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Different Voice For Owners But Same Message

from Michael Grange of Sportsnet,

But this crew, hand-picked by Bettman in advance of Wednesday's board of governors meeting, will almost certainly deliver a message consistent with what the players have been hearing all along.

That league revenue is growing, but the majority of clubs aren't profitable and cutting players costs is one way to help that.

That the league is very close to cancelling games beyond those cancelled through Dec. 14th already.

That the best case for league revenues for a season beginning sometime in the next month may be $2.4-billion, or $1.1-billion less than what would have been without a labour stoppage.

That by failing to get a deal done in November to preserve an 82-game season, the players and the NHLPA may end up costing themselves $500-million this season alone - and counting.

That the $211-million in 'make whole' money that the owners have guaranteed in their last offer is on the verge of being pulled off the table.

That the best case going forward is that league revenues for a 2013-14 season would recover to 2011-12 revenues, with perhaps 2.5 per cent growth, or about $3.38-billion (compared with revenues in the $3.6-to-$3.8-billion range they were projected to hit without a lockout).

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Comments

CaptainDennisPolonich's avatar

But this crew, hand-picked by Bettman in advance of Wednesday’s board of governors meeting

What a sham. If the two sides want new blood and fresh perspectives at the bargaining table, let the owners pick 15-20 players and the players pick 5-10 owners to attend a meeting. Then you might have a chance of getting something done. The whole process has been hijacked by a midget pimp and a handful of extremist owners.

Posted by CaptainDennisPolonich from The Land of Fake Boobs and Real Nuts on 12/04/12 at 02:24 PM ET

Avatar

The whole process has been hijacked by a midget pimp and a handful of extremist owners.

Grange asks an interesting question in the piece, namely (paraphrasing) “what if Bettman really is giving the position of the majority of owners?”

In most people’s haste to pour bucket after bucket of digital diarrhea on Bettman’s head it’s a question that very few, if any, people actually take a moment to pause and consider.

What if Bettman really does have the support of 18+ owners?  What if around the same number of owners (although certainly not the same group of them) are actually either barely breaking even or losing money from hockey ops?  What if the information he’s giving the NHLPA, while certainly massaged, is far more accurate than not?

Posted by HockeyinHD on 12/04/12 at 04:10 PM ET

J.J. from Kansas's avatar

If it’s the case, then where is 2012’s Levitt Report?  Wasn’t that pretty much the rallying pin for support of the league during the last lockout? 

It just seems like if things were as bad as that, the league wouldn’t have a problem with exposing that.  It would be pretty damning for the NHLPA if the league actually produced evidence that the financials have to be adjusted so drastically and they were the ones blocking it.

That’s nothing to say that Bettman doesn’t have support of 18 owners though. There doesn’t have to be a relationship between a team barely breaking even or losing money and supporting Bettman in the lockout.  Bettman only needs 8 owners on his side.  He probably has more than that, but they don’t have to all be the worst-off teams.

Posted by J.J. from Kansas on 12/04/12 at 04:21 PM ET

CaptainDennisPolonich's avatar

Bettman only needs 8 owners on his side

What if Bettman really does have the support of 18+ owners?

How many owners does it take to ratify a CBA?  IIRC it takes a 2/3 (or maybe higher) vote of owners to ratify a CBA. I can’t remember where I read that, nor could I find a cite during a quick search. If anyone knows how many owners need to ratify a CBA would like to know

Posted by CaptainDennisPolonich from The Land of Fake Boobs and Real Nuts on 12/04/12 at 04:37 PM ET

J.J. from Kansas's avatar

I believe it’s just a simple majority needed to ratify a CBA while it’s a bigger majority needed for specific items such as addition/subtraction of new members, amendments to the league constitution/bylaws, dissolution of the league, and overriding a disciplinary finding by the commissioner against somebody who in his sole discretion has engaged in conduct detrimental to the league.

Posted by J.J. from Kansas on 12/04/12 at 05:32 PM ET

Red Winger's avatar

If Bettman really is representing a majority view of the owners, then nothing less than Hockey Armageddon is upon us. The league will be fundamentally different when it returns in the fall of 2014.

Posted by Red Winger from Sault Ste Marie on 12/04/12 at 07:20 PM ET

Avatar

If it’s the case, then where is 2012’s Levitt Report? 

In that situation the league was asking for comparatively gigantic concessions, though.

The 2005 CBA took the players from 75ish% to 54%.  A 28ish% drop in their share.
The 2012 CBA was stalled for a month over a 57 to 50% move.  12.3% move.

So in 2005 the owners were going after well over twice as big of a concession.

It just seems like if things were as bad as that, the league wouldn’t have a problem with exposing that.

And they have ‘exposed’ it.  By saying it.  What you want is an exhaustive third-party audit of every team in the NHL, which is something wildly different and a bar of proof so amazingly high that it’s rarely employed in actual negotiations.

We saw it last in the Hostess negotiations just because that business was actually in danger of closing it’s doors entirely.

The problem with these kinds of audits is that business groups are so enmeshed on the owners side it’s tough to back out things properly and accurately without just turning everything into a ‘hey you’re cooking the books!’ accusation.  If a business unit owns a team, operates an arena, and has a bunch of other events at the venue how are costs and revenue split up?  Is there a split of operating expenses for the venue?  Does the team bear all the costs?  Is that going to be the same between business units that own arenas versus those that merely operate them and have debt loads to carry?

Etc, etc, etc.

Again, the basic reality of the NHL being willing to throw another season over the side to get another 12% of revenue really ought to open some eyes.

I mean, what amount of profit do you think rational, thoughtful businessmen would throw over a seasons’ worth of it in order to increase it by 12%?  I have a hard time coming up with a very large number because the 12% integer makes the math not work at any significant positive amount, especially considering the not-insignificant possibility that total revenues are going to be down for a year or so once hockey resumes.

That’s why I think the financials of the NHL really are a mess.  If the 12% is just getting 15+ teams to break even then heck yeah, I can totally see the rationale behind tossing a season over the side. 

On the players side, well, as I’ve said before I just think the lot of them are being stubborn, emotional, and stupid.  It’s become a ‘kill Bettman’ thing and a ‘make whole’ thing for them, and they just aren’t looking at the larger picture.  They aren’t businessmen as much as they are competitors, and that shows.

Posted by HockeyinHD on 12/04/12 at 09:05 PM ET

J.J. from Kansas's avatar

And they have ‘exposed’ it.  By saying it.  What you want is an exhaustive third-party audit of every team in the NHL, which is something wildly different and a bar of proof so amazingly high that it’s rarely employed in actual negotiations.

Can we try not to jump to hyperbolic strawmanning just once here, please?

Surely you can understand the difference between saying “We think the players make too much” and actually producing something resembling evidence.

the 12% integer makes the math not work at any significant positive amount, especially considering the not-insignificant possibility that total revenues are going to be down for a year or so once hockey resumes.

That depends on how long it takes for revenues to grow back and how much franchise values grow in the meantime, and how much owners can leverage those increased franchise values in ways that grow revenue streams that are neither counted nor shared.

Or it depends on the true impact of what appears to be an agreement to start counting AHL salaries against the cap as well, further reducing actual salary expenditures.

 

Posted by J.J. from Kansas on 12/04/12 at 09:22 PM ET

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Paul Kukla founded Kukla’s Korner in 2005 and the site has since become the must-read site on the ‘net for all the latest happenings around the NHL.

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