toby91_ca

Unfair discussion to have in Detroit or Denver

I wasn't saying that the CBA was the end-all and be-all deal.  I was saying that the players had zero incentive to change it because the deal benefited them the most.  If the NHL played hockey this year, then the players would have just sat on the deal and not negotiated at all.  Why negotiate a deal that benefits the players the most?

What is it about the last CBA that benefited the players the most?  I know the owners certainly thought they won big getting that one.

these kinds of meetings should have started many months ago. marathan sessions and no pr bs.

i can see the light at the end of the dark tunnel.

The fact of the matter is, there is no way such meetings could have happened months ago.....well....I suppose the meetings could have happened, but there is no chance either side is going to conceed anything when there are no pressure points.  Now that games and money are being lost, pressure is mounting on both sides.  Hopefully enough to get a deal done.

In terms of the PR battle....it's really stupid, but it is also a "necessary" step in the process....from both sides' standpoints anyway.  Both sides take PR very seriously and what we saw in the media previously was really just PR postering and a way of negotiating, trying to get leverage on the other side.  That type of thing happens early on.  A deal doesn't get done that way, it just builds from there.  A deal gets done behind closed doors with nothing being reported....hopefully that is the stage we are getting into, but i's very delicate.  You never know if something may cause a blow up and forcing them back to the PR battle phase.

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.

There are good examples here of how they can get to a 50/50 split out of the gate while paying out existing contracts.

http://espn.go.com/b...ving-make-whole

The idea noted in the article doesnt' get to 50/50 immediately.  Basically, it's saying, let's start at 50/50 and the amounts greater than 50% will be paid as well, but we won't include that in the 50/50 split calc.  The owners would never agree to that.  I like the mechanism, but perhaps too complicated to track existing and new contracts.  Apart from that, I think they'd have to tweak how the 13% gets topped up (i.e. make it contingent on revenue growth and take it down a bit).  Whatever you do, you aren't going to be at 50% right away unless revenues grow by 15% in year one.

Edit....the thing that really pisses me off is the fact that the owners proposal does nothing to fix their problem...all is does is grab some additional cash from the players to help now, but the systematic problem still exists.  When revenues keep growing due to select teams and 50/50 splits end up costing other teams who's revenues are not growing at the same rate....what is the NHL going to do in the next CBA?  Take the players down to 40%?  All that is going to happen is that the league as a whole will make more and more money....all coming from the top teams, with the occasional correction for smaller teams by grabbing money from players.  It really, really annoys me to no end.  They either need to abandon their desire for parity and allow teams to spend less than a floor (easy to do and still get to 50/50 in the end) or have more revenue sharing.

Actually, the owners are proposing to shorten ELCs by a year. However, the purpose of that is to lower the value of the second contract. Consider Evander Kane. Had he come off his ELC before last year, his current deal would likely be $1-2M less per year. More than makes up the difference in year 3 salary. Originally they wanted it longer, but their latest offer is 2 years.

Actually, the two year ELC in the NHL's proposal is by design, not too lower value of 2nd contracts, but to delay UFA.  While it initially looks like a give back to the players (i.e. the players want to get out of ELC as quickly as possible as the ELCs cap their earnings), it really is a take from the players when you combine with other proposals from the owners.

The owners want to push UFA back to 8 years from the current 7.  They also want to cap contracts at 5 years.  Therefore, if an ELC goes 2 years, then the max a player can get after that is 5 years....you are at 7 years, but still not a UFA.  Forces players to go through 3 contracts at least before getting to UFA.  Players are used to be getting big paydays much sooner than that.

Ignoring other aspects of the deal, I think this should be a fair framework:

Year 1 - players get minimum 50% of HRR and max 55% (if full contracts are paid at 52%, they get no more than that).
Year 2 - min 50%, max 54%
Year 3 - min 50%, max 53%
Year 4 - min 50%, max 52%
Year 5 - min 50%, max 51%
Year 6 - 50%....period

Neither side will really like it too much, which probably means it would be a pretty fair deal.

If that's true, the question becomes... is it reasonable to expect that contracts will be honoured based on previous growth patterns?

That's not really the point.  The point is that is that the players will be paying themselves to cover intitial shortfalls.  If 50% fo revenues are not enough this year to cover salaries, the players will just take less money later to cover the difference....so they might get 45% of revnues in a later year for example.  The league suggesting no rollbacks is completely bogus.

Yzerman, with no doubt.
Lets say that you had to have one of these two players to bring your team out of an era of failure, which would do the better job?
Without Yzerman the Wings could very well have maintained the gold standard of fail around the league.
I love me some lids, but he could NOT have been the spark this team needed to reach success.
I draft a rookie Yzerman over a rookie Lids each and every time.

Dont forget that Yzerman was a mad mad point producer, scoring 1040 points before Bowman took over and made him a two way player. Had Yzerman remained the pure scorer he was he would have challenged many records.

10 years before 2 way play by Bowman 1040 points, After Bowman, 12 years 715 points.
Now I'm not arguing that this helped us win our first cup in forever, just that Yzerman unselfishly changed his entire game for this team, and he could have gone on to break records had he decided to not put this team first.

Yzerman is the better Wing and the better player.

It would be extremely foolish to think that Yzerman (or any player for the matter) could have kept a consistent scoring pace in the first half of his career and his second half.  I think you are overestimating the impact of him putting his team first.  You could probably take any player in history and you will likely see some signficant declines in later years.

If Gretzky maintained the same pace in his last 10 years as he did in his first 10 years, he'd have scored 3,674 points, not 2,857.  Injury + age, same for Yzerman, is the main reason for decline.

I maybe one of the few that see it this way but...

I feel that it is quite ironic that shortly after the NHL hires some help from the GOP to help save face, they then offer a proposal that on the surface says we caved and this is completely fair, but in the details the league still gets all of there other demands yes ironed down a bit but all still mainly in tact. I believe firmly the NHLPA will respond with a counter offer instead of accepting which in turns makes fans turn against them. Which is exactly what the NHL wants and hired the GOP to help them do. To me this is just a face saving act.

There is some truth to this, but any rational person should understand that it would be unreasonable to simply expect the NHLPA to come back and say, yes, we like the deal, where do we sign.  The good news I take from it is that the league moved a little, the league doesn't expect an outright acceptance, but they will expect it to move negotiations forward and there should be a counter off I would think...then some back and forth, hopefully a deal in the next week or so.  I don't care about PR, I just want to see a deal.

I must apologize, I quoted the wrong person on my thread, although it truly is not the owners choice,  Bettman decided to use the lockout as a negotiating tactic three times. Nonetheless this was the post I meant to quote

Well, I'm not sure if it was Bettman's choice or not, might be, might not, I don't know.  I would assume he woudl have addressed the board of govenors and suggested this as an approach (worked for them last time as an example) and then the board would endorse such approach.  In the end, Bettman wouldn't need an majority to endorse, but I truly don't know whether it is him pushing this tactic or not.

Also, the stupdity of needing something like 75% to overrule him is just that, stupidity.  I'm not sure if it matters though.  Who knows if more than 50% would be against the lockout right now?  You could point to them overruling back in 1994, but that was almost 20 years ago, different economics....different people in a lot of cases as well.

I believe that financially, things change so a new CBA should be negotiated every 5 years or so.  Lets get that out of the way first.

I believe the players should have to give up a little for various reasons.  The cost to operate a club has went up, rent, fuel charges, team personnel, and so on.  I don't know what it takes to run an NHL team in terms of cash, but these costs alone are worth a little bit at least.  As clearly pointed out in Forbes, many teams are not making a profit right now, which means the most profitable ones are carrying the entire league.  Lastly, I look at other leagues and the split in each league.  For example, the NFL and NBA the split is close to 50-50 with the league.  I believe an even split is quite equitable.

Now, through all this do I believe the players should take the 43% that the owners were asking for in the original proposal?  No.  The players should not be held at fault for the foolish ownership decisions that have been made.  The players are entitled to every dollar of every contract that signed.  The players should not be held responsible for the NHL adding franchises into areas that cannot sustain them.

There is a fair and equitable deal to be made here.  I keep going back to 52-48 in favor of the players.

I can see your point though in that the players should not have to relinquish any share of the revenues for the mistakes of the NHL or management of the teams.  At the same time, there are other factors which can easily make the CBA sway 2-3% back from the players to the owners.

Are you seriously referencing increased fuel costs and rent as reasons why the players should take less?  I'm pretty sure revenues have increased at a much greater rate and pure dollar amount than any costs the owner's need to pay (which would include player salaries).  I'm sure the league as a whole made way more this year than they did back in 2005-06. The key issue here is that the revenue growth is being driven by some teams and not others.  While costs of every team have gone up, somewhat consistently, the same can't be said for revenues.  That issue, is a simple one, and one that points to the teams having to share more revenues, not take money from the players to prop up poorer franchises while making the super rich teams richer....it makes no sense.

All that being said, I have no idea what a reasonable sharing percentage is.  No one can say 50/50 makes perfect sense unless they are in there and have all the facts, etc.  Gary Bettman strongly argued against looking at the NBA and NFL, etc. back in 2005 because those leagues were very different, revenue sources are different, etc.  Now, when it helps their argument, they point to the NBA and NFL deals.....very annoying.

The most annoying thing of all is the request of roll-backs.  The players never should have agreed to it back in 2005, but because they did, the league is pushing for it again and they'll do the same next time around if they agree to it again.  I think the most "FAIR" deal is to determine what the fair split is and get to a split the makes sense without immediate roll-backs.

The thing that really annoys me is that there were owners out there probably contemplating big signings this summer and the league was whispering in their ear that they will be able to negotiate 10-15% reductions in salaries.  So owners go out and spend $100 million on a guy thinking that in the long run it will really only cost $85 million.

I am absolutely shocked at the poll results thus far.  I could care less about Bettman.  Sure, he's not very likeable, I can't stand the guy, but he really has little impact on me.  I'd sign him to a 20 year contract if it meant I could start watching NHL hockey again tomorrow.

Would be nice to see a new person come in, but I'd be willing to bet that we would all start to form some hatred for that person as well....maybe a little less so though.  I'm not sure it would have a signficant impact on lockouts vs. no lockouts though as that is really the owners decision.  I know some will reference the fact that there needs to be 22 votes to overturn vs. what you would expect (15), but I'd bet you'd still seem the signficant power from a signficant vew owners.

What I'd be more interested in seeing is a replacement of the chairman of the Board (i.e. get rid of Jacobs).

He's become quite quotable in the last little while; doing a little campaigning for the position of Captain?

Personally, I don't like this from him.  With the situation we are in, the players need to be unified, you don't want individual players making comments.  Hard to control, but from an NHLPA perspective, I'm sure they don't like seeing comments from the players.

He heavily eludes to it without saying the exact words (probably to avoid a fine)


I think this quote speaks volumes -



http://www.mlive.com...ng_anticip.html

For the life of me, I'm trying to figure out how you get from what Zetterberg said to him thinking Bettman should be fired.  I read it as him talking about Bettman's negotiating style and as long as he is in that role, he expects the same.  That to me is just basic logic.  Doesn't say anything about whether he thinks he's doing a good job or a bad job.