League Revenues

[toby91_ca 620]

Interesting fact about league revenues I heard today.

Currently, the 6 Canadian teams are generating 40% of total league revenues. I knew they generated more than their fair share, but I didn't realize it was that dramatic.

[eva unit zero 271]

Interesting fact about league revenues I heard today.

Currently, the 6 Canadian teams are generating 40% of total league revenues. I knew they generated more than their fair share, but I didn't realize it was that dramatic.

Assuredly that number includes merchandise sales, which are going to be better for Canadian teams than many of the newer American teams.

Combined with the strong Canadian dollar, the Canadian revenue percentage will increase as even if the same dollar amount is spent in local currency, it means a greater value is spent in Canadian markets than before, when expressed in USD. Another major factor? The Michigan economy dragging on Wings ticket sales and merchandise revenue.

[lfd250 1]

Canadian sport, (as most candians will tell you) Stronger dollar, it's cold in canada what else is there to do except buy warm nhl gear and go to a game.

[irishtemper14+25 11]

wow thats a ridiculous amount

[BringHomeTheCup! 0]

Here are a few questions I have been thinking about...

With the Canadian dollar officially worth more than the US dollar, how does this effect the cap? I know that since the cap is set to the USD, in the past Canadian teams were allowed to spend up to the equivellant in Canadian. But since it has changed mid-season, how does this effect the current cap situation?

Does the NHL use the exchange rate that was current at the begining of the season? And if this trend continues, what happens if the adjusted amount puts a Canadian team over the cap? It doesn't seem fair to the American teams to continue to allow the use of an old exchange rate when the American dollar is now weaker. On the flip side, it doesn't seem fair to the Canadian teams that have cap room to see that cap room shrink or even disappear due to no actions of their own.

Does the NHL stop compensating the Canadian teams, and start compensating American teams for the weaker dollar?

Just some food for thought.

[T-Ruff 47]

I was always under the impression that it was that amount, or higher......

[toby91_ca 620]

Here are a few questions I have been thinking about...

With the Canadian dollar officially worth more than the US dollar, how does this effect the cap? I know that since the cap is set to the USD, in the past Canadian teams were allowed to spend up to the equivellant in Canadian. But since it has changed mid-season, how does this effect the current cap situation?

Does the NHL use the exchange rate that was current at the begining of the season? And if this trend continues, what happens if the adjusted amount puts a Canadian team over the cap? It doesn't seem fair to the American teams to continue to allow the use of an old exchange rate when the American dollar is now weaker. On the flip side, it doesn't seem fair to the Canadian teams that have cap room to see that cap room shrink or even disappear due to no actions of their own.

Does the NHL stop compensating the Canadian teams, and start compensating American teams for the weaker dollar?

Just some food for thought.

I have no idea what you are talking about. The only difference between the Canadian teams and the American teams is that their revenues are generated in Canadian dollars. Their payrolls are all in US dollars and they were not compensated.

The answer to your question is quite simple though. With the large proportion of revenues coming from Canadian dollars, the increased value of the Canadian dollar will increase the US dollar based cap. Of course, it works both ways as well. If the dollar goes back down to 80 or 90 cents lets say, then the cap will decrease.

Assuredly that number includes merchandise sales, which are going to be better for Canadian teams than many of the newer American teams.

Combined with the strong Canadian dollar, the Canadian revenue percentage will increase as even if the same dollar amount is spent in local currency, it means a greater value is spent in Canadian markets than before, when expressed in USD. Another major factor? The Michigan economy dragging on Wings ticket sales and merchandise revenue.

2 main factors as far as I can tell:

1 - strong dollar

2 - broadcast revenues (TV revenues in Canada dwarf the comparison in the US).

[auxlepli 17]

All the more reason to put teams in Canada.

[toby91_ca 620]

All the more reason to put teams in Canada.

It would make for a stronger league as a whole, but doesn't fit in with Gary's plan to grow the game in the US. This is one of the main reasons Basillie hasn't been able to buy a team yet. If you think the head office of the NHL has nothing to do with this, you are dillusional.

I think it will happen eventually, but the NHL will do what it can to avoid it (i.e. won't happen with expansion).

[eva unit zero 271]

All the more reason to put teams in Canada.

The problem being that the two largest Canadian markets that don't currently have teams have lost teams recently due to a lack of financial support. It's like if you have two people named Jack and three named Bobs working for ACME corporation. Even if all both Jacks are better workers than any of the Bobs, that's no guarantee that if you hired the next Jack over the next Bob that you would get a great worker.

It would make for a stronger league as a whole, but doesn't fit in with Gary's plan to grow the game in the US. This is one of the main reasons Basillie hasn't been able to buy a team yet. If you think the head office of the NHL has nothing to do with this, you are dillusional.

The main reason Balsillie hasn't been able to buy a team is that he has been willing to throw offers and words but hasn't been willing to put down a single cent towards a purchase or to play by the rules. If Balsillie had played by the rules and been willing to put his money where his mouth is, the Preds would be on their way to Hamilton.

[toby91_ca 620]

The main reason Balsillie hasn't been able to buy a team is that he has been willing to throw offers and words but hasn't been willing to put down a single cent towards a purchase or to play by the rules. If Balsillie had played by the rules and been willing to put his money where his mouth is, the Preds would be on their way to Hamilton.[/font]

I know what your position is on the situation, but I don't think you have all the facts...neither do I, but from a logical point of view, if the only thing keeping him from getting a team is his failure to put any money down I would be shocked. Why would the guy waste all the time he has put into the process of trying to a buy a team to only have it fail by not putting money down, it makes no sense. I could understand this if it was an isolated incident and he attempted to try and buy a team and failed, but he's been looking to be an NHL owner for years now.

[Hank 0]

Canadian sport, (as most candians will tell you) Stronger dollar, it's cold in canada what else is there to do except buy warm nhl gear and go to a game.

LOL. I'll 2nd that. I have 4 toques at home with 2 of them being Wings hats, 1 Team Canada hat and 1 Montreal Canadiens hat (from my not-funny father).

[toby91_ca 620]

The 2 attempts Balsillie made to purchase a franchise were halted on his part due to the issues of keeping the teams in their current location; Balsillie has no interest in keeping the Preds in Nashville, nor did he have any interest in keeping the Pens in Pittsburgh...No matter how obvious it is to us that a team would thrive in Hamilton with Balsillie @ the helm - Gary B appears content with running the league into the ground

He's also attempted to get a franchise team in the past and has been shot down because he wanted that team in Canada.

[eva unit zero 271]

I know what your position is on the situation, but I don't think you have all the facts...neither do I, but from a logical point of view, if the only thing keeping him from getting a team is his failure to put any money down I would be shocked. Why would the guy waste all the time he has put into the process of trying to a buy a team to only have it fail by not putting money down, it makes no sense. I could understand this if it was an isolated incident and he attempted to try and buy a team and failed, but he's been looking to be an NHL owner for years now.

The policy of the Board of Governors is that sale and moving of a franchise cannot even be voted on without a binding agreement. The Board also requires that votes on moving teams be held separately from sale votes, and that new owners for existing teams must make a good faith effort in the current market. Balsillie was quoted as saying he would not enter into a binding agreement (which would require him to actually put money down) until the Board of Governors ruled on the sale AND the move. Balsillie was taking deposits for 2007-08 season tickets for the Hamilton Predators. Had Balsillie been willing to pony up the money to enter into a binding agreement, he'd have a team. Despite the persecution complex Canadians seem to have in recent years, Balsillie was NOT blackballed from the league. Balsillie not owning a team is the fault Balsillie and Balsillie alone. During the Pittsburgh process, Bettman and the league put down conditions to Balsillie regarding keeping the team in Pittsburgh; that was more of an 'anti-Balsillie' act than anything involved in the Nashville sale process. This whole bruhaha has more to do with the fact that Canadians don't feel Nashville 'deserves' a team because they don't have a history of hockey like Pittsburgh, which entered a team in the very first professional hockey league, despite it being based mainly on several teams in Michigan's UP. If Balsillie were to get involved in the Tampa Bay sale process, it's likely he could have his team if he played by the rules as people in northern markets tend to view a successful Lightning franchise in the same 'Southern market=no fan support' label that has been stuck to Nashville.

[toby91_ca 620]

The policy of the Board of Governors is that sale and moving of a franchise cannot even be voted on without a binding agreement. The Board also requires that votes on moving teams be held separately from sale votes, and that new owners for existing teams must make a good faith effort in the current market. Balsillie was quoted as saying he would not enter into a binding agreement (which would require him to actually put money down) until the Board of Governors ruled on the sale AND the move. Balsillie was taking deposits for 2007-08 season tickets for the Hamilton Predators. Had Balsillie been willing to pony up the money to enter into a binding agreement, he'd have a team. Despite the persecution complex Canadians seem to have in recent years, Balsillie was NOT blackballed from the league. Balsillie not owning a team is the fault Balsillie and Balsillie alone. During the Pittsburgh process, Bettman and the league put down conditions to Balsillie regarding keeping the team in Pittsburgh; that was more of an 'anti-Balsillie' act than anything involved in the Nashville sale process. This whole bruhaha has more to do with the fact that Canadians don't feel Nashville 'deserves' a team because they don't have a history of hockey like Pittsburgh, which entered a team in the very first professional hockey league, despite it being based mainly on several teams in Michigan's UP. If Balsillie were to get involved in the Tampa Bay sale process, it's likely he could have his team if he played by the rules as people in northern markets tend to view a successful Lightning franchise in the same 'Southern market=no fan support' label that has been stuck to Nashville.

I know all that and agree with it for the most part. If Basillie wanted a team, he could have a team, but what he wants is a team in Canada and the league will do everything they can to avoid that. I don't know all the specifics, but I suspect Basillie could have owned and moved the Predators to Canada if he took a different approach. Making it very public that his intentions were to move the team was not good from the perspective of the league and what I suspect happened is that a "binding agreement" that he would have had to enter would involving something that would require him to keep the team there, at least for a longer period than he wanted.

[eva unit zero 271]

I know all that and agree with it for the most part. If Basillie wanted a team, he could have a team, but what he wants is a team in Canada and the league will do everything they can to avoid that. I don't know all the specifics, but I suspect Basillie could have owned and moved the Predators to Canada if he took a different approach. Making it very public that his intentions were to move the team was not good from the perspective of the league and what I suspect happened is that a "binding agreement" that he would have had to enter would involving something that would require him to keep the team there, at least for a longer period than he wanted.

He didn't want to keep them in Nashville past the offseason, which is as I said against BoG bylaws. ANY owner who wants to move a team has to abide by that, not just those trying to move an American team to Canada. If you recall, people were worried that George Gilette was going to move the Canadiens to the US, and Bettman quickly shot that down saying the Canadiens would never be allowed to be moved while he is commissioner.

[toby91_ca 620]

He didn't want to keep them in Nashville past the offseason, which is as I said against BoG bylaws. ANY owner who wants to move a team has to abide by that, not just those trying to move an American team to Canada. If you recall, people were worried that George Gilette was going to move the Canadiens to the US, and Bettman quickly shot that down saying the Canadiens would never be allowed to be moved while he is commissioner.

I think the situation is different with the Canadiens. No one is going to want to see them moved.

I say this, knowing full well that you shouldn't look differently at that franchise than you would with Nashville....it's not fair, but oh well. There is also the major difference in the Canadiens frachise actually working out in its current location for 80 years or so and Nashville, well, not so much.

[BringHomeTheCup! 0]

I have no idea what you are talking about. The only difference between the Canadian teams and the American teams is that their revenues are generated in Canadian dollars. Their payrolls are all in US dollars and they were not compensated.

The answer to your question is quite simple though. With the large proportion of revenues coming from Canadian dollars, the increased value of the Canadian dollar will increase the US dollar based cap. Of course, it works both ways as well. If the dollar goes back down to 80 or 90 cents lets say, then the cap will decrease.

Let me rephrase.

1. How was the cap determined for the Canadian teams before the Canadian dollar was equal to or as is now, worth more than the USD?

I am 99% sure that Canadian teams were allowed to spend the Canadian equilevant. When I said the league compensated the Canadian teams, that is what I meant. I didn't mean the league actually gave the Canadian teams money.

2. If this 'compensation' method is correct, how is it handled now that the CD is worth more than the USD? Again, it doesn't really make sense to allow the Canadian teams to actually be spending less than the American teams, so a midseason cap adjustment to the Canadian teams cap seems like the right move. However, penalizing the Canadian teams for something beyond their control doesn't seem right. Especially if it were to put a team over the cap.

Example.

For the sake of this example the NHL cap will be $10 and the exchange rate will start out 10% in favor of the USD.

All US teams can spend $10. Canadian teams also spend $10 USD, but in Canadian that translates to $11. Mid season the dollar is at par. This would put the Canadian teams over the cap of $10. A month later, the USD drops, and the CD is now worth 10% more than the USD. All Canadian teams are now 20% over the cap, while US teams would not be affected.

Now I am assuming there is something I am missing. The NHL has to have some sort of rules set in place to allow for this adjustment. What I want to know is what are those rules

[eva unit zero 271]

I think the situation is different with the Canadiens. No one is going to want to see them moved.

I say this, knowing full well that you shouldn't look differently at that franchise than you would with Nashville....it's not fair, but oh well. There is also the major difference in the Canadiens frachise actually working out in its current location for 80 years or so and Nashville, well, not so much.

Ok, we'll step away from the Montreal example. People complain constantly that Winnipeg lost their franchise to a non-hockey market liek Phoenix. Yet Phoenix consistently posts better attendance marks than Winnipeg ever achieved, in both actual attendance and percentage of capacity. Winnipeg was a failed market even moreso than Nashville is; Winnipeg had a pre-NHL history of winning and was the only major sports team of any kind in town.

As long as there are people (read:Canadians with a superiority complex) arguing Winnipeg deserves a team, Nashville should not be subject to 'moved that failed market's team' bulls*** because it is a more successful market than Winnipeg was, despite having no pre-existing hockey tradition.

Let me rephrase.

1. How was the cap determined for the Canadian teams before the Canadian dollar was equal to or as is now, worth more than the USD?

I am 99% sure that Canadian teams were allowed to spend the Canadian equilevant. When I said the league compensated the Canadian teams, that is what I meant. I didn't mean the league actually gave the Canadian teams money.

2. If this 'compensation' method is correct, how is it handled now that the CD is worth more than the USD? Again, it doesn't really make sense to allow the Canadian teams to actually be spending less than the American teams, so a midseason cap adjustment to the Canadian teams cap seems like the right move. However, penalizing the Canadian teams for something beyond their control doesn't seem right. Especially if it were to put a team over the cap.

Example.

For the sake of this example the NHL cap will be $10 and the exchange rate will start out 10% in favor of the USD.

All US teams can spend $10. Canadian teams also spend $10 USD, but in Canadian that translates to $11. Mid season the dollar is at par. This would put the Canadian teams over the cap of $10. A month later, the USD drops, and the CD is now worth 10% more than the USD. All Canadian teams are now 20% over the cap, while US teams would not be affected.

Now I am assuming there is something I am missing. The NHL has to have some sort of rules set in place to allow for this adjustment. What I want to know is what are those rules

You are wrong. All teams are subject to a cap in USD. Otherwise it is unfair as the six Canadian teams would have a different cap than the 24 American teams. What happens with the Canadian dollar being stronger than the American right nwo is simply that the Canadian franchises effectively are paying a lower percentage of their revenue than they were a year ago for the same thing. What would have cost 500,000 Canadian when the Canadian dollar was at .80 USD would now cost under 400,000 Canadian. If you're looking at it from a percentage of revenue standpoint, the Canadian teams received an increase in the amount of money they can afford to spend under the cap.

[Kp-Wings 3]

All the more reason to put teams in Canada.

It's hard to find a city to put it in. Obviously Winnipeg is an option, but I don't think that will happen again. The last team was less than successful.

I really can't think of any other large enough cities in Canada. The current day NHL doesn't seem fitting to smaller Canadian cities. Saskatoon? Medicine Hat? London? Regina? Brandon? Thunder Bay? It's possible, but all of those are pretty small compared to the average US city.

Edited November 29, 2007 by Kp-Wings

[toby91_ca 620]

Let me rephrase.

1. How was the cap determined for the Canadian teams before the Canadian dollar was equal to or as is now, worth more than the USD?

I am 99% sure that Canadian teams were allowed to spend the Canadian equilevant. When I said the league compensated the Canadian teams, that is what I meant. I didn't mean the league actually gave the Canadian teams money.

2. If this 'compensation' method is correct, how is it handled now that the CD is worth more than the USD? Again, it doesn't really make sense to allow the Canadian teams to actually be spending less than the American teams, so a midseason cap adjustment to the Canadian teams cap seems like the right move. However, penalizing the Canadian teams for something beyond their control doesn't seem right. Especially if it were to put a team over the cap.

Example.

For the sake of this example the NHL cap will be $10 and the exchange rate will start out 10% in favor of the USD.

All US teams can spend $10. Canadian teams also spend $10 USD, but in Canadian that translates to $11. Mid season the dollar is at par. This would put the Canadian teams over the cap of $10. A month later, the USD drops, and the CD is now worth 10% more than the USD. All Canadian teams are now 20% over the cap, while US teams would not be affected.

Now I am assuming there is something I am missing. The NHL has to have some sort of rules set in place to allow for this adjustment. What I want to know is what are those rules

Again, I'm not sure what you are talking about. 99% sure Canadian teams were able to spend the Canadian dollar equivalent? All of their spending is in US dollars, so not sure where that thought comes from.

The Canadian teams are subject to the same US cap as every other team. Where a Canadian team would benefit from the increase in the value of the Canadian dollar is in revenues. Canadian team's revenues are denominated in Canadian dollars and their expenses are in US dollars. As the Canadian dollar goes up, profits go up.

[union drone 0]

It's like if you have two people named Jack and three named Bobs working for ACME corporation. Even if all both Jacks are better workers than any of the Bobs, that's no guarantee that if you hired the next Jack over the next Bob that you would get a great worker.

Well, we all know that Bobs tend to be lazy and suck. I would hire Jack.

[vangvace 12]

Let me rephrase.

1. How was the cap determined for the Canadian teams before the Canadian dollar was equal to or as is now, worth more than the USD?

I am 99% sure that Canadian teams were allowed to spend the Canadian equivalents. When I said the league compensated the Canadian teams, that is what I meant. I didn't mean the league actually gave the Canadian teams money.

2. If this 'compensation' method is correct, how is it handled now that the CD is worth more than the USD? Again, it doesn't really make sense to allow the Canadian teams to actually be spending less than the American teams, so a midseason cap adjustment to the Canadian teams cap seems like the right move. However, penalizing the Canadian teams for something beyond their control doesn't seem right. Especially if it were to put a team over the cap.

Example.

For the sake of this example the NHL cap will be $10 and the exchange rate will start out 10% in favor of the USD.

All US teams can spend $10. Canadian teams also spend $10 USD, but in Canadian that translates to $11. Mid season the dollar is at par. This would put the Canadian teams over the cap of $10. A month later, the USD drops, and the CD is now worth 10% more than the USD. All Canadian teams are now 20% over the cap, while US teams would not be affected.

Now I am assuming there is something I am missing. The NHL has to have some sort of rules set in place to allow for this adjustment. What I want to know is what are those rules

The Canadian teams play their players in US dollars. Their cap is based in US dollars.

The exchange rate only benefits/hurts the players in regards to when they spend their money and what country their paycheck goes to. If the bank that the player's paycheck runs on a currency other than US currency then it is converted to that nations respective currency at the time of deposit. Also, every withdraw also gets converted to that banks currency if needed.

For example, Jason Blake is an American playing for Toronto. For arguments sake his bank is still in Minn. and the leafs deposit his $4 million US a year into it. Whenever he's in the US and withdraws money (ATM, debit card, mortgage, etc.) the money is taken out in US currency.

Now when he's in Canada and withdraws money (ATM, debit card, mortgage, etc.) the money being taken out is converted from Canadian to US currency based on that days exchange rate and then removed. Using your example of the Canadian dollar being worth 10% more. If he were to buy a pop for 1 Canadian dollar, $1.10 US is removed from his account.

Scenario #2: Jason Blake has his paycheck going to a Canadian bank account instead of an American one. His paycheck is converted from US to Canadian currency at the time of deposit. Whenever he withdraws money from that account while in Canada nothing extra is done to it. However, when in America the amount being withdrawn is converted from us to Canadian currency and processed.

edit for spelling

Edited November 29, 2007 by vangvace

[toby91_ca 620]

The Canadian teams play their players in US dollars. Their cap is based in US dollars.

The exchange rate only benefits/hurts the players in regards to when they spend their money and what country thier paycheck goes to. If the bank that the player's paycheck runs on a currancy other than US currancy then it is converted to that nations respective currancy at the time of deposit. Also, every withdraw also gets converted to that banks currancy if needed.

For example, Jason Blake is an american playing for toronto. For arguements sake his bank is still in Minn. and the leafs deposit his $4 million US a year into it. Whenever he's in the US and withdraws money (ATM, debit card, mortgage, etc.) the money is taken out in US currancy.

Now when he's in Canada and withdraws money (ATM, debit card, mortgage, etc.) the money being taken out is converted from canadien to US currancy based on that days exchange rate and then removed. Using your example of the canadian dollar being worth 10% more. If he were to buy a pop for 1 canadian dollar, $1.10 US is removed from his account.

Secenrio #2: Jason Blake has his paycheck going to a canadian bank account instead of an american one. His paycheck is converted from US to Canadian currancy at the time of deposit. Whenever he withdraws money from that account while in canada nothing extra is done to it. However, when in america the amount being withdrawn is converted from us to canadian currancy and processed.

It's curre ncy.

Also, Player XYZ could be playing for Toronto and have a US bank account IN Toronto. Just because you are in Canada and have a bank account in Canada, doesn't mean it has to be in Canadian dollars.

[vangvace 12]

It's curre ncy.

Also, Player XYZ could be playing for Toronto and have a US bank account IN Toronto. Just because you are in Canada and have a bank account in Canada, doesn't mean it has to be in Canadian dollars.

Fixed... I hate not having spell check at work.

Didn't know about the second point.

Edited November 29, 2007 by vangvace