Personal thoughts…

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Bettman-NHL/Kansas City/Canada

Blogger Tom Benjamin is always controversial, sometimes I garee with him… often I don’t Either way he invariably causes a lot of interesting discussion.

Something he said the other day, bears repeating because it’s probably frighteningly accurate and quite disturbing.

 

 A post he made Thursday—-

…Canadians, pound for pound, are willing to spend more than Americans on hockey means that there’s no way Gary Bettman or the NHL could actually prefer a team in Kansas City over Hamilton or Mississauga or North York. Money talks! – Ian D.

As strange as it seems, most teams in the NHL do prefer Kansas City. Even better would be if Gary Bettman and local Nashville businessmen manage to prop up the Predators despite the pathetic $46 MM in revenues the team generates. The players are learning that sometimes money doesn’t talk very loudly in the NHL.

Why not? Three facts:

  • The NHL may be the NHLPA’s partner, but the NHL doesn’t generate spit in revenues. About 90% of league income is local.
  • Individual teams are individual businesses pursuing individual objectives. They care far less about league revenues than they care about team revenues, and in that regard, there are huge disparities, team to team.
  • In the Gary Bettman hockey league, player salaries are tied to league revenues. The players get nearly two thirds of the next $400 MM in league revenues.

    Add it up. From the Wharnsby piece:

    It has been suggested that having another high-revenue Canadian team might not be in the league’s best interests since it would push the salary cap higher without putting any money into the pockets of its 24 American-based teams. Those owners are already dealing with a salary cap that is much higher than they anticipated it would be, solely because of the strength of the Canadian dollar.

    Higher league revenues are not in the interest of any (not just American) individual team unless those increases are driven by their own or pooled centralized revenues. (And in the case of pooled revenue, the benefits are reduced because a chunk of those revenues will go to save the rich teams revenue sharing money.) When the Leafs raise ticket prices, salaries go up for everyone. As pay per view expands in Vancouver, player costs are driven up in Washington.

    The owner of the Atlanta Thrashers would be very happy to see Nashville stay put. If Hamilton generated $50 MM more than Nashville, the Thrashers don’t see a penny of that money and player costs across the league go up by about $1 MM a team. Why does Atlanta want Nashville to move? Why would a Toronto? The Leafs might like the idea if it reduced revenue sharing costs but it won’t because those are tied to revenues, too. If Nashville doesn’t get the money, another poor team will get more.

    The stupidity works in expansion thinking, too. If the league can find chumps willing to pony up big bucks for teams in new markets, it’s a double win. First, the teams get expansion fees which don’t have to be shared with players. Second, by adding a couple of low revenue teams they hold down their own salary costs.

    Remember when small market whiners couldn’t stop telling us the league was being ruined by salaries inflated by big market spending? In the Gary Bettman Hockey League, the big market teams don’t even have to spend to drive up salaries. Now salaries can be inflated by big market revenues whether the big boys spend or not. Most teams don’t want to see league revenues grow.

    It’s just another absurd consequence of an absurd system.

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    July 21, 2007 - Posted by | NHL Business

    2 Comments »

    1. This is my first post
      just saying HI

      Comment by jameswillisisthebest | September 8, 2007 | Reply

    2. Hi.
      Good design, who make it?

      Comment by naisioxerloro | November 29, 2007 | Reply


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