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[Retired] Official Lockout Thread

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In the meantime, the asset you talk about is about $240 million, which means the profit of $4-$5 million per season equates to about 1-2% of the asset. Going to tell me that you can't get a better return on investment elsewhere?

Okay, where to start? I will assume you simply don't understand the finances or what the profits actually mean when using to assume a return on investment....because that is what it appears when you make that comment. However, it could be completely possible that you are presenting the information in such a way to make it look like the owners aren't making much at all (not sure why you'd do that...but it's possible).

1) I'm not sure what the $240 million represents....if it was the approximate team value, fine....doesn't seem too far off. However, I don't think I can recall any owner who has recently paid that kind of money to acquire a franchise (other than the recent Maple Leafs transaction....but we can all agree that is in another category). So when you are talking about return on investment, consider increases in market values of the franchises themselves, not just profits earned each year. Didn't Ilitch pay about $8M for the Wings....pretty decent return on investment he's been able to generate I think.

2) If you are looking at profits only, you will never be able to understand whether the players get a fair share vs. the owners. EBITDA is probably a pretty good guage to use. In a lot of cases, if the net profit of a franchise is close to nil....the owner could be getting a pretty good return on their investment, it all depends on how everything is structured.

So, let's start with your $5M profit per team. Then, we should gross it up for various items, but the 3 biggest being the following:

1) Taxes - assume taxes at about 30%....that will bring the $5M up to about $7M or so (remember, player salaries are pre-tax as well).

2) Interest or debt servicing costs - this is a real wild card. I would assume that the vast majority of franchises in the NHL are highly leveraged....they didn't simply take money out of their bank accounts and buy a franchise, they borrowed money. So, whatever interest they are incurring on that debt would decrase profits (amount of interest could be $10-20 million or more....based on $200M borrowing at a rate of 5-10%). It is very important to add this back because it is irrelevant from the players perspective. If an owner comes in with all their own money, they won't incurr that cost.

3) Depreciation (non-cash) - if a team owns the building, their profit will be less due to depreciation charges taken on the building....you'd need to add that back to get a true sense of the income being generated at the owners' investments.

So....in summary, I have no idea what the true average return on investment might be, but I do know for sure it is well in excess of what you have illustrated.

Based on these factors, it points to why splitting a revenue number is the most appropriate because everything below that is really a function of how the owner runs his business. I think the overall profits the NHL owners are generating are very good (this doesn't even consider their rising franchise values). Time and time again, I'll keep coming back to the problem being disparity of revenue generation amoung teams, not how much money the players are making.

Pskov Wings Fan likes this

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The NHL's deputy commissioner expects collective bargaining talks to resume in the "relatively near future."

Bill Daly told The Canadian Press that the league and NHL Players' Association are still working through logistics. Daly and NHLPA general counsel Steve Fehr added to TSN that while both sides have tentatively agreed on resuming bargaining, they've yet to agree on the meeting format, location and date.

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Free coffee and doughnuts?

Knowing the NHL, I am sure they are not really free. The NHL is probably going to add up the cost of all the coffee, donuts and bottled water from all the meetings and add it on to the amount that the players "owe" them.

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Two separate ESPN NHL polls that asked the exact same question....

This one from October 19th

willnhlplaygamesoct19.JPG

This one from November 1st

willnhlplaygamesnov1.JPG

:withstupid:

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Well, opinions can change. Having said that, I don't know what makes people more confident now that there will be games as opposed to two weeks ago. If anything, those are backwards from what I would expect.

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Well, opinions can change. Having said that, I don't know what makes people more confident now that there will be games as opposed to two weeks ago. If anything, those are backwards from what I would expect.

My thought exactly

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Boycott spending money on the NHL until Bettman is fired, if you don't you deserve what you got comin

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Boycott spending money on the NHL.

Fixed it for you.

The NHL or players don't deserve the fans at this stage. I am not spending any money on the NHL for a long time. The only money that the NHL is going to get from me will be the money they get from the cable subsidity.

Edited by Nightfall

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~$ stuff...

Just to note, the "profit" numbers being used here are actually operating income. Before taxes, interest, depreciation, and amortization. None of us really have any idea what the real profits are. The average team is carrying about $100M in debt, which could certainly eat up that operating income. However, we don't know the real details. Regardless, the revenue disparity is still the biggest problem.

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http://espn.go.com/blog/nhl/post/_/id/20084/lockout-would-denigrate-winter-classic

If I’m a fan today, I’m angry that the league and NHLPA haven’t been able to resolve their differences in labor talks. It’s an absolute disgrace that the lockout even had to last into November, never mind the possibility it may go even longer than that.

It should not have been that hard to figure out how to divvy up the revenue pie. And for that, NHL commissioner Gary Bettman and NHLPA executive director Donald Fehr deserve all the criticism they’re getting from fans.

But it’s my opinion that when it comes to Friday’s cancellation of the Winter Classic, it was the right move, and the only move.

This season is going to be a sham either way. Let’s not denigrate the Winter Classic with it.

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that's a great article by lebrun.

hopefully illitch makes it to next year to see it. by the looks of him he might not.

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that's a great article by lebrun.

hopefully illitch makes it to next year to see it. by the looks of him he might not.

I have had the same feeling. That picture of him on the field at Comerica, he didn't look good.

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that's a great article by lebrun.

hopefully illitch makes it to next year to see it. by the looks of him he might not.

This is my fear as well. What a horrible day for the city of Detroit that will be. Hang in there Mr. I!

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Per Dreger's twitter:

As we just discussed on Sportscentre. NHL advised PA it will absorb share of Make Whole provision. This is a considerable concession.

If this turns out to be true (both that the NHL actually said it would do this and that the math supports their claim), then they better be able to knock out a friggin deal very very soon.

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Per Dreger's twitter:

If this turns out to be true (both that the NHL actually said it would do this and that the math supports their claim), then they better be able to knock out a friggin deal very very soon.

How ironic would it be if a deal came a day too late to save the WC?

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Per Dreger's twitter:

If this turns out to be true (both that the NHL actually said it would do this and that the math supports their claim), then they better be able to knock out a friggin deal very very soon.

at the very least it should be able to get each side back to the bargaining table

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At this point, I am not concerned when it was proposed. It was verbal, but you have to wonder if Fehr had his fingers in his ears and was posturing for he last week. Either that or the NHL is spreading lies. So lets make that a push.

Lets hope this results in a deal by thanksgiving.

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what????

Darren Dreger@DarrenDreger

The NHL's verbal offer to absorb some or all of Make Whole was made Tuesday. 3 days ago?? PA wants more detail before getting too excited.

After the "50/50" deal the NHL proposed, I'm not surprised. Considering where both sides are at the moment, they're certainly not going to take anything on faith.

It all comes down to if the math (and legalese) is in line with what they're claiming.

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After the "50/50" deal the NHL proposed, I'm not surprised. Considering where both sides are at the moment, they're certainly not going to take anything on faith.

It all comes down to if the math (and legalese) is in line with what they're claiming.

Another PR move and I am sure some of the ,,I only read the headline - because my attention span is that small" guys will pretty much fall in love with those greedy bastards again. Fehr is right, let's see the numbers first and how they are trying to tweak it again...

Either start serious negotiations or keep your mouth shut, I am sick of this PR back and forth moves.

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Another PR move and I am sure some of the ,,I only read the headline - because my attention span is that small" guys will pretty much fall in love with those greedy bastards again. Fehr is right, let's see the numbers first and how they are trying to tweak it again...

that's exactly what fehr did with that 3rd proposal. i don't recall you blasting fehr for that

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S Fehr and Daly to meet tomorrow at undisclosed location

Just to note, the "profit" numbers being used here are actually operating income. Before taxes, interest, depreciation, and amortization. None of us really have any idea what the real profits are. The average team is carrying about $100M in debt, which could certainly eat up that operating income. However, we don't know the real details. Regardless, the revenue disparity is still the biggest problem.

I don't see how that can be true ($5-6M on average per team that is). Last year the owners' share of revenues after paying the players was about $52M per team. I know it costs approximately $30M to run a team before player salaries, so I'm not sure where that other $15M or so goes.

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