Revenue Sharing

[Sammy*]

Another reason significant revenue sharing is critical if salaries are going are going to be pegged to league revenues involves trust.

Under the NHL plan presented to the players, everyone has an incentive to hide revenues. Significant revenue sharing would include involving owners policing owners.

Tom

Thats a very good point.

 

[SENSible1*]

Thats a very good point.

No it is not.

Any system that links revenue and salaries will contain an agreed upon definition of hockey revenue and an independant audit of all teams each year to ensure they reporting all revenues under the defined terms.

The trust issue is a smokescreen.

 

[PecaFan]

Sorry Nashville fans but convince me that under ANY sort of CBA that does not involve becoming a welfare state with the league and other teams supporting you. HOW this team can thrive?

So can I assume that you support the owner's side then? Because it's the players that want to institute the "welfare state" revenue sharing.

 

[Tom_Benjamin]

No it is not.

Any system that links revenue and salaries will contain an agreed upon definition of hockey revenue and an independant audit of all teams each year to ensure they reporting all revenues under the defined terms.

The trust issue is a smokescreen.

There will not be independent audits of all teams and affiliated entities. That is simply impractical. Levitt claims to have spent 2,000 hours on his report, and it wasn't anywhere near an audit. At best, we can expect random checks. Kind of like Olympic doping tests.

The definition of revenue would certainly be different if it was used as both a cap level and a metric for revenue sharing. Suddenly a bunch of owners would become interested in how Jeremy Jacobs manages his TV revenue.

Tom

 

[CarlRacki]

There will not be independent audits of all teams and affiliated entities. That is simply impractical. Levitt claims to have spent 2,000 hours on his report, and it wasn't anywhere near an audit. At best, we can expect random checks. Kind of like Olympic doping tests.

The definition of revenue would certainly be different if it was used as both a cap level and a metric for revenue sharing. Suddenly a bunch of owners would become interested in how Jeremy Jacobs manages his TV revenue.

Tom

So the NFL can do it for 32 teams, but it would be impossible for the NHL to pull it off for 30?
The issue in any revenue sharing plan would be what is defined as revenue. Once that's settled, the rest is easy. If the NHL follows an NFL or NBA model, it's actually quite simple. It's TV money, national sponsorships, licensing and a percentage of the gate in the NFL and a few more items (parking, a percentage of suites) in the NBA. If Jerry Reinsdorf owns a pizza restaurant two blocks from the United Center, it doesn't count as revenue for the Chicago Bulls (though I'm sure some around here would claim he's hiding his pepperoni profits). Seriously, how hard would it be to audit those figures? Not very, I imagine.
Now, I understand there would be some complexities derived from cross-ownership issues between teams and broadcast/cable networks (i.e. Flyers and Comcast, Rangers and Cablevision). But I imagine of those can be addressed in the NBA, they can likewise be addressed in the NHL.
p.s. Every Olympic athlete is tested.

 

[hockeytown9321]

So the NFL can do it for 32 teams, but it would be impossible for the NHL to pull it off for 30?

The NFL has had extensive revenue sharing instilled in it since the days of Pete Rozelle. He insisted on it. He made sure that they had extensive revenue sharing becuase he knew the benefits. So when billionaires buy NFL teams, they know the score. They know whats expected of them. The NHL has always been sort of a good ole boys network and they've never been forced to do anything with their money. It starts at the top, and goes back further than Bettman.

 

[nyr7andcounting]

No it is not.

Any system that links revenue and salaries will contain an agreed upon definition of hockey revenue and an independant audit of all teams each year to ensure they reporting all revenues under the defined terms.

The trust issue is a smokescreen.

It isnt a smokescreen because a revenue sharing program brings into play owners vs owners rather that owners vs players. If revenues are agreed upon in order to create a cap numbers than it will be all the owners trying to minimize revenues and the PA trying to maximize revenues. An agreement will certainly be reached. But if you are also defining revenues in order to see how much the Rangers will kick back to smaller markets, than you will also have some owners wanting revenues to be maximized and the result would be, if we do end up with a cap and a revenue sharing system, that the players cap will be a little higher because it will be harder for owners to keep revenues off the cap if other owners want them on for the sake of the revenue sharing.

 

[SENSible1*]

It isnt a smokescreen because a revenue sharing program brings into play owners vs owners rather that owners vs players. If revenues are agreed upon in order to create a cap numbers than it will be all the owners trying to minimize revenues and the PA trying to maximize revenues. An agreement will certainly be reached. But if you are also defining revenues in order to see how much the Rangers will kick back to smaller markets, than you will also have some owners wanting revenues to be maximized and the result would be, if we do end up with a cap and a revenue sharing system, that the players cap will be a little higher because it will be harder for owners to keep revenues off the cap if other owners want them on for the sake of the revenue sharing.

Small market teams forced to increase payroll to the high cap minimum will have HUGE incentive to increase revenue.

The NHL's offer contained a clause which offered independant 3rd party audits of all teams yearly to ensure fairness in the declartion of revenue. To pretend this task is impossible and that the owners are going to try and cheat ignores reality. If the players are really worried about it, get the owners to put in a series of exorbitant fines for anyone caught trying to hide revenues.

The trust issue is a smokescreen.

 

[nyr7andcounting]

Small market teams forced to increase payroll to the high cap minimum will have HUGE incentive to increase revenue.

The NHL's offer contained a clause which offered independant 3rd party audits of all teams yearly to ensure fairness in the declartion of revenue. To pretend this task is impossible and that the owners are going to try and cheat ignores reality. If the players are really worried about it, get the owners to put in a series of exorbitant fines for anyone caught trying to hide revenues.

The trust issue is a smokescreen.

Missed my point.

I am not saying that revenues won't be declared and agreed upon by the NHL and the PA. But obvioulsy that agreement will be somewhere in the middle, as are all agreements. My point is that if you had revenue sharing the revenues that will be agreed upon would be different. Small markets would have a reason to want owners to declare as much revenue as possible, because that would mean more money going to the small marekts. Thus the agreement on declared revenue will probably be swayed a little but in the players favor because some owners will be on their side on this as well. This is one of the 2 reasons why the NHL has tried to keep any revenue sharing plans under wraps as much as possible...because the more revenue sharing becomes a viable option, the more owners want do disclose as much revenue as possible, and the higher the NHL's proposed cap would be.

 

[Poignant Discussion*]

So can I assume that you support the owner's side then? Because it's the players that want to institute the "welfare state" revenue sharing.

I don't support billionaire owners who caused the mess in the first place, nor do I support coddled spoiled athletes who make millions playing a game and act like its their devine right to do so.

To be honest i'm not sure I can ever look at the game of hockey the same way ever again. And I have a feeling there are more people than just I that feels this way

 

[Go Flames Go*]

The biggest problem for the NHL IMO is there tv deal hell the way it sounds, seems like they are gonna be paying for the deal instead of NBC.

Revenue Sharing is important here the way I feel it should be broken down.

40% Regular Season Gate
100% National TV Contract
10% Local TV Contract
100 % Leauge Wide Sponsors

Do not share playoff money.

 

[SENSible1*]

Missed my point.

I am not saying that revenues won't be declared and agreed upon by the NHL and the PA. But obvioulsy that agreement will be somewhere in the middle, as are all agreements. My point is that if you had revenue sharing the revenues that will be agreed upon would be different. Small markets would have a reason to want owners to declare as much revenue as possible, because that would mean more money going to the small marekts. Thus the agreement on declared revenue will probably be swayed a little but in the players favor because some owners will be on their side on this as well. This is one of the 2 reasons why the NHL has tried to keep any revenue sharing plans under wraps as much as possible...because the more revenue sharing becomes a viable option, the more owners want do disclose as much revenue as possible, and the higher the NHL's proposed cap would be.

I did NOT miss your point.

A definition of hockey revenue will have to agreed upon because there will be linkage coming out of this process. Once agree upon the teams will be forced to be subjected to yearly audits. Fines of 200% of any undeclared funds would make the issue a non-starter.

The PA will have a good deal of leverage to negotiate the terms once they agree to linkage.

 

[Lanny MacDonald*]

The biggest problem for the NHL IMO is there tv deal hell the way it sounds, seems like they are gonna be paying for the deal instead of NBC.

Revenue Sharing is important here the way I feel it should be broken down.

40% Regular Season Gate
100% National TV Contract
10% Local TV Contract
100 % Leauge Wide Sponsors

Do not share playoff money.

Well, that's going to work great for the American based teams. They will be the ones getting all the money FROM the Canadian based teams. The Canadian teams draw more fans on average. The Canadian teams have the NATIONAL broadcast contract that actually pays money up front. The Rangers and Flyers, who have the expensive TV contracts, are considered local and they get to keep their revenues. Who does this help again? You really spent like a nano-second thinking this one out didn't you?

 

[nyr7andcounting]

I did NOT miss your point.

A definition of hockey revenue will have to agreed upon because there will be linkage coming out of this process. Once agree upon the teams will be forced to be subjected to yearly audits. Fines of 200% of any undeclared funds would make the issue a non-starter.

The PA will have a good deal of leverage to negotiate the terms once they agree to linkage.

I know and the players will have even more leverage to negotiate the terms because if they were defining terms for the sake of revenue sharing as well than it would put owners vs owners and some of the small market owners would be on the players side as far as defining revenue.

I am not saying there won't be yearly audits I am not even talking about that stage of it yet. I am simply saying that increased revenue sharing will support the players in the 'defining of revenue process'.

 

[Go Flames Go*]

Well, that's going to work great for the American based teams. They will be the ones getting all the money FROM the Canadian based teams. The Canadian teams draw more fans on average. The Canadian teams have the NATIONAL broadcast contract that actually pays money up front. The Rangers and Flyers, who have the expensive TV contracts, are considered local and they get to keep their revenues. Who does this help again? You really spent like a nano-second thinking this one out didn't you?

How much does our national contract pay?

 

[Tom_Benjamin]

The NHL's offer contained a clause which offered independant 3rd party audits of all teams yearly to ensure fairness in the declartion of revenue. To pretend this task is impossible and that the owners are going to try and cheat ignores reality. If the players are really worried about it, get the owners to put in a series of exorbitant fines for anyone caught trying to hide revenues.

The trust issue is a smokescreen.

Bunk. The league offered an audit of league revenues, the league summaries. There is not a whisper about auditing individual teams. Levitt did not audit any teams or the affiliated entities and the NHL has consistently refused access to individual team financial records. They did provide supporting documents for four teams on a one time basis, and the NHLPA found 52 million reasons to dispute the summaries provided by those four teams.

Goodenow on the Levitt report:

The owners and their commissioner Gary Bettman have obviously found it necessary to retain a new spokesman/consultant to provide general conclusions about League finances while still not disclosing any individual team information or providing an opportunity to examine the actual records upon which the conclusions are allegedly based...

We have consistently stated that one critical issue of disagreement between the NHLPA and the League on finances is how to define the complete business of owning an NHL franchise, and how to address the significant inconsistencies contained in the NHL's voluntary and unaudited URO reporting process...

We were given access to the UROs for 30 clubs, but were only able to conduct a thorough review of four NHL clubs. On those four clubs alone we found just over $52 million in hockey related revenues and benefits not reported in the League's voluntary and unaudited URO process. If we are given similar access to all of the other individual teams' financial information, presumably used in the Levitt report, we will be in a position to provide further comment.

Tom

 

[SENSible1*]

Bunk. The league offered an audit of league revenues, the league summaries. There is not a whisper about auditing individual teams. Levitt did not audit any teams or the affiliated entities and the NHL has consistently refused access to individual team financial records. They did provide supporting documents for four teams on a one time basis, and the NHLPA found 52 million reasons to dispute the summaries provided by those four teams.

Goodenow on the Levitt report:

The owners and their commissioner Gary Bettman have obviously found it necessary to retain a new spokesman/consultant to provide general conclusions about League finances while still not disclosing any individual team information or providing an opportunity to examine the actual records upon which the conclusions are allegedly based...

We have consistently stated that one critical issue of disagreement between the NHLPA and the League on finances is how to define the complete business of owning an NHL franchise, and how to address the significant inconsistencies contained in the NHL's voluntary and unaudited URO reporting process...

We were given access to the UROs for 30 clubs, but were only able to conduct a thorough review of four NHL clubs. On those four clubs alone we found just over $52 million in hockey related revenues and benefits not reported in the League's voluntary and unaudited URO process. If we are given similar access to all of the other individual teams' financial information, presumably used in the Levitt report, we will be in a position to provide further comment.

Tom

When all else fails and facts contradict your PA vision of the world, just make up complete BS.

From the NHL's proposal. Section 7 Payroll Range System.

Following the end of each League Year, the League's Hockey-Related Revenues will be audited by an independent auditor jointly selected by the NHL and NHLPA, and the escrowed funds will be distributed either to the Players; or to the Clubs; or to both Players and Clubs in order to ensure that the Players receive 54% of the League's Hockey-Related Revenues.

NHL proposal

 

[Tom_Benjamin]

When all else fails and facts contradict your PA vision of the world, just make up complete BS.

From the NHL's proposal. Section 7 Payroll Range System.

NHL proposal

Where does that say anything about auditing team revenues? League revenues involve the national TV contract, and the league sponsorship arrangements. Otherwise the league has no revenues.

It is so easy to fool a chump. All you have to do is substitute the word "league" for "team" and some people will gobble it up.

Every post you make I laugh and think "What a chump!"

Tom

 

[Go Flames Go*]

That payroll ranges system was something amazing. It was really smart and creative from Bettmans part and the league and big concessions. What owner would want to give there employes half there revenues? This was very fair deal and they should of accepted it right away instead of being a big idiot and waiting for the ranges to fall between 3.5 million and 4 million.

 

[SENSible1*]

Where does that say anything about auditing team revenues? League revenues involve the national TV contract, and the league sponsorship arrangements. Otherwise the league has no revenues.

It is so easy to fool a chump. All you have to do is substitute the word "league" for "team" and some people will gobble it up.

Every post you make I laugh and think "What a chump!"

Tom

Ah, Tom's last resort when cornered---the personal attack.

How stupid do you really think people are?

League revenue is obviously composed of the individual team revenues, unless you'd like to go on record stating that the NHL makes 2B on "national TV contract, and the league sponsorship arrangements." Is that what you're trying to claim?

Here's a direct quote from the same section that I posted.

Accordingly, we propose that the Players, as a group, receive initially 54% of all Hockey-Related Revenues (as defined), which Revenues, as you know for 2003-04 are forecasted to be $2.1 billion ("Revenues" is a "projection" because the financial reporting for last season has not been completed). Fifty-four percent (54%) represents an approximate $17 million (U.S.) increase over our prior offer of 53.2% and demonstrates the NHL's willingness to compromise the cost, so long as that cost is known.

So Tommy-boy, is it still your position that the NHL is defining league revenue based on "national TV contract, and the league sponsorship arrangements."

It is patently clear, to anyone not trying to muddy the waters, that the NHL has offered the PA the right to independant audit of hockey related revenues of all teams.

Keep up the good fight. I'm going to enjoy watching you whine when this is all said and done.

 

[Tom_Benjamin]

How stupid do you really think people are?

Incredibly so. I've got all your posts to remind me if I forget. It shouldn't really bother you that I think you are a chump. Consider the source and ignore it. Just because I'm laughing at you doesn't make you or your positions laughable. It's a minority opinion for sure. Chalk it up to my weird sense of humour.

Teehee.

League revenue is obviously composed of the individual team revenues, unless you'd like to go on record stating that the NHL makes 2B on "national TV contract, and the league sponsorship arrangements." Is that what you're trying to claim?

League revenue is not obviously composed of the individual team revenues. It is composed of what individual teams report as individual team revenues. This is exactly how the NHL makes a monkey out of you. They imply something that they don't explicitly state. They call what Levitt did a "superaudit" when a peabrain can see that it is nonsense.

It is patently clear, to anyone not trying to muddy the waters, that the NHL has offered the PA the right to independant audit of hockey related revenues of all teams.

Not good enough. We need independent audits of the entire business, not just what Bill Wirtz decides to declare as hockey related revenue. Where do you get this "all teams" stuff? Quote a source. Find an explicit reference in the NHL proposal. The NHLPA has never had access to this kind of information and it has always been a sore point with the NHLPA.

Why didn't the NHL table the audited financial statements of all the teams along with the Levitt report? Why can't Goodenow see the complete financial records of all 30 teams - and affiliated entities - instead of just the four he did see?

Tom

 

[nyr7andcounting]

Ah, Tom's last resort when cornered---the personal attack.

How stupid do you really think people are?

League revenue is obviously composed of the individual team revenues, unless you'd like to go on record stating that the NHL makes 2B on "national TV contract, and the league sponsorship arrangements." Is that what you're trying to claim?

Here's a direct quote from the same section that I posted.



So Tommy-boy, is it still your position that the NHL is defining league revenue based on "national TV contract, and the league sponsorship arrangements."

It is patently clear, to anyone not trying to muddy the waters, that the NHL has offered the PA the right to independant audit of hockey related revenues of all teams.

Keep up the good fight. I'm going to enjoy watching you whine when this is all said and done.

That's great and all but I just wish the NHL would allow that to happen at this point. I think the players would be much more willing to move if they were able to seem team books. If the PA found the same losses for the league as the NHL did than negotiations would go much smoother.

The fact that the NHL won't allow anyone access to all the books is most likely because they have exaggerated their figures and if they were proven wrong at this point it would kill them in the press and it would also bring in to question their position.

 

[Hockey_Nut99]

There's no need to talk about revenue sharing b/c the PA will not accept a cap even if the league does an acceptable amount of revenue sharing. Well that's what Linden said anyways.

 

[CarlRacki]

Not good enough. We need independent audits of the entire business, not just what Bill Wirtz decides to declare as hockey related revenue. Where do you get this "all teams" stuff? Quote a source. Find an explicit reference in the NHL proposal. The NHLPA has never had access to this kind of information and it has always been a sore point with the NHLPA.

Sigh ... don't let facts get in the way of a good argument.
What Bill Wirtz decides to delacre as hockey-related revenue is irrelevant beyond the point of his role in negotiating that issue. The league and the PA will negotiate a definition of revenue, as has every other capped league. After that, the league - just like every other league - will audit those revenue streams to determine the total and then set aside a percentage of that total for player salaries.
This is not rocket science. At least not for most of us.
One last point ... despite what some want to believe, money generated from nearby restaurants, hotels, shopping malls, etc. will never and should never be declared hockey revenue. It doesn't work that way in the NFL, NBA or MLB and won't work that way in hockey.

 

[SENSible1*]

Sigh ... don't let facts get in the way of a good argument.
What Bill Wirtz decides to delacre as hockey-related revenue is irrelevant beyond the point of his role in negotiating that issue. The league and the PA will negotiate a definition of revenue, as has every other capped league. After that, the league - just like every other league - will audit those revenue streams to determine the total and then set aside a percentage of that total for player salaries.
This is not rocket science. At least not for most of us.
One last point ... despite what some want to believe, money generated from nearby restaurants, hotels, shopping malls, etc. will never and should never be declared hockey revenue. It doesn't work that way in the NFL, NBA or MLB and won't work that way in hockey.

Thanks for saving me the keystrokes.

Don't worry. Tom knows this basic fact, but will continue to pretend otherwise.

Have your laughs Tom. I know we are both aware of which one of us will be laughing last.