Stress fractures in the CBA, small markets wringing their hands
Interesting look at how small markets are wringing their hands over the potential of losing their portions of revenue sharing because they can't keep up with the overall growth rate of the league as a whole.
The entire Canadian dollar thing is turning into a mind-blower that probably couldn't have been anticipated.
Still, it would be hard to believe revenue sharing would be denied.
Look for the NHLPA to be lobbying for more revenue sharing as part of its negotiations leading into agreeing to keep the CBA in place through 2009. But perhaps clubs themselves will want to crack the CBA and start again. Could be an interesting time.
The surge in the Canadian dollar is surprising. What isn't is that the "money" teams would be making even more under the new CBA than they did under the last one. With player salaries capped at far lower levels than they used to spend, their overall expenditures have dropped significantly, while their revenue streams have increased.
Toronto was going to make money under any CBA. Now, instead of spending 60 million a season on salaries they are only allowed to spend 50. The rest is pure profit.
What I don't get is how the small markets allowed this clause into the CBA - if you are qualifying for revenue sharing, how can you be expected to have an overall growth GREATER than that of the league as a whole?
I mean, Nashville is in trouble because they aren't growing - hence they need the revenue sharing to stay afloat. But the revenue sharing is tied to their success... soo they don't qualify!
WTF?
Also - Any article talking about the Jets coming back to Wpg shows a lack of journalistic integrity and good common sense.
Even if it is just an afterthought.
__________________
"I had only seen the NHL in black and white. My grandfather bought a colour tv. The Flyers were inexplicably wearing orange uniforms. I fiddled with the colour controls until they were wearing proper red uniforms. For some reason, this adjustment screwed up the colours on the other programs. There was only one station to watch. I thought he had got a defective tv. The technology was in its infancy. It took a long time to figure that one out."
-Cowperson
There is also a paid attendance requirement in addition to the revenue growth rate requirement. In 2007/08 the team has to have an average paid attendance at or exceeding the lesser or 13,125 per game or the average league-wide paid attendance. In 2008/09, the number jumps to 14,000.
I think this was implemented to prevent a Lozia-type arrangement where management intentionally guts the team, takes a loss, and gets huge revenue-sharing to subsidize the team.
In the context of the Nashville/Hamilton relocation plan: another sure-fire successful, moneymaking team is bad news for a lot of the small-market owners; makes it harder for them to collect their shared revenue, as well as dragging up the cap and the floor. Toronto and Buffalo don't want to see the team moved to Hamilton because it's diluting their markets. Small-market, low-revenue teams don't want to see a Hamilton franchise because it'll hurt their revenue sharing. And the rest of the teams in the league don't want to see a Hamilton franchise because they'll drive up the cap and create greater salary competition. For all of the talk about the owners having a conspiracy against Balsillie, the reality is that they inadvertently created a CBA where nobody wants an individual franchise to be really successful. Honestly, when they created this CBA, there was an expectation that the NHL's revenue situation, at least on a team-by-team basis, would stay the same (the hope was, and continues to be, that television would be the economic panacea of the league). But the new disparity that has emerged has created a situation where the success of one team is not good for other teams.
Location: I ain't playing nose tackle in a 3-4 defence
Exp:
Well I think the clause is there to try and encourage these small market teams to improve and start growing their own revenues or they won't get a dime. You don't want to be in a position where you're just giving out charity handouts to teams who aren't getting better. But yeah, the did fail to account for the Canadian dollar jumping by 30%. Than you have a team like Nashville who built a good team but had to start offing guys and now has an angry fan base. So now they're looking at losing their revenue sharing money.
In order to get 30 stable financial markets....I think the NHL is going to have to adopt some type of revenue sharing program. At which point you have the greedy folks of the old boys club asked to shrae. Can't see that going over well.
I think this was implemented to prevent a Lozia-type arrangement where management intentionally guts the team, takes a loss, and gets huge revenue-sharing to subsidize the team.
In the context of the Nashville/Hamilton relocation plan: another sure-fire successful, moneymaking team is bad news for a lot of the small-market owners; makes it harder for them to collect their shared revenue, as well as dragging up the cap and the floor. Toronto and Buffalo don't want to see the team moved to Hamilton because it's diluting their markets. Small-market, low-revenue teams don't want to see a Hamilton franchise because it'll hurt their revenue sharing. And the rest of the teams in the league don't want to see a Hamilton franchise because they'll drive up the cap and create greater salary competition. For all of the talk about the owners having a conspiracy against Balsillie, the reality is that they inadvertently created a CBA where nobody wants an individual franchise to be really successful. Honestly, when they created this CBA, there was an expectation that the NHL's revenue situation, at least on a team-by-team basis, would stay the same (the hope was, and continues to be, that television would be the economic panacea of the league). But the new disparity that has emerged has created a situation where the success of one team is not good for other teams.
It really creates future pressure by the majority for the minority to share more revenues.
The NHLPA position during the lockout was that wealthy teams should share more revenues so it would be hard to believe the NHLPA wouldn't want more money to be spread around.
The minority who have the larger revenue streams might concede to sharing more revenues IF they're allowed to spend more on their teams . . . . ie: if the gap between the floor and the ceiling is allowed to widen.
Interestingly, for all the crying in the aisles, the overwhelming majority of teams are spending at or near the cap.
In that vein, we forget that most of these teams are 1) owned by billionaires or corporations that have no problem whatsoever writing the shortfall cheques and 2) most have seen the value of their franchises increase astronomically as a result of the current CBA.
But . . . . . as we march inexoribly towards 2009, it seems ALL parties may have an interest in re-jigging this thing and ALL of them will want concessions to strengthen their own relative positions.
Cowperson
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Dear Lord, help me to be the kind of person my dog thinks I am. - Anonymous
Then there's another odd twist. The CBA also says the seven teams that play in North America's largest media markets aren't eligible to receive revenue sharing. Yet four of those clubs, including the Chicago Blackhawks and New York Islanders, would otherwise have been eligible to receive the stipend. Their owners may also be grumbling about how revenue-sharing is handled.
That's an odd way to determine who qualifies and who doesn't for revenue sharing and only further cements the fact that the small market club voting block is really running the league.
One would have to wonder how the large markets are contemplating contraction if it would mean a dilution of small market power. Contraction would achieve three of the following objectives: a reduction in voting power of small market clubs, reduction of gross revene sharing payments, and a reduction in the max salary cap.
All three of these aims would tend to satisfy not only big market clubs, but financially successful clubs as well.
To this point, maybe it is of little interest why article 49 is in the CBA. With no looming TV deal anywhere in the near to medium term, this article may provide a convenient run-around for the league to contract while partially avoiding messy PA negotiations on the topic. The justifiication would be that individual markets are just unviable when compared to league averages.
That's an odd way to determine who qualifies and who doesn't for revenue sharing and only further cements the fact that the small market club voting block is really running the league.
One would have to wonder how the large markets are contemplating contraction if it would mean a dilution of small market power. Contraction would achieve three of the following objectives: a reduction in voting power of small market clubs, reduction of gross revene sharing payments, and a reduction in the max salary cap.
All three of these aims would tend to satisfy not only big market clubs, but financially successful clubs as well.
Contraction, was, is, and always will be a complete non starter for the modern NHL. You will never ever see it.
Which isn't to say all current markets will remain in place.
The NHLPA will do everything they can to prevent ANY reduction in the number of jobs.
No team owner is going to offer up their own franchise for sacrifice.
The NHL's current goal is NFL style TV deal. More markets = more chance of national coverage.
Unless of course, you were referring to the Canadian teams. In which case only the first two apply, and the thought could be entertained if US television could rid itself of the ratings black hole that are the Flames, Oilers, Senators, and Canucks.
__________________
"I had only seen the NHL in black and white. My grandfather bought a colour tv. The Flyers were inexplicably wearing orange uniforms. I fiddled with the colour controls until they were wearing proper red uniforms. For some reason, this adjustment screwed up the colours on the other programs. There was only one station to watch. I thought he had got a defective tv. The technology was in its infancy. It took a long time to figure that one out."
-Cowperson
In that vein, we forget that most of these teams are 1) owned by billionaires or corporations that have no problem whatsoever writing the shortfall cheques and 2) most have seen the value of their franchises increase astronomically as a result of the current CBA.
Cowperson
Should it be prohibited for owners to write "shortfall" cheques? ie. you can only pay hockey expenses from hockey revenues.
__________________ I wish the heck I could like fish, I just hate the taste of it . . . I wish I could eat one, they look so good . . . - Gil Fisher (The Fishin' Musician):
Should it be prohibited for owners to write "shortfall" cheques? ie. you can only pay hockey expenses from hockey revenues.
Why?
Billionaires blowing their brains out for their own amusement on pro sports teams is a trend as old as the hair on grammas chest.
Every fan with crickets in his own wallet wants one of those crazies on his side.
One would have to wonder how the large markets are contemplating contraction if it would mean a dilution of small market power.
The NHLPA wouldn't want it for sure but it could be used as club in CBA negotiations.
Anyhoo, the average Canadian fan has long demonstrated he/she will tolerate just about any kind of indignity the NHL might foist on him/her but contracting teams without moving one to Hamilton or Winnipeg first would probably be a line the NHL wouldn't want to cross.
Besides that, Houston still awaits.
Cowperson
__________________
Dear Lord, help me to be the kind of person my dog thinks I am. - Anonymous
Billionaires blowing their brains out for their own amusement on pro sports teams is a trend as old as the hair on grammas chest.
Cowperson
Doesn't this lead to run-away salaries that have no connection to actual hockey revenues? Does it create a false market for player worth?
For example, is it fair if a certain mo-town owner is paying his players out of his pizza pocket (no pun intended), while other owners are paying from their hockey pockets?
__________________ I wish the heck I could like fish, I just hate the taste of it . . . I wish I could eat one, they look so good . . . - Gil Fisher (The Fishin' Musician):
Stress fractures in the CBA, small markets wringing their hands
