Quote:
Originally Posted by valo403
This isn't that complicated. Look at Resolute's post. The losses/low revenues of the Coyotes decrease costs on average for the other teams. As he also pointed out this isn't a long term thing, but for the short term it hasn't had the negative financial impacts on the NHL or its constituent owners that people pretend it has.
And I'm not sure where you get the idea that a loss leader has to be some sort of R&D or like type thing, it could be done strictly for tax purposes.
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Yes but this is a zero-sum game - there are 30 teams therefore we're not just talking about the losers in this situation. Yes you're decreasing the costs on average for 'loser' teams, but you're distributing these losses accross profitable teams. A higher cap hit would imply a higher cap floor true, but this has always been a fraction of total revenue (more revenue, more cap).
Phoenix sucking has no benefit to the league or other teams - there's no argument for it. It may help struggling teams in an oblique way but it does not help the league! Loss leaders for tax purposes is pretty awesome indeed but this isn't a 'book keeping' or sheltering loss, this is real money being flushed down the toilet.
And I'd love to take the 'lower cap' argument taken a bit further - if lowering the cap is such a benefit to everyone, then Jagr & company and other elite players will bolt to the KHL. The on-ice product of the NHL will suffer and therefore so will revenues.