Still believe Forbes? I know I don't.

[AM]

they have another choice

Nobody is paying out any owners, when they don't get the cap system, they can make a business decision they think is best for them, legally, financially etc. whatever they consider relevant.

They can stay in the league and continue losing/making money, or voluntarily concede they made a bad investment to get into/stay in the hockey business and take the losses that come with that decision.

It happens in other business all the time, the owner has to decide whether to get out of some (bad) venture and at what point of time, and take the one-time losses accompanied. Or whether to choose to stay in the business and try to improve and hope for the better future.

Its simple, sue the NHL to get their buy in back. Seeing as the players got 75%, I think they'd be suing the NHLPA also.

 

[Tom_Benjamin]

You think the whole of the NHL should fold? There's no way that the NHL will survive in any recognizable shape w/o a new CBA.

Bunk. Absolute bunk. When was the last time a team folded, let alone a league?

You think teams should fold? Who is going to pay out those owners? Or do you think they will just take 100 million dollar investments and file them in the bad debts file?

Nobody should give them a red cent. Not a penny. If they lose more by not playing, they should walk away and be glad for it. It teaches them right not to buy into such a stupid league.

Tom

 

[Tom_Benjamin]

That's all very interesting but I was wondering where it was stated that board advertising doesn't count as hockey revenue. A general statement from the Levitt report doesn't say that.

It doesn't say it anywhere. Board revenue is buried in arena revenue, and the general Levitt statement covers how teams are supposed to split those revenues between the team and the arena. It sounds to me as if they can split it pretty much any way they want.

I think it's quite reasonable for the two sides to sit down and hash out what exactly constitutes hockey revenue.

Why? It is none of the player's business.

Even if you take the cap out of the negotiations then there would still be an apparent underlying problem of supposed trust between the players and owners.

As long as owners are getting indicted for fraud, there won't be any trust. They could hire an army of accountants and the players wouldn't believe anything Bettman said. Bettman was hired by the guys who conspired with Eagleson to rip off the players. They would have all been nailed with RICO violations if the statute of limitations had not run out. Trust? They may be hockey players but they aren't fools.

It also appears that the players have no interest in getting to the bottom line in fear of perhaps actually knowing the realities.

No, they aren't. They don't have to be afraid. All they have to do is say, "What planet do you guys come from? What an incredibly stupid idea. Isn't this still North America? Isn't this supposed to be where capitalism reigns? Count up your own damn revenues. Define them any way you want. We don't care. Just don't expect us to peg our salaries to them. That's your job."

Why aren't they, they have the most to gain from it. Atleast they have the most to gain based on your arguments.

They don't have anything to gain by trying to do management's job. The league won't work if the owners play hockey either.

Tom

 

[djhn579]

I never job to the smilies, but that genuinely made me laugh, and it was a very valid point.

I don't see how anyone can put much worth into the Forbes numbers, but then again who hired Forbes Magazine to analyze the finances of the NHL? Forbes doesn't have much at stake, besides their subscribers, so fudging a few numbers to make a report look good doesn't hurt their bottom line. They got their article, and they covered their own side by stating how they achieved their numbers. Anyone reading more into the numbers is just looking at it short sighted.

And stirring up a little bit of contorversy never hurt ratings...

 

[djhn579]

Bunk. Absolute bunk. When was the last time a team folded, let alone a league?



Nobody should give them a red cent. Not a penny. If they lose more by not playing, they should walk away and be glad for it. It teaches them right not to buy into such a stupid league.
Tom

You really come across as quite the hockey fan sometimes...

 

[Tom_Benjamin]

You really come across as quite the hockey fan sometimes...

I guess not. I've only followed it for 45 years and I learned the game before whining became an important fan attribute. I'd be ashamed to be as good a fan as you.

Tom

 

[djhn579]

I guess not. I've only followed it for 45 years and I learned the game before whining became an important fan attribute. I'd be ashamed to be as good a fan as you.

Tom

The feeling is mutual, believe me...

Your such a great fan that teams can fold and that is okay, as long as it's not your team. Maybe if they go back to the original six you'll be happy...

 

[Tom_Benjamin]

The feeling is mutual, believe me...

Your such a great fan that teams can fold and that is okay, as long as it's not your team. Maybe if they go back to the original six you'll be happy...

It is okay even if it was my team. I certainly wouldn't expect other fans or the players to pay for my entertainment. I wouldn't ask Buffalo fans for any of their charity, let alone demand it as a right.

I've got some pride.

Tom

 

[djhn579]

It is okay even if it was my team. I certainly wouldn't expect other fans or the players to pay for my entertainment. I wouldn't ask Buffalo fans for any of their charity, let alone demand it as a right.

I've got some pride.

Tom

Charity... Interesting. Is that what the Green Bay Packers are getting from the resy of the NFL. I don't seem to hear the rest of the NFL owners, players, or fans complaining about having to give charity to Green Bay or any other team in their league.

If you want to call it charity. That's fine. But there is no doubt in my mind that the NHL will be better for all teams involved with some form of reasonable link between revenues and salaries.

Pride... You have your agenda, just like I have mine. Don't pretend that yours is any better than anyone elses.

 

[YellHockey*]

Charity... Interesting. Is that what the Green Bay Packers are getting from the resy of the NFL. I don't seem to hear the rest of the NFL owners, players, or fans complaining about having to give charity to Green Bay or any other team in their league.

What do the other NFL owners give the Packers? Just because they are located in a small city doesn't mean that they exist because of the salary cap.

They exist because their stadium is sold out in perpetuity, at what I suspect are market prices for NFL tickets. Because local broadcast deals don't account for much in the NFL, the Packers can compete on a financial basis with all the other teams. They are an NFL market in any CBA.

Meanwhile some NHL markets feel they can't compete without a particular CBA. Maybe the problem isn't the CBA but rather the markets. Maybe there aren't 30 NHL calibre markets.

 

[thinkwild]

Charity... Interesting. Is that what the Green Bay Packers are getting from the resy of the NFL. I don't seem to hear the rest of the NFL owners, players, or fans complaining about having to give charity to Green Bay or any other team in their league.

There's no such thing as small market in NFL

One of the vox populi arguments for the NFL is that teams in its smallest cities--Green Bay, Jacksonville, Minneapolis--are competitive. It's a nice thought, but the fact is, where an NFL team plays is essentially irrelevant. With the national-TV contract bringing in so much money, all that's left is to fill a stadium eight days a year. The population base required to sustain an NFL team is probably one-tenth that needed to sustain an MLB franchise, when you consider the limited number of home dates and the greater percentage of seats sold via season tickets.

If anything, the NFL's system has led to some real absurdities. One Los Angeles team moved to Oakland, another to St. Louis. The team in Houston moved to Memphis. If "markets" mattered, these things would never happen. Essentially, NFL games are studio events, and where the studios happen to be located isn't important, as long as there are 80,000 interested parties within an hour's drive.

But there is no doubt in my mind that the NHL will be better for all teams involved with some form of reasonable link between revenues and salaries.

Why dont the owners do that then? To say, the Devil made me do it is pretty lame dont ya think? WHy use URO's? WHy not just use the real books. Why do the players have to agree on a phony set of books?

 

[craig1]

Keep in mind that when Forbes says the value of the franchise, they do not necessarily mean the price it would sell for. They are using the term estimated value in the sense of the Modigliani & Miller theories of firm maximization. In that semse, value is from a current shareholder perspective........not a sale price necessarily.

Unfortunately, the Union, and most definately the players are completely ignorant to any financial concepts such as this........they see a owner who wants a paltry 2% ROI as greedy, when in reality, the owner is barely breaking even given inflation......If an owner paid $100 million for a franchise, you better darn well belevie he should net a $7-8million per year profit annually given current market conditions.

 

[thinkwild]

Forbes also notes that if they were to value hockey teams, the same way they would value any of the other businesses that is their specialty to value, that there are other revenue streams that can be ambiguously accounted for. Whether or not their number is right beside the point, its that their different way of accounting shows the ambiguity the players are talking about. How does Forbes know the value of any of the 500 top billionaires?

Forbes numbers also represent how they would account for the full measure of owning a hockey team. A hotly contested topic apparently. Many of the sale prices did not purchase the full value of the team that Forbes was valuing.

Melnyk in Ottawa bought the team and the arena for a combined firesale price of $130mil, largely because Covanta went bankrupt and dumped the arena in their bankruptcy sale, not in the Sens bankruptcy. He wouldnt buy or profit from the arena without the team. If he makes $20mil on the arena, but loses $5mil on the team, and the franchise jumps in value 7%, can he be fairly said to be losing money on the team? Or would that be accounting sophistry?

 

[craig1]

Melnyk in Ottawa bought the team and the arena for a combined firesale price of $130mil, largely because Covanta went bankrupt and dumped the arena in their bankruptcy sale, not in the Sens bankruptcy. He wouldnt buy or profit from the arena without the team. If he makes $20mil on the arena, but loses $5mil on the team, and the franchise jumps in value 7%, can he be fairly said to be losing money on the team? Or would that be accounting sophistry?

First off, it was bought under bankruptcy. Assuming that the Canadian courts are even similar to US courts, creditors would have had to approve the sale, which means that the sale, while not maximized value, would have been a slighty undervalued NAV.

Second, yes, he would have lost money on the team. His gains would have come from other investments. Consider the owner a holding company. He is operating a hockey team, and an arena seperately. Use translation methods to account for the business to business sales aspect of Team renting services from Arena. Arena is also operating with outside operations. Arena makes money from renting to team, ice capades, tractor pulls, etc. They have nothing to do with the function of the team. Yes, it is true that any losses the team accrues can account as a tax shield for the overall holding company to reduce tax burden, but this is only a fraction of overall losses incurred.

In the end, they need to be viewed as seperate investments when discussing the league. Not all teams own or operate their respective arenas, so not all realize all, if any profits from operation.

 

[thinkwild]

If the team left, how much would he make from the arena? Will the 50% of luxury box revenue, naming rights, club seats, and board advertisements amount to anything at all if there was no team? Not to mention concessions, parking. Would he even have the economy of scale without the team to pull it off. If the team sucks, and fans stop going, how much does his unrelated arena revenue suffer?

THe whole thing is one investment. If he shuffles revenues to his left pocket and expenses to his right one, the overall value of owning the franchise is the team and arena and all associated revenue.

If he didnt have a cap, would he on his own as a business decision determine the spending was a wise move for the business? Many apparently are. Like Melnyk now, and as he has stated, he is willing to spend what it takes.

As far as billionaires go, Illitch is nothing special amongst these guys. LA's owner is way richer. If they had the team to spend the money on, and it was generating revenue for the owners team and unrelated companies, they are capable of spending - once they develop a winner. THis is the thing in the NHL, every team has the ability to be Detroit if they work and succeed. There is no Yankees advantage because ofthe high age of free agency. Any team that develops like Detroit did, will have the Detroit advantage. And the only way to beat them is to start the same way they did.

 

[me2]

If he didnt have a cap, would he on his own as a business decision determine the spending was a wise move for the business? Many apparently are. Like Melnyk now, and as he has stated, he is willing to spend what it takes.

And if Melnyk decides its time for the Sens to carry their weight and demands they slash the budget so the team is profitable, that would be good business sense. I wonder if you'd be happy if Melnyk asked the sens to behave in a fiscally tight manner.

 

[djhn579]

There's no such thing as small market in NFL

I read an article once, probably a year, year and a half ago, that talked about Green Bay before their was revenue sharing and a salary cap in the NFL. I posted it on here at the time, but don't know where it is now. They were talking about how Green Bay was on the verge of bankruptcy and how the cap and revenue sharing was the only thing that allowed them to compete. I can't find that article now, so I don't expect you to believe this, but that is why I mentioned them specifically.

Why dont the owners do that then? To say, the Devil made me do it is pretty lame dont ya think? WHy use URO's? WHy not just use the real books. Why do the players have to agree on a phony set of books?

I think the owners are trying o do just that. You think they should do it just with in their team (budget), I happen to think it will be better if they did it league wide.

The rest about the real books... whatever. I know the owners are not angels. I know that Goodenow is nat a saint as well. There are many ways the players can go about identifying the real income, but it starts with defining revenue. They refuse to do that. Why?

 

[YellHockey*]

And if Melnyk decides its time for the Sens to carry their weight and demands they slash the budget so the team is profitable, that would be good business sense. I wonder if you'd be happy if Melnyk asked the sens to behave in a fiscally tight manner.

Rod Bryden did it for years.

The Sens did it this offseason by unloading Bonk and Lalime.

Slashing the budget makes more sense then having no games at all.

 

[copperandblue]

It doesn't say it anywhere. Board revenue is buried in arena revenue, and the general Levitt statement covers how teams are supposed to split those revenues between the team and the arena. It sounds to me as if they can split it pretty much any way they want.

Geez and it sounded to me like Levitt did assess wether the dividing up of the revenue was hockey related or not.

So in the end, there is nothing that says specifically one way or another.

As it turns out, in this case you seem to have simply fabricated another argument towards the evil shading dealings of the owners. I wonder if that is how the PA approaches the negotiations as well?

Why? It is none of the player's business.

You say....

And yet I recall players questioning specifically that. The day the Levitt report came out I remember Craig Conroy standing infront of the Sportsnet camera asking - how are they (the PA) supposed to negotiate with the owners when the owners aren't being truthful about the money they are making?

As long as owners are getting indicted for fraud, there won't be any trust. They could hire an army of accountants and the players wouldn't believe anything Bettman said. Bettman was hired by the guys who conspired with Eagleson to rip off the players. They would have all been nailed with RICO violations if the statute of limitations had not run out. Trust? They may be hockey players but they aren't fools.

And yet, inspite of open speculation that the Russian Elite League has connections to the russian mob, players can still find it in their moral concience to sign on. Even after incidents over the last ten years where the mob has tried to extort money from the russian players playing in NA......hmmmmmm double standard maybe or just another case of grasping at straws in an attempt to shift the argument?

No, they aren't. They don't have to be afraid. All they have to do is say, "What planet do you guys come from? What an incredibly stupid idea. Isn't this still North America? Isn't this supposed to be where capitalism reigns? Count up your own damn revenues. Define them any way you want. We don't care. Just don't expect us to peg our salaries to them. That's your job."

And yet at the end of the day when an agreement is made, wether it's a hard cap or a soft cap - the players are going to need an agreed upon system to evaluate revenues.

I know you say it won't happen....but then again you don't really have a say in it.

What a crock it is to complain about something and then suggest that the solution is none of your business. They want the biggest piece of the pie that they can get and yet you say they have no business/interest in determining just how big that pie is. I don't see the logic or even the moral ground that is applied to that argument. You should either take an all in approach or all out - this best of both worlds position is bull.

Then again this attitude seems to capsulate this whole soap opera perfectly. It's not about solutions is it, it's about two sides wanting it their way and not willing to look at the alternatives.

They don't have anything to gain by trying to do management's job. The league won't work if the owners play hockey either.

Funny, and I thought this wasn't about doing managements job but instead about keeping tabs on it for the long term health of the league.

Hockey players and the cronies they employ at the PA head office must really struggle in the intelligence department if as you contend "it's an impossible task" to determine revenues.

Both sides talk about the future of this game and how to protect it or ensure that it is as viable as possible. The two sides also seem to approach this question from different angles.

You your seld in another thread once asked what the most basic problem is in regards to this impass.

Well in my opinion the most basic problem facing this impass, based on the information that has been made public, is that the two sides have never sat down and determined what exactly the revenues and by extension, expenditures of the league really are.

As I mentioned earlier, no matter who is proven correct as far as how the numbers shake down, once this is established and agreed upon, the end result can only be the two sides getting closer to an agreement.

An agreement that works within the frame work of how healthy or unhealthy the league actually is.

 

[Charge_Seven]

Newsflash dude, there are currently 28 other teams besides Toronto and Montreal, also the number of non-canadian NHL players increases all the time and they don't have any emotional ties to those cities/teams. Yes, Gary Roberts and Joe Niuwendyke wanted to play for Leafs but they were born in the 60's when there was 6 teams in total and Canada had 2. Nowadays young players have so many options to choose their fav teams.

So if you're expecting players to flock to Leafs just because they so eagerly want to play for them you're in for a rude surprise.

I'd agree with you if we keep our current financial agreement. However if we take away the money factor, and add lower salaries, players are more likely to go to the teams they love.

Newsflash dude, The Leafs and the Canadiens have more fans, and always will have more fans than any other team in the NHL. Try going to a Leafs vs ANYTEAM game, and you'll see just as many Leafs fans as the other teams fans. Same goes for Montreal. What's more, those aren't the only two teams I was talking about as gaining in this fashion, any team that boasts a MASSIVE fan base would receive the same effects.

 

[me2]

Rod Bryden did it for years.

The Sens did it this offseason by unloading Bonk and Lalime.

Slashing the budget makes more sense then having no games at all.

and yet they still lost $5m according to forbes? What is that 7% more expenses than revenues? They should be slashing the budget a further $8m to be sure.

 

[gary69]

And yet, inspite of open speculation that the Russian Elite League has connections to the russian mob, players can still find it in their moral concience to sign on. Even after incidents over the last ten years where the mob has tried to extort money from the russian players playing in NA......hmmmmmm double standard maybe or just another case of grasping at straws in an attempt to shift the argument?

I think it's better to leave the moral aspect out of this, since the western world isn't exactly known for that, jesus, how many people e.g. still keep buying oil or Asian made clothes despite the fact that hundreds of thousands of innocent people have died or tens of housands of children have gone blind because of this.

This is all about money and greed, and most people in the world are exactly the same as hockey players, no better or worse, not able to think beyond their immediate circle of family and friends.

Surely hockey players are no more or less to blame than westeners in general.

 

[Brent Burns Beard]

But these things are IMPOSSIBLE to do !!!

I don't understand why negotiating a definition for revenue has to be impossible. It only gets out of hand when people stop being rational. As for cheating owners, well they should be given very, very, very large fines for cheating. Keep it simple. Make the game better. Everyone benifits. These shouldn't be and aren't "impossible" goals for Owners and players to meet.

i agree, 1 billion dollars for each infraction.

dr

 

[Brent Burns Beard]

Just a quick update in capitalism. Something is worth whatever someone else is willing to pay for it.

right .. so why cant that be applied to players salaries again ?

To awnser your point above - why were the Penguins in bankruptcy? Might that be that their expenses were greater than their revenues? In that case, how could reveneues be an accurate baseline for valuing the team?

The Pens are in trouble because when they were the most popular team in the world, the owner decided to take as much cash out of hte operation as possible and then left it high and dry when the back ended contracts were due. If PIT had done like VAN and privatly financed an arena, they would have the revenue to compete in the NHL.

DR

 

[PecaFan]

right .. so why cant that be applied to players salaries again ?

It can, in the future, as soon as we get rid of all the artificial constructs in the old CBA which make GM's pay players more than they want to, such as arbitration and mandatory raises.