Kukla's Korner

Kukla's Korner Hockey

This Is Not Major League Baseball

from Mark Spector of Sportsnet,

It is Gary Bettman’s impossible dream: To create a National Hockey League economy in which Dallas, Florida, Phoenix, Columbus and Anaheim can all be profitable.

Without, of course, shipping containers full of money heading south on a regular basis from the Canadian teams, the Rangers, Philadelphia, Detroit and Boston.

Even if the NHL Players’ Association gave in on all collective bargaining agreement fronts this weekend, would Phoenix not still be a smoking crater of a hockey market? Would the Stars' ticket prices still not be the lowest in the NHL? (Dallas was the only club with an average ticket price of less than $30 last season.)

With apologies to Sports Illustrated, this is hockey’s dirty little secret: Even if the financial pendulum stops right at six o’clock, with the revenues split evenly down the middle between the owners and players, it won’t even come close to guaranteeing profitability in Tampa, Carolina, Nashville, or a number of ill-advised Sunbelt markets.

And that, folks, is why NHLPA executive director Donald Fehr has found a different foe in Bettman than he ever did in Major League Baseball commissioner Bud Selig.

continued

Filed in: NHL Talk, NHLPA, | KK Hockey | Permalink
 

Comments

Avatar

This article nails it.  Wow, this is what every player in the league should be reading today.

especially this part:

And what’s worse for the NHLPA? A deal for all 750 players that doesn’t sit well? Or lopping off four teams, and applying that deal to 650 players?

 

 

Posted by gretzky_to_lemieux on 12/14/12 at 12:49 PM ET

joedaiceman's avatar

Ditto to the comments above. However, so many bloggers/journalists (ala Malik) go apoplectic when this conflict is put into the context of the business that is at stake. To them it is simply class warfare with the owners oppressing the players and the fans - very sad.

Posted by joedaiceman on 12/14/12 at 02:06 PM ET

Evilpens's avatar

Good Article BUT with what
Happened today in Conn. it isn’t in me to Comment, Just Shaking my head sick

Posted by Evilpens on 12/14/12 at 02:35 PM ET

Avatar

lopping off four teams, and applying that deal to 650 players?

And would any of those four teams find better markets? Say Hamilton, the GTA, Seattle or Quebec. Or is the NHL Southern Footprint strategy that is causing the drain? How quickly would Pittsburgh have found a new team if they would have been allowed to move to Hamilton? Are some franchises too important to fail? What took the move back to Winnipeg so long?  How did the North Stars move to Dallas in the first place?  Are these all things that the NHLPA did?

Posted by hockey1919 from mid-atlantic on 12/14/12 at 02:42 PM ET

J.J. from Kansas's avatar

Mark Spector’s choice in the matter is exactly where the NHL has the leverage:

We (the big teams) are not going to pay enough to keep these teams around.  We’d like to have them around because they establish footprints in places we need those footprints established in the chase for the eventual television contract which is going to take us away from having to be gate-driven.

The players also want those teams around for that reason AND the reason that having those teams collectively gives them all more jobs.

So the players’ choice is to do the majority of the loss-underwriting for the league in the hopes of getting that deal or being the assholes who willfully destroyed 100 of their own jobs AND abandoned a handful of markets that they had no say in establishing.

The players made a huge mistake in 2005 in letting Gary Bettman ever use the term “partnership” and now they’re finding out how business partners actually act towards one another.

Posted by J.J. from Kansas on 12/14/12 at 03:01 PM ET

Nathan's avatar

Whoa whoa whoa. Wait. Hockey and baseball aren’t the same thing?!?!? Stop the presses.

Posted by Nathan from the scoresheet! on 12/14/12 at 03:03 PM ET

Avatar

Even if the financial pendulum stops right at six o’clock, with the revenues split evenly down the middle between the owners and players, it won’t even come close to guaranteeing profitability in Tampa, Carolina, Nashville, or a number of ill-advised Sunbelt markets.

Dingdingding!

Posted by HockeyinHD on 12/14/12 at 03:04 PM ET

Avatar

We’d like to have them around because they establish footprints in places we need those footprints established in the chase for the eventual television contract which is going to take us away from having to be gate-driven.

I don’t think a big TV contract is even remotely ‘eventual’, by any definition of the term.

So the players’ choice is to do the majority of the loss-underwriting for the league

Um, the players aren’t doing any of the loss underwriting for the league.  Every single player will generate a vast profit margin from their hockey career.

or being the assholes who willfully destroyed 100 of their own jobs AND abandoned a handful of markets that they had no say in establishing.

The sticky wicket here for you is that you are in favor of having a bunch of teams in bad markets, yet you’re not in favor of the NHL having a financial system which allows them to have teams in crappy markets.  That’s… problematic.

In order for this idiotic southern expansion to even have a chance at success, there has to be a narrow cap-floor range so those southern teams aren’t always badly outspent and routinely average or worse.

In order for that cap-floor range to work at all for non-trad markets it has to be fairly low, so that even the weakest team in the weakest market isn’t getting killed for 8 figure losses out of hockey ops each year.

So, you end up with CBA negotiations like the last two we’ve seen, where the NHL has to try and drive down player share to such a point that the Nashville’s, Columbus’s, Tampa’s, Florida’s, Phoenix’s, Dallas’, Anaheim’s, Carolina’s and SJ’s of the league can still spend into the range the HRR split mandates.

‘Profit share’ can’t realistically work because there aren’t enough teams making enough profit to soak hockey ops losses for ~15 clubs.  You’d have to tax the top 10 operating revenue-generating clubs at almost 40% in order to ‘make whole’ all the rest of financial losers in the NHL.

That isn’t happening.

That leaves pushing down player share.

Posted by HockeyinHD on 12/14/12 at 03:38 PM ET

Vladimir16's avatar

Great article but for once I have to agree with Evilpens here :(

Good Article BUT with what
Happened today in Conn. it isn’t in me to Comment, Just Shaking my head

Posted by Evilpens on 12/14/12 at 01:35 PM ET

Posted by Vladimir16 from Grand River Valley on 12/14/12 at 03:40 PM ET

Avatar

Just heard the news, just despicable and inconceivable and made me sick to my stomach. Prayers and thoughts are with everyone involved. I see that even I can agree with EP today.

Posted by hockey1919 from mid-atlantic on 12/14/12 at 03:52 PM ET

Avatar

Posted by hockey1919 from mid-atlantic on 12/14/12 at 01:42 PM ET

Just about everything you mentioned was an arena thing between the city and the franchise that had nothing to do with player compensation.

Of course, it could definitely be argued that Atlanta was non-viable, in large part, because it was a weak market where viability was made worse by player salaries eating up revenue beyond what the market could produce.

Posted by larry on 12/14/12 at 04:02 PM ET

J.J. from Kansas's avatar

I don’t think a big TV contract is even remotely ‘eventual’, by any definition of the term.

We know what you think about this by now, but the reality that the NHL wants teams in locations where they need to be in order to get that deal is why those teams are in those locations. We already know what you think about that plan. Let’s actually try discussing it going forward.

Um, the players aren’t doing any of the loss underwriting for the league.  Every single player will generate a vast profit margin from their hockey career.

That’s one way to look at it. I look at it differently.

The sticky wicket here for you is that you are in favor of having a bunch of teams in bad markets, yet you’re not in favor of the NHL having a financial system which allows them to have teams in crappy markets.  That’s… problematic.

This is a lie.

In order for this idiotic southern expansion to even have a chance at success, there has to be a narrow cap-floor range so those southern teams aren’t always badly outspent and routinely average or worse.

That is one way to accomplish that, but it is not the only way.

‘Profit share’ can’t realistically work because there aren’t enough teams making enough profit to soak hockey ops losses for ~15 clubs.  You’d have to tax the top 10 operating revenue-generating clubs at almost 40% in order to ‘make whole’ all the rest of financial losers in the NHL.

So you don’t mean “can’t” realistically work because you just explained how it actually could. What you meant was “won’t” because the big teams won’t sign off on that.

Great. None of that changes what I was already talking about. The system in place is not sufficient to allow teams like Phoenix to survive. Something has to change.  There is nobody who disagrees with that.  Hell, there are very few people who ever disagreed with that.

The idea that the big owners won’t share more so the players have to accept a smaller share is just another way of saying that the players won’t accept a smaller share so the big owners will have to share more.

If you want to keep beating up on strawmen to support a rather narrow view of the situation, have fun with that, but please stop using me as the effigy for this. It’s really affecting how much I respect you.

Posted by J.J. from Kansas on 12/14/12 at 04:02 PM ET

Avatar

and as long as the owners have the players to subsidize bad locations, there is no incentive to move. Those losses help to keep inflation down for the teams that are making money hand over fist and leave viable markets open for expansion fees which don’t go into HRR.

Just about everything you mentioned was an arena thing between the city and the franchise that had nothing to do with player compensation.

And a sweetheart arena deal in a city that would support a team would not improve the ability to provide higher compensation?

Posted by hockey1919 from mid-atlantic on 12/14/12 at 05:38 PM ET

Avatar

There is a cost problem when teams can generate 50 to 90 million in revenue and still lose money. Every NHL team generates more than 50 million, the cap should be set to reflect profitability at about 75 mllion gross revenue per franchise.  That would set the cap at about 38 million.

Posted by timbits on 12/14/12 at 05:52 PM ET

SnLO's avatar

If the condition as written is the reality, there are really two options that need addressing (or a third):
1) franchise re-location to markets with the demand
2) franchise contraction to a level the market can sustain
[3) return to no salary cap, allowing players to contract for market-value to teams with the ability to pay]

Posted by SnLO from beyond the M-1 on 12/14/12 at 07:03 PM ET

HockeytownOverhaul's avatar

Without a cap the Brewer’s of the NHL would never win the Stanley Cup.

Posted by HockeytownOverhaul on 12/14/12 at 09:47 PM ET

Vladimir16's avatar

That would set the cap at about 38 million.
Posted by timbits on 12/14/12 at 04:52 PM ET

Hahahahaha…... thanks, man. It’s been a difficult week and I really needed that.

Posted by Vladimir16 from Grand River Valley on 12/14/12 at 11:02 PM ET

Add a Comment

Please limit embedded image or media size to 575 pixels wide.

Add your own avatar by joining Kukla's Korner, or logging in and uploading one in your member control panel.

Captchas bug you? Join KK or log in and you won't have to bother.

Smileys

Notify me of follow-up comments?

Feed

Most Recent Blog Posts

About Kukla's Korner Hockey

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.

From breaking news to in-depth stories around the league, KK Hockey is updated with fresh stories all day long and will bring you the latest news as quickly as possible.

Email Paul anytime at pk@kuklaskorner.com

 

image

image