...I believe that these investors should at least have the right to try to make a profit on their investment. A 1.5% profit is not fair in the least bit.
I really don't believe the "players were screwed" in the last contract. If you do not recall, the players were making a killing and a vast majority of people were on the owners side in that lockout. True, they took a rollback, but they also had 57% of the revenue in the length of the last CBA. In that time, the players salaries on average are up from 1.5 million to 2.5 million before the start of the 2011-2012 season. Today, it is even higher I am sure.
In the meantime, many people want to look at the Forbes report and say that it is bunk. The league made $110 million last year. That is all fine and dandy, but you if you split 30 teams between $110 million, that $3.66 million per franchise. If those are pure profits, the owners who have invested in a $250 million dollar investment would be making 1.5% on their investment. I know that the owners are viewed as billionaires and they can "lose some money", but if you had the opportunity to make 1.5% on your investment for a year, would you be happy about it?
IMHO, the players can and should take a pay cut of some kind, but every contract should be honored. There is more than enough for both sides in this negotiation.
Don't make up numbers and use them as if they were facts.
The league made $126.5M in 2010-11. About 4% of revenue. We don't know what the profit was last year, since Forbes doesn't have those numbers yet. (However, the numbers we do know, and growth trends for those we don't know, suggest it's very possible the league may have turned record profits last year.)
Secondly, the average purchase price for an NHL team was $139M. Average ownership length is 14 years. Average team value as of last November is $240M, for an appreciation average of $101M. Average profit for the first 6 years of the prior CBA, plus the last year of the CBA before that was $24.5M. Even if we assume profits for last year of only $110M, it brings that to $28.2. Profits or losses from '98-99 through '02-03 aren't available, but considering the league could have, but didn't (in fact, the league agreed to extend that deal 4 years beyond it's original end), open negotiations for a new CBA before each of those years it's hard to imagine any losses were significant. We'll just say the league broke even over that span.
So in total profits, income plus appreciation, the average owner has seen pretty close to (and possibly more than) a 100% return on investment minus whatever was lost in '04-05. Average annual ROI is probably at least 6%, and that's even with losing an entire season. Average annual return on revenue over the life of the last CBA is likely around 5%. And that was with a players' share of 54-57%. All the players' proposals have been less than that.
So you can continue to make up "facts", act like owners can't make any money, etc...but saying it doesn't make it true. Even at 57%, the league as a whole does decent. At 53-54%, the league as a whole would be doing better than the vast majority of industries in the US. The problem in the league is not player salaries, nor player contract rights. The problem is the revenue disparity. That is an issue the owners need to address among themselves. The players have offered to slow (almost stagnate) their salary growth for a time to help. The owners should be saying 'thank you'.
In regards to the bolded section, it simply isn't possible to take an immediate pay cut and honor every contract at the same time. They can take a relative cut in the future, and they have already offered to do so. But the owners are demanding both an immediate cut, and a larger relative cut in the future. Neither is justified by the numbers.
And here's something for the owners to think about, if they're already worried about their public image: Imagine how much worse it will be if we're still locked out in a month, and the Forbes numbers do come out showing record profits.
- sibiriak likes this