2458 replies to this topic

[haroldsnepsts]

...

Minnesota did what it thought it needed to in order to be competitive within the previous CBA. They are still allowed to criticize that CBA (player salaries) without being accused of hypocrisy. Your argument would only hold water if the owners weren't forced to operate and compete under the rules outlined in the CBA.

Contract length limits and a reduction in player salaries under a new CBA would go far to solve that problem...

I didn't accuse anyone of hypocrisy or make an argument about the new CBA.

In response to a post pointing out how players already have their contracts affected by escrow, I speculated on one example of why they still may find the salary reductions in these negotiations difficult to take. I didn't make any argument about the logic of it.

[Johnz96]

Quit spending money on the NHL until Bettman is fired if you don't want to go through this when the new CBA expires.
I was telling everybody this after and during the last lockout and everyone laughed it off. "He got his cap, he isn't going to lock us out again" is what most people said.

Edited by Johnz96, 01 November 2012 - 10:53 AM.

[F.Michael]

Quit spending money on the NHL until Bettman is fired if you don't want to go through this when the new CBA expires.
I was telling everybody this after and during the last lockout and everyone laughed it off. "He got his cap, he isn't going to lock us out again" is what most people said.

Many here thought I was off my rocker this past spring when I predicted this mess.

[Johnz96]

Many here thought I was off my rocker this past spring when I predicted this mess.

Haha, I predicted it 8 years ago

[F.Michael]

Haha, I predicted it 8 years ago

lol - you're a bigger pessimist (read realist) than I am!

[Euro_Twins]

What's kind of funny about that is that the players have never been guaranteed the money due to the escrow system that they negotiated in the last cba.

The only money that they have ever been guaranteed is signing bonuses.

While this IS true, you have to remember the escrow payments were around 8-10% every year, and they got the money back once they went through the finances. Now what the owners are asking, is that the players take an immediate rollback of 12% and still they will lose money to escrow, so they are actually losing more than what is contracted.

I will say this, you have hit the nail on the head with every one of your complaints. At the same time though, as you mentioned, the NHLPA has fault in this which you didn't mention at all.

The NHLPA has not been negotiating in good faith either. Their delays with their first proposal (3 weeks) and waiting until the last minute to come to the table after the league said it was ready to start negotiating in January. I have called out the NHL proposal already numerous times. No sense of urgency and dragging things out is not negotiating in good faith.

Fehr has been looking at "alternate methods" and I applaud him for doing so. At the same time, if one side is speaking English and the other side comes to the table with an agreement set in Spanish, is that necessarily right? I do get what you are saying. The NHL should be looking at these proposals and be more willing to consider them. What I fault Fehr and the players with is not speaking the same language when they come to the bargaining table. This is where the disconnect lies right here. You would think by now both sides would be speaking the same language and they are not.

Bettman's proposals are definitely not what they are being advertised to be. The NHLPA is also guilty of this as well. For instance, in the NHLPA 3rd proposal, the numbers never get to the 50/50 split that the NHLPA makes it out to be.

http://espn.go.com/b...tter-to-players

None of the players proposals actually make it down to 50/50 in year 2 or 3.

So before you talk about misrepresentation, lies, not bargaining in good faith, look on both sides of the ledger. There is plenty of blame to go around.

Oh, and I am not surprised that our resident mod "liked" your post. It offered nothing in terms of pointing out these failings of the NHLPA and everything involving the sins of the NHL.

Yes, to begin with Fehr was playing hardball, but that is what you have to do against Bettman or you won't get anywhere with him.

Maybe they are not speaking the "same language" but Fehr has been consistently trying to get Bettman in a negotiation room with him, which won't happen unless it is on Bettman's terms.

The PA's proposals do actually make it down to 50/50, as long as the league continues to grow at least 5% each year.

Lastly everyone is entitled to their opinion, so if the resident mod wants to like my post, I do not see the issue, as it is something he agrees with. (yes I did see your apology letter, and I think it speaks volumes, but again everyone is entitled to their opinion)

True, it is not double, but you also cannot count before the lockout either. Clubs were spending 76% of their revenue on salaries and changes had to be made for the long term survival of the league. Remember, this was needed at the time.

Player salaries average after the lockout year concessions were 1.4 million. In 2011 they were 2.45 million. I would guess they have gone up in the year after that, but thats 75% higher and we still have another year to tack on which we don't know the numbers for.

As for the ROI, you are correct. I am just calculating how much they are making in terms of the asset they own. By the way, making $5 million off a $240 million dollar asset is only 2% of the asset in terms of the profit. If the owner instead took $240 million and put it in an interest baring checking account, he would make 3% on his investment.

You are looking at this as if the owners actually paid $240 million for their teams, which they did not. For instance Mr. Illitch, I believe actually paid somewhere around 75-80 million, and not it is WORTH about $350 million. So if his original investment was $80 million, and we assume he made $7 million this year, his profit on his investment would actually be 8.75%. Now you can argue about money they spend every year blah blah blah, but they make that money back, and most years make profit, and mr. illitch's teams worth has grown about $270 million since his purchase, which is even more profit. There is about 10 teams "making money" and about 7-8 teams losing money, every other team basically is breaking even, give or take

[Nightfall]

Quit spending money on the NHL until Bettman is fired if you don't want to go through this when the new CBA expires.
I was telling everybody this after and during the last lockout and everyone laughed it off. "He got his cap, he isn't going to lock us out again" is what most people said.

This really is the right way to go.

The NHL and NHLPA need to be told that this kind of behavior, unwillingness to negotiate, and general bullheadedness won't be tolerated. By speaking with your wallets, the fans have a great opportunity to really tell the NHL what they think when they come back. I have already vowed to take every penny that I spent on NHL merchandise and tickets and put it towards something else. I can find something else to spend $1500-$2000 a season on. No more hotels or travel expenses to see games. No more time involved driving to games. No more NHL Center Ice.

If we want to be heard, then speaking with our wallets is really going to be the best option.

[Buppy]

While this IS true, you have to remember the escrow payments were around 8-10% every year, and they got the money back once they went through the finances. Now what the owners are asking, is that the players take an immediate rollback of 12% and still they will lose money to escrow, so they are actually losing more than what is contracted.
...
For instance Mr. Illitch, I believe actually paid somewhere around 75-80 million, ...

Actually, the owners aren't asking for a rollback anymore, just a deferment of payment. The sticky issue now is that the deferment effectively lowers the % in future years below what the players feel is acceptable. (i.e. Instead of players earning 50% across the board, it's like 55, 52, 49, 47, 44, 50.) Existing contracts are still paid, and subject to only the same escrow as before.

And Ilitch paid $8 million for the Wings. I'm sure he's invested much more over the years, but the purchase price was only $8M.

Minnesota did what it thought it needed to in order to be competitive within the previous CBA. They are still allowed to criticize that CBA (player salaries) without being accused of hypocrisy. Your argument would only hold water if the owners weren't forced to operate and compete under the rules outlined in the CBA.
...

Correct to a point. They were operating within the rules at the time. They were not forced to commit almost $72M in salary for next year. Owners may be right to say, "If we didn't someone else would", but in some cases, someone else should. Someone who can afford it. Like it or not, all teams are not created equal. A team like Minnesota shouldn't be spending $10-15M more than teams like the Wings, Rangers, Leafs, and Montreal.

The cap system was designed around the premise that at current revenue levels, a team should be able to spend around 57% of their revenue on players. And that's salary and benefits, so around 53-55% for salaries. Minnesota is probably in the range of 70% for just salary. Now they want to lower the split to 50%. Why? So they can spend 63%? They'd be better off just following the intent of the old rules.

They didn't have to sign Parise and Suter, they wanted to. It's not necessary for parity. Look at Nashville or St. Louis. Look at baseball. Teams that spend smartly can still compete. It may be a bit easier for teams that can spend at will, but why shouldn't it be?

[Johnz96]

Actually, the owners aren't asking for a rollback anymore, just a deferment of payment. The sticky issue now is that the deferment effectively lowers the % in future years below what the players feel is acceptable. (i.e. Instead of players earning 50% across the board, it's like 55, 52, 49, 47, 44, 50.) Existing contracts are still paid, and subject to only the same escrow as before.

And Ilitch paid $8 million for the Wings. I'm sure he's invested much more over the years, but the purchase price was only $8M.


Correct to a point. They were operating within the rules at the time. They were not forced to commit almost $72M in salary for next year. Owners may be right to say, "If we didn't someone else would", but in some cases, someone else should. Someone who can afford it. Like it or not, all teams are not created equal. A team like Minnesota shouldn't be spending $10-15M more than teams like the Wings, Rangers, Leafs, and Montreal.

The cap system was designed around the premise that at current revenue levels, a team should be able to spend around 57% of their revenue on players. And that's salary and benefits, so around 53-55% for salaries. Minnesota is probably in the range of 70% for just salary. Now they want to lower the split to 50%. Why? So they can spend 63%? They'd be better off just following the intent of the old rules.

They didn't have to sign Parise and Suter, they wanted to. It's not necessary for parity. Look at Nashville or St. Louis. Look at baseball. Teams that spend smartly can still compete. It may be a bit easier for teams that can spend at will, but why shouldn't it be?

By creating an artificial parity for teams in the league you are creating an artificial disparity for the fans. The teams that create the greatest revenues have the most fans. So when a small market team knocks out a larger market there are more disappointed and losing fans than there are fans celebrating the victory.

[chances14]

update on cba talks from lebrun

The players’ negotiating committee and executive board, plus other players who wanted to join, held another conference call Thursday, one of many they’ve had throughout the labor talks process to update members.

I heard from two players who were on the call. They requested anonymity, but here is their recap of the call:

Player 1 said the call reaffirmed the union's willingness to stick together and hang tough, feeling that NHL is trying to wait and see if players crack.

Player 2 said the overwhelming feeling on the call was that players want NHLPA leadership back in the bargaining room with the NHL to explore what kind of flexibility from the league exists on key issues.

It was expected NHLPA No. 2 man Steve Fehr would reach out to Daly sometime Thursday to see if they could schedule bargaining talks.

[frankgrimes]

Well as long as the NHL is just whining and not interested in negotiating, what exactly is the point of meetings?

[Pskov Wings Fan]

Well as long as the NHL is just whining and not interested in negotiating, what exactly is the point of meetings?

Free coffee and doughnuts?

[thegerkin]

Won't someone think of the children?!? Nevermind, there isn't any thinking happening from the NHL/PA. They are too busy lining their pockets with the tears of orphan children, baby seals, and bunnies.

[frankgrimes]

Free coffee and doughnuts?

*lol* and some business class flights

[Nightfall]

Well as long as the NHL is just whining and not interested in negotiating, what exactly is the point of meetings?

At this point, I don't think either side is really interested in negotiating. Pontificating for the press seems to be higher on their list of things to do.

[toby91_ca]

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.

[cusimano_brothers]

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.

[sleepwalker]

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.

[Namtaru]

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

This one from October 19th


This one from November 1st

[rrasco]

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.