tantalum said:
I don't think the problem is having the two sides agree on what is or isn't revenue and player costs. I think those things can be handled in pretty short order by looking at the CBAs of other sports leagues.
I disagree. This is exactly the problem with the Levitt report. He did look at the NBA way of of defining revenues. The NHLPA rejects it for reasons that are fairly obvious. Every team is a complicated business that splits the revenue differently between the rink, or the broadcaster or a similar affiliated business.
An obvious example is in Vancouver. The Levitt methodology severely understates the Canuck revenue. Levitt divided the luxury box and advertising dollars according to attendance at all events rather than reality. Sponsors at GM Place don't pony up because of the Dog shows, concerts or other events at GM Place. They pony up because of the Canucks. The NHLPA doesn't want a slice of the Dog show money, but they don't want the Dog show to get Canuck money either. They don't want a convention of Jehovah's Witnesses to funnel Canuck money into GM Place coffers.
When the Canucks worked out their deal with the BC Lottery corporation, most of the money put up by the Lottery went to board advertising and radio spots. Instead of the team getting 100% of that revenue, it got a lot less in the reports sent to the NHL.
Levitt allocates that revenue by attendance at all GM Place events. If the Molson Indy pulled 200,000 fans through GM Place looking at old cars during the weekend, perhaps 20% of that Lottery money went to GM Place rather than the Canucks. (This would be true even if the advertising on the boards was not even seen by the Indy fan wandering around the GM Place concourse.) The same thing is true of the luxury box revenue. That revenue is divided according to attendance in the Levitt system even though without the Canucks, zero boxes are sold.
Every team situation is different. The Levitt report takes all the teams, declares a formula doesn't fit any situation and pretends that "designated hockey revenues" are actually the revenues that are generated by hockey. That's absurd. In Vancouver, GM Place would not exist without the Canucks. It would not be named GM Place. There would be virually zero advertising revenue if the hockey team was not there. Nobody would buy luxury boxes.
This is why the NHL was embarassed by the Flyer revelations. Under the URO system that artificially divides up the revenues between the affiliated entities, the Flyers lost money. When the Flyers divide up the revenues according to their own business model, the Flyers make money. Which is more accurate?
Or take Vancouver again. They made money even under the Levitt formula. (Cobb was quoted at the time as saying it was $10 million.) When they were looking at selling the team however, the profits balloon to $20 million in 2002-2003. Why? Because the Canucks split the revenues between GM Place and the team differently than Levitt did. Which is more accurate? Who can tell?
You cannot tweak it to fit hockey because there are 30 different business models. The percentage of the revenue allocated to hockey should not be the same in New York as it is in Vancouver. Any artificial division designed to fit all teams will be wrong for virtually every team. The NHLPA is against any artificial division because they can't sort out the real from the unreal.
They want each individual business to decide what their real hockey revenues are and plan accordingly. In fact, all the teams do do that. They generate a single URO that bears no relationship to the way the business is actually structured. Everybody has two sets of books. One is internal that reflects the actual business structure, and the other is for the NHL. The NHL wants to negotiate a one size fits all definition of revenue and the NHLPA wants nothing to do with that.
It almost worked and then the NHLPA seemed to stop talking so much about the revenues and costs and how the owners were reporting it and went back to the basic "we want as open a market as we have now. We will not accept a cap."
I don't think it almost worked. The players had no intention of ever agreeing. They wanted the individual reports because they wanted to know how the losses split out given this artificial system. While the system is obviously bogus, the individual team reports allowed the NHLPA to say, "Look at which teams are actually losing the money, even under the bogus NHL system of allocating revenues. These losses have nothing to do with the CBA. A new CBA will not fix the problems that occur because the team does not have a good rink or because they can't sell tickets in Florida or Carolina. The new CBA should not try to fix the problems caused by Ranger, Capital or Blue incompetence."
The NHLPA does not believe the numbers because they are not real.
Tom