Why Pro Athletes Make so much Money

[nyr7andcounting]

How are you able to determine that each player produces $3 million in revenue? How much of that revenue is due to the large, state-of-the-art arena? How much for the CEO? How much is due to the GM and coach? How much is due to the sales and marketing guys? How much for guy in charge of maintaining the ice surface, in a sport where those conditions can make for a much more exciting game?

You're right, there is no perfect way, but there is no consensus on what the most accurate way is either.

$2.1B/750 players. I've said before that there are other employees who contribute to that $2.1B...especially TV announcers and production crews, without them there is no TV money. You can make a case for coach and GM, but adding their salaries doesn't change the math much.

I'd guess they make about $1M-$1.5M on average, but in that case they could be overpaid...how much revenue is brought in to see the coach, or especially the GM? No one in NY pays a cent to see anything Glen Sather does, yet he makes like $3M a year...way overpaid.

BUT, in the end everyone that works for the team is bringing in revenues because they are selling or broadcasting one thing, and that's the players on the ice playing the game. State-of-the-art arenas simply increase revenues and the only reason they can do that is because they're filled with people watching the players, on the ice. Without the players, there are no revenues, as we see now. Teams aren't making money during the lockout while the players are locked out are they? I don't go to MSG and buy some food and a few beers just for the hell of it. I do that WHILE I'm there to watch the players. I don't want to say the players are the product, but they are closer to being the product in their industry than any other employee in any other industry. Therefor, I would say those 750 players, by themselves, bring in that $2.1B.

 

[ResidentAlien*]

I'm not just talking about hockey when I refer to sports. Baseball is in serious serious trouble. The large markets are doing okay, but the mid to small markets are suffering at the box office. Same with basketball. Football seems to be the only major sport not taking a significant hit now. To tell you how bad it is, NASCAR is moving up towards the top of watched and followed sports. And its easy to see why. Its cheap and the "athletes" are not paid in the stratosphere. They're good ole boys who drive around in circles and the fans can watch for next to nothing AND bring their own cooler of beer to an event. Going to practice\qualification is cheap and you can take the kids for free. They're marketing and doing things right as the other leagues price themselves out of sight.

As for doomsdayish, I disagree. Just understanding what is coming down the tube at both sides of this. If they don't get together and hammer something out in the next month to six weeks I think the NHL is in for a very long cold winter. ESPN will balk and NBC will have no reason to waste their time on a league that can't get its act together. I think the league is at a crossroads an that they have an opportunity to move off in a bold new direction, but the NHLPA has been brainwashed into believing that they deserve to be paid more than the economics of the game can support. I think they may kill the game and we may never see it get back to where it was two short years ago. If you feel that is doomsdayish that is your opinion. But when I see the potential for hockey to slip from non-premium service cable TV, when the likes of NASCAR and Arena Football are making enroads on network TV, I think the league is close to utter failure and can blame no one but ALL the parties involved.

I understand most of what you say, and agree to some of it as well.
The NASCAR angle is interesting to me because of the marketing. I have friends who live and breathe NASCAR and they have never even been to an event. They live thousands of miles away form the closest track, and hoestly having talked to them I doubt they will ever go to one. But they are hooked, Line and sinker. That's great marketing IMO. How many drivers are there? How much do they get paid? They are endorsed up the ying yang and Im sure they get a nice chunk of that, not too mention the merchandising. BUt the diiference is the marketing, they make it family friendly, the kids are there waving the flags and callin the "Start your engines" again... Marketing.
But Hockey is still the fastest(unassisted of course) greatest game on the planet, you know it or you wouldnt be here, unless you are just here to educate the rest of us.

I dont think they will ever kill the game as you put it, and I think when it does come back it will come back better then before, it may take awhile but it will, and Im kind of excited about that. I think with some good marketing, a good financial model and some good prospects coming up, Hockey has chance to be better then ever. I think all of us here hope the same..I mean if not, why the hell do we come here everyday?

The fact that nasacar and Arena football are making enroads of moola, kind of puts to rest your theory of atheletes being "grossly" overpaid. Not that they make as much or more the Hockey players, but rather that it shows how we are starved for entertainment. How we need to escape from the crap that is the day to day world we live in, and how we will pay for that priviledge.

 

[discostu]

$2.1B/750 players. I've said before that there are other employees who contribute to that $2.1B...especially TV announcers and production crews, without them there is no TV money. You can make a case for coach and GM, but adding their salaries doesn't change the math much.

I'd guess they make about $1M-$1.5M on average, but in that case they could be overpaid...how much revenue is brought in to see the coach, or especially the GM? No one in NY pays a cent to see anything Glen Sather does, yet he makes like $3M a year...way overpaid.

BUT, in the end everyone that works for the team is bringing in revenues because they are selling or broadcasting one thing, and that's the players on the ice playing the game. State-of-the-art arenas simply increase revenues and the only reason they can do that is because they're filled with people watching the players, on the ice. Without the players, there are no revenues, as we see now. Teams aren't making money during the lockout while the players are locked out are they? I don't go to MSG and buy some food and a few beers just for the hell of it. I do that WHILE I'm there to watch the players. I don't want to say the players are the product, but they are closer to being the product in their industry than any other employee in any other industry. Therefor, I would say those 750 players, by themselves, bring in that $2.1B.

If those players themselves bring in that $2.1B in revenue by themselves, then they would have no problems generating huge crowds in their charity tournaments. Instead, those turned out to be a bust.

Also, if that's the case, then a replacement player league, if it does come into fruition, would generate absolutely zero dollars.

The logic of attributing all revenues to the players just doesn't work. The NHL is a complex business model, with all contributors responsible for the revenue that is brought in, all to varying degrees.

 

[nyr7andcounting]

If those players themselves bring in that $2.1B in revenue by themselves, then they would have no problems generating huge crowds in their charity tournaments. Instead, those turned out to be a bust.

Also, if that's the case, then a replacement player league, if it does come into fruition, would generate absolutely zero dollars.

The logic of attributing all revenues to the players just doesn't work. The NHL is a complex business model, with all contributors responsible for the revenue that is brought in, all to varying degrees.

Charity tournaments aren't real games, I don't care about that. If you want to me to re-state what gets the NHL revenues....it would be the best players playing a competative game. Anything without the combo of those two factors will bring in way way less revenues.

Replacement players wouldn't generate $0 dollars? People still want to watch competative hockey.

I know it's to varying degrees, but that's my point. Hockey is purely a spectator sport, it brings revenues in solely because we watch the players play. Everyone in an organization contributes to putting those players on the ice, but the actual revenue they generate is so minimal that it has almost no affect. Take a little off that $2.1B, and the players STILL generate a huge amount of revenue on average.

 

[discostu]

Charity tournaments aren't real games, I don't care about that. If you want to me to re-state what gets the NHL revenues....it would be the best players playing a competative game. Anything without the combo of those two factors will bring in way way less revenues.

Replacement players wouldn't generate $0 dollars? People still want to watch competative hockey.

I know it's to varying degrees, but that's my point. Hockey is purely a spectator sport, it brings revenues in solely because we watch the players play. Everyone in an organization contributes to putting those players on the ice, but the actual revenue they generate is so minimal that it has almost no affect. Take a little off that $2.1B, and the players STILL generate a huge amount of revenue on average.

I know the charity games weren't competitive. That is the point. It takes a league, with all it's infrastructure, branding, history and controls in place to make games meaningful, exciting and competitive. Plus, you need arenas, which are huge capital investments to host games. These are not trivial amounts.

Bottom line, assuming the lockout gets resolved, and a new salary level is then determined, if the players are then truly underpaid in proportion to the revenues that are directly attributable to them, it shouldn't take long for a rival league to start up, and the best players to migrate over there, and for the NHL to lose it's status as the premier league in North America.

After all, if all it takes is the best 700 hockey players to make $2.1B, then it shouldn't be that hard for someone else to put a league together.

 

[nyr7andcounting]

Bottom line, assuming the lockout gets resolved, and a new salary level is then determined, if the players are then truly underpaid in proportion to the revenues that are directly attributable to them, it shouldn't take long for a rival league to start up, and the best players to migrate over there, and for the NHL to lose it's status as the premier league in North America.

After all, if all it takes is the best 700 hockey players to make $2.1B, then it shouldn't be that hard for someone else to put a league together.

If they had enough capital to put together a $2B industry, than yea all they would need is the players to cross.

 

[AM]

nope

Charity tournaments aren't real games, I don't care about that. If you want to me to re-state what gets the NHL revenues....it would be the best players playing a competative game. Anything without the combo of those two factors will bring in way way less revenues.

Replacement players wouldn't generate $0 dollars? People still want to watch competative hockey.

I know it's to varying degrees, but that's my point. Hockey is purely a spectator sport, it brings revenues in solely because we watch the players play. Everyone in an organization contributes to putting those players on the ice, but the actual revenue they generate is so minimal that it has almost no affect. Take a little off that $2.1B, and the players STILL generate a huge amount of revenue on average.

I watch the team play. I dont watch the players play. I'll go to the night club if I want to see the players play(or to a charity game). When the team plays, the players are working.

This has been groused over a million times.

 

[AM]

simply put

If they had enough capital to put together a $2B industry, than yea all they would need is the players to cross.

Youre wrong, they could throw 3billion at it, it wouldnt make a difference.

 

[discostu]

If they had enough capital to put together a $2B industry, than yea all they would need is the players to cross.

Well, if you're willing to stand by that prediction, you can.

Myself, I think the NHL will continue to be the premier league in the world, barring the setting of a cap level at some obsenely low amount, or the lockout extending for another couple of years.

Time will tell who is right I guess.

 

[nyr7andcounting]

I watch the team play. I dont watch the players play. I'll go to the night club if I want to see the players play(or to a charity game). When the team plays, the players are working.

This has been groused over a million times.

What?

You watch your team play competative hockey, exactly what I said...which is why charity tounraments don't make any money.

The players are the team. If you go to watch your team, your going to watch your teams players...therefor players are almost solely responsible for you being in the arena and spending your money.

 

[nyr7andcounting]

Well, if you're willing to stand by that prediction, you can.

Myself, I think the NHL will continue to be the premier league in the world, barring the setting of a cap level at some obsenely low amount, or the lockout extending for another couple of years.

Time will tell who is right I guess.

I never said I think there will be another league at the NHL's level.

The NHl will continue to be the premier league...wether or not the players are overpaid or not doesn't matter. If someone else wants to start a league where players will make more money than they do in the NHL, than players will play there.

 

[AM]

players are....

What?

You watch your team play competative hockey, exactly what I said...which is why charity tounraments don't make any money.

The players are the team. If you go to watch your team, your going to watch your teams players...therefor players are almost solely responsible for you being in the arena and spending your money.

not the team.

I go to watch the team, the current players could all disappear tomorrow. The team has a plan for that and it'll still be playing next year if that happens.

 

[discostu]

I never said I think there will be another league at the NHL's level.

The NHl will continue to be the premier league...wether or not the players are overpaid or not doesn't matter. If someone else wants to start a league where players will make more money than they do in the NHL, than players will play there.

You're saying that the infrastructure of the league is essentially immaterial, and irrelevant, and that the $2.1B in revenue is attributable only to them.

Therefore, if you believe that, then anyone who pays the players more than the NHL does, and less than the $2.1 billion they are currently making, would be making a profit. Why wouldn't someone start up a league.

Unless, of course, you believe that all those things like league infrastructure, arenas, management, sales and marketing, etc. are all valuable components of the league, and a big reason behind the $2.1 billion in revenue, in which case, you would have to attribute a large chunk of that revenue to those expenditures, which is why league revenues attributable to players is significantly less than the $2.1 billion dollars you have attributed to them.

 

[nyr7andcounting]

not the team.

I go to watch the team, the current players could all disappear tomorrow. The team has a plan for that and it'll still be playing next year if that happens.

Well than why do you even bother coming to this board? Why not watch UHL hockey?

Personally, I would be completely turned off by the sport if they use replacements for an extended period of time. I watch Rangers game because they are my favorite team, but I also watch to see the best players play the game.

 

[nyr7andcounting]

You're saying that the infrastructure of the league is essentially immaterial, and irrelevant, and that the $2.1B in revenue is attributable only to them.

Therefore, if you believe that, then anyone who pays the players more than the NHL does, and less than the $2.1 billion they are currently making, would be making a profit. Why wouldn't someone start up a league.

No, I'm not saying that the infrastructure doesn't matter. Obviously, if a league has enough money to pay NHL players more than they are making in the NHL, than they are definetly a decent league. Why wouldn't someone start up a league? Because there aren't 30 owners out there willing to invest in the sport of hockey when the trademark hockey league here is failing big time.

Unless, of course, you believe that all those things like league infrastructure, arenas, management, sales and marketing, etc. are all valuable components of the league, and a big reason behind the $2.1 billion in revenue, in which case, you would have to attribute a large chunk of that revenue to those expenditures, which is why league revenues attributable to players is significantly less than the $2.1 billion dollars you have attributed to them.

Sure you need all those thing to start a league...but you make your revenues based on people coming to watch the players play the game. You can build an arena for hockey, but it's not going to make any money without the players playing the game. Everything that goes into making the NHL work is certainly valuable, but as far as revenues go the players are the ones that bring in the money.

 

[discostu]

No, I'm not saying that the infrastructure doesn't matter. Obviously, if a league has enough money to pay NHL players more than they are making in the NHL, than they are definetly a decent league. Why wouldn't someone start up a league? Because there aren't 30 owners out there willing to invest in the sport of hockey when the trademark hockey league here is failing big time.



Sure you need all those thing to start a league...but you make your revenues based on people coming to watch the players play the game. You can build an arena for hockey, but it's not going to make any money without the players playing the game. Everything that goes into making the NHL work is certainly valuable, but as far as revenues go the players are the ones that bring in the money.

You keep on re-iterating contradicting points, so I'm saying this one last time.

If the players cannot generate $2B in revenue all on their own, without the rest of the league infrastructure, then full amount of revenue is not attributable to them.

 

[nyr7andcounting]

You keep on re-iterating contradicting points, so I'm saying this one last time.

If the players cannot generate $2B in revenue all on their own, without the rest of the league infrastructure, then full amount of revenue is not attributable to them.

But there is no revenue value on the infastructure of the league.

You don't attribute revenue to the factory in which the employees make the product, do you see what I am saying? The arenas are owned or rented by the owners...owners are not employees, they do not have an average revenue produced because they don't have a pure salary (they pretty much make what is leftover after paying everyone else).

Out of all the employees of an NHL team, and that is not counting owners, name one employee that you can say produces a lot of revenue on there own. You can't, because everyone's job relates to the players playing the game.