OT: Lebron James Advocates NBA Contraction

[Brodie]

Nash is a ****** comparison. It would be slightly more like Iginla blowing out of Calgary to take less money and play with Rick Nash (too small a market!) and Steven Stamkos in Tampa Bay. Then the Flames utterly collapse and are left virtually valueless.

 

[Dado]

It would be slightly more like Iginla blowing out of Calgary to take less money and play with Rick Nash (too small a market!) and Steven Stamkos in Tampa Bay.

All playing under Yzerman. That would be 19 kinds of awesome.

Too bad NHL players are too greedy to give up money to pursue championships.

 

[Crazy_Ike]

While the deliberate dishonesty is debatable and difficult to prove either way, let's be clear that the claim was that costs were too high given the actual revenues. Except that some owners decided which revenues to count (e.g., Wirtz), but no one could take the option on which costs to count. For example, it was certainly possible for a team to claim only $60m in hockey revenues (what they considered hockey revenues) but in retrospect these might really have been far higher. It wasn't surprising to me that that the alleged $2-ish billion was really far closer to $2.2 billion. That might have affected Mr. Levitt's per centage of HRR that goes towards players cost just a smidge. And since the entire premise was set player costs as a per centage of revenues.... this was a very material point. Central, in fact.

Not really. You still think that the 2b number was "wrong". It wasn't. It just took different numbers into consideration. In fact, there is nothing particularly gospel about even the new number - it was a negotiation, like I said, and gains made by one side there are balanced in other places in the CBA, and are quite up for renegotiation in this one.

And when it comes down to it, even if your 2.2b is accepted at face value, it would still mean the player share was far higher than any other sport at the time, dropping about 6% from the Levitt estimate.

You're just going to have to face the fact that Levitt wasn't wrong at all at some point. You are hanging on to that 2.2b like it's some sort of "gotcha!" at the league, when it simply isn't.

What they didn't expect was parity from the CAD.

The idea that revenue has only grown due to Canadian dollar strength is laughable to the point of ludicrous. Give some credit where credit is due for once, this bitterness is unbecoming and comes across as sour grapes. Did you WANT the league to crumble after the lockout? It's hard to tell sometimes.

I disagree with this as well. The CBA "should" be able to accommodate growth very well since the players' share is always a fixed percentage of HRR. The problem has been that the growth has come in the markets that either were already faring quite well, and the Canadian dollar's effect on the smaller of the Cdn markets. The Leafs and Habs have benefited doubly in that they've experienced organic growth, then had that amplified by the CAD's increase.

What exactly are you disagreeing with? It is the fact that the CBA doesn't accomodate UNEVEN growth that is the problem. It's like that because by the same token it also wouldn't unduly punish for uneven DECLINE which was the expected direction coming out of the lockout. After all, it stands to reason that more significant revenue sharing wouldn't be looked upon very kindly if things were so bad the teams that tend to pay into it were struggling to stay above the water themselves.

 

[Crazy_Ike]

I wrote a paper recently chronicling the lockout - there were dozens of reports of pressure from the union on players who spoke out against what was happening or in support of a cap. Union solidarity was a big issue that undermined the unions strength and resilience in the long run.

Goodenow was a dictatorial goon. He was enabled by a small number of players who had stars in their eyes (some of them - like Healy - are still at it). Linden was the best thing to ever happen to the NHLPA.

NHL players, as a general rule, are rather unworldly (and uneducated) and naive about how the real world works and it is not as hard for a smooth talker (like, say, Buzz Hargrove) to twitch them like puppets. There's exceptions, but the behavior of the team reps makes it abundantly clear the inmates have often been running the asylum.

It's once again a problem as there is little indication that there is anyone in the NHLPA with both the vision and the clout to stop Fehr if he ever did run off the tracks. Everyone is depending on Fehr taking the slow, rational course of action. Hopefully he does, because there's nothing stopping him from breaking everything to pieces if he so desires.

 

[StormCast]

Worrying about short-term changes in q-rating is a waste of time. One great finals series against Kobe and he'll be viewed as a stud again. Heck, Kobe has had *much* worse ratings than Lebron currently has, and still managed to make the top-5 sports endorsers list. In fact, his endorsement income has gone *down* as his Q-ratings increased dramatically.

Lebron recognized he was in a situation that would not lead to championships, and made what he deemed necessary changes. I, and many others, applaud him for it. Here's hoping it leads to scintillating playoff atmosphere/results. In the NHL, it would be great if someone like Nash would forgo the easy pay check from a crap team to make less on a real contender.

This sort of thing needs to happen more, not less.

Terrible analogy with Kobe. His endorsement income vaporized because he was accused of sexual assault.

I don't applaud LeBron for leaving and I really don't care at all about Cleveland. If he's as good as he thinks he is, then stick it out and make your own history. Joining forces with your rivals does tarnish one's legacy, as many of the guys from the 80's correctly observed. He took the easy way out. Hardly anything to be proud about.

 

[btn]

The real shame is that Lebron has such a awful knowledge of NBA history. Outside of LA, Boston, Houston, Chicago, and NY.....where were all the All Stars/HOFers?

Nike needs to get him a tutor so he stops saying so many stupid things.

 

[Dado]

The real shame is that Lebron has such a awful knowledge of NBA history.
Outside of LA, Boston, Houston, Chicago, and NY.....where were all the All Stars/HOFers?

There is nothing wrong with his understanding. By definition there can only be a handful of all stars/HOFers at one time. Therefore, by definition, there can only be a handful of teams that can have them.

This means the bigger the league, the worse the remaining teams are going to be, since all tiers of talent will be spread ever-thinner.

Nike needs to get him a tutor so he stops saying so many stupid things.

What Lebron said makes 100% sense, and is a fundamental reason the promotion/relegation system used across the rest of the globe works so well.

 

[Fugu]

Not really. You still think that the 2b number was "wrong". It wasn't.

It was because revenues that could be connected to hockey operations were not. It IS that simple.

It just took different numbers into consideration. In fact, there is nothing particularly gospel about even the new number - it was a negotiation, like I said, and gains made by one side there are balanced in other places in the CBA, and are quite up for renegotiation in this one.

One has nothing to do with the other. The first HRR figures were used by Levitt to build a case that X% of revenues went to players. That figure would have been different if anything connected to hockey ops was counted.

The current HRR is indeed negotiated but the reason one is nothing like the other is that it was absolutely necessary for the two sides to set an HRR figure. The cap, escrow/players share are all based on this figure. Prior to the lockout, it didn't really matter what the teams collectively brought in as revenue. It only mattered to each team. Now it must be collected and tabulated so that the entire league can operate under this system.

And when it comes down to it, even if your 2.2b is accepted at face value, it would still mean the player share was far higher than any other sport at the time, dropping about 6% from the Levitt estimate.

It is a significant drop. At the same time, it's almost meaningless because revenues are local, and costs are global. The sought after Cost Certainty is cold comfort to the teams whose revenues have stayed at pre-lockout levels minus the revenue transfer. It's simply not enough, while allowing the player costs to keep growing because revenues [elsewhere] keep growing.

You're just going to have to face the fact that Levitt wasn't wrong at all at some point. You are hanging on to that 2.2b like it's some sort of "gotcha!" at the league, when it simply isn't.

Like I said, while interesting, Levitt's work was mostly useless because it put the focus on the wrong problem to solve. It was always about the gap in revenues, not cost certainty derived pooling team revenues for the giggles of it, but in running their businesses, the teams still have to account for the revenues and costs individually.

The idea that revenue has only grown due to Canadian dollar strength is laughable to the point of ludicrous. Give some credit where credit is due for once, this bitterness is unbecoming and comes across as sour grapes. Did you WANT the league to crumble after the lockout? It's hard to tell sometimes.

Me bitter? Seriously, Ike.

Okay, I'll bite. You tell me whose revenues have grown. Actual dollars. Percentages are very misleading, especially if your base was pretty paltry.

 

[The Bob Cole]

Goodenow was a dictatorial goon. He was enabled by a small number of players who had stars in their eyes (some of them - like Healy - are still at it). Linden was the best thing to ever happen to the NHLPA.

NHL players, as a general rule, are rather unworldly (and uneducated) and naive about how the real world works and it is not as hard for a smooth talker (like, say, Buzz Hargrove) to twitch them like puppets. There's exceptions, but the behavior of the team reps makes it abundantly clear the inmates have often been running the asylum.

It's once again a problem as there is little indication that there is anyone in the NHLPA with both the vision and the clout to stop Fehr if he ever did run off the tracks. Everyone is depending on Fehr taking the slow, rational course of action. Hopefully he does, because there's nothing stopping him from breaking everything to pieces if he so desires.

Yes.

I know, that's what I was saying.

The guy I quoted stated that there were times when players were forced to go back on their words during the lockout and I agreed with him.

 

[mouser]

What Lebron said makes 100% sense, and is a fundamental reason the promotion/relegation system used across the rest of the globe works so well.

Could you offer up an example of a league where it works well?

 

[Crazy_Ike]

Yes.

I know, that's what I was saying.

The guy I quoted stated that there were times when players were forced to go back on their words during the lockout and I agreed with him.

Responding to you does not necessarily mean I was disagreeing with you. I was simply adding in further context to what you already said.

It was because revenues that could be connected to hockey operations were not. It IS that simple.

"Could" does not mean "should". It was all a part of the full negotiation.

One has nothing to do with the other. The first HRR figures were used by Levitt to build a case that X% of revenues went to players. That figure would have been different if anything connected to hockey ops was counted.

As already stated, even using worst case numbers the difference was not particularly material. Adding in two hundred million in revenue still has the players share in the preceeding years far above what was deemed reasonable by major league sports leagues.

I get the impression that you believe if those revenues had been counted that way all along, the number would have been in the 40% ranges or something. Not even close.

The current HRR is indeed negotiated but the reason one is nothing like the other is that it was absolutely necessary for the two sides to set an HRR figure. The cap, escrow/players share are all based on this figure. Prior to the lockout, it didn't really matter what the teams collectively brought in as revenue. It only mattered to each team. Now it must be collected and tabulated so that the entire league can operate under this system.

Yes, I am aware of this and you know I am. This doesn't change the fact that Levitt's report reasonably accurately reported league revenues and expenses.

I remind you that the NHLPA thought it was entirely reasonable to count all events at an arena as hockey revenue if any part of it could possibly get back to the owner of the hockey team. By the same standard it therefore follows that the owners probably didn't include the parking fees during a concert as hockey revenue even if the team owner gets a bite of the pie, as an example. There are many different shades of grey when it comes to the definition of hockey revenue that were quite up for debate when Levitt did his report, and the fact that afterwards they got together and decided on a formula that was acceptable to both sides doesn't somehow make Levitt "wrong" or "disproven". I find your conception of "hockey revenue" as something ironclad and not subjective puzzling in the extreme.

It is a significant drop.

A material drop would have required about ~15% or about half a billion in revenue (and that is making the very questionable assumption that other leagues were in fact using the revenue reporting model the NHL is now). It was nowhere close.

Like I said, while interesting, Levitt's work was mostly useless because it put the focus on the wrong problem to solve. It was always about the gap in revenues, not cost certainty derived pooling team revenues for the giggles of it, but in running their businesses, the teams still have to account for the revenues and costs individually.

Levitt's report was very useful because it illustrated how much of revenue was being eaten up by player costs. You can't permanently fix an expense problem by changing revenues when the expenses are directly tied to them. The differences in revenue reporting were not large enough to change this.

Me bitter? Seriously, Ike.

Okay, I'll bite. You tell me whose revenues have grown. Actual dollars. Percentages are very misleading, especially if your base was pretty paltry.

Isn't it up to the person making the claim to back it up? League revenues have grown just above 32% since 2003 if my math is correct. Using rough numbers, this means that according to your claim that it was solely the Canadian dollar's rise that is to be thanked for this, it would have to be responsible for about 700m more in revenue per year. The entire revenue of all Canadian teams combined in 2003 was ~500m (estimating high, my numbers have them a little lower than that). In effect, to get the raise you are claiming, they would have needed to more than double their revenue over the last seven years. If this was solely due to the Canadian dollar, it would now be worth 1.80 US (or in other words the US dollar would be worth about 0.55 C).

It goes without saying that the US dollar isn't quite that weak just yet.

Maybe you were just a victim of extravagant exaggeration? Let's say the Canadian dollar was just HALF of the reason. The dollar ratio would be about 1.27 US to 1 C. Better, but not right either.

In fact, the absolute maximum impact the Canadian dollar could have on revenues is, if we assume all Canadian increases are due to the dollar, is about 150m. The other 550-600m has to come from somewhere else. Even that number is unfair, since it's unrealistic to assume the Canadian markets haven't grown their revenue at all beyond the currency advance. The Canadian markets have grown their revenue by 250-300m total over that time, which the dollar is simply unable to account for. The US markets revenue have grown, on average, about 29.5%, since 2003. If we make the reasonable assumption that the Canadian markets grew that much as well, we get a number of about 650m for true market value, about 100m less than they actually rose.

Therefore, we can conclude fairly reasonably that the Canadian dollar is responsible for about 100m in increased revenue for the league compared to 2003, or about 14% of its increase. Under no definition could this possibly be declared as the main reason for the league's increase in revenue.

You're about 600-650m short, Fugu.



Numbers used for this calculation:

2003 revenue 2.2b (500m from the six Canadian teams)
2010 revenue 2.95b (750m from the six Canadian teams)
C dollar 2003: 0.75 US
C dollar 2010: parity

edit: If we back it up a bit and use the 2.7b the league was talking about before the offseason, I would need specific numbers of the Canadian teams themselves as the 750m number isn't valid. Going apples to apples in sources suggests current revenues of 2.95b. Reducing everyone evenly to get the 2.7b number reduces that to 670m, the growth of US markets is now 330m or ~14m a team, a percentage increase of 20%. Give that to the Canadian teams and you get an increase of 600m, leaving 70m to the change in the Canadian dollar, about 14% again.

Unless you have the league's numbers for Canadian teams as it relates to the 2.7b they gave in June, that is the best estimate possible. Either way, about 14% of the increase in league's revenues from 2003 to now is due to the Canadian dollar.

 

[Fugu]

Yes, I am aware of this and you know I am. This doesn't change the fact that Levitt's report reasonably accurately reported league revenues and expenses.

I'll get to the rest of this later, after I drink a few more cups of coffee..... Some of us sleep at night.


The league per se doesn't have revenues and expenses any where close to what Levitt reported. The NHL is not-for-profit entity that administers the 30 teams' affairs.

Now, if you gather up the 30 individual teams/businesses and add up all their individual HRR and costs, throw in about 10% from central revenue and subtract league-level costs...... you get Levitt's figures. They're interesting as an academic exercise but have little to do with the actual teams' finances.

 

[Fugu]

And if only we had the Canadian revenues expressed in the CAD, we'd stand a chance of hazarding a realistic guess at organic growth.

 

[Dado]

Could you offer up an example of a league where it works well?

English Premier league, the most watched professional sports league on the planet, whose international TV contract is larger than the NHL's North American contract.

 

[kaiser matias]

There is no such law, nor has there ever been such a law.

Trudeau had the Canadian Football Act written up in 1974 to keep a World Football League team out of Toronto. It would have only allowed CFL teams to play in Canada and reached a second of three readings in the House of Commons before the WFL team gave up and moved to Memphis.

Some have suggested rewritting the law and passing it to keep the NFL out, but nothing has been done.

 

[Mr Atoz*]

They need it. It remains to be see for the NHL.

The NHL needs it way more than the NBA.

 

[mouser]

English Premier league, the most watched professional sports league on the planet, whose international TV contract is larger than the NHL's North American contract.

That's the league where only three teams have combined to win all but one of the league championships and no team has ever won a championship after being promoted, right?

The Premier league is tremendously successful. I would argue the relegation/promotion system is not an important reason why though. The majority of promoted teams are relegated again within a year or two and the financial differences between the Premiership and League One are well documented. The relegation system even causes issues for League One as the relegated teams from the Premiership receive significant payments from the Premier that can distort payroll spending in League One, contributing to a lot of teams bouncing down to League One for a year or two before returning back to the Premiership.

 

[glovesave42]

The first point is the biggest reason I can't see contraction happening. What the hell does the rest of the league get out of spending all this money to contract 2-4 teams? How does that make revenues go up. Other then contracting maybe the NJ market because it shares TV market with NYC how does losing 2-4 TV markets help the NBA national ratings? How will it get more people to buy tickets for the new worst team in the league? The worst team in the league is still the worst team in the league and most markets no matter how much they tend to like their teams struggle to sell tickets if the team is bad.

Contraction makes sense for owners to consider if they get a large enough increase in income. To illustrate with hypothetical numbers: Let's say that each NHL or NBA team (since they have the same number of teams, the numbers work for both) gets $5 M a year in National (League contract) TV revenue. If the league can contract 4 teams and not lose money from the TV contract, the remaining team' share of TV revenue will increase to $5.8 M per year. If the 4 contracted teams had a value of $200 M a piece, each remaining team would have to pay $30.8 M each. That probably wouldn't do it.

However, if the national TV revenue for 30 teams was $50M per team, contracting 4 teams would mean that each remaining team's TV revenue would go up to $57.7M per year, an increase of $7.7M. In that case, the 26 teams would love to contract.

That was a very brief illustration of how contraction COULD work. However, there's a lot of "if"s in this hypothetical that would need to be worked out (player contracts, Union approval, leases on arenas, TV contracts, values of teams... and that's just a start).

My opinion: Contraction won't happen any time soon... for any league.

 

[Dado]

That's the league where only three teams have combined to win all but one of the league championships and no team has ever won a championship after being promoted, right?

Which demonstrates that "parity" is more important to teams owners looking for revenue-sharing handouts than it is to fans.

ManU is the #1 marketing arm of the EPL, like the Yankees (and now to a lesser extent) Red Sox are the marketing arm of MLB, another league with massive international revenue many timezones from the nearest team.

The NHL has no equivalent, and is doing everything structurally possible to make sure it never does.

I would argue the relegation/promotion system is not an important reason why though.

Fair enough. I disagree, but you do at least have a defensible argument.

 

[puckhead103*]

B-b-b-b-but I didn't know what the word "contraction" meant.

http://sports.yahoo.com/nba/blog/ba...t=AnIUrHlKWemMXJFq_wP0KKy8vLYF?urn=nba-300875




Ok Lebron...

boy...lebron has more waffles than the leafs...

Goodenow was a dictatorial goon. He was enabled by a small number of players who had stars in their eyes (some of them - like Healy - are still at it). Linden was the best thing to ever happen to the NHLPA.

NHL players, as a general rule, are rather unworldly (and uneducated) and naive about how the real world works and it is not as hard for a smooth talker (like, say, Buzz Hargrove) to twitch them like puppets. There's exceptions, but the behavior of the team reps makes it abundantly clear the inmates have often been running the asylum.

It's once again a problem as there is little indication that there is anyone in the NHLPA with both the vision and the clout to stop Fehr if he ever did run off the tracks. Everyone is depending on Fehr taking the slow, rational course of action. Hopefully he does, because there's nothing stopping him from breaking everything to pieces if he so desires.

that was one reason eagleson was able screw his own union players for some many years....

 

[MAROONSRoad]

boy...lebron has more waffles than the leafs...

He never waffled about wanting to get the hell out of Cleveland, though, did he?

GHOST

 

[Melrose Munch]

Well

....
http://www.cbc.ca/sports/story/2010/12/24/spf-2011-lookahead.html

You'll need that device to capture the remaining sports heroics and plays of the year since such acts may be few and far between in the coming months. That's assuming we believe all the talk from NFL and NBA league executives and their corresponding players' union counterparts.



Read more: http://www.cbc.ca/sports/story/2010/12/24/spf-2011-lookahead.html#ixzz19SxsWdnD

 

[MaskedSonja]

Well

....
http://www.cbc.ca/sports/story/2010/12/24/spf-2011-lookahead.html

After reading that, I have to say is....

Anyone up for a game of cards in ayear or so? That might be all we have through 2011-12!

 

[IU Hawks fan]

^
And 2 years later it would move

Chicago is a Bulls city much like it is a Bear/Blackhawk city

2nd teams aren't viable in these sports as no one will support them

We could easily take on 2 football teams here. I don't think an AFC team would find it hard to find fans in Chicago.

Heck, if the Cardinals were still around, I would surely be a fan of them if the Cubs/Bears on the northside and Sox/Cards on the south stuck around.

 

[Jeffrey93]

Why does anybody care what this guy says? I agree with what that dood from the Nets (or whoever said) ....maybe the NBA would be better if 3 all-stars didn't conspire to sign with the same team.

This guy is an absolute loser for how he handled his free agency......