Kdb206,
If those revenue numbers are accurate, then:
a) I will happily eat a lot of crow because it means the average team is generating about $70 million a year in revenue
b) the NHLPA is the absolute stupidest union ever for agreeing to a $44 million salary cap when the median team revenue is about $70 million
However, I am highly suspicious of those numbers for several reasons:
According to those stats, the average league attendance in 2005-2006 was 16,955, and the average ticket price was $41.13. Take 16,955, multiply by 1230 (the number of games in the regular season) and you get 20,854,650 paid admissions. Now multiply that by $41.13 and you get $858 million in regular season gate revenues. Now explain to me how the league generated another $1.32 billion dollars in revenue (to get to the $2.178 billion number cited) when its US TV contract only paid it $67.5 million+ revenue sharing from 11 games on NBC averaging a 1.7 rating. Even assuming that the playoffs generated $150 million, that's still about $600 million dollars that are not accounted for. Even assuming a boffo $150 million per year canadian TV contract, your still left with a $450 million shortfall. Now maybe all that money came from merchandising, the internet, local TV contracts, and arena naming rights, but it seems like a bit of a stretch to me.
That said, if those numbers are correct and even the smallest market teams are making $30 million in non-ticket revenue, then with a $44 million salary cap, because they will still be making a profit even if they only draw 9,000 fans per game.
In that case, nobody needs to be contracted, nobody needs to be relocated, and the players are the biggest idiots ever for signing off on a $44 million salary cap.
I have been trying mightily to refrain from responding to your thoroughly superficial posts. That has been pretty difficult, given your apparent sincerity in thinking that you are posting thoughtfully on matters when, with a little reading back, you would find that your notions have long been discredited. Furthermore, your tendency towards completely unsupported statements (such as the ridiculous statement that Bettman "should have" gone to Fox or other networks when ESPN stiffed the NHL but - according to you - did not) is more than a little aggravating.
However, I cannot resist.
My strong suggestion would be that you do a little reading on the subject. I would start with the Levitt Report itself, which provides a considerable amount of insight on NHL business if you know where to look. For someone with a "business background" (which I can assure you is
more than matched by that of some other posters here), that should not be much of a challenge. Kdb's numbers are derived from that report. They are audited numbers (with the exception of only the 2 entities that were bankrupt at the time and accordingly could not get an auditor's opinion).
Secondly, you apparently do not understand the idea of concessions. Food/drink, together with souvenirs, programs, etc. comprise $400 million in revenues for the NHL.
You also do not seem to recognize that every NHL team also has local TV and radio deals, which (combined with the national deals) results in revenue of $432 million. All 2002-03 numbers, incidentally.
Also, it is not accurate to say that the smallest market teams are making $30 million in non-ticket revenue. The $70 million figure is an
average, chum. Use your business background to figure out what that probably means. Alternatively, you can use grade five level math to figure it out.
On the cost side, you seem to fail to recognize that player costs are but a portion of total expenses. In 2002-03, non-salary/benefit expenses were approximately $24.5 million per team. Benefit expenses were $2.2 million per team.
For the NHLPA, obtaining a cap of that level on average revenues of approximately $70 million was a coup. I am assuming that you understand the difference between the cap and the real cap, which is the salary range midpoint. Their compensation percentage of the low-to-mid-50's is relatively consistent with that of basketball. In case you were not paying attention, the NHLPA was in the process of being routed due to the terminally flawed strategies of their former leader. It was only through the league's determination to actually think longterm and get themselves a partner in the PA (instead of squashing them and sowing dragon's teeth) that they were able to secure the deal. Being "stupid" had nothing to do with it. Do a little reading in that area as well.
Does that give you some insight?
Now go forward and post nonsensically no more.