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The cost of doing business?

TIM WHARNSBY

From Thursday's Globe and Mail

Latest comment posted at 1:12 PM EST 10/07/08

It's taken just three years for combined team salaries to exceed the amount that led to a lockout ...Read the full article

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  1. Rick Wolff from Calgary, Canada writes: There is not a problem with the salary cap increasing in a league where there is true growth. With cost certainty players only get so much, and if teams over spend they get the money back in escrow. Where the problem comes in the league is that not every team has the same source of revenue, and this is forcing the have-not teams to keep up with the markets that can continue to increase ticket prices. There is nothing wrong with the CBA, and I think that the owners did win. The only way for the entire league to remain financially viable and stable is for the owners to put a cap on ticket price increases and to improve the revenue sharing model that is in place. Without better revenue sharing the league is dooming a half dozen franchises.
  2. Young Gunner from Canada writes: Another reason why hockey lost me after the lockout. The NFL model seems to be the way to go.
  3. g h from Canada writes: Actually I quite enjoyed the lockout.
  4. Scot Loucks from Pickering, Canada writes: Rick Wolff from Calgary, Canada writes: There is not a problem with the salary cap increasing in a league where there is true growth.
    -----------------------------------------
    You are correct Rick... as in real growth.

    The growth in the NHL has revolved around 6 sold out Canadian arenas who are now collecting CDN dollars at par instead of 65 cent dollars.

    The problem now is that the cap minimum is above what the cap maximum was after the lockout.

    Currently there are 4 teams under the minimum. LA Kings are 13m below and trying to rebuild with youth. How are they going to spend 13m based on the remaining crop of UFA's?

    At the other end of the spectrum is Philadelphia. 4m plus over the cap.... will Philadelphia be shipping Hatcher and Knuble to LA for a draft pick and a bag up pucks?

    Atlanta is 10m under the cap.. the other two... Phoenix and NYI are a player away from the minimum.

    Interesting times.

    Cheers
  5. Dave Miller from Canada writes: @Scot Loucks. Good point, I do think that having these teams reaching for the salary cap is going to have a huge impact on inflating salaries...This year it may not be a huge issue, but a couple of off seasons of giving all those Nolan Pratts and Jeff Fingers $4-5 million a year just to meet a salary cap minimum will probably get owners scratching their heads eventually...
  6. Scot Loucks from Pickering, Canada writes: Dave Miller;

    The above mentioned situation is also the reason we won't see another team in Canada anytime soon.

    Bettman has made his promises to the owners down south who are now having a hard time meeting the minimum cap. Add or move a couple teams to Canada and guess what... cap goes up.

    If Bettman really knew anything about the game (IMHO) he would do a couple things.... First he would move the obviously under performing US teams (Nashville comes to mind) to US markets that are already established.

    Houston is one who obviously has a traditional rivalry with Dallas... Texas is actually producing hockey players now as is California.

    Move another to Seattle. Then put one in Southern Ontario.

    Re negotiate the revenue sharing agreement among the owners. Totally about the owners and not the players.

    Cheers
  7. R Miller from Halifax, Canada writes: Who exactly are these NHL execs trying to kid ?

    Before the lock out year, fans were told that the NHL would be bankrupt if the high percentage of league revenues that were going towards players' salaries were allowed to continue unabated.... I think that Bettman had some politico in the US write some report to prove this...

    And now, the salaries have climbed even higher than they were before the lock out occured...

    Are these NHL execs actually suggesting that revenues will rise in the future from what they are today or have been in the past few years to cover the increased players' salaries ?

    Really? Are these guys following what is happening in the American economy right now...

    In order of importance to Americans :

    1. NHL hockey
    2. Beer
    3. Gas
    4. Shelter
    5. Food

    Actually, I think that list is similar to Maslow's Hierarchy of Needs.

    None of this makes the least bit of sense really ...

    The NHL is heading for trouble again IMHO.
  8. Gary Dare from Portland, Oregon, Canada, writes: Scot Loucks writes, "Move another to Seattle." Nice thought but the Key Arena was purposefully built to not host a NHL team. Only when/if a NBA team returns to that area, to a new arena in Bellevue, WA (a fully locally-funded proposal that the OKC Sonics owners blatantly ignored), would that be possible.

    And while we're in that area, also forget about Portland, Oregon since Paul Allen owns access to the Rose Garden arena and has lost interest in the NHL after being jilted twice (Penguins in 1999; Coyotes in 2000). Now, the last thing that he needs is competition with his Trailblazers for ticket sales.
  9. R Miller from Halifax, Canada writes: According to an NHL commissioned report prepared by former US Securities and Exchange Commission chairman, Arthur Levitt, prior to 2004-2005, NHL clubs spent a whopping 76% of their gross revenues on players' salaries alone...

    Today, player salaries are now collectively higher than they were before the lock-out year so does anyone have any idea what percentage that puts the league at right now ?

    I cannot actually foresee revenues going up to match the increases in players' salaries in very many markets in the near future -- particularly American ones.

    Is the NHL heading towards an inevitable contraction ?
  10. R Miller from Halifax, Canada writes: Opppsss.... Loucks may be wrong again...

    Seattle and Portland don't seem to even want NHL franchises... Still awaiting Houston's rejection.

    Better get Balsillie on the phone quickly..... :)

    Cheers
  11. Gary Dare from Portland, Oregon, Canada, writes: R Miller writes, "Still awaiting Houston's rejection." While Les Alexander had supposedly pursued the Flames, Oilers and maybe Senators for Houston in the 90's, he has since stated that he would be interested in a minority ownership if someone were to bring a team to his Toyota Center. So it was a surprise to me that Pete Karmanos extended his lease for the Hurricanes.
  12. O Boy from Canada writes: I say go right to it guys,,,,,,,,,,write those huge contracts, make a bunch of nobodies multi millionaires, drive those ticket prices through the roof,,,,,

    but as the saying goes,,,,don't come crying to me when,,,,,,,

    Seriously, we fans shouldn't get too upset about a bunch of millionaires spending their money. Shut the league down for a year, start it up, go on strike,,,,who cares. Every player, every manager, every executive, every owner is still getting their paycheques. Until that doesn't happen, the NHL will continue to exist. It's a business. Like any business, as long as the bills are paid, and paycheques don't bounce, it will remain in business.
  13. J K GALBRAITH from Canada writes: I don't think anybody thought the lockout would solve all the problems of all the teams losing money. Is there a better competitive balance in the league now? Yes. Are there fewer teams in financial trouble now than before the lockout? Yes. Is there still a problem on how the overall revenues are distributed across the league? Yes. Do a few teams need to fold or be moved? Yes.

    R. Miller: The percentage of revenue that players salaries represent is a fixed amount somewhere in the low fifties. Remember everyone took around a 20 to 25% cut in salary as part of the lockout and new agreement

    Where things could get very challenging is when revenues decline either for general ecconomic reasons or a rapid decline in the Canadian dollar.
  14. Wes Stanton from Nashville, United States writes: Thanks for mentioning the Preds Scott. Actually of importance to Americans......

    1. NHL
    2. Weed
    3. Shelter
    4. Gas
    5. Food
    6. Scandanavian Death Metal
  15. Terry Terry from Brantford, Canada writes: If the Los Angeles Kings are scrambling to reach the $40.7-million minimum, let them know I'm available as some kind of consultant to suck up as much of the 40-mill as needed. But seriously, the league/players should consider the merits of a 2-year lockout next time. That's two whole years of cost certainty.
  16. Legman22 In Montreal from Montreal, Canada writes: While the players and owners get richer by the year, who's left holding the bag?...that's right, YOU, the fan. I'm so glad Buttman stuck to his promise that ticket prices would drop, aren't you?

    Aside from these silly numbers being awarded to journeymen players, if I was an NHLPA member, I would be livid that the NHL continues to stifle my potential income by insisting that the bottom 6 teams in revenue stay afloat in their current locations. Where's Paul Kelley in all this?
  17. R Miller from Halifax, Canada writes: Bob Gainey for Commissioner...

    Cost containment, class and bye bye bad apples like Sean Avery...

    BTW I can also skate and will be happy to accept a multi-million contract to help some pathetic team reach their cap minimum.
  18. J K GALBRAITH from Canada writes: Legman; I hardly think the players can be that upset with this collective bargaining. Either though luck such as the Canadian dollar increasing or the overall competitive balance has created some additional revenues, the players have probably made back all if not more than what they lossed. Remember, the union's job is to protect the overall number of jobs, not whether every individual player is getting the maximum amount possible.

    I am also unsure that if you dropped the bottom six teams, the salary cap would go up. Is the revenue figure based on gross revenues or a net figure? If it is a gross figure, then cutting teams will not improve players salaries. Can any of the CBA experts help us out on this discussion?
  19. Gary Dare from Portland, Oregon, Canada, writes: R Miller writes, "Seattle and Portland don't seem to even want NHL franchises..." I would rather say wrong circumstances (see my first posting, above). Both cities were part of the PCHA founded by the Patrick brothers and in the early 20th century, the Metropolitans and the Rosebuds played the NHL champions, the Habs, for the Stanley Cup when it was a challenge cup.

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