TSN: How the new CBA hurt Canada's small market teams

[Crazy_Ike]

Besides the thorough debunking of the article and the ludicrous, undefendable idea that the small markets were better off before the last CBA (it should be a pretty big red flag when even the markets you are supposedly saying that about don't agree with you), once again it appears that people are forgetting that the new CBA wasn't just about stopping the bleeding that was going on at the time, but preventing it from getting worse. The Rangers and Leafs and similar teams of the league would not be sitting at their 70m+ 2004 payrolls today.

One of these days these guys who post articles like this are just going to have to bite the bullet and admit the CBA has been a good thing.

 

[Fugu]

Besides the thorough debunking of the article and the ludicrous, undefendable idea that the small markets were better off before the last CBA (it should be a pretty big red flag when even the markets you are supposedly saying that about don't agree with you), once again it appears that people are forgetting that the new CBA wasn't just about stopping the bleeding that was going on at the time, but preventing it from getting worse. The Rangers and Leafs and similar teams of the league would not be sitting at their 70m+ 2004 payrolls today.

One of these days these guys who post articles like this are just going to have to bite the bullet and admit the CBA has been a good thing.

When teams stop bleeding and ending up in BK court or their owners stop kvetching that they cannot stomach more $30 MM/yr losses... we can decide if the CBA has been good. Because that's what it was supposed to do. It's ludicrous to suggest that Cdn teams were hurt by the CBA when it's eminently obvious to even the most casual of observers that currency had something to do with it. Just like it's inflating the NHL's revenue reports.

 

[Fugu]

Pretty poor arguement.

The Sens were good in the late 90s / early 00s because of incredibly good scouting, drafting, and player moves. The owner had very little money, the team was sunk in debt, and the financial structure was a house of cards.

The Sens decline certainly wasn't because of money. We have a rich owner who paid $20 million for a $200 million arena. He has spent to the cap every year, heck, last season we were about $8 mil over the cap due to the Heatley bonus, and front-loaded contracts. The decline is due to terrible scouting and drafting from 2002-2007, and more bad than good NHL moves and free-agent signings (not to mention letting Chara walk) from 2002-present.

If our team was still poor, and way below the cap, we might be in better shape as we wouldn't have blown our brains out with bad signing after bad signing.

The article takes correlation and infers causation. Not very intelligent.

I hope you can point out exactly what you believe is being correlated.


You prove the authors point for him. Ottawa's decline indeed was due to poor management, but furthermore it was compounded by the timing of the lockout with regard to their key RFA's (age/status) and where the cap was pegged after the lockout ended. The timing couldn't have been worse.

In the old system, Ottawa had a choice of keeping their aging core by riding up the cost spiral as their key players matured and succeeded. The next two pieces to doing that successfully are to continue to draft/develop as the primary mode to replace players lost otherwise, and to carefully bring in an UFA when a push can be made. You need "some" money to do the latter, but anyone who believed that you could build through the UFA market was off chasing wild geese all along. It was always about managing the draft and development cycle. Sometimes it made sense to trade picks for a key piece as well. Today a team is further limited by the cap and cannot really make decisions just based on hockey needs, but is primarily driven by cap restrictions.


My point is that money was cited as the primary reason for failure (and hence the promise of success if spending was 'controlled') but really, we're just back to drafting, developing and managing assets within a team's budget. Nashville should be held up as a model for smaller market teams as they always seem to be able to do well no matter what everyone else is spending.

 

[MaskedSonja]

I was thinking about this (and correct me if I'm wrong)


Teams that have won cup since Lockout (not in order)

Detroit
Pittsburgh
Chicago
Carolina
Anahiem

Add TB I believe the (last?) team to win before lockout

When I look at the teams, I see a pattern, with the exception of Detroit (who is just godly when it comes to Hockey Personnel )

All those teams were doing poorly economically for a very long time. But (not counting this year) they not have won more than one Cup since lockout. This year Carolina is not even in the playoffs, and I believe Chicago and Ana got in on the last day due to losses by other teams) And I'm seeing evidence that the window is really small for winning a Cup-peak 2-3 years, before it seems massive salary dumps have to take place. And unless things change, I see realistically only Detroit having the means to make serious Cup run.

So it could be argued that smaller market teams have a chance to win *A* Cup, the indication is that having a constant Cup contender seems unlikely-you'll get 2-3 chances at MOST IMO to get a cup before tearing down. So because of that, are we looking at 5 year cycles due to economics? year 1-3, rebuild, years 4-6 Cup Contend, lather rinse repeat?


I'm not trying to take a side one way or the other-other than to suggest, as I said, the Cap in short term gives smaller markets a chance to win A Cup, but is not engineered so that a team could attempt a Dynasty ("parity" )

So which is better for a small market team? A chance a couple of years in a 5 year Cycle to win a cup followed by teardown, or building a consecutive "Playoff" contender (not necessiarly a Cup contender)?

 

[LadyStanley]

... and I believe Chicago and Ana got in on the last day due to losses by other teams

Anaheim clinched a berth before that (Friday or Saturday). Chicago got in on the final day due to a loss by Dallas.

 

[Fugu]

I was thinking about this (and correct me if I'm wrong)


Teams that have won cup since Lockout (not in order)

Detroit
Pittsburgh
Chicago
Carolina
Anahiem

Add TB I believe the (last?) team to win before lockout

When I look at the teams, I see a pattern, with the exception of Detroit (who is just godly when it comes to Hockey Personnel )

All those teams were doing poorly economically for a very long time. But (not counting this year) they not have won more than one Cup since lockout. This year Carolina is not even in the playoffs, and I believe Chicago and Ana got in on the last day due to losses by other teams) And I'm seeing evidence that the window is really small for winning a Cup-peak 2-3 years, before it seems massive salary dumps have to take place. And unless things change, I see realistically only Detroit having the means to make serious Cup run.

So it could be argued that smaller market teams have a chance to win *A* Cup, the indication is that having a constant Cup contender seems unlikely-you'll get 2-3 chances at MOST IMO to get a cup before tearing down. So because of that, are we looking at 5 year cycles due to economics? year 1-3, rebuild, years 4-6 Cup Contend, lather rinse repeat?


I'm not trying to take a side one way or the other-other than to suggest, as I said, the Cap in short term gives smaller markets a chance to win A Cup, but is not engineered so that a team could attempt a Dynasty ("parity" )

So which is better for a small market team? A chance a couple of years in a 5 year Cycle to win a cup followed by teardown, or building a consecutive "Playoff" contender (not necessiarly a Cup contender)?

Only one team can win, out of 30 teams (as you know).

The best that can be hoped for is 1 Cup every 30 years. Can teams survive the other 29 while they ride up, win once, slide back down, repeat?

 

[danishh]

i see the argument, i dont agree on the specific cases.

from an ottawa standpoint, we lost our scouting staff. We lost the coach who got more out of every player. We hired a dinasaur who couldnt draft as GM. We found a coach that worked, but then peter principled him up to GM.

Ottawa failed because of bad front office staff, not their checkbook.

 

[MaskedSonja]

Only one team can win, out of 30 teams (as you know).

The best that can be hoped for is 1 Cup every 30 years. Can teams survive the other 29 while they ride up, win once, slide back down, repeat?

In my long winded way, that's what I was asking

I'll try to word it this way:

Is it more important for the small market team to, as you say win 1 Cup and slide the 29 times(with the build/bust cycles), or is it more important for them to build and keep a team that might only make 1st or 2nd round, but do so in a way that keeps them "competitive" (optically) over that 30 year period, with the idea you may not win a Cup-but you keep the HOPE there (insert Toronto Maple Leaf joke here )

There's a similar thread in the polls, about would you rather have 50 years of contending with no Cup, or 1 Cup win and 49 non contending years (contending seems to be defined as making the Cup final)

 

[Crazy_Ike]

When teams stop bleeding and ending up in BK court or their owners stop kvetching that they cannot stomach more $30 MM/yr losses... we can decide if the CBA has been good. Because that's what it was supposed to do. It's ludicrous to suggest that Cdn teams were hurt by the CBA when it's eminently obvious to even the most casual of observers that currency had something to do with it. Just like it's inflating the NHL's revenue reports.

You bring this up AGAIN? The increase in the dollar exchange rate has been PROVEN to not be a very significant part of the league's revenues. I posted a mathematical step by step analysis of it months ago. If you recall, the absolute most it could account for came in at less than a third of the growth in NHL revenue last year and that was assuming everything possible in favor of the exchange rate theory; a more conservative and realistic estimate is probably closer to one sixth or one seventh.

As for whether or not they would have been fine with a parity dollar, you have stated that opinion many times, and you are welcome to it, but you and I both know it isn't supported by any of the owners of the smaller Canadian teams of the time (even now, when they are not the ones paying anymore and don't have to toe any lines). Edmonton said explicitly there would have been no ownership group without a promise to fix the CBA and Ottawa had issues surviving even WITH a new CBA and increasing dollar.

You seem to be telling us that you know better than Melnyk, Hotchkiss, and Nichols. Perhaps you would like to do what I did and show, via math, how currency parity would have allowed the Oilers and Flames of the league to compete with 120m (a conservative estimate of what the Leafs would spend on a team today without any controls) team salaries today.

 

[Fugu]

You bring this up AGAIN? The increase in the dollar exchange rate has been PROVEN to not be a very significant part of the league's revenues. I posted a mathematical step by step analysis of it months ago. If you recall, the absolute most it could account for came in at less than a third of the growth in NHL revenue last year and that was assuming everything possible in favor of the exchange rate theory; a more conservative and realistic estimate is probably closer to one sixth or one seventh.

As for whether or not they would have been fine with a parity dollar, you have stated that opinion many times, and you are welcome to it, but you and I both know it isn't supported by any of the owners of the smaller Canadian teams of the time (even now, when they are not the ones paying anymore and don't have to toe any lines). Edmonton said explicitly there would have been no ownership group without a promise to fix the CBA and Ottawa had issues surviving even WITH a new CBA and increasing dollar.

You seem to be telling us that you know better than Melnyk, Hotchkiss, and Nichols. Perhaps you would like to do what I did and show, via math, how currency parity would have allowed the Oilers and Flames of the league to compete with 120m (a conservative estimate of what the Leafs would spend on a team today without any controls) team salaries today.

Who could the Leafs pay? A 34 yr old veteran who is looking at retiring in 2 yrs, but will sign for 5 yr. Boo hoo.

Maybe I do know better than H, M and N because they could sit down and figure out that if they pull in CAD 80MM and their salary is payable in USD at 40 MM, and the CAD is worth 60% of the dollar, yup.

Brain. Dead. Simple.

And who proved what about the CAD portion? You stating it 5,395,932 times? Oops. I apparently forgot to bookmark it.

 

[Fugu]

i see the argument, i dont agree on the specific cases.

from an ottawa standpoint, we lost our scouting staff. We lost the coach who got more out of every player. We hired a dinasaur who couldnt draft as GM. We found a coach that worked, but then peter principled him up to GM.

Ottawa failed because of bad front office staff, not their checkbook.

Are you saying that the CBA had nothing to do with their earlier difficulties financially, or any of the failures post-lockout under the new CBA?

 

[danishh]

earlier difficulties financially = loonie, a freaking interchange, and an owner going personally bankrupt.

failures post lockout: yes, the UFA age hurt us, but i cant complain about "all our key players going UFA right as the cap was artificially low". Hossa was traded for financial reasons, not cap. Havlat was never going to get the money from a financial standpoint, not a cap one. While we may had been able to sign both chara and redden had there been no cap (greatly increased revenues and stronger loonie), the management is still the ones who made the wrong choice between the two.

 

[Crazy_Ike]

Who could the Leafs pay? A 34 yr old veteran who is looking at retiring in 2 yrs, but will sign for 5 yr. Boo hoo.

Meanwhile everyone else is now being paid according to the Leafs payscale. Boo hoo indeed.

Maybe I do know better than H, M and N because they could sit down and figure out that if they pull in CAD 80MM and their salary is payable in USD at 40 MM, and the CAD is worth 60% of the dollar, yup.

Brain. Dead. Simple.

H, M, and N as you put them were wise enough to see that not only was the current model unsustainable at the level it was at, but that it was getting worse and worse. One only wonders what kind of state the league would be in now if they worked the way you would apparently prefer - hitting the brakes only after you've flown off the cliff and are a couple meters away from the sudden stop at the end.

And who proved what about the CAD portion? You stating it 5,395,932 times? Oops. I apparently forgot to bookmark it.

Oh come on, you saw the math. I showed you explicitly that the increase in revenues could not be even close to significantly explained by changes in currency rates.

You've certainly never shown the math backing up your assertion. Maybe its time we see this.

 

[Fugu]

I did that math 4-5 yrs ago. I'm bored by it.

Here's the thing, Ike. There are a fixed number of spots in the NHL. The superstars will get their money no matter which system is in play. What remains then is how much the middle and little guys get.

The Leafs have 23 roster spots. They overpay a bunch of old goats.

So what? No one says that means the Panthers have to pay their 26 yr old RFA that same money. They are bidding on different players.

Leafs payroll wasn't bloated by overpaying RFA's.

The increase in revenues isn't happening in the markets that need the help. So Canadian fans are paying more and buying more stuff and the league has a bigger TV contract from Canada, and then you add the CAD appreciation... If you back it all out and remove the Cdn contribution, league growth will be rather small (maybe 2%, which is inflation level tbh); and if you remove the big market teams who never really had trouble with revenue, you're left with revenue growth in Pittsburgh, Washington..... and Chicago--- a team that should never have been in the dungeon HRR-wise.

Meanwhile, you always sweep under the rug the FACT that US TV money is less now than pre-lockout. Maybe the league will turn that around, 6 yrs after the lockout. You can't count it until the check clears.


I may come back later and see if I feel like doing the league revenues expressed in CAD (reverse translation). It's an interesting exercise, to be sure.

 

[Crazy_Ike]

I did that math 4-5 yrs ago. I'm bored by it.

Here's the think, Ike. There are a fixed number of spots in the NHL. The superstars will get their money no matter which system is in play. What remains then is how much the middle and little guys get.

The Leafs have 23 roster spots. They overpay a bunch of old goats.

So what? No one says that means the Panthers have to pay their 26 yr old RFA that same money. They are bidding on different players.

Different players who are now, through the NHLPA, measuring their salaries against the players the Leafs have paid.

Oh, you want to follow a Florida Panther budget? Enjoy inferior players!

The increase in revenues isn't happening in the markets that need the help.

No one disputed this.

then you add the CAD appreciation... If you back it all out and remove the Cdn contribution, league growth will be rather small (maybe 2%, which is inflation level tbh)

The numbers I worked that you are now pretending I didn't post indicated this is simply factually incorrect.

Here, I'll even do an abridged version for you again. 2003/4 to 2010, easy math, the league has gained about a billion in revenue (per year) in that time, from about two billion to about three billion. Exchange rate has increased by about 50% in that time too. Quite convenient numbers, in fact! Because therefore, if we are to credit the Canadian currency with the entire increase in revenue, it would in fact mean that the US teams contributed no revenue at all. Not "no increase in revenue", no revenue period. (the math - if all 1b is due to exchange rate, then it would require a 2b base - the entire league revenue - to get a 50% increase). This is obviously absurd.

But okay. You are not so foolish to say that the entire increase is due to currency rates. You claim a number of 2% for non-currency related increases (and claim it is due to inflation). That indicates about 60% of the revenue increase was due to Canadian dollar rising (if we use the fairly close 5% increase). 600 million dollars per year simply due to the dollar.

Required amount of revenue for a 600m increase in revenue from the dollar rising 50%? 1.2b. For your numbers to be correct, the Canadian teams would have needed to be contributing 1.2b out of 2b in league revenues in 2003, or about 60%... from 6 out of 30 teams. And that is STILL assuming there is no growth at all in any market, US and Canada, because you assigned the other 3% to inflation.

Your numbers are looking really, really bad.

Now here's more realistic numbers. Canadian team revenues came to about 400m back then, about 20% of the league. Now, it is about 750m which is 25% of the league's revenue. If we assume Canadian teams grew as much as American teams did, which is not unreasonable, then one would have expected Canadian teams to have 20% of revenue again. That is a 150m extra. 150m out of a 1b increase.

A bit over 17.5%. That is a reasonable estimation of how much the Canadian dollar has been responsible for the increase in revenues from 2004. The rest, the vast majority, come from somewhere else.

Meanwhile, you always sweep under the rug the FACT that US TV money is less now than pre-lockout. Maybe the league will turn that around, 6 yrs after the lockout. You can't count it until the check clears.

The US TV money changing doesn't change the math in any way. Other revenue streams have more than made up the difference.

I may come back later and see if I feel like doing the league revenues expressed in CAD (reverse translation). It's an interesting exercise, to be sure.

Consider it done.