impact on ticket prices.

As an example, a statement that all Canadians are hockey fans can be true but the converse, all hockey fans are Canadian, cannot be true.

Arguments about minimizing losses instead of maximizing profits are assinine. By maxmizing revenues you do both at the same time.

 

[rikker]

There are compelling arguments on both sides of this debate. Let's face it, you and I, the average Joe Blow do not understand entirely the complexities involved in this particular scenario. To state unequivocally that 'this side' is right or 'that side is wrong' is ludicrous.

Most people grasp onto a single thread of truth that closely affects their particular desires and then begin to rant.

To me, it's all about integrity, and I trust the players a hell of a lot more than the owners. Remember, a large majority of the players are guys that we grew up with and busted their hump and sacrificed alot to get where they are.

We know the players make alot of money, but they also have a short career span and quite a few of these modern day gladiators are hobbling around on plastic knees after they retire. Their salaries are posted for everyone to see, so why can't the owners open up their books and let us see if they're telling the truth. I'm willing to bet that the owners aren't nearly as bad off as they profess and are crying wolf so that they can get even richer. It wouldn't be the first time that a rich person dabbled in creative accounting in order to get richer (Enron, etc...).

I read (sorry, no link) that there was quite a bit of animosity in the Flames organization, due to the fact that the players did not believe that there was more in the pot for them. The Flames owners opened up the books for the players to see, and when the players realized that the owners were telling the truth, their performance improved dramatically.

A little truth goes a long way, and as far as I can see right now, the owners are the ones providing the smoke and mirrors.

Lastly, for me, it does boil down to basic economics...supply and demand. If the players started their own league and the owners started their own league, who would you watch? Of course ticket prices would be the determining factor, but I for one would not hesitate to stand behind the players.