Small/big market myths, Bettman and standing ovations in Canada...

Discussion in 'Fugu's Business of Hockey Forum' started by Ola, Dec 16, 2004.

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  1. Ola

    Ola Registered User Sponsor

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    The biggest myth of them all must be the talk about how these negotiations are about saving small market teams vs big market teams. Its almost laugable...

    The only thing that would give small market teams a good economical enviorment is if the product, the NHL, were really strong with a national tv contract. For every day that passes by and never comes back the product is damaged. Its obvious that whats most important to Bettman and the owners isn´t the product, if anything its the real small market teams who suffer the most from this lockout. Carolina, Nashville and Columbus among others. The owners could care more about yearly earnings...

    The owners wants their frachises to be valuble, a NHL team is often part of a arena concern with several other teams. For a local cable companys owning a concern like that is valuble. And gets more valuble by the day. People are prepared to spend more and more money on these things. If Bettman gets what he want owners will have a product on their hand who they in december 05´ can put on a overhead and show what expenses it will have in 06´, 07´ & 08´.

    In order to do this Bettman have to break the union and it will also cost him unrepairable damage of the game on the american market. But the really strong owners won´t care because the value of their product will be higher, it will save them allot worry in the future.

    This is not a sport, its a business. Nothing remarkable about that. But public opinion is also important. Bettman can´t afford to destroy his product. And what I can´t get is all the love Bettman gets in Canada. Everywhere he shows up he gets a standing ovation. All Canadian fans don´t care how much and for how long he destroys the game. As long as it will give their favorite franchises a advantage in the future.

    What could have saved this season was a united public opinion who wouldn´t take Bettmans crap. Everyone around understands the problem the NHL have had, even the players to some extent. But what Bettman is offering the players is as outreagous as if the players would offerback a proposal more generous then the one in 94´-04´.
     
  2. Hockey_Nut99

    Hockey_Nut99 Guest

    Small market teams can benefit. I read an article this morning about Edmonton(ya ya I know we usually talk about them). They said that Edmonton set themselves up for a situation like this by staying within their budget all these years. They have 22 players under contract and their payroll is about 31M US...After a roll back like Bettmans it is 26M US...That leaves about 8 million to spend if there is some sort of minumum cap like Gary proposed at 34M...So now they have a desent team with lots of good prospects coming up and can also go try signing 2 players for a total of around 8 million. That will get them their #1 Centre and another good player. It will make them more competitive.

    lets face it. We know there will be a cap implemeted. Gary already answered a question last night by saying "Well when we get it...." The players can stop drinking Goodenows koolaid and take the offer now..They can also wait this season out and fight over even less money next year..
     
    Last edited by moderator : Dec 16, 2004
  3. Ola

    Ola Registered User Sponsor

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    //First of all there is a error in your post, with the rollback in salarys Edmonton would have 5 million to spend, not 8. (31-26) Not counting in the lost revenues Edmonton and all teams will suffer once the league starts again. Even if Edmonton is a hockey hotbed I doubt attandence won´t drop some when the leagues starts again after 24 month without hockey. So that probably means that EDM will have to exceed their budget to reach Bettmans salary floor...

    If there is a salary rollback around 20-25% that lasts it will defenitley be possible for edmonton to be competetive. On another issue Edmonton is a small market if you compare with NY, Toronto and Colorado among others. But compared with the rest of the pack they are in the middle in revenues for example.

    The problem is that there isn´t a offer on the table that the players can sign. This crap offer from Bettman with a small window for teams between $38.6 million and $34.6 would give the players a avg. salary thats decent but in all other aspects its insane. Its the 15th of december and this is all Bettman has to offer? Its obvious what Bettman has in plans and how much he and the owners care about the game.
     
  4. First of all there is an error in your post. Hockey_Nut99's math was correct, yours was not. The Oilers would have $8 million to spend. Their salary structure recoups them $5 million, but they have to spend an additional $3 million to get to the league enforced salary minimum. 5+3=8. I would recommend you don't call a guy out when his math is better than yours and he displays a better understanding of the issue. It really kills the remainder of your post and brings into question the base understanding of the issue all together.



    You sound like someone from the NHLPA. Listening to these guys talk in the media it is obvious they are out of touch with reality and it appears you suffer from the same malady. You cannot compare the NHL to other sports unless you want to start comparing apples to apples. The NHL does not have the huge TV contracts that the other sports have, so the primary revenue stream these sports rely on is missing. The players cannot ask for something the league does not have and that the league has come to the realization that it will likely never obtain. The players can dream about the possibility, but the reality is that it is a no go for that revenue. You can't ask for what does not exist.

    The players need to get their heads out of the back pockets and think. With a revenue linkage guarantee, as the league proposes, if reveunes go up so do salaries. If the game gets better and develops a better following and finally gets that TV contract, the players get their cut of that. Someone from the players side is going to have to explain HOW they cannot see this and WHY it does not work? If the players are so certain that they can take the game to new and dizzying heights, then why are they not willing to partner up and take their 60% of the pie? If they manage to take the game to the point where they get that $500 million broadcast contract (you're dreaming fellas) they would be guaranteed $300 million of that. Is that not a fair bump in revenue?
     
  5. chara

    chara Registered User

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    The deal that's on the table is a fair one.

    The players should concede to the Cap but negotiate a better percentage. Cost certainity is inevitable. Accept it and move on. Moreover, they need to get a better deal on the proposed rollback, i.e. we'll take the cap but we want less money given back.

    As for the arbritration and rookie salaries with no bonuses, c'est la vie. Arbritration has to go, its a serious blight on the financial state of the game. Rookies have to earn their dues before cashing in. The only exception: A "franchise" player clause to allow clubs to increase a rookie's base salary. (i.e.the Sidney Crosby, Ilya Kovalchuk, etc. exception)

    The owners will give them something back as there's no need here to fully humiliate the players and I believe its reducing the rollback substantiously. The NHLPA needs to play that card because this proposal could be worse next year.
     
  6. Ola

    Ola Registered User Sponsor

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    First of all the players have a point in that the owners number which states that they lost 273 million can´t be trusted. And if you knew what you were talking about you would also know that there is allot more to it then that number. You can call out my math if you want but the guys at Forbes is world leading in there line of work and they estimated it to a 93 million dollars loss.

    What you are talking about and whats the owners are offering is like night and day. Seriously, is that so hard to understand???

    If Bettman negotiated a deal where GM weren´t allowed to exceed a % of his teams revenues it would be cost certainity. That works in other sports and leagues. And have nothing to do with tv-contracts.

    However the players have admited and everyone understands that for the good of the game their needs to be restraints on the market. However if you belive that what Bettman is offering is about costcertainity you don´t know what you are talking about. Its about handcuffing the entire league. How do you envision the league would work if all teams had a hard 4 million window to work with for an entire year? Seriously think about that. Honestly if teams have a avg. of 36.6 million they could only increase or decrease their roster salary 2 million after the season starts. The most likely scenario is that the median salary would be 800K in the league.
     
  7. HF2002

    HF2002 Registered User

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    When Sweden becomes a hockey power come back and complain then.
     
  8. Ola

    Ola Registered User Sponsor

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    You should come back and complain when you have a league at all. Rigth now we have the best league in the world. Still I spend so much time here. I care more about the game of hockey then I do seeing some of the absolutly best players in the world play live every week. I just wonder why there seems to be so little love for the game in the greatest hockey country in the world. Bettmans stance has been insane from the get go. Still he have almost gotten a free ride from the canadian press up untill the last week or so. Why is that?

    (well the only obvious answear I can come up with is because people in canada belives Bettmans offer will be the best for their favorite team, not careing about the risk that the entire league will be ruined.)
     
  9. Historically Forbes has never been very accurate at projecting the values of sporting teams or having a grip on the goings on of the aporting industries at all. The Forbes report has been completely destroyed and proven to be 100% inaccurate. The NHLPA proved that, and supported the validity of the Leavitt report by submitting their offer of a 24% roll back to match the figures the Leavitt report lead the NHL to. I know its a tough pill for you to swallow, but your own players association's actions support the Leavitt report and the loss claims of the NHL.

    What is your point? This is exactly what Bettman is doing, trying to negotiate a deal where cost certainty is is just that, a certainty. And yes, TV contracts have a lot to do with that as they are a revenue stream that must be associated to the cost certainty formula.

    Everyone works under the same rules and the same guidelines. It doesn't handcuff anyone. Just like all players have to play by the same rules when they are on the ice this applies the same type of rules to the general managers to follow for salaries. The fact that you argue other wise is beyond belief. The only thing this does is make organizations make a choice in how they build their team. Do they go for two or three grossly over paid "stars", or do they flatten out their payroll and develop a team of players that make a fair dollar and everyone is happy? Its all about choices. The league is just trying to level the playing field so everyone has to work from the same menu of choices.
     
  10. You live in Russia? How is Ak Bars doing any how? :lol
     
  11. pacde

    pacde Registered User

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    Its easy to see why Bettman has Canadian support. Lets look at the facts:

    1) NHL hockey is the national past-time here, something like football in US.
    2) We have had one Canadian team to the finals in 10 seasons - actually only one since the last CBA. This CBA doesnt work for us at all.
    3) We have nothing to lose except more teams to American markets if we dont change the current situation.
    4) Hockey will not lose much support here in Canada with an extended lockout. Yes, I think some fans will turn their back, but we have tradition here, we all grew up playing and watching the game, and our parents before us. Fan support will return quickly - and it might even gain support from fans that just couldnt justify the previous financial issues of the league. Im thinking of a couple guys I know in particular whose interest has drifted from the game because of their protest to player salaries and holdouts etc and Im sure if I know a couple, there must be more of them.

    Now if you add those points up, Im surprised more Canadians dont support Bettman in this issue. Im even more shocked some of the players dont see it. :dunno:
     
  12. SENSible1*

    SENSible1* Guest

    This fight is about money and nothing else.

    The small market owners are willing to support Bettman because they need the competitive balance a cap will provide to maximize revenue in their markets.

    The big market owners are willing to support Bettman because a cap with little revenue sharing is a license to print money.

    Small market fans support Bettman because they want a level playing field and don't frankly care if hockey players make slightly less astronomical money in the short term. Many large market hockey fans share the willingness to sacrifice players financial gains for a level playing field and the long term health of the league.

    The bottom line for the PA (and the inescapable conclusion they must arrive at) is that they are screwed--they will end up playing under a cap.

    Bettman's plan is perfect because both big and small market owners support this for the same reason--greed. Waiting for the owners to split is completely futile becasue this is about money for them.

    The general public supports the owners because competitive balance will be a pleasant side effect of the owners winning the battle over a cap.

    Hope this helps you understand the basics of this process.

    P.S. If you are speaking with any members of the PA, you might want to make them aware of this.
     
    Last edited by moderator : Dec 16, 2004
  13. jcpenny

    jcpenny Registered User

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    BINGO! Man you just give me an idea. This is exactly what owners should use to shut the players up. Every time a player says that a owner cant manage himself they should reply that:

    So players think that the old system worked and their lack of control brought them there. So imagine an NHL game without penalties (restrictions) Do you really think they could manage or control themselves? I think not.

    Like Daly said, you need restrictions for a system to work.
     
  14. Ola

    Ola Registered User Sponsor

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    All the talk about "players proved validity of the Leavitt" ect. is just BS and rethorics, why do you waste time on me with that? Christ sake the level on this baords sometimes...

    Cost certainty for who? Certainty has a meaning the expression "cost certainty" another. Its about revenues not being lower then expenses thats what should be certain. Bettman has choiced a level for all teams far lower then what many teams would be prepared to pay.

    Again just a load of complete and utter BS. There isn´t anyone who belives this isn´t about taking away the power from the individual GM´s and owners. Whats next should the NHL hand out 30 stanley cups too to make the canadians happy??? Unbelivable... You are not in touch with reality if you belive in 1% of what you are writing...

    So you are willing to kill the game because of this? The Rangers have had the higest payroll and missed the playoffs seven straight years. Isn´t this what sports are all about? Should we hand out Stanley Cups for free to Canadian teams in the future?

    Oooh the league needs restrictions to work. You are on to something.

    I think we are talking about what restrictions are reasonable...
     
  15. pacde

    pacde Registered User

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    So your comparing the Rangers' folly to the entire 6 Canadian teams? Ideally sports is about fair play and in the current system the ice is definitely slanted south of Canada.
    You might want to reread my post, this lockout may have some negative effect in Canada, but it will kill the sport in the US. Maybe this will be the Canadian teams' revenge but other than a few centers, nobody there really seems to care, so why should we? The sport will continue here and when NHL returns (or some facsimile thereof), people will go - maybe not immediately, but they will go. Especially if they start to feel more like this is a sport - ie feel like their team has a legitimate shot at developing a winner and not have to trade their stars just to survive because of an economic system that is out of their control.
    Just so you understand the mathematics of this, with 6 teams in Canada, there is an Expected value of a Canadian team making the finals twice every 5 years and a Canadian team winning the cup twice every ten years (in an equally likely environment). To compare that to the Rangers, they have an expectation value of making the finals once every 15 years and winning once every thirty years. I think they are on track and the Canadian teams are wayyyy off. That shows there is a systematic disparity in the way the probablities regarding the Canadian teams. I could probably throw a couple American teams into that mix as well, but most of them havent been around long enough to count.
     
    Last edited: Dec 16, 2004
  16. jcpenny

    jcpenny Registered User

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    Ola I dont think you read my comment till the end, you just took what you wanted and wrote about it. I said this what i would say to players who say that Owners cant manage themselves. I know weve been talking about that everyday and nice try of making me look like a moron.
     
  17. Hockey_Nut99

    Hockey_Nut99 Guest

    Why is it so easy for you guys to say "walk away from the arbitration award" or "GM's act like they are in a candy store"...Do you know the GM's compete against eachother to make the best team possible? It's the competitve bidding wars that drive up salaries. If one team offered Federov a contract when he was a free agent do all the other Gm's go: "ok somone made a bid we all better stop".? That's such a naive comment to make.

    If every single team stayed within their budgets in the last cba then we would have had half the players sitting out. If Anaheim tells federov to go pick his nose when he wants 10 Million dollars what is he going to do? It's called collusion. The owners/gm's can't get into a huddle and say "Yo Anaheim GM..Stay firm.We won't sign him. Just wait until he breaks"..No.Some other GM is going to snatch him up...Competition..That is what is ruining the game and parity in this league.
    season?
     
  18. I think you need to spend some time on a Swedish head shrinker's couch. You need to deal with this Canadian issue. Seriously, did some Canadian have relations with your wife/girl friend/daughter and make you look bad while doing so? Your fixation with Canada is a little disturbing.

    The whole lockout is as much to help small market American teams as it is to help Canadian teams. Heck, if there were teams in Sweden it would be helping them too. I have yet to see you bring a single argument to support what you are trying to say, what ever that is. What is it that you are trying to say? What would be a good proposal for the NHL and why? You have very little comprehension of what is going on from a business perspective and talk just like a player would, spewing nonsense about how you're being abused by the proposed system. How about trying to clearly and concisely explain what is wrong with the proposal and what you would suggest to improve it and how it helps ALL teams. So far your blatherings about a cap hurting teams has been incoherent and full of more holes than Swiss cheese.
     
  19. waffledave

    waffledave waffledave, from hf

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    Does Sweden get the news slower than over here? The Forbes report was proven innacurate weeks ago...

    Oh well, there goes your credibility! :lol
     
  20. cws

    cws ...in the drink

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    It's just part of the market that the NHL is in. The nature of the NHL's particular situation is driven by different market forces than you would see in an open market.

    It is competitive and non-cooperative. One of those factors inherent and crucial to such a market is that of mutual interdependence; teams base their decisions upon the actions of their rivals. That could be extended to strategic decision making and game theory if you wanted to get more in depth (I don't really, some of that sh*t is just too boring). But that's just one of the many basic facts of this particular market (the one most relevant to this little discussion I thought).

    I'm guessing you'll believe that more than those on the other side of the argument. So I'll make the same suggestion I did last night for those that don't particulary buy this; read an economics text and see it for yourself. These aren't my thoughts that I just pulled out of a hat, but more recognized and accepted facts from others who know a hell of lot more than me.
     
  21. ak47

    ak47 Registered User

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    The short term thinking of the PA is astounding. The cap is a "snapshot" of revenue vs cost TODAY. The part of Bettman's rhetoric that the PA does not seem to buy into is that of partnership. Going forward, the NHL product will be better if a cap system is instituted. Small market teams won't have to hive off their assets because of cost. Take one example. Imagine if the Penguins were able to keep their stars of the early 90's - do you think they would be in the economic quagmire they are in today? Likely not. If all NHL markets are able to keep their best assets, then you wouldn't have the problems that we see today in many of today's markets. The total revenue of the league would increase year over year, which in turn would increase the cap, year over year. Would the PA complain if in 5 years 54% of revenue equals a $60 MM cap with stronger markets, a fan base and a better product? Of course not.
     
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