NHLPA and basic math don't add up

[alecfromtherock]

The NHLPA needs a big kick in the ass

Audacity: Bold or insolent heedlessness of restraints, as of those imposed by prudence, propriety, or convention.

Bob Goodenow fits the above definition to a tee with regard to Mr. Arthur Levitt’s report on the finances of the NHL. Mr. Levitt is the former chairman of the US Securities and Exchange Commission, not your local bean counter at the bank
Mr. Levitt’s report stated that the NHL as a whole lost $273 million when he went through the books of the 30 NHL teams. Mr. Levitt even offered to go through his findings with the NHLPA, but they did not want that.
Facts and figures:

The disparity between the highest and lowest team salaries is astounding.
$77,856,100 is the highest team salary for the Detroit Red Wings. The lowest team salary belongs to the Nashville Predators at $21,932,500. The difference in the extremities is $55,923,600, 23 of the NHL teams do not even have a team salary over the difference in high-low.

High team salaries do not necessarily translate into a Stanley Cup, rather contention to be in the playoffs. Last years Stanley Cup teams were the Tampa Bay Lightning $34,065450 (21st overall) and the Calgary Flames $36,402,600 (18th overall)

Players salaries totalled $1,332,014,890 last season, averaging $44,400,496 per team. 18/30 teams were under the average team salaries last season.

The NHL preposed team cap is $35 million in which based on the 2003-2004 season team salaries translates to 11 teams under the cap, 8 teams relatively close to the cap and 11 teams way over the cap. Under the salary cap the team salaries would equal $991,925,200, saving the league $340,089,690
Gary Bettman did not say that $35 million was the only acceptable salary cap, it is his initial offer, the NHLPA have given their initial salary cap offer of $0. In order to negotiate both sides counter offer until an acceptable amount is achieved. A salary cap should not exceed last years team average rounded up to $45 million dollars.

Where does all of the money go?

The top 25(3.4% of NHL players) individual salaries combined for $219,740,700 or 16.4% of the total NHL salaries. The other 705 players (96.6%) take in only 83.6% of the total salary.

With a $35-$45 million cap could a team afford to pay Peter Frosberg $11 million a year? That’s 25%-31% of the entire teams player budget. Throw in a Pavel Bure and Robert Holik for $29.5 million and you have a 3 member team.

While the salary cap is a simple formula to calculate: Team can not exceed X dollars, a individual salary cap is far more complex.
A $5 million dollar maximum individual salary cap would be reasonable in my estimation. Players making under $1,000,000 would bareley be effected by the cap, $1 -- $2.5 million modestly effected and players $7 million plus greatly effected.

Ticket cost also needs to be addressed to the NHL and the NHLPA because the average ticket is $41.56(middle to nose bleed section) For comparison sake an average MLB ticket is $13.60, the best game of baseball, the Yankees is only $20.51 on the average.

A Toronto Maple leafs ticket averages $75, this cost is inflated due to the fact that 17,000/19,000 seats are season ticket holders mostly owned by companies and not individuals. The average Joe can not compete with corporate firms that have deep pockets.

76% of all the revenue in hockey goes towards players salaries. The other 24%, $420,636,281 goes to all other things in the league.

The Montreal Canadians had the highest total fans 842,767 and the highest average attendance 20,555 in the NHL last season. Lowering the cost will allow more teams to enjoy a full house like the HABS and the other top fan draws in the NHL. The total fans for hockey last season was 20,336,163, times the average ticket cost and we get $845,170,934.28 (63% of player revenue, 48% of the total revenue)

With 800 million dollars the fans should have far more weight then the players and owners in the NHL labour dispute.

Fans of hockey have been ignored by the NHL and the NHLPA is this labour dispute.

Christmas is coming soon, mortgage payments and bills have to be paid, gifts for the kids and the turkey have to be bought. As soon as the middle ground is reached the NHL players should have a general vote on it.

Owners are losing money, players are getting far too much money and ticket prices are astronomically high.

But hey for all of that we get to see a great game of hockey where players have no respect for each other and willingly use cheep and dirty hits to injure other players. Hockey has cheapened over the past few years and unless it changes from principal up, its not going to be missed that much.

Alec Campbell

Click to read more...

 

[BLONG7]

Nice rant...Most would agree with you, I certainly do, but the problem is Knob Goodenow and his band of 700 men do not! This could be a very long winter...

 

[jacketracket*]

I wasn't aware that Levitt had offered to sit down with the NHLPA and go over the team's books. Why wouldn't the NHLPA take him up on the invitation?

I can see the argument from the players, that it's easy to hide reveunue streams in arena rents, concession sales, parking and such.

But still.....

 

[bling]

I wasn't aware that Levitt had offered to sit down with the NHLPA and go over the team's books. Why wouldn't the NHLPA take him up on the invitation?

I can see the argument from the players, that it's easy to hide reveunue streams in arena rents, concession sales, parking and such.

But still.....

Quite simply put, Leavitt only has the information that the NHL and the team owners wish them to have. It does not include all the income sources and revenue streams that make up the total of the teams incomes.
It is an excercise in futility to look at only the part that the teams are willing to share, which I am sure you can imagine shows the losses that the the NHL wants us to believe.
You answered your own question....

 

[hockeytown9321]

I wasn't aware that Levitt had offered to sit down with the NHLPA and go over the team's books. Why wouldn't the NHLPA take him up on the invitation?

I can see the argument from the players, that it's easy to hide reveunue streams in arena rents, concession sales, parking and such.

But still.....

No one has ever questioned whether Levitt himself was lying. All he did was verify the NHL lost what they said they lost based on the numbers they gave to him. The question is were the numbers given to him by the league accurate. Basically he was being paid by the league to tell them what they wanted to hear and to use him for PR, which has worked wonderfully. If Bettman had put this much thought into marketing the game, it might not be in the shape it is.

 

[Street Hawk]

Players don't care...

Quite simply put, Leavitt only has the information that the NHL and the team owners wish them to have. It does not include all the income sources and revenue streams that make up the total of the teams incomes.
It is an excercise in futility to look at only the part that the teams are willing to share, which I am sure you can imagine shows the losses that the the NHL wants us to believe.
You answered your own question....

I live in Vancouver and I've heard Trevor Linden many times on radio and tv say that the players don't have any business looking into the financials of the owners. He said they are private companies and thus don't need to reveal their numbers to the players.

To me, this whole situation shouldn't be this complicated to resolve. I mean, what the owners have proposed is a system whereby the players receive a certain percentage of NHL Revenue. Well, that is going to require both sides to sit down and determine what NHL revenue is, not simply what the Owners offered up to Arthur Levitt. Also, in that discussion about NHL revenue, should be a discussion of NHL Expenses, such as travel, equipment, admin staff, coaches, etc. all the costs required to run an NHL franchise, so that the players know what percentage of revenue is required to cover those costs.

As for the player's last offer of 5% salary rollback along with revising Rookie bonus clauses and revenue sharing, well my take is this.
1) Revenue Sharing occurs between the teams, so the players aren't giving anything back from their own pockets.
2) 5% rollback, given player salaries estimated to be between 1.2 and 1.4 billion last year equates to 60 or 70 million dollars. Given that the US TV deal was drastically cut from ESPN and the new deal with NBC. The ESPN is about half of what is was, so that's around a 35 million dollar loss and the NBC deal won't approach the 125 million per season the NHL got from ABC. So, it's anyone's guess what the NHL will take in from NBC, it could be 25, 50, 75 million, whatever, but I would bet that it wouldn't be close to 100 million. So, the loss from TV money offsets the 5% rollback.
3) Rookie bonuses. Definately a step in the right direction, but depending on how much US TV money comes from NBC, this offer might not make much of dent in the loses reported by the league.

Even if you believe Forbes numbers, the rollback and rookie bonus stuff are offset by the decrease in tv money, so the league would still lose money.

Last month on Sportsnet in Canada, they had a show called the Business of Sports with Bob McCown and he had on JP Barry and Mike Gillis, 2 high profile NHL agents, along with the former head of sports at CBS and the former President of the Thrashers/Falcons/Hawks/current NHL board of Directors. Bob asked Mike Gillis, that if the 2 sides could agree on what was NHL Revenue would the players accept 53% of the Revenues. Mike said No. What asked the same question, but with the players getting 75% of the revenues, Mike changed his answer to Yes.

Can 25% of Revenues cover the other NHL expenses of travel, equipment, hotels, scouts, coaches, rent, etc. and provide the owners with a decent return on their investment?

 

[roadrunner]

But why don't the NHLPA look at the NHL books and THEN say they don't believe Levitt's report? Is it because the NHLPA's position will be somehow weakened if they look at those set of facts?

Why don't the NHLPA hire their own accountant(s) and THEN say they don't believe the owners reported revenue? Is it because the NHLPA's position will be somehow weakened if they look at those set of facts?

I don't get why the NHLPA are just saying that the owners aren't being truthful and yet make no effort to PROVE that stance. GRRRRR!

 

[bling]

But why don't the NHLPA look at the NHL books and THEN say they don't believe Levitt's report? Is it because the NHLPA's position will be somehow weakened if they look at those set of facts?

Why don't the NHLPA hire their own accountant(s) and THEN say they don't believe the owners reported revenue? Is it because the NHLPA's position will be somehow weakened if they look at those set of facts?

I don't get why the NHLPA are just saying that the owners aren't being truthful and yet make no effort to PROVE that stance. GRRRRR!

How are they going to prove the owners are not being truthful? They can't audit books or look at financial documents that the owners will not let them see.

They already know what the ones the owners are willing to show them say. What is the point in going over ground already covered?

 

[kn]

Quite simply put, Leavitt only has the information that the NHL and the team owners wish them to have. It does not include all the income sources and revenue streams that make up the total of the teams incomes.

Pages 8, 9, 10 and 11 include the actual detailed forms that the teams had to fill out and give Levitt. It's difficult to argue that the list of required reporting does not cover all hockey-related income.

 

[Tom_Benjamin]

Pages 8, 9, 10 and 11 include the actual detailed forms that the teams had to fill out and give Levitt. It's difficult to argue that the list of required reporting does not cover all hockey-related income.

Why should the players care? What owners call hockey related income is surely different from place to place and that makes it difficult to track. That would matter to the players if revenue mattered to the players. It doesn't.

Most employees don't have a clue what revenues their employers turn. It is none of their business.

Tom

 

[CoolburnIsGone]

Mr. Levitt’s report stated that the NHL as a whole lost $273 million when he went through the books of the 30 NHL teams.

That was the losses in 2002-2003...last season the NHL said they lost approximately $224 million (stated on TSN.ca). Given that it was the last yr before an expiring CBA/expected lockout, you'd think that most of the teams would lose more because they would be spending more on a last ditch effort to win a Cup before a salary cap or whatever plan is in place. I just found the fact that the league as a whole reduced their losses by almost $50 million to be interesting to say the least.

Facts and figures:

Well where did you get these facts and figures? I mean most facts have proof and you've provided none. In fact, these figures would generally only come from the URO of a team so were you privy to seeing these like Mr. Levitt??

Players salaries totalled $1,332,014,890 last season, averaging $44,400,496 per team. 18/30 teams were under the average team salaries last season.

Interesting because if you take the total salaries that the players earned last season and divide it by the $2.1 billion in revenue the league claims, you get a surprising result. The percentage of revenue paid to the players was not the 75% claimed by the league but more inline with other leagues at 63.4%. Even if you decrease the revenue to $2 billion, you still get less than the 75% of revenues being paid to the players (it would be 66%). Either your numbers are wrong or the league is lying through its teeth...your choice as to what it is. But how can you be wrong if these are facts and figures??

The NHL preposed team cap is $35 million in which based on the 2003-2004 season team salaries translates to 11 teams under the cap, 8 teams relatively close to the cap and 11 teams way over the cap. Under the salary cap the team salaries would equal $991,925,200, saving the league $340,089,690.

Where does all of the money go?

The top 25(3.4% of NHL players) individual salaries combined for $219,740,700 or 16.4% of the total NHL salaries. The other 705 players (96.6%) take in only 83.6% of the total salary.

Maybe my math is off but when I multiple $35 million by 30 teams in the league, I don't get your $991,925,200. I get $1,050,000,000 ($35M times 30 teams) and given your suggested amount of total players (top 25+other 705=730 total players), the average salary per player would be $1,438,356. But that's only if team's didn't exceed the cap. But if you take your amount of $991,925,200, the salary cap would be $33,064,173. For this difference, I bet you can find a decent player for almost $2 million/season. But I remember the league suggesting a salary cap of only $31 million not the $35M you're suggesting (or even the calculated $33M).

Now if the league even considered the players offer and got them to change the salary rollback from 5% to 10%, let's see the results. If the average player salary last season according to the NHL was $1,830,126 and you have 730 players, the total player salaries for the league is $1,335,991,980 (only about $3M difference between what you stated earlier). Now, take 10% of that total and you can reduce the total salary to $1,199,692,701 and the average player salary to $1,643,415. Based on revenues in the Levitt report ($1,996,000,000), this would put the percentage of salaries to just 60%...which I think would be the lowest among all the leagues.

Ticket cost also needs to be addressed to the NHL and the NHLPA because the average ticket is $41.56(middle to nose bleed section) For comparison sake an average MLB ticket is $13.60, the best game of baseball, the Yankees is only $20.51 on the average.

A Toronto Maple leafs ticket averages $75, this cost is inflated due to the fact that 17,000/19,000 seats are season ticket holders mostly owned by companies and not individuals. The average Joe can not compete with corporate firms that have deep pockets.

Ticket costs need to be addressed by the league only. The players don't set the ticket prices. Yes the players' salaries influence the ticket price but that doesn't mean they get a say in what the average ticket price is at an arena. And if you think a salary cap is going to change the fact that the average Joe can't compete with corporate firms with deep pockets, you're sadly mistaken. If anything, you're taking an example of just one team to make a generality about the entire league. And average ticket prices aren't easy to calculate...you need to weight each ticket category according to the amount of tickets available for that category (the 1st two rows at most arenas account for the highest ticket prices but the fewest number of seats available). So I wonder how accurate your average ticket price is in the NHL. The Levitt report suggests an overall average ticket price of $48.37 but I wonder how they came up with their numbers myself.

76% of all the revenue in hockey goes towards players salaries. The other 24%, $420,636,281 goes to all other things in the league.

If all the other things in the league cost $420,636,281 and you divide that by your 24% as you suggest, the total revenue in the league results to $1,752,651,170 which is less than both the Levitt report and what the league claims in that the NHL is making over $2 billion per year. Now, if you subtract the supposed losses incurred by the league last season that I stated above, then you get a total (still less than what's in the Levitt report) more in line ($1,752,651,170+$224,000,000=$1,976,651,170) but still close to $123,348,830 of a difference. It works out to about $4,111,628 per team or at least 2 players making the league average.

The Montreal Canadians had the highest total fans 842,767 and the highest average attendance 20,555 in the NHL last season. Lowering the cost will allow more teams to enjoy a full house like the HABS and the other top fan draws in the NHL. The total fans for hockey last season was 20,336,163, times the average ticket cost and we get $845,170,934.28 (63% of player revenue, 48% of the total revenue)

Alec Campbell

Another person that claims that lowering the player cost will allow increase attendance. The 2 aren't a direct correlation or something that can be proven (though simple economics suggest that you could be correct). Even lowering the ticket price may not guarantee increased attendance. Attendance will be determined in each market based on fan interest and the team successes or failures. A salary cap won't change fan interest in every market or change the successes or failures of poorly run teams.

Your numbers still don't seem to add up because if you take your ticket revenues of $845,170,934.28 and divide it by your 48%, you get $1,760,772,780 total revenue in the league.

What I've basically done here is take these numbers you provided and shape them to how I wanted them to look. Is the league doing the same thing? Dunno and that's probably why the players don't trust the league because statistics are just a way to twist the facts into a way for you to lie.

Sources:
http://www.nhlcbanews.com/historical_results.html

http://www.tsn.ca/nhl/feature.asp?fid=9329

 

[missthenet]

income

are the players that make money from doing commercials, or sponsers for equipment etc. including this money when they calculate their income from playing hockey? this income would not even be available to the players if they were not playing the sport! do you think the players would like to include this as part of their salary? The owners are entitled to make a profit, period.

 

[Tom_Benjamin]

are the players that make money from doing commercials, or sponsers for equipment etc. including this money when they calculate their income from playing hockey? this income would not even be available to the players if they were not playing the sport! do you think the players would like to include this as part of their salary? The owners are entitled to make a profit, period.

If the player is wearing his uniform, the team gets 1/3 of his fee.

Tom

 

[FlyersFan10*]

Look, let the truth be told. The players union never held a gun to the owners heads. It was the owners who negotiated the deal with the union and had the owners used the CBA accordingly, we wouldn't even be in this mess. The problem is that a few owners saw fit to run amok with the CBA and they have created the problems for the other owners. It's funny how you always see everything point back to the players. What about the owners who blew it for everyone else? Why is there no retribution for those owners? Instead, we have people who are screaming for the players' heads, but are sympathetic to owners. Let's ask a question. What happens if there is a cap? What happens to teams like Toronto, Philadelphia, Detroit, New York, Dallas, etc.......They're going to get richer. What's going to happen with teams like Nashville, Pittsburgh, etc.....nothing because they still have payroll that is below the $31 million "cap". Is there going to be revenue sharing amongst the richer and poorer teams? Doubt it. You think Mike Illitch is going to share his billions with an owner in Nashville or Calgary? Doubt it. Do you think Ed Snider is going to share his money with the Tampa Bays or the Floridas of the world? Doubt it too. Fact of the matter is this: It was the OWNERS who created the mess, but it's the PLAYERS who are being asked to clean up what the OWNERS created. I don't blame the players for this at all. They've got every right to not agree to a cap.

 

[PecaFan]

Interesting because if you take the total salaries that the players earned last season and divide it by the $2.1 billion in revenue the league claims, you get a surprising result. The percentage of revenue paid to the players was not the 75% claimed by the league but more inline with other leagues at 63.4%. Even if you decrease the revenue to $2 billion, you still get less than the 75% of revenues being paid to the players (it would be 66%). Either your numbers are wrong or the league is lying through its teeth...your choice as to what it is.

In your rush to declare everyone liars, you've overlooked a simple fact. The NHL states player *costs* are 75%, not player salaries.

 

[CoolburnIsGone]

In your rush to declare everyone liars, you've overlooked a simple fact. The NHL states player *costs* are 75%, not player salaries.

Just so you know, I read the Levitt report and knew that those player "costs" were what the league was talking about (see how anyone can shape facts & figures to how they want them to look). If you want to go through all of how the Levitt report came to their numbers for player costs, we can but several of the pieces will basically be the same under any type of system (Pension, Worker's Comp., Medical/Dental insurance, Life Insurance, etc). But the league is using the 75% to help justify a "salary" cap which by definition only includes player salaries. If the league were upfront and separately declared player salaries as 63% and other player costs as 12%, you probably would see less support for the owners than you do now. But you helped me prove my point regardless...the thread starter titled this that the NHLPA and basic math don't add up but the same can be said for the league as well.

 

[thinkwild]

The disparity between the highest and lowest team salaries is astounding.

$77,856,100 is the highest team salary for the Detroit Red Wings. The lowest team salary belongs to the Nashville Predators at $21,932,500. The difference in the extremities is $55,923,600, 23 of the NHL teams do not even have a team salary over the difference in high-low.

Im amazed anyone could bring this up as proof a cap is required. And how much better are they than Nashville for that $55mil difference in payroll. Perhap Nashville could trade Walker, Vokoun, Zidlicky and Radulov for Cujo, Yzerman, Shanahan, and Lisdtrom, That would make them more financially competitive. How do you suppose it would effect their on ice competitiveness. Would you care as long as they are financially competitive. Is that how you would like decisions made?

 

[jacketracket*]

No one has ever questioned whether Levitt himself was lying. All he did was verify the NHL lost what they said they lost based on the numbers they gave to him. The question is were the numbers given to him by the league accurate. Basically he was being paid by the league to tell them what they wanted to hear and to use him for PR, which has worked wonderfully. If Bettman had put this much thought into marketing the game, it might not be in the shape it is.

In response to both you and bling, I think the players missed a golden opportunity to have their own hired accountants sit down and look at the numbers that Levitt looked at, and point out the possible flaws.

I don't have a side in this worm wrestle, and I understand that the Levitt report is limited by the accuracy and fullness of the info supplied by the owners.

 

[thinkwild]

In response to both you and bling, I think the players missed a golden opportunity to have their own hired accountants sit down and look at the numbers that Levitt looked at, and point out the possible flaws.

Look at which books? Melnyk has a set of books for his overall investment in the team and arena, his financial position regarding this overall investment. He sells restaurant space, advertising for the arena, sponsorships, etc. From all this revenue, some hockey related, some not, he fills out a set of UROs designed to capture a common look and feel way of reporting revenues for 30 different businesses with no common look and feel. Melnyk decides how much of the revenue he wants to put on those books.

Now you say they say should examine those books. To do what? Check the math? The problem has already occurred.

They dont need to check the books because first of all, they dont care and dont think they should have to care, and 2nd, they already know the types of things that are wrong with them. Examples are all over the place. THey can find $50mil they would call hockey revenue by looking at 4 teams. They have looked at some books and decided they are selectively reporting. Some teams allocate revenue in a way to purposefully generate a loss in one division. Others dont allocate all their advertising, sponsorship, suite revenues. Some owners get the value out of their team by ways other than the bottom of the profit and loss statement of the team itself. Why do franchise values of a business losing money keep rising?

Forbes offered Levitt and the NHL to comment and advise why Forbes' numbers are wrong. The NHL could of easily clarified it. But they dont. They just say Forbes couldnt know. Well isnt that the problem they are trying to clear up? Why didnt they clear it up?

Forbes is wrong because ...
they couldnt know the real books? What kind of clarification is that from an honest person.

 

[jacketracket*]

Look at which books?

I didn't mention "books".

I said that, IMO, the players missed a chance for some pr of their own by not going through the motions --- when offered the chance to sit with Levtt and look at his numbers --- and pointing out where they see discrepancies.

 

[thinkwild]

I didn't mention "books".

I said that, IMO, the players missed a chance for some pr of their own by not going through the motions --- when offered the chance to sit with Levtt and look at his numbers --- and pointing out where they see discrepancies.

lol. Maybe if we say it enough times ..

Sit and look at the numbers the owners have provided of what they deem hockey revenue, which included things like no luxury box revenue for Chicago.

Looking at the books they created for Levitt doesnt solve anything. If they are to share as partners from the revenue of the hockey business, they need to see the Comcast books, the MLSE books, the Orca Bay Books, The Ottawa Hockey club books, and determine if they are allocating the proper revenue to the UROs. They need to see the books of the overall position in the business that the owners dont want to release. Thats why they are creating UROs. So they dont have to show the real books they look at when they decide what will be the revenues and expenses for the team this year.

Looking at the UROs doesnt do anything. Now I know what you are thinking, couldnt the PA have done something that would have created a headline that said NHLPA shows books are wrong, so they could convince you and win a PR war. But they have done that and no one beleive them so why should they. They know if anyone looks at it honestly, they will see it. The info is out there once you stop thinking the owners are Santa Clause

 

[jacketracket*]

Looking at the UROs doesnt do anything. Now I know what you are thinking, couldnt the PA have done something that would have created a headline that said NHLPA shows books are wrong, so they could convince you and win a PR war. But they have done that and no one beleive them so why should they. They know if anyone looks at it honestly, they will see it. The info is out there once you stop thinking the owners are Santa Clause

You're right.

Simply dismissing Levitt's numbers out of hand does nothing to convince me.

 

[hockeytown9321]

You're right.

Simply dismissing Levitt's numbers out of hand does nothing to convince me.

How can people dismiss Levitt's numbers when he didn't have any? His numbers were the league's and he was paid to agree with them.

 

[thinkwild]

They arent dismissing them out of hand though. There are many solid examples out there, inlcuding the 4 franchises the PA did get their accountants to look at. But quite apart from the accounting issues, you have to consider that perhaps half the losses are quite normal, non salary related, and short term.

Washingtons owner for example set upon a 5 year plan that was designed to lose 10s of millions and he was ok with it. Yet Bettman is using it as proof salaries need to be lowered. Washingtons failed strategy of trying to buy the Cup, in a just world, should lead to them losing money. Wouldnt you agree?

St Louis losing big money is said to be paper losses writing down his assets at an accelerated pace. They will soon disappear on their own. Otherwise he will need a $3mil salary cap to compete.

NYR and Detroit are losing money, but that should be a good thing in a system that is working.

Pit, Carolina, and NYI are losing money, but that is either market or arena related. The ability to solve those problems is in planning.

Fla and Ana are losing money, not that the mega corporations owning them actually notice it, and perhaps they can make it, perhaps they cant. The situation remains the same cap or no cap.

Nashville, Columbus, Minny, Atlanta, SJ, Cal, Edm, are all apparently doing ok.

Even if Levitts numbers were assumed to be a fair presention of the revenues associated with what the owners are designating as their hockey part of the business, even if, how much of Levitts losses are fairly related to salaries being too high and needing correction.

We already know Ottawa and Buffalo went bankrupt for reasons not attributable to the CBA. Bettman admits this. Yet people use it as an argument still.

Simply dismissing Levitts numbers would be baseless and shouldnt convince you. But there are very many good reasons to dismiss them not just simply

 

[kerrly]

Im amazed anyone could bring this up as proof a cap is required. And how much better are they than Nashville for that $55mil difference in payroll. Perhap Nashville could trade Walker, Vokoun, Zidlicky and Radulov for Cujo, Yzerman, Shanahan, and Lisdtrom, That would make them more financially competitive. How do you suppose it would effect their on ice competitiveness. Would you care as long as they are financially competitive. Is that how you would like decisions made?

No that doesn't prove why a cap is required, but I'll tell you what does. The difference between Nahsville and Detroit, is that Detroit can remain competitive buy re-signing and adding valued players year after year. Small market teams, sure can have some success, but only for a period of a year or two. Why? When a small market team has success with a low payroll, it means that the players are going to get raises, thus they won't be able to afford to keep that competitive team together for very long. If they do decide to sign their guys, fine they stay competitive for another few years, but are no longer spending like a small market team. This could translate in huge losses for teams doing this. Example: Tampa Bay Lightning. As of right now they are considered small market, and had tremendous success last year, winning the cup. But when the keys players contracts come up, St. Louis, Richards, Modin, Lecavalier, Kubina, they will no longer fall into the small market category. Teams who can't afford to do this, Tampa might not be able to either, after being very successful end up losing their players. The cap offers teams to be competitive year after year. Wouldn't it be good for the whole league, especially the fans of small market teams, knowing at the start of the year that it could be very possible to be a contender, and not always knowing that your team doesn't have a hope in hell of making the playoffs.