Predators Suffer From Lack Of Revenues (Mod: Why low payroll?)

[triggrman]

Because those successful teams are making more profit now, with a cap - even with revenue sharing - than they would in an uncapped world.

Absent a cap, you would likely be seeing $100M+ payrolls - based on the salary inflation we saw before the lockout and the fact that revenues have increased by >40% since the lockout.

The cap has given the Leafs a license to print money. Their revenues are increasing and their largest cost is capped (and increasing at a slower rate than their revenues).

This. Why can't people understand this.

 

[Jeffrey93]

I've been following the salary arbitration issue featuring Shea Weber.

It appears the Preds may lose him. (just speculating here)

This brings the question: Do the Predators suffer from lack of revenues?

I'm not advocating that they should move, since I believe Nashville is still a great hockey market.

Its just that Predators don't have enough revenues to compete with the rest of the NHL and with this problem they can't keep their elite players like Weber, and Rinne, etc.

What are the reasons why Predators can't generate enough revenues to compete in the NHL? And this probably why they have a self imposed salary cap.

What is it: Is it the market? or the arena? or lack of corporate support?

The market. /thread

 

[Jeffrey93]

This. Why can't people understand this.

What he just said makes a solid argument for no cap.....and Nashville NEEDS a cap.

Markets like Toronto pay more and make more....they sellout every night at top dollar.....they make piles of money and still want to spend piles (even if on the wrong players) on salary.

But...teams like Nashville couldn't survive in a market like that. So Toronto has been handcuffed in how much they can spend...but their revenues are still high and increasing. Nashville is now under "cost certainty" but they are still hurting.

System doesn't work with markets like Nashville....sorry.

If it helps...I argued for a stiff Luxury Tax during the lockout...that would have helped Nashville A LOT more than the current system is.

 

[chasespace]

What he just said makes a solid argument for no cap.....and Nashville NEEDS a cap.

Markets like Toronto pay more and make more....they sellout every night at top dollar.....they make piles of money and still want to spend piles (even if on the wrong players) on salary.

But...teams like Nashville couldn't survive in a market like that. So Toronto has been handcuffed in how much they can spend...but their revenues are still high and increasing. Nashville is now under "cost certainty" but they are still hurting.

System doesn't work with markets like Nashville....sorry.

If it helps...I argued for a stiff Luxury Tax during the lockout...that would have helped Nashville A LOT more than the current system is.

I'm pretty sure he was arguing for a cap, as with one they can firmly control their major expense while still raking in ticket and merchandising income.

 

[KzooShark]

Why would Toronto want a luxury tax system?

Say the tax line is 60 million. They'll be expected by their fanbase, players, and agents to spend $100 million and then pay 40-50 million in tax.

Why do that when they can be capped by the league at 65 million and toss 20-40 million into a revenue sharing system?

The only owners that would want a luxury tax setup would be people that want to win more than make money, so Pegula and Illitch, maybe? Certainly not any kind of majority.

 

[KzooShark]

You mad?

Don Fehr broke a league with over 6 billion in revenue. The NHL is small potatoes.

And it looks like the NBA won't be getting that hard cap, so I consider that a step back.

The size of revenue has nothing to do with the ease or difficulty of "breaking a league", especially with an already broken union.

And it's laughable that you think you know what the NBA's final makeup will be months, if not a year before the CBA is reached. You were probably figuring in October 2004 that there was no way there would ever be a hard cap in the NHL, too.

 

[theIceWookie]

You mad?

Don Fehr broke a league with over 6 billion in revenue. The NHL is small potatoes.

And it looks like the NBA won't be getting that hard cap, so I consider that a step back.

I think your underestimating Gary Bettman and the trust he has from the Owners. He's gone to a lockout twice in his tenure, the first locking out the players for half the season. The second time he was willing to loss an entire season just to get what he wanted. The owners were willing to let him cancel an entire season because they believed in him. Each time he has gone to war for the Owners or the NHL he has won.

He won in the 1994-1995 lockout. He won in the 2004-2005 lockout. He won against Balsillie versus Phoenix. He won the beer deal with Molson. He's gone and made the past year the leagues most successful. Do not underestimate his ability to get what he, and by extension the owners, wants.

 

[tarheelhockey]

Has anyone said a single word about revenues in Nashville yet?

 

[theIceWookie]

Has anyone said a single word about revenues in Nashville yet?

They sold out 16 times this year and Poile has mentioned that he has permission to spend more than the bottom floor. I think they are fine.

 

[Butch 19]

I think the war will be owner versus owner actually. The NHLPA would be in good position to exploit it and reap a big windfall imo.

At what price? Contracting teams? i.e. losing paying members? What good is exploiting / big windfalls then?

The NHLPA realizes it is a 2-way street and keeping every frachise "relatively healthy" is in their best interest as well (although your user names does confuse in this thread )

 

[RandR]

Has anyone said a single word about revenues in Nashville yet?

They sold out 16 times this year and Poile has mentioned that he has permission to spend more than the bottom floor. I think they are fine.

Nashville may be willing and able to pay for Weber's arbitrated contract, but the question of revenues is still a good one:

At issue all along, according to Poile, was trying to lock Weber into a long-term contract, something that proved difficult given Nashville may lose two key players – Pekka Rinne and Ryan Suter – as free agents next summer.

Weber, 25, didn’t want to tie himself into a deal and then watch the team’s other stars leave for greener pastures a year later.

Link: Weber cashes in at arbitration

Apparently Nashville is spending closer to the floor than they are to the cap ceiling. That makes good business sense (good for them!) given their revenue stream. However, would they still be profitable if, in order to keep Suter and Rinne, they spend near the cap? I suspect the answer may be "it depends on how they do in the playoffs", both for playoff game revenues and also renewing/attacting season ticket holders the following year.

 

[tarheelhockey]

Apparently Nashville is spending closer to the floor than they are to the cap ceiling. That makes good business sense (good for them!) given their revenue stream. However, would they still be profitable if, in order to keep Suter and Rinne, they spend near the cap? I suspect the answer may be "it depends on how they do in the playoffs", both for playoff game revenues and also renewing/attacting season ticket holders the following year.

I feel comfortable with that state of affairs for any team. A lot of people seem to think that the goal should be to spend to the cap ceiling every year. To me, the more sensible thing is that teams should generally be spending around halfway between the cap and floor, and then ramping up to the ceiling when they are in contending years. That way, the team is able to capitalize on revenues to make a profit, which enables them to spend more on promoting themselves, which brings in more money, etc. After all, the owner should be able to reap some financial rewards rather than just blowing money all over the UFA market.

Personally, I start to get worried when a team is losing money in spite of scraping the cap floor. At that point you know that something is seriously wrong with revenues. But until then, it's just a matter of running a tight ship and making good decisions.

Weber, 25, didn’t want to tie himself into a deal and then watch the team’s other stars leave for greener pastures a year later.

This may or may not have to do with Nashville's finances. Even if Poile was willing to throw money at Suter and Rinne, that doesn't guarantee they will sign a deal. It's understandable that Weber wants to wait and see what happens with those guys, regardless whether or not the Preds are willing to pay for them.

 

[SmokeyClause]

Footing the bill now leads to the development of those struggling markets. More fans leads to more corporate sponsorship which generates more revenue into the league as a whole, to the benefit of every owner. Helping out another owner builds rapport, which builds owner solidarity and stabilizes the league.

There is something to be said for the ability for all teams in a league to compete for a championship on the merits of management and its players, irrespective of the size of the market. The most popular and profitable league in North America, by far, is the NFL, whose popularity has skyrocketed since the revenue sharing/salary cap was put into place. The NHL's recent run in popularity also occurred once revenue sharing/salary cap were instituted.

Now, correlation is not causation. So those two may be unrelated. But there's a logical and chronological argument for a relationship between revenue sharing/salary cap and league-wide popularity/revenues to exist.

 

[theIceWookie]

I feel comfortable with that state of affairs for any team. A lot of people seem to think that the goal should be to spend to the cap ceiling every year. To me, the more sensible thing is that teams should generally be spending around halfway between the cap and floor, and then ramping up to the ceiling when they are in contending years. That way, the team is able to capitalize on revenues to make a profit, which enables them to spend more on promoting themselves, which brings in more money, etc. After all, the owner should be able to reap some financial rewards rather than just blowing money all over the UFA market.

Personally, I start to get worried when a team is losing money in spite of scraping the cap floor. At that point you know that something is seriously wrong with revenues. But until then, it's just a matter of running a tight ship and making good decisions.



This may or may not have to do with Nashville's finances. Even if Poile was willing to throw money at Suter and Rinne, that doesn't guarantee they will sign a deal. It's understandable that Weber wants to wait and see what happens with those guys, regardless whether or not the Preds are willing to pay for them.

I agree. Both Poile and Weber alluded to him wanting to compete for the Cup. They had a conference call after the hearing results and both stated they wanted Weber to stay in Nashville. However Poile acknowledged that Weber wanted to win a cup and it was up to him to give him a team capable of that. Doesn't mean they can't afford to pay him,.

 

[SmokeyClause]

Apparently Nashville is spending closer to the floor than they are to the cap ceiling. That makes good business sense (good for them!) given their revenue stream. However, would they still be profitable if, in order to keep Suter and Rinne, they spend near the cap? I suspect the answer may be "it depends on how they do in the playoffs", both for playoff game revenues and also renewing/attacting season ticket holders the following year.

Nashville is at the floor this year. However, in previous seasons, they've operated at the midpoint. And the midpoint was the team's stated budget this year. However, after shedding deadweight in Lombardi and Dumont and letting Sullivan go to free agency, the team is near the floor.

I think they want to be up at the midpoint, but the team isn't going to do what Florida did and start spending money incredibly aggressively just to reach the midpoint. Free agency is an inefficient means to reach the midpoint. And trading requires a confluence of having the right talent to offer up, having the right talent available to acquire, and having all the financial numbers working (i.e. decent contracts, UFA status, etc.).

And resigning Rinne and Suter wouldn't put them near the cap. They've structured other contracts (Legwand and Erat, specifically) to decline as the need to give Suter/Rinne pay raises arises.

 

[edog37]

You mad?

Don Fehr broke a league with over 6 billion in revenue. The NHL is small potatoes.

And it looks like the NBA won't be getting that hard cap, so I consider that a step back.

except for the part that MLB never had a cap to begin with, you are correct. The cap is decided policy & isn't going anywhere. People overestimate Donald Fehr & underestimate Gary Bettman. Bettman isn't that buffoon Selig. He's twice the shark Fehr is or has everyone forgotten his personal vendetta against Balsillie....

 

[edog37]

I think your underestimating Gary Bettman and the trust he has from the Owners. He's gone to a lockout twice in his tenure, the first locking out the players for half the season. The second time he was willing to loss an entire season just to get what he wanted. The owners were willing to let him cancel an entire season because they believed in him. Each time he has gone to war for the Owners or the NHL he has won.

He won in the 1994-1995 lockout. He won in the 2004-2005 lockout. He won against Balsillie versus Phoenix. He won the beer deal with Molson. He's gone and made the past year the leagues most successful. Do not underestimate his ability to get what he, and by extension the owners, wants.

It never ceases to amaze me how much people underestimate Bettman & more importantly, how much people don't appreciate the fact the owners love him....

 

[RandR]

Weber, 25, didn’t want to tie himself into a deal and then watch the team’s other stars leave for greener pastures a year later.

This may or may not have to do with Nashville's finances. Even if Poile was willing to throw money at Suter and Rinne, that doesn't guarantee they will sign a deal. It's understandable that Weber wants to wait and see what happens with those guys, regardless whether or not the Preds are willing to pay for them.

I agree with you. If some other team wants to be reckless and throw a hugely overpriced offer at Suter or Rinne, then at some point the Preds would be perfectly reasonable in letting them walk. The danger of course would be that Weber (and some of the fans) might then decide that Poile is "not committed enough" to building a winner.

 

[tarheelhockey]

I agree with you. If some other team wants to be reckless and throw a hugely overpriced offer at Suter or Rinne, then at some point the Preds would be perfectly reasonable in letting them walk. The danger of course would be that Weber (and some of the fans) might then decide that Poile is "not committed enough" to building a winner.

Exactly. TBH, I think next summer is going to be the real soap opera for Nashville. This was just a prelude to the real business at hand.

 

[KzooShark]

I think Weber sees a possible future version of himself in Iginla if he signs long term right away. Not that Calgary hasn't been willing to spend money to win a cup, but they've handcuffed themselves with outright bad contracts and Sutter's weird moves, and Iginla has had little success post-lockout in chasing the Cup, and now he's probably 2-3 years from being the kind of guy you mention about a team picking up at the deadline to make a run instead of being a guy to build around.

He wants to know that if say, Chicago has a rash of injuries and Detroit's not firing on all cylinders that Nashville will be willing to add some salary for a year or two to win that division, get a top 3 seed and be a legitimate threat to come out of the West. He doesn't want to watch Suter and/or Rinne leave, and spend the next 7 years hovering around 7-10th in the West with maybe a series upset mixed in.

 

[theIceWookie]

It never ceases to amaze me how much people underestimate Bettman & more importantly, how much people don't appreciate the fact the owners love him....

I really don't like the guy, and he annoys me to the core (quite an accomplishment, its very rare that people get under my skin) but I have to give the guy credit for what he's done. I read an article the other day about how he was paid far to highly and it astounded me. What do people expect of a guy that running a 3 billion dollar business? That's he's just going to lay down and let the other guy win? He doesn't keep getting raises and new contracts from the Board of Directors (on behalf of the owners) because he's losing money. It astounds me how people can't see such a simple idea.

I appreciate the handclap sir.

 

[one2gamble]

What he just said makes a solid argument for no cap.....and Nashville NEEDS a cap.

Markets like Toronto pay more and make more....they sellout every night at top dollar.....they make piles of money and still want to spend piles (even if on the wrong players) on salary.

But...teams like Nashville couldn't survive in a market like that. So Toronto has been handcuffed in how much they can spend...but their revenues are still high and increasing. Nashville is now under "cost certainty" but they are still hurting.

System doesn't work with markets like Nashville....sorry.

If it helps...I argued for a stiff Luxury Tax during the lockout...that would have helped Nashville A LOT more than the current system is.

So you want a system like Major League baseball where there are 8 teams that are competitive every year with maybe two surprises every once in awhile? Thats not a good product.

It takes time for markets like Nashville to develop. The Sharks have just recently started spending to the cap. Consider it took them almost 20 years to get to a financial place where they can spend. If you removed the cap, San Jose's salary isnt going up, the huge markets like Toronto and NY are just going to snipe talent and those "healthy"" smaller market teams are going to start losing a lot more games and have a lot harder time filling their buildings. That in turn will only lead to more movement and more contraction.

 

[Pinkfloyd]

What he just said makes a solid argument for no cap.....and Nashville NEEDS a cap.

Markets like Toronto pay more and make more....they sellout every night at top dollar.....they make piles of money and still want to spend piles (even if on the wrong players) on salary.

But...teams like Nashville couldn't survive in a market like that. So Toronto has been handcuffed in how much they can spend...but their revenues are still high and increasing. Nashville is now under "cost certainty" but they are still hurting.

System doesn't work with markets like Nashville....sorry.

If it helps...I argued for a stiff Luxury Tax during the lockout...that would have helped Nashville A LOT more than the current system is.

How does saying that they make more money with the cap than they did without the cap make for an argument to have no cap? That is one ridiculously skewed and warped view of that post...or wrong in other words. The health of the league as a whole helps teams like Toronto make more money than a league that is uncapped and has half their league in dire straights while a handful actually make money while the remaining ten or so teams having to lose money to be competitive.

 

[Melrose Munch]

except for the part that MLB never had a cap to begin with, you are correct. The cap is decided policy & isn't going anywhere. People overestimate Donald Fehr & underestimate Gary Bettman. Bettman isn't that buffoon Selig. He's twice the shark Fehr is or has everyone forgotten his personal vendetta against Balsillie....

And looked how that turned out edog. Phoenix has lost money for 3 years now and will be gone to QC city anyway. Some "Win". Looks like James B. to me.

 

[Dado]

So you want a system like Major League baseball where there are 8 teams that are competitive every year with maybe two surprises every once in awhile?

There has been as much variety in World Series winners as there has been in Stanley Cup champions.