Quote:
Originally Posted by Strange Brew
HRR by definition, are not net of salaries, which I thought is what you were saying. My mistake.
Your conclusion though that it is a zero sum game is not accurate. Even without including expansion fees, the expansion to new markets should increase revenue at a faster rate than the dilutive effect of adding two new teams. For example, I think the Canadian TV contract allows for an escalator when a new Canadian market joins. As others have stated, it is tricky to estimate depending on the average contribution of existing teams vs. new teams but I suspect the new teams will be accretive. That is one of the reasons the league wanted to see the results of the season ticket drive in LV. They don't add to add a team that will be a drag on league results (although ponying up $500M would make that easier to swallow).
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I do remember reading about the escalator clause in the Canadian TV contract, but that offsets the fact that there is an additional team to divvy it up with. Without it, per team HRR would actually go down. Also, IIRC NBC's (not as rich) contract doesn't doesn't have one. LV's season ticket drive took them several months to get to a level that qualifies them for revenue sharing payments. Hopefully they should have enough walk up business that they won't be receiving those payments, but they are a far cry from Winnipeg selling their building out for 5 yrs in a matter of minutes. Overall, maybe they bring HRR up more than the league average, but I doubt it would be enough to have a drastic effect on the cap. Another poster ran some interesting numbers on that. This is much more about $1B in expansion fees than it is about raising per team HRR.
BTW, should we move this discussion to the expansion thread? Sorry for contributing to a derailment.