Time to re-evaluate HFNHL?

[Vaive-Alive]

This is my finances pagefrom another league...my payroll is higher and my ticket prices are lower but I'm making more money then I will in the hfnhl.

It looks like you guys have some sort of subsidization in your league. Attendence figures are very high to start, and with extremely low ticket prices, theoretically your franchise should be making $522,270/ game tops at 100% attendance ( full capacity of your arena ), but in fact you're somehow averaging $970,458 per game at <100% attendance on average. Looking at other teams, it almost looks like you guys get 2x on ticket revenues per game.

 

[HFNHL Commish]

I've purposely been staying out of this discussion in order to further encourage the free flow of ideas...

Even though this discussion wasn't intended to be about league finances, a number of people have addressed the issue in this thread, so I might as well provide a few thoughts of my own on the subject. I don't think a new CBA, whether it's our own or a copy of the NHL's, is the answer to our problems...unless a new CBA simply means slashing salaries XX% across the board. A new CBA means more rules, and we probably have a few too many rules as it is (although that's not to say that most of our rules aren't necessary).

I think it is possible for the league to continue on, financially, under the current structure. However, my fear is that, with so many teams close to critical mass, and so few teams flush with cash, that teams will run out of places to trade their high/over-priced players. Last year, we had a 78 OV player, Mark Recchi, placed on waivers because of his $8,000,000 salary. As a one-time occurence, that's not a big deal. Now imagine if things progressed to the point where 10-20 such players cleared waivers and ended up rotting in the minors. Do we want a league where good players can't find a job ANYWHERE because of their crappy contract?

As much as I don't like it, the only answer to this problem may be to jack revenue up artificially...either through toying with the sim, or through a league-wide subsidy. I know that's not "fair" to the rich owners, and that it will probably only serve to jack up salaries even further, but it works as a short-term cure.

Oh, and while it may be slightly self-serving, I do think it would be a good idea for every arena in the league to have about 20,000 seats. I don't think the sim completely accounts for supply/demand, and I honestly believe I would've made a bit more money last year had my Ducks played somewhere other than the 17,174 seat Arrowhead Pond.

Moving on to the "fish or cut bait" question...

Obviously, the NHL lockout hasn't done our league any favors...although, at this rate, Al MacInnis may never have to formally retire, which would certainly help my blueline. Seriously though, I'm so ticked at the NHL that I almost hope that this season DOES get cancelled, just so all of the parties involved can further suffer from the mess they've made. Since I got over the initial shock of the lockout, I've been perfectly content to watch more NCAA hockey and more soccer. Oh, and the fact that the Eagles are in the Super Bowl doesn't hurt, either.

Vitriol aside, the HFNHL will always be faced with two major problems:

1) League administration is a pain in the rear.
2) Three or four bad/absent GMs are capable of screwing things up for everyone.

The perfect solution to problem #1 is an impossible dream - a commissioner, a DoPP, and a Sim Manager with oodles of time and boundless enthusiasm for administrative drudgery. Almost as impossible would be delegating administrative tasks across fifteen people, because it only takes one person not doing their job to screw things up, plus the coordination would be time-consuming.

I think the current structure we have - a commissioner, DoPP, DoPR, Sim Manager with one layer of redundancy - can work...especially in an environment where we don't have to worry about problem #2, bad/absent GMs. At the moment, I think we have the best group of GMs we've ever had. Still, keeping up with league administration can be a problem simply because people go through periods where they wish they were just a GM.

What we have to do is lessen the workload as much as possible to help league administrators cope. If that means that the HFNHL is slightly less realistic, so be it. It will still be a lot more realistic than 99% of FHL leagues out there.

What can we do specifically to lessen the workload? Obviously, being able to import someone else's ratings database would be a start, even if it meant a couple of bucks. Rating challenges would end up straightening out most of the major discrepancies. Perhaps we should limit the waiver draft to non-playoff teams only? Perhaps limit the entry draft to six rounds? Process contract offers once a month during the season? Make all nights "double sim nights"? I'm just throwing out suggestions here.

Bottom line, we're all doing this for fun. Everything isn't always going to be 100% fair, but that's life.

 

[Donga]

It looks like you guys have some sort of subsidization in your league. Attendence figures are very high to start, and with extremely low ticket prices, theoretically your franchise should be making $522,270/ game tops at 100% attendance ( full capacity of your arena ), but in fact you're somehow averaging $970,458 per game at <100% attendance on average. Looking at other teams, it almost looks like you guys get 2x on ticket revenues per game.

I calculated for me last year. I was averaging about 1.26 greater that the price I advertised. Meaning, my ticket prices were $28. But in reality, per head it was about $35.

Dryden, if you guys are using FHL, I have a sneaking suspicion that your sim guy has jacked up the finances by moving the scroll bar to the max. Maybe someone like Drew can enlighten us if this has any effect on the overall bearing of the finances. However, after I've done all this admin stuff, I'll play around with the sim some more.

Oh, and while it may be slightly self-serving, I do think it would be a good idea for every arena in the league to have about 20,000 seats. I don't think the sim completely accounts for supply/demand, and I honestly believe I would've made a bit more money last year had my Ducks played somewhere other than the 17,174 seat Arrowhead Pond.

I probably have the most to loose if this kicks in, as I have the highest seating capacity in the league. Even though, I have only top 20000 about 1 or 2 times both at the start of the season. To be realistic, I feel this should be left alone. I know, I know, I am a bit biased . Matt, I sort of disagree with you with the all supply/demand argument. When your team is doing bad, there are less people are going to it. This suggests supply and demand in the truest sense.

The ratings are slightly high IMO in that league. Especially for young players.

I find that a lot in some leagues that I have been browsing around.

 

[Dr.Sens(e)]

I calculated for me last year. I was averaging about 1.26 greater that the price I advertised. Meaning, my ticket prices were $28. But in reality, per head it was about $35.

I believe the sim adds 25% for additional game day revenue such as food, drink, merchandise and parking.

And yes, we can increase the revenue setting in the sim, but according to Drew, this creates a major impact with the bigger revenue gains going to the high revenue teams (basically a % increase I guess). We did this once a few years ago, and it did indeed create a major revenue spike.

THanks again for all your hard work Dion. Any further ideas on an expected ready date?

 

[Wildman]

Here is my suggestion to revenue. We can take the average bank balance and if the average balance is below $30MM per team than we can bring the bank roll up to $30MM by distributing the money equally among 30 teams.

 

[HFNHL Red Wings]

Just a point of clarification as I have seen a statement I made referenced a few times. When I said it takes 100+ hours to prep all the files for the start of a new season that is not exclusively the ratings update (though it is prolly 60-70% of it). This time includes adding all the prospects from the draft, player/prospect releases, updating financials, all the UFA transactions including the addition of unsigned FA's, waiver draft movements, and then of course all the trades that tend to spike in volume around the entry and waiver drafts. Thankfully over the years various Admin members have compiled some of these mass transaction lists into more user friendly compilations to speed up the entry process for the Sim Managers.

During the year the work load is tolerable it's just the annual prepping that's the killer.

 

[Mandaou]

My Take

First, I think this tread answered the question of whether we should start over. The answer is NO. If as a group we have to collectively come up with a small sum of cash to pay for a file and save a lot of work, I’m up for that. Plus if we can find ways to spread the work (ie updating trades, contracts, etc…) this should reduce the time on some individuals and get more people involved.

Second, WOW, I never did the math but assuming that Krueg’s is correct the league can’t continue at this pace much longer although it has been smacking us all in the face. Nine (9) teams have less than $10 million, another five (5) are under $13 million. That’s about 50% of the league in financial crisis.

We obviously need a multi-step approach to the financial problems this league faces. The advertising packages are a great idea and should continue, but they help the strongest teams the most (much like the real NHL) but it’s obvious that like the NHL, unless revenues are shared this formula alone does not work.

Some suggestions:

1. Roll back salaries. We have to. Taking in consideration the league revenues versus salaries I think we may have to slash them by at least 25%. That should get the league at B/E for at least the short term.
2. Distribute some cash to the teams in trouble. Not a lot because the reduction in salaries will help teams already and cash handouts even in a sim league.

$7.5 million for teams who have cash reserves under $5 million
$5.0 million for teams who have cash reserves under $10 million
$2.5 million for teams who have cash reserves under $15 million

3. Slightly increase league revenues through Sim.

4. Install a cap but no floor. This reduces administration and should help reducing salaries going forward. Teams will either have to trade or waive players or pay a tax. If the figures are correct, using the August 23rd figures we currently have 11 teams over 40 Million in salaries.

Pre 25% Salary Adj Post 25%

Ott 96 72
NYI 68 51
StL 60 45
Ana 59 44
SJ 55 41.25
LA 52 39
Mon 52 39
Min 49 36.75
Chi 46 33.75
Nash 41 30.75
Was 41 30.75

Set the Cap at $40 million. A tax of 200% for every dollar over 40 million before the season starts. Those funds will be used to distribute to the non-playoff teams. Playoff teams already get playoff revenues anyway.

Ottawa suffers the most here but that franchise had some advantages of early year unfair trade practices. Not Keith’s fault but he has already benefited from that situation and even if he has to trade or waive a player his franchise is in great shape. Plus having 2 goalies earning over $5 mil and 1 earn over $8 million a year is silly. Not even the NYR would have themselves in situation like that.

The other teams: 1. NYI have a couple of players that retired (Oates & Ronning), SJ won’t have Forsberg to pay, St. Louis can easily afford to pay the tax and most likely would be willing.

Players who are waived for financial purposes but as a league knows should be playing will be taken from waived rosters and put up as UFA with compensation.


I think these suggestions will help the league as a whole, minimize the hurt for the teams that have to potentially slash their budgets, doesn't overly compensate franchises at the back of the line and keep realism in the league.

What do you guys think?

 

[Mandaou]

My Take

First, I think this tread answered the question of whether we should start over. The answer is NO. If as a group we have to collectively come up with a small sum of cash to pay for a file and save a lot of work, I’m up for that. Plus if we can find ways to spread the work (ie updating trades, contracts, etc…) this should reduce the time on some individuals and get more people involved.

Second, WOW, I never did the math but assuming that Krueg’s is correct the league can’t continue at this pace much longer although it has been smacking us all in the face. Nine (9) teams have less than $10 million, another five (5) are under $13 million. That’s about 50% of the league in financial crisis.

We obviously need a multi-step approach to the financial problems this league faces. The advertising packages are a great idea and should continue, but they help the strongest teams the most (much like the real NHL) but it’s obvious that like the NHL, unless revenues are shared this formula alone does not work.

Some suggestions:

1. Roll back salaries. We have to. Taking in consideration the league revenues versus salaries I think we may have to slash them by at least 25%. That should get the league at B/E for at least the short term.
2. Distribute some cash to the teams in trouble. Not a lot because the reduction in salaries will help teams already and cash handouts even in a sim league.

$7.5 million for teams who have cash reserves under $5 million
$5.0 million for teams who have cash reserves under $10 million
$2.5 million for teams who have cash reserves under $15 million

3. Slightly increase league revenues through Sim.

4. Install a cap but no floor. This reduces administration and should help reducing salaries going forward. Teams will either have to trade or waive players or pay a tax. If the figures are correct, using the August 23rd figures we currently have 11 teams over 40 Million in salaries.

Pre 25% Salary Adj Post 25%

Ott 96 72
NYI 68 51
StL 60 45
Ana 59 44
SJ 55 41.25
LA 52 39
Mon 52 39
Min 49 36.75
Chi 46 33.75
Nash 41 30.75
Was 41 30.75

Set the Cap at $40 million. A tax of 200% for every dollar over 40 million before the season starts. Those funds will be used to distribute to the non-playoff teams. Playoff teams already get playoff revenues anyway.

Ottawa suffers the most here but that franchise had some advantages of early year unfair trade practices. Not Keith’s fault, but he has already benefited from that situation and even if he has to trade or waive a player his franchise is in great shape. Plus having 2 goalies earning over $5 mil and 1 earn over $8 million a year is not realistic and the Sens could afford to waive one and trade another. That would reduce the Sens payroll by about $10 million alone.

The other teams: 1. NYI have a couple of players that retired (Oates & Ronning), SJ won’t have Forsberg to pay, St. Louis can easily afford to pay the tax and most likely would be willing.

Players who are waived for financial purposes but as a league knows should be playing will be taken from waived rosters and put up as UFA with compensation.

I think these suggestions will help the league as a whole, minimize the hurt for the teams that have to potentially slash their budgets, doesn't overly compensate franchises at the back of the line and keep realism in the league.

What do you guys think?

 

[Dr.Sens(e)]

Well, I think the last thing we should be doing is handing out money to the teams that have gotten themselves in a financial mess, while not giving any money to the teams that have managed their finances better. Kind of like handing an alcohlic a pint of whiskey to help them get sober. Teams who have dug themselves a financial hole should dig themselves out and learn how to make money.

And under your suggestion Claudio, you would receive $5 million, but a team like Pittsburgh, who only has a little more than $1 million in the bank than you, would only receive $2.5 million, thereby allowing your team to leap-frog other teams because of your proposed structure and the fact your team just slips under one of those threshholds. No matter how you propose it, it will be difficult to do something equitable.

That said, applying some measures across the league sounds reasonable. If we did in fact try and simply 'roll back' salaries at some point down the road, can someone comment on how easy or difficult that would be? Just curious, because if it had to be done manually for each player that sounds like a nightmare.

I also know some of the financial calculations being thrown around are a little misleading. The old financials file is not really that accurate. I know my salary total will probably be under $55 million, yet that file says it's almost $60 million. Most teams have players who won't be on their pro roster counting as part of their payroll. We'll have a better idea once everything has been updated and we've run through a half dozen home games or so for each team.

 

[HFNHL Commish]

I also know some of the financial calculations being thrown around are a little misleading. The old financials file is not really that accurate. I know my salary total will probably be under $55 million, yet that file says it's almost $60 million. Most teams have players who won't be on their pro roster counting as part of their payroll. We'll have a better idea once everything has been updated and we've run through a half dozen home games or so for each team.

For example, there's no way I'm going to pay Jon Klemm 100% of his $3,800,000/year contract.

 

[Mandaou]

Response

Nick,

The chart for giving some funds to teams in need was I think reasonable. It can be modified to make sure such descrepencies as the one you outlined are reduced.

As far as my team is concerned I would be waiving my right to such an amount anyway. I was with the league from the beginning and thus I don't think I deserve such an amount, even if my mistakes financially were made at the beginning of my tenure when the financial structure (ie revenues) was slightly different I quite frankly I did not pay attention to it.

Some of us also did not benefit from some trades that were one-sided early on (this is not pointing fingers at anyone), that was the reality of what occured. Giving a supplement for those teams now in trouble allows them a little breathing room and gives them a chance with the other suggestions I made to remain competitive.

The supplement was suggested so that the GM's at the bottom of the pool are not discouraged and the teams who are "Rich" are not penalized.

I think my suggestions were fair, simple and have a good chance of working both in the short-term and long-term even if the supplement is not implemented.

Claudio

 

[Hossa]

Nick,

The chart for giving some funds to teams in need was I think reasonable. It can be modified to make sure such descrepencies as the one you outlined are reduced.

As far as my team is concerned I would be waiving my right to such an amount anyway. I was with the league from the beginning and thus I don't think I deserve such an amount, even if my mistakes financially were made at the beginning of my tenure when the financial structure (ie revenues) was slightly different I quite frankly I did not pay attention to it.

Some of us also did not benefit from some trades that were one-sided early on (this is not pointing fingers at anyone), that was the reality of what occured. Giving a supplement for those teams now in trouble allows them a little breathing room and gives them a chance with the other suggestions I made to remain competitive.

The supplement was suggested so that the GM's at the bottom of the pool are not discouraged and the teams who are "Rich" are not penalized.

I think my suggestions were fair, simple and have a good chance of working both in the short-term and long-term even if the supplement is not implemented.

Claudio

In reviewing your suggestions Claudio, I like them in general, but I agree with Nick, that you can't give specific teams different lump sums of money. The only reason I probably would not recieve the most money in your little plan was because when I recieved the Canucks, I had to completely gut the roster to stay out of financial ruin. I mean, I could have been in a horrible situation, but I took care of the dirty work and put myself in a better (but still not entirely comfortable) situation.

I'm not asking for money, but I don't agree with giving certain teams certain amounts of money and leaving others out in the cold. The entire league as a whole needs some help, and that's when it makes sense to tinker with the financial situation. But if we restrict the money to specific teams, we're taking the stance that some teams are struggling, but some teams are fine. That in my mind is when it doesn't make sense to have the league step in, because it only rewards the irresponsible or neglectful. I'm of the opinion that everybody could use the money. Maybe Nick and a couple other people don't really need it, but just like the league's salaries could use a rollback as you suggested, all the teams should/could use a five million prop-up, or whatever.

 

[BlueAndWhite]

Ottawa suffers the most here but that franchise had some advantages of early year unfair trade practices. Not Keith’s fault but he has already benefited from that situation and even if he has to trade or waive a player his franchise is in great shape. Plus having 2 goalies earning over $5 mil and 1 earn over $8 million a year is silly. Not even the NYR would have themselves in situation like that.

On a totally self-serving note - just to clarify on my finances, because it may appear that I'm very irresponsible, but I'd like to think that I'm not.

The current Finance Page lists my payroll at 96 million, but I've made trades that have been approved by the league and one that is still pending that bring my payroll to 71 million (this INCLUDES the addition of a 10,000,000 Jagr for the next year).

As well - I now only have one goalie (which was my plan all along) and he (Luongo) makes 5 million.

And as far as "unfair trade" advantages - I assume you mean the roster I took over, not the one I shaped. Because popular opinion is that I haven't "won" a trade yet, and can't draft either (right Dion/Josh ?)

This wasn't meant as any sort of "take-that, Claudio". I just wanted to clarify the situation.

 

[Tampa GM]

I have part of this league ever since the begining and I dont think we should just stop now. This league has been going on forever and we can survive this thing as well.

I actually think Claudios suggestion is good. I would vote yes for a cap. That would be a good way to keep salaries down. I also believe something needs to be done for those teams with not much money left in the bank.

 

[Wildman]

I strongly disagree about putting a salary cap a week before season starts. It doesn't give enough time for teams to get below cap without getting riped off. If we decide early enough, maybe next year when we are given more time.

I don't agree with only giving money to teams that have little money left. Its like giving them a "reward" for not watching their budget. I believe you give money to everybody or nobody.

I do agree about rolling back salaries.


Barry Corras
AGM NYI

 

[Dr.Sens(e)]

Don't worry - we're not talking about these changes before the season starts - certainly not a salary cap or handing out cash. What we're realistically brainstorming about is next season.

I suppose it's possible that once the season starts and if projected cash flows are so ominous, then perhaps we'll look at an interim measure. But in the mean time, discussing solutions is more about the long-term health of the league.

 

[Ville Isopaa]

I strongly disagree about putting a salary cap a week before season starts. It doesn't give enough time for teams to get below cap without getting riped off. If we decide early enough, maybe next year when we are given more time.

I don't agree with only giving money to teams that have little money left. Its like giving them a "reward" for not watching their budget. I believe you give money to everybody or nobody.

I do agree about rolling back salaries.


Barry Corras
AGM NYI

I pretty much agree with Barry on these 3 points. Depends ofcourse on how big the rollbacks would be and how high the cap would be...

 

[Vaive-Alive]

Indeed.

Don't worry - we're not talking about these changes before the season starts - certainly not a salary cap or handing out cash. What we're realistically brainstorming about is next season.

I suppose it's possible that once the season starts and if projected cash flows are so ominous, then perhaps we'll look at an interim measure. But in the mean time, discussing solutions is more about the long-term health of the league.

Whatever systemic finacial fixes are proposed now should only be realized in the next HFNHL season - there is too little time now to implement major changes and have all teams adjust appropriately.
However, raising the average ticket price in the HFNHL to $44.00 is not a difficult transition to make. I would encourage all GM's currently under the average NHL price to raise their ticket prices. Granted that there are some teams that would have to weigh the costs of raising ticket price with attendance ( particularely those who have an endorsement based on overall Attendance ), it would be a first step in trying to bring money back into the league. After all - if your players are making NHL salaries, shouldn't you at least be charging NHL ticket prices?

Kruegs
GM Bruins

 

[MatthewFlames]

Well, I think the last thing we should be doing is handing out money to the teams that have gotten themselves in a financial mess, while not giving any money to the teams that have managed their finances better. Kind of like handing an alcohlic a pint of whiskey to help them get sober. Teams who have dug themselves a financial hole should dig themselves out and learn how to make money.

As a GM that recently inherited a team with financial shambles that has already cost me several players... let me say this... handing out money is NOT the answer.. I have had discussions with the league management about the financial situations... and I agreed with them ... and after some time have decided that there is a way out of the mess and that I am looking forward to digging this team out...

Matthew
GM Flames

 

[Brent Burns Beard]

pardon me for not readin all the posts yet, but i did read a few about the cash situation.

one league i was in reset everyone's bank account to 15million. some teams lost, some teams won. but basically we were all back at even ground.

r

 

[Wildman]

Responding to previous EMAIL: re: one league restarting everyone at $15million.

The problem with starting everybody at $15 million bank accounts are 2 things:
1) Rewards teams that have little money left and screwes the teams that spent money wisely.

2) The team with little money, may have spent their original money to load up on superstars, and whould have more money given to them to buy more. The team that originally had alot of money because they have no superstars, would have less money to buy more superstars, and would also have to bid against teams that are already loaded with superstars that were given more money.

Barry
AGM NYI

 

[Brent Burns Beard]

Responding to previous EMAIL: re: one league restarting everyone at $15million.

The problem with starting everybody at $15 million bank accounts are 2 things:
1) Rewards teams that have little money left and screwes the teams that spent money wisely.

2) The team with little money, may have spent their original money to load up on superstars, and whould have more money given to them to buy more. The team that originally had alot of money because they have no superstars, would have less money to buy more superstars, and would also have to bid against teams that are already loaded with superstars that were given more money.

Barry
AGM NYI

no argument ... any resolution, whether it be status quo or otherwise, will have flaws.

r

 

[Chuzwazza]

I've said it before and I'll say it again. I think it should all be placed on the GM's to make sure thier teams are financially responsible. with a few catches.

Any team that falls below $0 has it's GM removed instantly.

Any GM that takes over a team with less than $10M in the bank will start with that amount...every Gm needs time to adjust to the league and learn what the market value is. Also, the admin team should give each new GM a quick run down of what has ahppened in our league and advise them no to spend that money which they are give too quickly. It also stops there from being a couple of "hopeless teams" with little talent and no money that nobody will want to take.

Like i said before...we have our own caps...its just called a bank balance, not a set salary cap.

We can implement a rule for overpraiced waiver bound players (eg. Klemm)

1). Contract buy outs (say at 40% of total contract)

and/or

2). Any player who has sat on a minor league roster (and played less than 20HFNHL games in a season for anything other than injury....or been exposed on waivers) is over 25 years of age, with a salary of over x amount per year (say $2million) instantly becomes a UFA in the off-season, with no compensation picks going to the team that placed him on waivers.

just an idea...thoughts?

 

[Ville Isopaa]

I've said it before and I'll say it again. I think it should all be placed on the GM's to make sure thier teams are financially responsible. with a few catches.

Any team that falls below $0 has it's GM removed instantly.

If you mean at any point during the season I don't agree to this. When I went down under $0 last season, it was during a 9 game road trip which I started with about 1,5m in the bank. At the time I was trying to get the best value for my high salary players and when the deal was done after a few games in the red, I was back on plus. Would I have been forced to move the players for first offer I got I would have been much worse off and had a longer road to go to get my team back on positive. When you're down in the 1-2m region and turning it around one longer road trip can lead to going negative for a few games..

I'd rather make it so that unless the GM can show that he has a plan how to get the team finances back up shortly (trade high priced players, get cash in trades, etc.).

Any GM that takes over a team with less than $10M in the bank will start with that amount...every Gm needs time to adjust to the league and learn what the market value is. Also, the admin team should give each new GM a quick run down of what has ahppened in our league and advise them no to spend that money which they are give too quickly. It also stops there from being a couple of "hopeless teams" with little talent and no money that nobody will want to take.

Like i said before...we have our own caps...its just called a bank balance, not a set salary cap.

We can implement a rule for overpraiced waiver bound players (eg. Klemm)

1). Contract buy outs (say at 40% of total contract)

and/or

2). Any player who has sat on a minor league roster (and played less than 20HFNHL games in a season for anything other than injury....or been exposed on waivers) is over 25 years of age, with a salary of over x amount per year (say $2million) instantly becomes a UFA in the off-season, with no compensation picks going to the team that placed him on waivers.

just an idea...thoughts?

-The 10m for new GM's is good, and I agree that we do have our cap in the budgets already.

1)Contract Buyouts: I'm ok with that.
2) I think 1,5m should be enough to put the player in that position, maybe ever 1,2m.