Sharks still a have not- qualify for Revenue sharing

[rekrul]

Sharks are considered among the NHL's financial have-nots, doing it by high player salaries and limited revenue money comming in. one of 11 teams that recieved $$ from the new agreement.

http://www.mercurynews.com/mld/mercurynews/sports/hockey/nhl/san_jose_sharks/15833728.htm

Jamison, who would not specify how much the Sharks received in revenue sharing, said limited income from local TV and radio stations is one thing that keeps San Jose in the red. In broadcasting, how much revenue a team receives for broadcast rights depends heavily on ratings.

``When you do a team comparison and analysis across the NHL, it's harder in this market to do well in television than it is in some other markets,'' he said.

Neither the NHL nor the players' association will disclose which teams donate to the revenue sharing pool and which teams draw from it. An NHL spokesman did say about $90 million helped 11 teams.

Click to read more...

 

[Ted Hoffman]

That was last year. The Sharks are *well* above the midpoint this year for salary cap purposes, so there won't be any revenue sharing for them in 2006-07.

 

[crashlanding]

That was last year. The Sharks are *well* above the midpoint this year for salary cap purposes, so there won't be any revenue sharing for them in 2006-07.

Doesn't spending over the midpoint just disqualify you from the secong go-round in revenue sharing? The part that comes from escrow? If every team over the midpoint is disqualified, are Columbus, St. Louis, Washington, and Pittsburgh the only teams that will share that windfall?

 

[Ted Hoffman]

Doesn't spending over the midpoint just disqualify you from the secong go-round in revenue sharing? The part that comes from escrow? If every team over the midpoint is disqualified, are Columbus, St. Louis, Washington, and Pittsburgh the only teams that will share that windfall?

I'm going to have to read this carefully again ... I've seen this interpreted three ways.

Back in a little while.

 

[burstgreen]

I'm going to have to read this carefully again ... I've seen this interpreted three ways.

Back in a little while.

Eligibility for the "first round" of revenue sharing is defined by 49.3(b). It's defined in sort of a backwards way, providing three conditions that cause ineligibility, the inference being, that if you are not ineligible because of 49.3(b)(i), (ii), or (iii), then you are eligible.

49.3(b)(i) is pretty easy to understand. They create a "master list" listing teams in order of revenue, with the highest revenue team on top. If you're on the top half of the list, you're ineligible.

49.3(b)(ii) applies only to "big market" teams. This means that even if Chicago's revenues are skimpy, they are still ineligible because they are in a big city and it is the owners' own damn fault if he can't find a way to make money in Chicago.

49.3(b)(iii) at first blush looks like some compensation-related requirement, but if you look at the defined terms "Available Team Player Compensation" and "Targeted Team Player Compensation" defined in 49.1, what this section does is say: targeted team player compensation is (more or less) the salary cap midpoint (this isn't exactly true, but this is a rough way to understand the general idea). If the players get 54% in a given year, then take your teams revenues and multiply it by 0.54, and then if that figure is greater than the league-wide compensation midpoint, then you're ineligible. Bottom line--49(b)(iii) has nothing to do with actual compensation or actual salary cap figure--the definitions tie back only to revenue.

So the difference between (i) and (iii) is that (i) says you can't be above the median and (iii) says you can't be above the mean (aka average). Either being above the median or above the mean in revenues will disqualify the team. This means that actual player compensation (or cap figure for that matter) will not disqualify a team from "round one."

The so-called "second round" of redistribution is set forth in 49.7, and this clause does explicitly disqualify teams from the second round if the team has "an Actual Club Salary" that is greater than the "Midpoint of the Payroll Range."

 

[USF Shark]

it's total BS. Last year Jamison told CNBC in an interview that the Sharks would make money, and that was after the trading deadline. Good accountants can make it look like your team is losing money in order to get more money from revenue sharing. Until they open up their books I won't believe a single thing any owner says about losing money.

That CNBC video is on youtube: http://www.youtube.com/watch?v=3IVvs-I71hw

 

[ColoradoHockeyFan]

Jamison, who would not specify how much the Sharks received in revenue sharing, said limited income from local TV and radio stations is one thing that keeps San Jose in the red. In broadcasting, how much revenue a team receives for broadcast rights depends heavily on ratings.

What kind of ratings did the Sharks average over the course of last season?

 

[Grizzly Adams]

Until they open up their books I won't believe a single thing any owner says about losing money.

I don't think anybody should believe them.

 

[Falloooooon]

I don't and you won't see me at the tank this season because I'm not going to support these clowns. I root for the players on the team, screw the rest of them.

 

[kdb209]

Eligibility for the "first round" of revenue sharing is defined by 49.3(b). It's defined in sort of a backwards way, providing three conditions that cause ineligibility, the inference being, that if you are not ineligible because of 49.3(b)(i), (ii), or (iii), then you are eligible.

49.3(b)(i) is pretty easy to understand. They create a "master list" listing teams in order of revenue, with the highest revenue team on top. If you're on the top half of the list, you're ineligible.

49.3(b)(ii) applies only to "big market" teams. This means that even if Chicago's revenues are skimpy, they are still ineligible because they are in a big city and it is the owners' own damn fault if he can't find a way to make money in Chicago.

49.3(b)(iii) at first blush looks like some compensation-related requirement, but if you look at the defined terms "Available Team Player Compensation" and "Targeted Team Player Compensation" defined in 49.1, what this section does is say: targeted team player compensation is (more or less) the salary cap midpoint (this isn't exactly true, but this is a rough way to understand the general idea). If the players get 54% in a given year, then take your teams revenues and multiply it by 0.54, and then if that figure is greater than the league-wide compensation midpoint, then you're ineligible. Bottom line--49(b)(iii) has nothing to do with actual compensation or actual salary cap figure--the definitions tie back only to revenue.

So the difference between (i) and (iii) is that (i) says you can't be above the median and (iii) says you can't be above the mean (aka average). Either being above the median or above the mean in revenues will disqualify the team. This means that actual player compensation (or cap figure for that matter) will not disqualify a team from "round one."

The so-called "second round" of redistribution is set forth in 49.7, and this clause does explicitly disqualify teams from the second round if the team has "an Actual Club Salary" that is greater than the "Midpoint of the Payroll Range."

This matches my interpretation of 49.3(b)(i) and (ii) and 49.7, but is a bit off on 49.3(b)(iii).

(b) Clubs Ineligible to Receive Player Compensation Cost Redistribution
Distributions. A Club shall be an Ineligible Club for a particular League Year if, for
such League Year, it meets any of the following criteria:

(i) If the Club is in the top half of the Master List (i.e., the Club is
among the fifteen (15) highest Clubs in terms of its Club Gross
Preseason and Regular Season Revenues) for such League Year; or

(ii) If the Club is in a DMA (or the equivalent BBM market) with a
value of greater than or equal to 2.5 million households; or

(iii) If the Club has Available Team Player Compensation for the
League Year that exceeds the Targeted Team Player Compensation
for such League Year.​

49.3(b)(i) is pretty straight forward - if you're in the upper half of teams in Regular Season and Pre Season (but explicitly NOT Post Season) revenues, you don't qualify.

49.3(b)(ii) is the Screw You Wirtz Rule. The only teams with a DMA greater than 2.5M households (households, not population) are New York, LA, Chicago and Philly.

Nielsen Media Research Local Universe Estimates* (US)

    *Estimates used throughout the 2005-2006 television season which starts on September 24, 2005

     
    RANK 	Designated Market Area (DMA) 	TV Homes 	% of US
    1 	New York 	7,375,530 	6.692
    2 	Los Angeles 	5,536,430 	5.023
    3 	Chicago 	3,430,790 	3.113
    4 	Philadelphia 	2,925,560 	2.654
    5 	Boston (Manchester) 	2,375,310 	2.155
    6 	San Francisco-Oak-San Jose 	2,355,740 	2.137
    7 	Dallas-Ft. Worth 	2,336,140 	2.120
    8 	Washington, DC (Hagrstwn) 	2,252,550 	2.044
    9 	Atlanta 	2,097,220 	1.903
    10 	Houston 	1,938,670 	1.759

49.3(b)(iii) is just a qualifier that makes the redistribution amounts greater than zero.

"Available Team Player Compensation" is (approx) 54% of the teams Regular Season HRR.

"Targeted Team Player Compensation" is just the revenue sharing target payroll (between midpoint-$4M and midpoint) plus the per team benefits (~$2.2M).

The baseline revenue sharing distribution is "an amount equal to the difference between the Club's Available Team Player Compensation and the Targeted Team Player Compensation."

If a teams "Available Team Player Compensation" exceeded its "Targeted Team Player Compensation" - as in the case of 49.3(b)(iii) - the revenue sharing distribution would be negative.

49.1 Definitions.

...

(b) "Available Team Player Compensation" when used for a particular
League Year for a Club shall mean the result obtained by multiplying its Club Gross
Preseason and Regular Season Revenues for such League Year by the Applicable
Percentage of HRR that constitutes the Players' Share for that League Year, as set forth in
Section 50.4(b) of this Agreement. The Available Team Player Compensation for a Club,
for purposes of this Player Compensation Cost Redistribution System, is the amount that
such Club is deemed to have "available" for the payment of Player Compensation (i.e.,
Salary, Bonuses and Benefits).

Illustration: Assume the Applicable Percentage is fifty-four (54) percent. If a
Club has Club Gross Preseason and Regular Season Revenues of $58.0 million,
then its Available Team Player Compensation is fifty-four (54) percent of $58.0
million, or $31.32 million.​

...

(r) "Targeted TeamPlayer Payroll" when used for a particular League Year
shall mean the amount which, for purposes of this Player Compensation Cost
Redistribution System, all NHL Clubs shall be "targeted" to have available to spend on
Player payroll (i.e., Player Salaries and Bonuses only) for that League Year, following
receipt of any Distributions under this Player Compensation Cost Redistribution System.

For each League Year, the amount of the Targeted Team Player Payroll
shall be determined by the League in its sole discretion, provided such amount shall: (i)
be not less than an amount equal to the sum of the Lower Limit for that League Year plus
twenty-five (25) percent of the Payroll Range (i.e., for League Years subsequent to the
2005-06 League Year, $4 million above the Lower Limit for that League Year; and (ii)
not be greater than an amount equal to the sum of the Lower Limit for that League Year
plus fifty (50) percent of the Payroll Range (i.e., for League Years subsequent to the
2005-06 League Year, $8 million above the Lower Limit). The Targeted Team Player
Payroll shall be determined by the League based on the total funds available and needed
for distribution in a given League Year. To the extent the total funds available for the
Player Compensation Cost Redistribution System in a League Year would support a
Targeted Team Player Payroll that is the sum of the Lower Limit plus fifty (50) percent
of the Payroll Range, the Targeted Team Player Payroll will be determined to be the sum
of the Lower Limit plus fifty (50) percent of the Payroll Range, but no more.

(s) "Targeted TeamPlayer Compensation" when used for a particular
League Year shall mean the amount which, for purposes of this Player Compensation
Cost Redistribution System, all NHL Clubs shall be "targeted" to have available to spend
on Player Compensation (i.e., Player Salaries, Bonuses and Benefits) for that League
Year, following receipt of any Distributions under this Player Compensation Cost
Redistribution System. It shall be one of the stated goals of this Player Compensation
Cost Redistribution System to enable all lower-revenue Clubs to have the ability to spend
up to the amount of the Targeted Team Player Compensation by providing Distributions
to such Clubs. For each League Year, the amount of the Targeted Team Player
Compensation shall be the amount of the Targeted Team Player Payroll for such League
Year, plus the Pro Rata Benefits Portion for such League Year.

Illustration: If the League set the amount of the Targeted Team Player Payroll for
a League Year at $26.0 million, then assuming $66 million in total Benefits for
that League Year (yielding a Pro Rata Benefits Portion of $2.2 million), the
amount of the Targeted Team Player Compensation would be $28.2 million.
​

49.4 Determination of Distribution Amounts, Minimum Redistribution
Commitment.

(a) Determination of Distribution Amounts for Recipient Clubs. Each
Recipient Club shall be entitled to receive a Distribution in an amount to be determined
as follows:

(i) For a Recipient Club whose Available Team Player Compensation
exceeds the Minimum Team Player Compensation, but is less than
the Targeted Team Player Compensation, such Club shall be
entitled to receive a Distribution in an amount equal to the
difference between the Club's Available Team Player
Compensation and the Targeted Team Player Compensation.​

The first round of Revenue Sharing is designed to bring the teams ability to pay up to the club's "Targeted Team Player Compensation" - between midpoint minus $4m and the midpoint. The leage gets to arbitrarily set the "Targeted Team Player Compensation" between those limits based on available revenues.

The second round of Revenue Sharing - the "Escrow Funding Phase" - is designed to then bring the teams ability to pay up to the midpoint itself. It is this second round that has the exclusion for "Actual Club Salary" being above the midpoint.

Actual Club Salary has no bearing on the first round of Revenue Sharing.

49.7 Final Escrow Disbursements. Once the League has satisfied its commitment to
bring all eligible Clubs up to the Targeted Team Player Compensation (which amount, as
set forth above, shall be determined based upon the League's "need-based distribution
formula" in each League Year), then any further remaining Escrow Account funds owed
to the League (as the result of there being an Overage in the League Year), to the extent
there are such remaining funds, shall be distributed as follows:
(a) First, as set forth in Section 50.11(d)(i)(B) of this Agreement, any
remaining Escrow Account funds shall be distributed to any Club that had an Actual Club
Salary that was less than the Midpoint of the Payroll Range (measured as of the final day
of the NHL Regular Season), with the amount of funds each such Club receives being
sufficient to bring it up to the Midpoint of the Payroll Range, provided, however, that no
Club will receive a distribution pursuant to this subsection that would cause the Club's
Club Gross Preseason and Regular Season Revenues, including moneys received from
the Player Compensation Cost Redistribution System, when multiplied by the Applicable
Percentage of HRR, to exceed the Midpoint of the Payroll Range; a

 

[190Octane]

So would the Ducks not qualify because they are in the LA tv market?

 

[rekrul]

What kind of ratings did the Sharks average over the course of last season?

I can't find hard numbers but during the 2004 WCF run the sharks were on the Sac kings playoff games out drew the sharks in cable ratings. Sort of 2.8 to 2.2 share.

Basicly they had to scrounge for radio these days and locally they are on a FM classic rock station- pregame ONLY if game starts after 7PM PST and a 15 postgame rap thats it. Having lived in the Bay Area for a while I have seen the sharks suffer for a number of reasons:

1) Hockey is a tough sell anywhere
2) Bay Area is a very soft sports market- really its 49ers/Giants and everyone else. Sure we have 2 sports stations but our market is like the 5th largest so it can support it. Warm weather= playing outside.
3) Anything NOT San Francisco is second class in the media's mind. Especially a non-urban ( read un-hip ) suburban sprawl like San Jose.

combined with the fact that the Arena has 65 Lux Suites where as the new ones today have around 100, infact they play now in 5th oldest Arena I think. They also lamment that they did not plan well enough to clear on parking, most is provided by the city ( and many are in free lots ).

On the otherside I remember the original Gund deal with the city, which SVEE works on. Its a absurd $500K per year lease and the sharks, now SVEE, get EVERYTHING from the circus, to promis keepers to U2 concerts or other events. How they could qualify for revenue sharing is an awfully tricky numbers shanangians IMO.

 

[kdb209]

So would the Ducks not qualify because they are in the LA tv market?

Correct. The Ducks are part of the Los Angeles DMA.

It looks like the LA DMA includes all of Los Angeles, Orange, San Bernadino, Ventura, and Inyo Counties and parts of Riverside and Kern Counties.

http://www.truckads.com/Affiliate/Los_Angeles.htm#map

7 COUNTIES IN THIS DMA
Inyo, CA ~ Kern (East), CA ~ Los Angeles, CA ~ Orange, CA ~
Riverside (West), CA ~ San Bernardino, CA ~ Ventura, CA

 

[Falloooooon]

I think the Sharks made a pretty good jump during last postseason in the TV ratings. I seem to remember an article which said they were in the area of 3.0, which is similar to what an Oakland A's regular season game on FSNBA gets.

But they get almost zilch in the regular season.

 

[MLH]

So who exactly is eligible for revenue sharing money? Only four teams?

 

[kdb209]

So who exactly is eligible for revenue sharing money? Only four teams?

According to the Murky News article, 11 teams (including San Jose) received revenue sharing money last year. It did not identify the teams.

 

[crashlanding]

Basicly they had to scrounge for radio these days and locally they are on a FM classic rock station- pregame ONLY if game starts after 7PM PST and a 15 postgame rap thats it.

That seems pretty standard for most teams. I know that's how NJ works, they're talking about the Mets or Yankees up until 7:30, then a 5 minute pre-game before the drop of the puck. Then if I go to the game the postgame is usually over by the time I get to my car. The only difference is the FM classic rock station, which could actually HELP ratings and reach people who wouldn't normally tune in for the five seconds after they get in the car and before they change the station.