[News] Expansion decision expected by June 22

[Lanny_McDonald]

Originally Posted by Magnum PEI

https://twitter.com/MurphysLaw74


Conferences would be even if this happens.

Seems unlikely. The league would leave a substantial amount of cash on the table. Expansion fee is $500M. A relocation fee would be in the $60-75M range, based on the $60M relocation fee True North spent on the Jets. What owner is going to vote to leave $400M+ sitting on the table? Especially with Quebec close to taking a team and having the financial challenges to pay the expansion fee. Unless Quebec is dropping out or there is another team in the east that is a move target, this doesn't make much sense. Not saying it isn't possible, just that the league already has a lot of pieces moving to accommodate Las Vegas and expansion to change course with 16 days to an announcement.

[Weitz]

Couldn't the las vegas owners see the Carolina situation and wait?

Why would I fork out $500 mill if someone else is getting it for cheaper?

[Resolute 14]

Originally Posted by Vinny01

If relocation occurs do the same owners stay on or does the Vegas ownership group buy the Hurricanes from the current owners?

Guaranteed it is a sale. Karmanos the elder is being sued because he's blown his kids' trust funds funding the team. He gets out of that mess by selling the team and repaying the cash.

Only question is whether someone in Carolina is willing to buy and operate the team locally.

[Vulcan]

Originally Posted by Weitz

Couldn't the las vegas owners see the Carolina situation and wait?

Why would I fork out $500 mill if someone else is getting it for cheaper?

Las Vegas pays $210M for Carolina and $290M for relocation. Each NHL team gets $10M and it solves the problem in Carolina.

[Resolute 14]

Originally Posted by CorsiHockeyLeague

Pet peeve, but the NHLPA can't inflate the cap by 5%. This isn't how the escalator works. It's presumed the midpoint will grow by 5%, and either party can opt out of that in which case they have to set a new escalator percentage.

Can you point me to the actual CBA clause, if for no other reason than to ensure I have the right process in my mind?

Regardless, you're arguing semantics. The 5% inflation on the predicted revenues (yes, I know it is a misnomer to call it a 5% increase on the cap) has always been presented as a player option. Even if it is a mutual option, there is no reason for the owners to ever opt against it. They suffer no loss if revenues don't cover the increase because of the guaranteed 50% share. The onus thus falls entirely on the players as they can inflate their published salaries at the risk of the owners retaining a larger percentage of those escrow payments.

And in the context of my post you responded to, it doesn't matter anyway. My point was that the cap, floor and midpoint were, after that 5% inflator, set at a point where an expansion team would have to reach only $120 million in revenue to be cap neutral.

$120 million in revenue would have been 19th in the league in 2014-15 if you believe Forbes' estimates. And for those keeping score, that is better than the Oilers, Senators and Jets managed and equal to the Lightning.

[Resolute 14]

Originally Posted by Weitz

Couldn't the las vegas owners see the Carolina situation and wait?

Why would I fork out $500 mill if someone else is getting it for cheaper?

As Vulcan points out with his example, no guarantee it is cheaper. Or if it is, perhaps not by much.

But there's also a risk of not getting the team. The NHL will always favour a local group over relocation. Seems a thin chance of this being a problem in this case, given how long the team has been on the market.

With no local ownership group apparently on the horizon and Karmanos seemingly on the edge of being forced to sell the team one way or another, that opens things up to not just Vegas, but other markets. Especially if the lawsuit puts the team under the control of the courts - i.e.: if Karmanos ends up declaring bankruptcy. A legitimate bankruptcy, not the scam Balsillie and Moyes tried to pull in Glendale.

[getbak]

Originally Posted by Resolute 14

Can you point me to the actual CBA clause, if for no other reason than to ensure I have the right process in my mind?

Article 50.5(b), page 258 of the CBA.

The Upper and Lower Limits of the Team Payroll Range shall be determined in accordance with the following formula:

(Preliminary HRR for the prior League Year multiplied by fifty (50) percent (the Applicable Percentage), minus [-] Projected Benefits), divided [/] by the number of Clubs then playing in the NHL (e.g., 30), shall equal [=] the Midpoint of the Payroll Range (which figure shall be considered the Midpoint only for purposes of calculating the Adjusted Midpoint; all references to the "Midpoint" thereafter shall mean the "Adjusted Midpoint"), which shall be adjusted upward by a factor of five (5) percent in each League Year (yielding the Adjusted Midpoint, which shall then become the Midpoint of the Payroll Range) unless or until either party to this Agreement proposes a different growth factor based on actual revenue experience and/or projections, in which case the parties shall discuss and agree upon a new factor. If a significant (i.e., $20 million or more) onetime increase or decrease to League-wide revenues (e.g., by reason of the addition or loss of a national television contract or the scheduled opening of one or more new arenas which is expected to result in a significant increase in League-wide revenues) is anticipated in the next League Year, the parties will endeavor to estimate the expected increase or decrease and incorporate that estimate into the above-stated formula for calculating the Adjusted Midpoint.

After adjustment for the revenue growth factor, the Payroll Range shall be constructed by adding to the Adjusted Midpoint an amount equal to fifteen (15) percent of the Adjusted Midpoint (i.e., multiplying the Adjusted Midpoint by one-hundred fifteen (115) percent) to establish the Upper Limit, and subtracting from the Adjusted Midpoint an amount equal to fifteen (15) percent of the Adjusted Midpoint (i.e., multiplying the Adjusted Midpoint by eighty five (85) percent) to establish the Lower Limit. Notwithstanding the foregoing, (i) the magnitude of the Team Payroll Range shall never be less than $16 million (i.e., +/- $8 million of the Adjusted Midpoint) or greater than $28 million (i.e., +/- $14 million of the Adjusted Midpoint) and (ii) the Upper Limit shall never be less than $64.3 million (notwithstanding Preliminary HRR for the prior League Year), provided, however, that should the calculations described above produce an Upper Limit below $64.3 million, the Midpoint and the Lower Limit for that League Year shall be set in accordance with those calculations (without regard to the resulting magnitude of the Payroll Range).

Originally Posted by Resolute 14

And in the context of my post you responded to, it doesn't matter anyway. My point was that the cap, floor and midpoint were, after that 5% inflator, set at a point where an expansion team would have to reach only $120 million in revenue to be cap neutral.

$120 million in revenue would have been 19th in the league in 2014-15 if you believe Forbes' estimates. And for those keeping score, that is better than the Oilers, Senators and Jets managed and equal to the Lightning.

This brings up an interesting question that somehow never gets mentioned when people discuss the cap implications of expansion: How much of the total league wide revenue is generated locally by each team, and how much is generated by the league as a whole?

If you add up the revenue numbers that Forbes uses for each team, it totals just under $4B. That's total revenue, so it isn't just what each team in generating on its own, but also each team's share of revenue brought in at the league level (things like the national broadcast deals; major sponsorships like Honda, Molson-Coors, Bridgestone, Enterprise, etc; and revenue from league events like the Winter Classic and All Star Game).

Right now, those league revenues are split 30 ways. With expansion, there will be another 1 or 2 teams taking a piece of the pie, so everyone's slice gets a little smaller. I doubt any of the sponsorship deals are written to increase as the number of teams increases.

I wonder what the revenue numbers would look like for each team if you only included revenue generated by the team? I also wonder what the Las Vegas team's revenue would need to be to be cap-neutral in that situation?

[EldrickOnIce]

FWIW, RDS Francois Gagnon reporting this morning that Las Vegas is a done deal for 2017-18, and will play in the Pacific division.

http://www.rds.ca/hockey/lnh/las-veg...2017-1.3399848

[underGRADFlame]

So here's a hypothetical...

If Vegas comes in and plays in the Pacific, bringing it to 8... in 3 years Seattle has its poop in a group and gets approved... Which team moves to the central? ARI, EDM or CGY?

[Red Menace]

Originally Posted by underGRADFlame

So here's a hypothetical...

If Vegas comes in and plays in the Pacific, bringing it to 8... in 3 years Seattle has its poop in a group and gets approved... Which team moves to the central? ARI, EDM or CGY?

In that scenario I think the most logical thing would be to move both CAL & EDM to the central and move COL back to the Pacific.

[jmac98]

Originally Posted by underGRADFlame

So here's a hypothetical...

If Vegas comes in and plays in the Pacific, bringing it to 8... in 3 years Seattle has its poop in a group and gets approved... Which team moves to the central? ARI, EDM or CGY?

In 3 years they award Seattle 'and' Quebec at the same time, maybe?

[underGRADFlame]

Originally Posted by jmac98

In 3 years they award Seattle 'and' Quebec at the same time, maybe?

I'm pretty sure Carolina moves to Quebec soon... 32 team league (okay) 33 team league (silly pants).

[Resolute 14]

Originally Posted by getbak

This brings up an interesting question that somehow never gets mentioned when people discuss the cap implications of expansion: How much of the total league wide revenue is generated locally by each team, and how much is generated by the league as a whole?

If you add up the revenue numbers that Forbes uses for each team, it totals just under $4B. That's total revenue, so it isn't just what each team in generating on its own, but also each team's share of revenue brought in at the league level (things like the national broadcast deals; major sponsorships like Honda, Molson-Coors, Bridgestone, Enterprise, etc; and revenue from league events like the Winter Classic and All Star Game).

Right now, those league revenues are split 30 ways. With expansion, there will be another 1 or 2 teams taking a piece of the pie, so everyone's slice gets a little smaller. I doubt any of the sponsorship deals are written to increase as the number of teams increases.

I wonder what the revenue numbers would look like for each team if you only included revenue generated by the team? I also wonder what the Las Vegas team's revenue would need to be to be cap-neutral in that situation?

Thanks for the CBA clause. I tried searching for it, but that part of the CBA is so god damned dry...

As to your question, we can at least remove the TV deals - assuming the annual payment is static.

Sportsnet: 12 years/$5.232 billion = c$436 million per year. We know the NHL stupidly did not hedge, so translated to Greenbacks at the current exchange rate, that's ~us$341 million per year.

NBC: 10 years/$2.000 billion.

So that currently means each of the 30 teams makes $18 million from those two national deals. Adding a 31st team only knocks it down to $17.45 million. 32 teams means $16.9 million. So the hit there - despite being 1/8 of overall league revenue - is not significant.

[jmac98]

Originally Posted by underGRADFlame

I'm pretty sure Carolina moves to Quebec soon... 32 team league (okay) 33 team league (silly pants).

But they were talking about Carolina moving to Vegas, err go, so was I.

then in 3 years they add 2 more teams, = 32 and no pants needed, silly or otherwise.

Sorry, I was going off the previous convo so maybe that was made clear. I apologize.

[Finger Cookin]

Originally Posted by underGRADFlame

So here's a hypothetical...

If Vegas comes in and plays in the Pacific, bringing it to 8... in 3 years Seattle has its poop in a group and gets approved... Which team moves to the central? ARI, EDM or CGY?

Arizona moves to the central in that scenario. They have shorter travel to the southern Central teams, and it doesn't increase travel for Colorado, Dallas, Nashville, and St. Louis as much as adding in one or both of Edmonton or Calgary.

[Fire]

Originally Posted by Resolute 14

As to your question, we can at least remove the TV deals - assuming the annual payment is static.

Sportsnet: 12 years/$5.232 billion = c$436 million per year. We know the NHL stupidly did not hedge, so translated to Greenbacks at the current exchange rate, that's ~us$341 million per year.

I'm pretty sure I remember hearing they structured the Sportsnet deal so the amount of money paid to the NHL increases every year (in CDN dollars).

[MisterJoji]

Originally Posted by Finger Cookin

Arizona moves to the central in that scenario. They have shorter travel to the southern Central teams, and it doesn't increase travel for Colorado, Dallas, Nashville, and St. Louis as much as adding in one or both of Edmonton or Calgary.

Doesn't it make more sense to add LV to the Central and then add Seattle to the Pacific if/when they join? That way no other teams have to move, other than when Carolina/Florida move to Quebec and it evens out both conferences.

[Fighting Banana Slug]

Originally Posted by MisterJoji

Doesn't it make more sense to add LV to the Central and then add Seattle to the Pacific if/when they join? That way no other teams have to move, other than when Carolina/Florida move to Quebec and it evens out both conferences.

It might be tough to work out, as I would think proximity to LA means they need to be in the Pacific (along with Arizona). If that is the case, I would think Cal/Edm moving makes some sense. Rather Calgary stay in the Pacific, though.

[Lord Carnage]

Originally Posted by Fighting Banana Slug

It might be tough to work out, as I would think proximity to LA means they need to be in the Pacific (along with Arizona). If that is the case, I would think Cal/Edm moving makes some sense. Rather Calgary stay in the Pacific, though.

Maybe a little off the board, but what about both Vegas and Arizona to the Central and move Winnipeg to the Pacific?

Maybe adding too much travel for S.Cal, but really you just make their road trips to hit 4 Canadian teams instead of 3...

Then you also take the single Canadian team out of the Central and put them together with 3 other Canadian teams?

[OutOfTheCube]

So, is Quebec basically dead in the water this go-around? Everyone is just talking about Vegas, but I haven't seen anything indicating Quebec has rescinded their application? Unless I missed it.