To the "Pro-PA" crowd...

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Timmy

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Feb 2, 2005
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jaws said:
In response to Splatman Phanutier


Owner: "We're so poor, we have to raise prices to compete..."
Fan: "Well I guess I better support my Blackhawks, even though the owner has hurt himself by blacking out home games and getting no one worth seeing."

.

Is this the pressure point most owners feel when they "overspend" in order to placate the fans and media, or is he simply one of the good guys, refusing to pay "market value" for players and suffering the consequences (horrible product, attendance).

Owners have to be labelled cheap during a CBA because they don't go after the talent in the offseason, and then labelled drunken sailors who deserve the current situation and shouldn't make the players take the hit for their stupidity when the CBA comes up.

Which is it?

Chicago had a budget, and stuck to it to the chagrin of Hawks fans everywhere, and yet is considered the worst owner in the league, even though he's done what every player rep is saying all the owners should have done in the first place - made a budget and stuck to it. It's not the players' fault salaries are where they are, but boy does Chicago suck. They need to spend more to "get people worth seeing."

Nobody "put a gun" to the Hawks head to sign players, and yet they're pilloried as the worst joke in the NHL.

They should have blown their budget, I guess.
 

jaws

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Mar 12, 2005
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Timmy said:
Is this the pressure point most owners feel when they "overspend" in order to placate the fans and media, or is he simply one of the good guys, refusing to pay "market value" for players and suffering the consequences (horrible product, attendance).

Owners have to be labelled cheap during a CBA because they don't go after the talent in the offseason, and then labelled drunken sailors who deserve the current situation and shouldn't make the players take the hit for their stupidity when the CBA comes up.

Which is it?

Chicago had a budget, and stuck to it to the chagrin of Hawks fans everywhere, and yet is considered the worst owner in the league, even though he's done what every player rep is saying all the owners should have done in the first place - made a budget and stuck to it. It's not the players' fault salaries are where they are, but boy does Chicago suck. They need to spend more to "get people worth seeing."

Nobody "put a gun" to the Hawks head to sign players, and yet they're pilloried as the worst joke in the NHL.

They should have blown their budget, I guess.

You bring up some good points here, mainly talking about whatever the owner does, he loses-unless he wins it all.

But I look at it like this. If we look at Chicago, who charges on average just under $50.00 a ticket (7th highest), yet has a payrole of $35m (17th overall), it is clear to see how Wirtz is cheating his fans. True, he keeps his payrole down, being a responsible owner, but at the same time is not spending the money the fans give him to improve his product. The Phoenix Coyotes on the other hand, just a few thousand dollars above Chicago's payrole, (16th overall), have an average ticket price just over $30.00 (4th lowest). True, the economic rules of supply and demand are at play, but regardless, Wirtz is treating his fans rather poorly, considering their loyalty.

Now, is the answer then, as you asked, to blow the budget? No. But if you aren't, then lower the ticket prices and stop taking advantage of the fans. If I'm paying on average $50.00 a ticket, then I expect my owner to have a payrole a lot higher than $35 million.

The numbers I used are from 2002-03 season and from the following sites:

http://www.leagueoffans.org/nhlfancost02-03.html
http://asp.usatoday.com/sports/hockey/nhl/salaries/totalpayroll.aspx?year=2002-03
 

Phanuthier*

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In response to jaws,

Incorrect. According to Gil Stein, former head of the NHL and author of Power Plays, he states that "in June of 1997, the NHL followed the precedent of the Plan of Third Expansion when it announced a new 3-phase plan, expanding to Nashville in 1998, to Atlanta in 1999, and to St. Paul, Minnesota and Columbus, Ohio, in 2000 (Stein, 64).
While that was implamented in 1997, expansion to at least Nashville and Atlanta started before Gary Bettman's time. Sorry, no source. I read it a while ago.

Furthermore, financial contraints were also well known in the media. Hence CBC's "The New Ice Age", made between 1997-98, clearly documenting the rise in player salaries (http://www.whitepinepictures.com/iceage.html). Despite the whole the NHL was digging itself into, it continued to expand, despite its unhealthy (supposibly anyway) situation.
Would you agree that these financial problems weren't magnified as much in 1998 then now, 2005? That was about the time when problems started to magnify.

Despite the Moose's success, Winnipeg is still dieing for an NHL team. Same with Saskatoon and Quebec City and others.
Just wondering what your thoughts/response was to towns like Kelowna and Kamloops willingness to take on a NHLPA team into their city, and drawing fans away from their resident WHL team. It's bound to happen, and I'm betting these smaller cities and towns arn't willing to gamble their WHL franchise on a NHLPA league that will be there for what, a year?

Also. would these smaller cities / towns have the proper assets to finance a league the NHLPA is proposing? How about the buildings? Remember that these pro athletes are spoiled filthy, as evident when you have guys like Rick Nash whining about long bus rides in the Swiss league. Coupled with the lower revenue a NHLPA league would draw and the small building capacity, I don't think the NHLPA league can afford 1st class flights and/or private jets to take them from town to town, and I don't think these pro players are game for 13-hour bus rides eating sandwiches from the fridge.

Also, another factor to consider is the backlash new owners would be taking on from the previous owners. Keep in mind alot of these NHL owners are incredibly powerful people in society, and can destroy a little owner should they butt heads. Take for instance Harley Hotchiss (as we are talking about a few Western small towns / cities here) who has been known to be a very charitable and friendly man, but will bend you over the table and tear you to pieces (eh, Trevor Linden?) if you decide to butt heads with him in bussiness.

Keeping that in mind, and the fact that the NHLPA drove a $2.1 billion industry in the toilet, is the risk really worth it to prospective NHLPA league owners... for a 1 year league? That sure seems like a lot of work all-for-not.

I fail to see your point about back paged financial troubles and its impact on whether to expand or not. The bottom line is the NHL knew as well as the business community, yet they still expanded, for the most part, to untraditional cities.
Basically, what I was getting at was this financial trouble is ALOT more magnified now then back then. We have the lockout, the Levitt report reporting astounding losses, and NHL franchises going into bankrupcy since - something that didn't happen at the time of expansion. Yes, it was known then, but it wasn't as magnified as it is now.

Now all that considered, how many prospective investors are there for NHL franchises? 1? 2? How do you plan on pulling off 12+? Is there really that much interest for the risks, the backlash and the financial troubles (as history would show) for owning a team for 1 season?

The Hitmen are pretty profittable last time I checked. In fact, since they're owned by the Flames, they're making them money while they don't even play. If CHL teams are worried about fans leaving, then have the PAHL work with them. Have double hitters-fans tickets go to both the players league and the CHL matchup. I'd go for the 2 for 1 deal. Also, if the CHL team owns the rink, that PAHL team has to pay rent, giving the CHL team more money.
The Hitman are in a large market (Calgary). Saskatoon is not. Huge difference.

You wonder how much interest there is? Look at "Ryan Smyth's Charity Game" tour.

As well, do you think the CHL will want to hold hands with the NHLPA league? What does the CHL have to gain from this? As far as I'm concerned, the CHL has nothing to gain from this and something to lose.

2-1 deals... as if there wasn't enough trouble for the NHLPA league to bring in revenue, now split the money with the CHL? These players would be making more in the UHL! Playing in small towns with likely no media revenue and nothing but small arena's (if they even fill half), low ticket prices and almost no marketing power will not support the Mike Modano's and Rick Nash's of the world who like their 1st class flights, gambling and nice cars. Considering the previous attempts like the OSHL and Ryan Smyth's Charity Hockey Game, this NHLPA will be lucky not to run their union into bankrupcy!

I'd say there more at risk from some wacko mifted at the players.
Lets see... Joe Thronton playing slashy-slashy... Todd Bertuzzi... I'd say "our" NHL players are probably more of a psycho on the ice then the resident league's players.

It'll be tough to create, but if they are committed, it'll work.
Once again using the OSHL as an example... that idea fell apart fast. This will take alot more work, alot more investing and alot more marketing. If the OSHL is any (even slight) indication, this deal will fall through and probably crush the union.

If they created and gave 112% into their league, it would truly show the fans what they really play and stand for.
Again... why would they? Once again, look at the OSHL. This league is almost guerenteed to be a season-long version of the all-star game, where players like Donald Brashear can continue pretending they are stars.

Why not? We got the technology. I think it'd be the greatest lure for fans to come and watch, as it really would be their team. Heck, even get them to make a payrole or something. Create a minimum salaray for players, then let the fans decide who gets most of their money. Fantasy pools come to life.
Why not? Well, first off, organization. Its too tough to organize (wow I'm sounding like a broken record here, but again, look to the OSHL) and it would take too much time, money and effort to gain awareness.

That, and fans are stupid. They will ice terrible teams, making this gong-show of a league draft more of a joke then you can ever imagine.

Payroll... who's pockets do these come out of again? Our floodgate of NHLPA league owners? And letting fans decide how much they are, with a MINIMUM salary? That'll be the day when any franchise invester agrees to that.

Then you create an even worse situation, especially for the small market teams. Three years and players could be gone, especially if he can go to a team that can offer and pay his full 10% leeway.
Huh? If they move organizations, theres no leeway. Its only if they stay with the same organization. If he changes franchises, the stipulation no longer applies.

You should. By not following their criminal history, you're allowing these unjustices to occur. Heck, your allowing them to steal from you.
Compared to whats already happening? Compared to the government money scandals? Considering how my university tuition is being throw around?

Knowing their history, would you believe their crys of poverty now?
As a fan of the Calgary Flames, I've never had to concern myself with that. First off, the Flames owners have never been accusted of any sort of crime. Secondly, the Flames have never cried poverty. They've only said that they are not willing to lose $10 million a year, and are looking to either break even or only lose a million or two.

Besides, having 3 guys, or even a bit more in law trouble, out of 700 is a pretty good ratio; much better than what the owners have.
Do I really have to name them all? Theo Fleury, Ed Belfore, Jose Theodore...

If the NHLPA really wants to play this game of chicken and destory the league, they are the ones losing. Break the NHL and the players have no where to make their $10 million. Simple as that. Not a smart idea to play chicken with your employer.
 

Timmy

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Feb 2, 2005
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jaws said:
You bring up some good points here, mainly talking about whatever the owner does, he loses-unless he wins it all.

But I look at it like this. If we look at Chicago, who charges on average just under $50.00 a ticket (7th highest), yet has a payrole of $35m (17th overall), it is clear to see how Wirtz is cheating his fans. True, he keeps his payrole down, being a responsible owner, but at the same time is not spending the money the fans give him to improve his product. The Phoenix Coyotes on the other hand, just a few thousand dollars above Chicago's payrole, (16th overall), have an average ticket price just over $30.00 (4th lowest). True, the economic rules of supply and demand are at play, but regardless, Wirtz is treating his fans rather poorly, considering their loyalty.

Now, is the answer then, as you asked, to blow the budget? No. But if you aren't, then lower the ticket prices and stop taking advantage of the fans. If I'm paying on average $50.00 a ticket, then I expect my owner to have a payrole a lot higher than $35 million.

The numbers I used are from 2002-03 season and from the following sites:

http://www.leagueoffans.org/nhlfancost02-03.html
http://asp.usatoday.com/sports/hockey/nhl/salaries/totalpayroll.aspx?year=2002-03


I understand the part about cheating the fans, but:

What should his ROE be, then?

Should he decrease ticket prices until he has broken even? The only rights the fans have in dictating how he should run the team is by not buying tickets. This may force him to lower ticket prices, although probably not past the break-even point.

I used to work for a large bank that made one or two billion per year. We got destroyed in the media every time, saying service charges should be eliminated, interest rates raised on bank accounts and lowered on credit cards and loans.

The market cap was $40b, and assets were 200b.

Internally, we thought $1b was a bad year, considering how much money our shareholders had invested in us.

So what should a hockey team's return on equity be? Honestly? Should it be zero? One percent? More? Do the owners/shareholders have a right to expect a profit, or do they deserve to lose money every year because they were stupid enough to buy a team? Should they expect to lose money every year on the Greater Fools Theory that down the road the sale of the team will reap enough profits to make up for their losses?

If you think so, that's fine, but please be honest. If it is your position that owners should lose money in perpetuity, say so.

It is my position that owners have a right to expect a return on their investment, and that the incentive to do so will keep this league alive in the face of continued adversity.
 

wazee

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jaws said:
Despite the Moose's success, Winnipeg is still dieing for an NHL team.

Not according to your fellow PA supporter, Icey. In a thread titled 'Was bringing Minnesota and Columbus into the league a bad idea?', Icey stated..

Icey said:
Winnipeg does not want an NHL team back. They have their AHL team and Winnipeg has become the center of the AHL and they are happy, but most in Winnipeg want nothing to do with a NHL team.

http://www.hfboards.com/showthread.php?t=134068&page=3&pp=30&highlight=winnipeg

Post number 45 or around there.
 

me2

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Tawnos said:
Noticeably? My system actually deals with salary. Read this carefully: making teams give up picks isn't going to stop them from over-spending. It won't create a a salary drag... ever. Salary drags stop salaries from ballooning. If a team wants Jerome Iginla, and is willing to spend $10m in a season to get him, charging a draft pick over $40m isn't going to make them think twice. If you make it so that in order to get Iginla, it's going to cost them $25m in one season, they'll never ever do that. Since that's the case a team would spend more around the $6m range... and that sets the market. Nobody that's on a lower level than Iginla is going to ask for $6m, and people on the same level will ask for around the same amount. If a team on a lowest taxed bracket says "we'd like Iginla and we have $8m in our budget to get him," then they're not going to offer him $8m, they're gonna offer him $6m. Again, salary drag... charging draft picks doesn't do a damn thing there.

So, my system has luxury tax and draft pick penalties. Hit them in the wallet and hit them in the prospects. Far more effective system. But being a wings fan, perhaps you are afraid of that.....


Taking the Wings picks away only keeps the Wings in the same cycle. They can't start rebuilding because they don't have the draft assets, so therefore they must re-tool constantly through free agency. Think these things through.


As opposed to the current wings system of retooling through free agency and still having draft picks? Even a pure luxury tax system sounds much, much easier for the Wings when they don't have to give up their draft picks as well. Teams still trying to overpower other teams through financial force.
 

Tawnos

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That's why you set a ceiling... teams can only use their financial advantage to a point and using their advantage gives back to the teams that don't have that advantage anyway.

What happens to the picks that are lost to tax? Are they just gone? So now instead of a 30 pick 1st round, we have a 27 pick one? There's no fair way to do that in any case so it's just a plain terrible idea.

By the way, I'm not a Wings fan I was just using their example. I'm a Rangers fan and I know how these things work. The Rangers pre-rebuilding wouldn't think twice about landing a Pavel Bure by giving up a first round pick because guess what, that's exactly what they did.

We weren't arguing luxury tax or no luxury tax, we were arguing the staggered luxury tax that taxes exponentially across 4 brackets vs Flat luxury tax for the highest spenders. My system is much more fair.
 

me2

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Tawnos said:
That's why you set a ceiling... teams can only use their financial advantage to a point and using their advantage gives back to the teams that don't have that advantage anyway.

What happens to the picks that are lost to tax? Are they just gone? So now instead of a 30 pick 1st round, we have a 27 pick one? There's no fair way to do that in any case so it's just a plain terrible idea.

By the way, I'm not a Wings fan I was just using their example. I'm a Rangers fan and I know how these things work. The Rangers pre-rebuilding wouldn't think twice about landing a Pavel Bure by giving up a first round pick because guess what, that's exactly what they did.

We weren't arguing luxury tax or no luxury tax, we were arguing the staggered luxury tax that taxes exponentially across 4 brackets vs Flat luxury tax for the highest spenders. My system is much more fair.

If you want revenue sharing giving from the large spending teams to low spending teams doesn't always work. If the Leafs/Wings do a massive rebuild and spend $25m on payroll while Tampa spends $40m on its team, then should Tampa being giving money to these two teams? I don't think so.

If revenue sharing is the key goal then tax revenue.

A 20% tax on every dollar a teams makes over $60m raises $96m (using Forbes guesses at revenue).

A 30% tax on every dollar a teams makes over $60m raises $144m (using Forbes guesses at revenue).

A 30% tax on every dollar a teams makes over $50m raises $221m (using Forbes guesses at revenue).

Redistrubute that $221m amoungst the weakest teams on an as needed basis and just use a simple hard cap at $40m.

* Wings (sticking to the same example) pay $14m in revenue taxes this way, roughly the same as your system.
*Payrolls stay closer together.
* money gets fairly distributed from rich to the poor and not based on payroll spent.
 

Icey

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Jan 23, 2005
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Timmy said:
I understand the part about cheating the fans, but:

What should his ROE be, then?

Should he decrease ticket prices until he has broken even? The only rights the fans have in dictating how he should run the team is by not buying tickets. This may force him to lower ticket prices, although probably not past the break-even point.

I used to work for a large bank that made one or two billion per year. We got destroyed in the media every time, saying service charges should be eliminated, interest rates raised on bank accounts and lowered on credit cards and loans.

The market cap was $40b, and assets were 200b.

Internally, we thought $1b was a bad year, considering how much money our shareholders had invested in us.

So what should a hockey team's return on equity be? Honestly? Should it be zero? One percent? More? Do the owners/shareholders have a right to expect a profit, or do they deserve to lose money every year because they were stupid enough to buy a team? Should they expect to lose money every year on the Greater Fools Theory that down the road the sale of the team will reap enough profits to make up for their losses?

If you think so, that's fine, but please be honest. If it is your position that owners should lose money in perpetuity, say so.

It is my position that owners have a right to expect a return on their investment, and that the incentive to do so will keep this league alive in the face of continued adversity.

An owner does not have a right to make a profit no matter what business you are in and especially if you own a sports team. Ask any owner, and they will tell you that they don't a team to make money they own a team to win and have the value of the franchise increase so when they sell it makes a profit.

They lose money because they spend more than they take it in. It quite simple math. Perhaps they need to become better negotiaters and get bettere arena deals, afterall how many teams are losing money over their arena deals vs. their expenses. Ottawa's problems last year were all about the lousey arena and not the fact that the team bought in no revenue.

And the bit about Phoenix isn't the entire story. What was left out was last season Phoenix spent 106% of revenues on players salaries. How is being a smart business man? Why would you keep your ticket prices so low when you spend more on players salaries than you bring in in revenue? That's just stupid if you ask me. But we are supposed to respect these SMART business men who run these teams?

Bill Wirtz may make money but he does it at the expense of his fans. Chicago broadcasts no home games on TV because he doesn't want to pay for the TV deal, but perhaps if he spent some money on his team and wasn't always dumping payroll he might have a winning team and therefore make some money on the TV deal. His arena is half empty most nights and the Chicago Wolves draw a bigger crowd than the Blackhawks. Wirtz just wants the tax write off. Until Wirtz is no longer involved with the Blackhawks what you see is what you'll get, cap or no cap. The only thing a cap will do is allow Wirtz to spend even less and give even less to the fans of Chicago, who deserve more.
 

Tawnos

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me2 said:
If you want revenue sharing giving from the large spending teams to low spending teams doesn't always work. If the Leafs/Wings do a massive rebuild and spend $25m on payroll while Tampa spends $40m on its team, then should Tampa being giving money to these two teams? I don't think so.

If revenue sharing is the key goal then tax revenue.

A 20% tax on every dollar a teams makes over $60m raises $96m (using Forbes guesses at revenue).

A 30% tax on every dollar a teams makes over $60m raises $144m (using Forbes guesses at revenue).

A 30% tax on every dollar a teams makes over $50m raises $221m (using Forbes guesses at revenue).

Redistrubute that $221m amoungst the weakest teams on an as needed basis and just use a simple hard cap at $40m.

* Wings (sticking to the same example) pay $14m in revenue taxes this way, roughly the same as your system.
*Payrolls stay closer together.
* money gets fairly distributed from rich to the poor and not based on payroll spent.

You need to stop getting yourself confused. I made no mention of revenue sharing in any of my posts. I want revenue sharing, but revenue sharing does not do anything to salaries. Only by taxing what they actually spend will salaries keep down.

I want 60% revenue sharing on all gate-receipts and 35% on all, and I mean all, local TV money.

The biggest difference between revenue sharing and luxury taxes? Revenue sharing money can be applied to a team's profit margin or whatever the team feels like, while luxury taxes have to be put towards hockey operations.
 

Timmy

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Feb 2, 2005
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Icey said:
An owner does not have a right to make a profit no matter what business you are in and especially if you own a sports team. Ask any owner, and they will tell you that they don't a team to make money they own a team to win and have the value of the franchise increase so when they sell it makes a profit.

They lose money because they spend more than they take it in. It quite simple math. Perhaps they need to become better negotiaters and get bettere arena deals, afterall how many teams are losing money over their arena deals vs. their expenses. Ottawa's problems last year were all about the lousey arena and not the fact that the team bought in no revenue.

The only thing a cap will do is allow Wirtz to spend even less and give even less to the fans of Chicago, who deserve more.

I asked if they have the right to expect to make a profit.

And you are suggesting that 100% of owners of professional sports teams, if polled, would say they bought teams to lose money up until the day they sell? Could you please post a reference or link?

And, do fans, then, have a right to a winning team? Keep in mind I've been a Canucks fan since I was old to go to the bathroom by myself before you answer that.
 

Hoss

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Feb 21, 2005
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Timmy said:
I asked if they have the right to expect to make a profit.

And you are suggesting that 100% of owners of professional sports teams, if polled, would say they bought teams to lose money up until the day they sell? Could you please post a reference or link?

And, do fans, then, have a right to a winning team? Keep in mind I've been a Canucks fan since I was old to go to the bathroom by myself before you answer that.
This is the real crux of the fix we are in, not all of the owners expect a profit. If some owners are knowingly and willingly running thier teams at a loss (for whatever reason) how can you expect the PA to accept linkage?

Yes the fans, especially the Canuck fans have a right to a winning team!
 

kdb209

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Jan 26, 2005
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Hoss said:
This is the real crux of the fix we are in, not all of the owners expect a profit. If some owners are knowingly and willingly running thier teams at a loss (for whatever reason) how can you expect the PA to accept linkage?

Running a team for a loss has absolutely nothing to do with linkage - linkage is to a %-age of REVENUE not profit (or loss).

Those teams which may be knowingly running teams for a loss are generally owned by ego driven owners spending more than their revenues. Do you know of any owner who is exlicitly working to reduce revenue.

The only real issue here is allocation of revenues between affiliated businesses - ie how much does Comcast pay itself for the Flyers TV rights - and this is an issue that can and has been solved (by the NBA).
 

Hoss

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Feb 21, 2005
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kdb209 said:
Running a team for a loss has absolutely nothing to do with linkage - linkage is to a %-age of REVENUE not profit (or loss).

Those teams which may be knowingly running teams for a loss are generally owned by ego driven owners spending more than their revenues. Do you know of any owner who is exlicitly working to reduce revenue.

The only real issue here is allocation of revenues between affiliated businesses - ie how much does Comcast pay itself for the Flyers TV rights - and this is an issue that can and has been solved (by the NBA).
Ah. Thank You, it's clear I was not understanding the proposed linkage.
 

andora

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19nazzy said:
Its hard to solve anything when only 1 side is giving up things and not getting anything back in return
well aren't they the only side of two in the position to give up things? what could the nhl 'give up' to the pa? concede more losses, jeopardize several franchises to pay players openly... etc...?

isn't the pa the only side here that SHOULD have to give something up? i can see arguing the nhl has to remain flexible, but not that they need to give up anything, they have nothing positive to give up
 
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