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Guest0657
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 Posted - 11/10/2012 : 21:00:59
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quote:
Originally posted by Guest8136
If you do the research using Forbes information, revenues went up by only $3 million in Winnipeg. Profits also dropped by $4 million for that franchise alone.
What's the next idea?
Sorry who or what are you asking? I just think there is something wrong with the math.
As for the Globe and Mail article vs Forbes article, how is ti that one said $30M where Forbes only said $3M?
Here is the link to the full globe and mail article: http://www.theglobeandmail.com/sports/hockey/globe-on-hockey/why-nhl-teams-cry-poor-despite-the-leagues-record-growth/article4429817/
Sorry can't find the Forbes link that Beans posted. |
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Beans15
Moderator
Canada
8286 Posts |
Posted - 11/12/2012 : 06:44:00
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Thanks for the link guest. I read the entire thing. Too bad it's a heavily assumption based opinion. I am in no way saying all the ideas in the article are bad but the thing has some number at that are published and provable and others that are a complete assumption.
The reporter does not say the revenue increased by $30 million, their exact statement is "going from Atlanta to Winnipeg alone had to have boosted league revenues $30-million or more." But writer backs this number up with exactly no fact based reference. It's his assumption.
The other point in this article is he is using 10 yr old numbers based on inflation to calculate the operating costs of the hockey team. How can he say inflation is the standard when nothing else in the NHL (salaries, ticket prices, revenue) has climbed by inflation.
So I take the article for exactly what it is, the opinion of a single person using very unprovable numbers as his basis.
By the way, here are the links you asked for. The first is the 2012 valuations release and the 2nd is the 2011 list. The numbers by Forbes may not be scientific but they are one of the most trusted financial publication in the world. Their valuations reports for all major North American and global sport franchises is standard in the industry.
I'll take Forbes over some nut trying to sell papers. I will stand corrected in that I was long at the number from ATL from 2009 and comparing them to WIN first year. Based on this information below, the last year in ATL and the first year in WIN show the exact same revenue with WIN losing $3 million less at the end of the day.
http://www.forbes.com/nhl-valuations/list/
http://www.forbes.com/lists/2010/31/hockey-valuations-10_land.html
Daniel Alfredsson is the MVP of the universe. All hail the Ottawa Senators!!!!! |
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JOSHUACANADA
PickupHockey Veteran
Canada
2308 Posts |
Posted - 11/12/2012 : 14:29:12
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This is not me making a shot at your point Bean's. I have to wonder how a team in Winnipeg playing in the Southeast division, can earn the same revenue, spend more on player salaries and travel, lose 3 million less? I just have to wonder if we are seeing all the details. One would assuming once Winnipeg plays in a more local and traditional hockey division like say the NE or Central hockey divisions, expenses will go down and profit will go up. I'd say the skies are looking clearer for the former Atlanta team in Winnipeg. This boosts the relocate versus prop up a dead horse franchise the league has been selling in Pheonix. Plus they have one less team drawing from the profit sharing pool. Hopefully one more team in Canada, where hockey sells BTW, contributing to the profit sharing pool. Do it 2 to 3 more times and the majority of the revenue problems fixed, without riding the band wagon of player versus owner revenue sharing problem we face every CBA.
quote:
Originally posted by Beans15
Thanks for the link guest. I read the entire thing. Too bad it's a heavily assumption based opinion. I am in no way saying all the ideas in the article are bad but the thing has some number at that are published and provable and others that are a complete assumption.
The reporter does not say the revenue increased by $30 million, their exact statement is "going from Atlanta to Winnipeg alone had to have boosted league revenues $30-million or more." But writer backs this number up with exactly no fact based reference. It's his assumption.
The other point in this article is he is using 10 yr old numbers based on inflation to calculate the operating costs of the hockey team. How can he say inflation is the standard when nothing else in the NHL (salaries, ticket prices, revenue) has climbed by inflation.
So I take the article for exactly what it is, the opinion of a single person using very unprovable numbers as his basis.
By the way, here are the links you asked for. The first is the 2012 valuations release and the 2nd is the 2011 list. The numbers by Forbes may not be scientific but they are one of the most trusted financial publication in the world. Their valuations reports for all major North American and global sport franchises is standard in the industry.
I'll take Forbes over some nut trying to sell papers. I will stand corrected in that I was long at the number from ATL from 2009 and comparing them to WIN first year. Based on this information below, the last year in ATL and the first year in WIN show the exact same revenue with WIN losing $3 million less at the end of the day.
http://www.forbes.com/nhl-valuations/list/
http://www.forbes.com/lists/2010/31/hockey-valuations-10_land.html
Daniel Alfredsson is the MVP of the universe. All hail the Ottawa Senators!!!!!
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Guest0657
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Posted - 11/12/2012 : 15:03:44
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quote:
Originally posted by Beans15
The reporter does not say the revenue increased by $30 million, their exact statement is "going from Atlanta to Winnipeg alone had to have boosted league revenues $30-million or more." But writer backs this number up with exactly no fact based reference. It's his assumption.
That's why I have to ask why there was a difference.
Some very interesting points that I bolded on page 9, though don't you think? |
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Guest0657
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Posted - 11/12/2012 : 15:05:51
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quote:
Originally posted by Guest0657
Thanks that explains it but sort of. Searching google shows:
2009-2010 revenue $2.7B.
2010-2011 revenue $2.9B.
Year to year increase 7.4%. How can salary increase be 11% if the cost certainty locks the salary increase to revenue and so only a 7.4% salary increase is possible?
Someone care to explain this little bit of weirdness? |
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JOSHUACANADA
PickupHockey Veteran
Canada
2308 Posts |
Posted - 11/12/2012 : 15:08:55
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| I would assume the Escrow returned to the players after the lockout wasnt taken into account prior to the posting, but I am not sure. I think the escrow amount is similar in the difference in revenue sharing. |
Edited by - JOSHUACANADA on 11/12/2012 15:10:32 |
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Beans15
Moderator
Canada
8286 Posts |
Posted - 11/12/2012 : 18:14:33
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Couple of things:
1 - I have never argued against relocation. I don't think it has the impact that some assume it would but there is value if the market it right. The issue is there are only 2-3 relocation markets available. Some of them are a stretch.
2 - as I understand the program, the NHL dictates the salary cap based on revenue projections for the next year, as Josua said, this is where the escrow comes in. If the NHL revenue is higher than expected then the players get their escrow money. If the revenue is below then the escrow goes to the league.
The variance between the revenue increase and players salary increase is based on this projection. Revenues are always a year behind.
Daniel Alfredsson is the MVP of the universe. All hail the Ottawa Senators!!!!! |
Edited by - Beans15 on 11/12/2012 18:16:37 |
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JOSHUACANADA
PickupHockey Veteran
Canada
2308 Posts |
Posted - 11/12/2012 : 19:22:27
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| I think in the case of the worst run team Pheonix, relocation would have a huge impact. Based on expenses in Pheonix alone a move to Ontario or Quebec would greatly increase the value of the team and revenues. Columbus, Nashville being the other 2 candidates. You take the losses of those low revenue teams out of the equasion and the other 15 money other losing teams look like bad accounting for Millionaires. |
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Beans15
Moderator
Canada
8286 Posts |
Posted - 11/12/2012 : 21:59:45
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If you are going to do that Joshua you also have to look at the other side of the coins.
What does the NHL look like if you take the top three teams out of the mix. Without TO, MONT, and NYR the NHL is a money losing league.
That's is one of the key points that most everyone is overlooking today. Part of the owners push is to have as many viable teams as possible. Having the illusion of a successful league when three teams are carrying the full load is not successful.
People very quickly talk about contraction or relocation but there is also a risk at the top end that has to be recognized.
Daniel Alfredsson is the MVP of the universe. All hail the Ottawa Senators!!!!! |
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JOSHUACANADA
PickupHockey Veteran
Canada
2308 Posts |
Posted - 11/13/2012 : 08:01:56
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Of the 24 teams in the middle, 15 are losing money and 9 are making profits. With the fix to the CBA at 50/50 should bring the remainder to the positive side. Mind you most of the middle teams are so close to profit now that, like I have said in the past, a simple waived contract would have fixed that. Simple accounting tricks and the might actually be making money. I dont 100% trust the math being provided for every money losing team.
Most teams have seen there worth of the team appreciate since the last CBA, so all is not bad. I would spend money on maintaining a long term investment. It like buying a poor conditioned house with a recessed value as a fixer upper to turn for a profit. Most of these money losing teams fit that mold, I know there are exceptions to that rule as well. By one of the articles provided almost all of the NHL franchises is currently at a recessed value and should see an increase once the league shows greater health. This fix to the CBA and if relocation to stronger markets happen, will affect all 30 teams not just to the one franchise.
quote:
Originally posted by Beans15
If you are going to do that Joshua you also have to look at the other side of the coins.
What does the NHL look like if you take the top three teams out of the mix. Without TO, MONT, and NYR the NHL is a money losing league.
That's is one of the key points that most everyone is overlooking today. Part of the owners push is to have as many viable teams as possible. Having the illusion of a successful league when three teams are carrying the full load is not successful.
People very quickly talk about contraction or relocation but there is also a risk at the top end that has to be recognized.
Daniel Alfredsson is the MVP of the universe. All hail the Ottawa Senators!!!!!
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Beans15
Moderator
Canada
8286 Posts |
Posted - 11/13/2012 : 11:34:11
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Of the 24 'middle' teams 9 are profitable and 15 are lossing money. Do the straight math on a 50/50 rather than 57/43 and only 5 are losing money. The 10 that are no longer losing money are barely breaking even and the teams making money today are making more money.
Breaking even is not profitable. Why can't every owner in the NHL make a reasonable return on their investment?? Why can't a guy who puts hundreds of millions into buy the team and tens of millions more into running the team expect to take a little out at the end of the day?? Why can't the guy with the best business keep most of his cash rather than giving it to the guy beside him??
All the while the players make 100% profit on every dollar.
Would you own an NHL team today??? If the plan is so fair, would you put up your own money to own a team??
Daniel Alfredsson is the MVP of the universe. All hail the Ottawa Senators!!!!! |
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JOSHUACANADA
PickupHockey Veteran
Canada
2308 Posts |
Posted - 11/13/2012 : 12:43:01
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It depends. Does my investment appreciate by greater than my yearly shortfall on my investment? Could I simply receive a return on my investment by spending less? Is there opportunity for additional income, such as Canadian TV rights, sponsorship etc, etc, etc. Plus am I making the most of my market share? Is there room for improvement in my market area. I don't always look to my employee's salary costs for how to improve my bottom line. Sometime I look to employees who can add or strenghten my marketshare, even if it puts me at a yearly loss for a long term return on my investment. I tried to best answer your question while relating business experience to the world of hockey.
quote:
Originally posted by Beans15
Of the 24 'middle' teams 9 are profitable and 15 are lossing money. Do the straight math on a 50/50 rather than 57/43 and only 5 are losing money. The 10 that are no longer losing money are barely breaking even and the teams making money today are making more money.
Breaking even is not profitable. Why can't every owner in the NHL make a reasonable return on their investment?? Why can't a guy who puts hundreds of millions into buy the team and tens of millions more into running the team expect to take a little out at the end of the day?? Why can't the guy with the best business keep most of his cash rather than giving it to the guy beside him??
All the while the players make 100% profit on every dollar.
Would you own an NHL team today??? If the plan is so fair, would you put up your own money to own a team??
Daniel Alfredsson is the MVP of the universe. All hail the Ottawa Senators!!!!!
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Guest0657
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Posted - 11/13/2012 : 17:56:30
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quote:
Originally posted by Beans15
Breaking even is not profitable. Why can't every owner in the NHL make a reasonable return on their investment?? Why can't a guy who puts hundreds of millions into buy the team and tens of millions more into running the team expect to take a little out at the end of the day?? Why can't the guy with the best business keep most of his cash rather than giving it to the guy beside him??
All the while the players make 100% profit on every dollar.
Would you own an NHL team today??? If the plan is so fair, would you put up your own money to own a team??
Well not all of what the players make is 100% profit. We agreed agents take a good cut as well as insurance and minimum professional dress code requirements.
But there you go assuming hockey owners are running a business again. They are not and never have. If they were, they would not run it the way they have ran it. If it was purely on a business perspective, it depends on where the team is. If it is a viable city (Montreal, TO, NYR, Detroit, Philly, Boston, Van), then yes. If it is in the middle of the fricking desert, then no.
If it meant competing to sign a $100M+ contract for 14 years for an employee for only 7 years of prime productivity when it can bankrupt the company, that is not a viable business decision. Stop making the assumption that hockey owners or any sports team owner is running a business. They are not and have never acted in such manner. |
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Guest0657
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Posted - 11/13/2012 : 18:00:04
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quote:
Originally posted by JOSHUACANADA
I would assume the Escrow returned to the players after the lockout wasnt taken into account prior to the posting, but I am not sure. I think the escrow amount is similar in the difference in revenue sharing.
So it would have meant that the owners didn't pay the players enough as a percentage of HRR and now have to pay extra to catch up. So they saved on one year to pay more in the next. Then they complain about paying more without ever mentioning about paying less the year before. Sigh. Maybe they should cry poor and have the cities and states build them a new arena too. Oh wait.... nevermind. |
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Beans15
Moderator
Canada
8286 Posts |
Posted - 11/13/2012 : 19:11:04
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Joshua, why don't you just answer the question? It's not that difficult. If the wicked system today is so awesome for the owners, why wouldn't you jump all over the investment? Pick a team. Let's say, the St. Louis Blues. Storied franchise. Great sports city. What about the Blues. Would you pump out $160 million to own the Blues? Decent revenue steam, already one of the lowest salaries in the NHL, team valuation lost 5% last year, and they lost $3 million. Don't forget the $127 million of debt the team has.
You jumping out there to put your cash into the Blues tomorrow. Lets go smart guy, what's your brilliant fix for that franchise? Shut it down and move it to Canada? You can only do that so many times. What else you got?
Now, to Guest and this frankly dumb comment about signing players with a shorter life span than the contract for rediculous money. A happens each and every day in the business world. The best of the bet always command rediculous money and huge perks. That's nothing new. The difference between the NHL and real word business is there are a few more zeros on the pay checks.
Daniel Alfredsson is the MVP of the universe. All hail the Ottawa Senators!!!!! |
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Guest4377
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Posted - 11/13/2012 : 21:15:29
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Mark Recchi just tweeted that the players should strike a deal. Here's his exact quote: "No matter what the contract, the owners always find a way to pay them more. That's why I say, get a deal and get back in there."
For the most part, he's right. And even if he's wrong, the players will still make way more money than most people can imagine, and for a game after all.
Does anyone really think NHL players are getting ripped off? Maybe pre-1967 expansion. Maybe pre-WHA. But in the last 30 years, NHL players don't have a lot to complain about.
I've gone to a lot of hockey games, and heard from lots of hockey fans the past 30 years, and I've heard numerous (too many to count) comments from fans (those who pay the freight after all) about this player or that player being overpaid, but I've rarely heard a comment about how a player is so poorly done by the game.
When you get down to the nuts and bolts, the players are holding out (and yes, I know it's a lockout) for a difference of 10% in what they want to earn and what the NHL is offering.
Really - is it worth sacrificing a season for such a small gain? A gain which will be diminished by losing a year's pay?
Go ahead and blame the owners if you want, but ask yourself this question. When was the last time you felt an owner was being cheap in signing a player? And then ask yourself how many times you criticized an owner (or GM or team) for paying too much for a player.
Blame the NHL or the owners all you want, but if you think NHL players are underpaid, I have a hard time understanding such a position. |
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Guest4350
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Posted - 11/14/2012 : 06:51:40
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quote:
Originally posted by Guest4377
Blame the NHL or the owners all you want, but if you think NHL players are underpaid, I have a hard time understanding such a position.
I don't think anyone is saying the players are being underpaid.
1. I think it is the fact that the owners can't control themselves throw bricks of thousands at the players then complain that they pay they pay the players too much.
2. Then owners say they have to pay the players those bricks of thousands because they agreed to a 57% share of HRR. When it is suggested that they get rid of revenue sharing and stop throwing bricks of thousands out, the owners say oh no we can't do that we can't control ourselves.
3. Repeat argument #1 and the cycle never ends. You can add somewhere that the owners claim that they are running a business. But somehow can't control their costs.
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Guest4350
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Posted - 11/14/2012 : 06:54:11
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quote:
Originally posted by Beans15
Now, to Guest and this frankly dumb comment about signing players with a shorter life span than the contract for rediculous money.
Admin, I don't know about you but I read this as an attack on the guest0657 poster. If the comment was directed at a member would it pass salt? |
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Beans15
Moderator
Canada
8286 Posts |
Posted - 11/14/2012 : 09:10:56
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First off, I did not intend my message to be a personal attack. If others viewed it as such and I have offended anyone, I to apologize. My point was to say that it is a very real world comparison to see the best of the best in ANY industry significantly overpaid and given long term contracts. If my message became person, again, I apologize.
I also just want to add in that the owners can not control themselves. This is very true. However, the NHL is trying to put controls in place to curb this into the CBA. Secondly, we can talk until we are blue in the face about all the huge dollar contracts and how they are ruining the game but the facts prove otherwise. The best players should get the most money and I have no problem with the amount of money the top 50 or so players are getting. The structure of their deals is very questionalbe, but Sid Crosby should be getting top dollar.
The issue is under that layer of elite players. Take a look at the math. Next season's contracts, under the current CBA, has the top 50 players making around $400 million. Sounds like a lot of money to us, but consider that is less than 20% of the total player's share. That means approx 640 players will share in the remaining $1.4 billion. That's an average of $2.3 million.
The issue with players salaries (in my opinion) is not the owner offering the best player in the league the most money. The issue is the owner having to pay a 3rd/4th line forward, 4th/5th/6th defensemen, or a back up goalie 7 figures. That market needs a correction.
Even if you fault the owners for all the massive contracts and not being able to control themselves but the true problem is not the Crosby's or the Malkin's making $8+ million a season. The true problem is the guys like Tanner Glass making over a million, Matt Niskanen making over $2 million, or Tyler Kennedy making $2 million.
That has NOTHING to do with the owner over spending. That is the revenue share at 57%.
Daniel Alfredsson is the MVP of the universe. All hail the Ottawa Senators!!!!! |
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JOSHUACANADA
PickupHockey Veteran
Canada
2308 Posts |
Posted - 11/14/2012 : 10:00:56
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Outside of the obvious personal shot, I would be glad to answer your question regarding how to fix the Blues. I think that team is right on track to fix the majority of there problems. They have a smart GM and coach. They are in a more traditionally strong hockey market than some of the other struggling markets and they have a winning team. I would look to expenses outside of player payroll for future fixes. With the CBA being negotiated and the likelihood the player cost should come down, it is now on St Louis to help fix the remainder of the problems financially, thru either fan support, government incentive and corporate sponsorship. Is St Louis drawing a large enough crowd to the games. Is the expenses of playing in St Louis conference costing them profitability, if so leverage a divisional change. Is corporate sponsorship tapped out. In the case of St Louis would a marquee player boost fan support enough to justify the long term cost. Hitchcock has proven he can build a winner with spare parts, give him the talent he needs to take it to the next level and hopefully build on there playoff success to drive fan support into the seats. Out of all the currently struggling franchises I believe St Louis prior to the lockout was on the upswing.
quote:
Originally posted by Beans15
Joshua, why don't you just answer the question? It's not that difficult. If the wicked system today is so awesome for the owners, why wouldn't you jump all over the investment? Pick a team. Let's say, the St. Louis Blues. Storied franchise. Great sports city. What about the Blues. Would you pump out $160 million to own the Blues? Decent revenue steam, already one of the lowest salaries in the NHL, team valuation lost 5% last year, and they lost $3 million. Don't forget the $127 million of debt the team has.
You jumping out there to put your cash into the Blues tomorrow. Lets go smart guy, what's your brilliant fix for that franchise? Shut it down and move it to Canada? You can only do that so many times. What else you got?
Now, to Guest and this frankly dumb comment about signing players with a shorter life span than the contract for rediculous money. A happens each and every day in the business world. The best of the bet always command rediculous money and huge perks. That's nothing new. The difference between the NHL and real word business is there are a few more zeros on the pay checks.
Daniel Alfredsson is the MVP of the universe. All hail the Ottawa Senators!!!!!
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Beans15
Moderator
Canada
8286 Posts |
Posted - 11/14/2012 : 10:43:38
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Thanks for repeating the post. I read it the first time. Also, thanks for missing the big question. Let me ask it again:
Under the current structure, would YOU invest in the St Louis Blues???
Daniel Alfredsson is the MVP of the universe. All hail the Ottawa Senators!!!!! |
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JOSHUACANADA
PickupHockey Veteran
Canada
2308 Posts |
Posted - 11/14/2012 : 11:31:49
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Yes, I would jump on them now before the CBA was negotiated. If I did invest, I would fix it the way I suggested. Being that the team has a recessed value and should be on the upswing, yes. Especially now that the CBA is in negotiations to fix the player expenses, with the expectation that when the season begins, this should be an inexpensive a winning team in a traditionally strong hockey market with a good coach and GM. Did I answer your question to your satisfaction?
quote:
Originally posted by Beans15
Thanks for repeating the post. I read it the first time. Also, thanks for missing the big question. Let me ask it again:
Under the current structure, would YOU invest in the St Louis Blues???
Daniel Alfredsson is the MVP of the universe. All hail the Ottawa Senators!!!!!
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Guest4350
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Posted - 11/14/2012 : 12:17:49
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quote:
Originally posted by Beans15
[That has NOTHING to do with the owner over spending. That is the revenue share at 57%.
The owner would still have to pay that much or close to it even if the HRR is down to 50%.
As previously posted the revenue sharing scheme is saving the owners money but they keep on complaining about it as a money loser. But aren't willing to get rid of it.
So what is the goal of this CBA for the owners, to have all owners to be profitable or some? How many owners being profitable is good enough? |
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Guest4350
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Posted - 11/14/2012 : 12:29:40
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quote:
Originally posted by JOSHUACANADA
Yes, I would jump on them now before the CBA was negotiated. If I did invest, I would fix it the way I suggested. Being that the team has a recessed value and should be on the upswing, yes. Especially now that the CBA is in negotiations to fix the player expenses, with the expectation that when the season begins, this should be an inexpensive a winning team in a traditionally strong hockey market with a good coach and GM. Did I answer your question to your satisfaction?
I wouldn't if I had $160M dollars to burn the last thing I would do is invest it in a sports team (any sports team) as it s a poor business model unless it is in the big cities depending on the sport. But for hockey I would only invest my money to (Mon, Tor, NYR, Van, Philly, Bos...) basically the original 6 franchises plus some other. St-Louis is not one of the teams I'd invest in.
BTW John Davidson is no longer GM of the Blues. |
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JOSHUACANADA
PickupHockey Veteran
Canada
2308 Posts |
Posted - 11/14/2012 : 13:38:44
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| Well would you buy an investment for $160 million now if market projections said it was available at a recessed value and should be valued at no less than $200 million. There was a prior article in this Forum which said pretty much that any NHL franchise was worth at least $200 million, word for word. I have a hard time believing a team in St Louis which in the past had a thriving market and not long ago, is in the lower end of the value side. The fact they only lost $3 million last year, to me, indicates in St Louis's 1st playoff year in almost a decade, they could be a worthwhile, with risk, investment if I had $160 million to burn. |
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Beans15
Moderator
Canada
8286 Posts |
Posted - 11/14/2012 : 13:47:36
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I couldn't care less if you answered it to my satisfaction or not. At least you answered it this time.
No different than you don't believe the numbers the owners share regarding loss, I have zero belief that you would actually invest in the Blues. None what so ever. You are are intelligent person and any intellegent person will tell you that is a horrible investment. I picked them intentionally as they are a pretty decent picture of an average NHL team in terms of revenues and stability.
Guest 4350 said it best, an investment in any original 6 team or Canadian team is sound. Any other investment in the NHL is an extremely high risk at best.
That has been my point from the start.
Daniel Alfredsson is the MVP of the universe. All hail the Ottawa Senators!!!!! |
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JOSHUACANADA
PickupHockey Veteran
Canada
2308 Posts |
Posted - 11/14/2012 : 17:01:05
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I made a sound arguement and you disregarded it. Makes sense to me.  Give me another example for me to pick away at or do you just want to make smug remarks and disregard others opinions. I would love to be in the financial position to own a NHL franchise. I remember when The Blues had one of the most exciting teams in the NHL. The fact that they are one of the bottom feeders, not quite making a profit now, currently the NHL is trying to fix the system for them and teams in there situation. This is great news, IMO, from a hockey fan or an investor's opinion. Not only can this team turn a profit in the future, but maybe, just maybe they can attract top tier talent in the future. Hitchcock to me is the big selling point here as he wins hockey games, period. And he does it from the bench with spare parts.
quote:
Originally posted by Beans15
I couldn't care less if you answered it to my satisfaction or not. At least you answered it this time.
No different than you don't believe the numbers the owners share regarding loss, I have zero belief that you would actually invest in the Blues. None what so ever. You are are intelligent person and any intellegent person will tell you that is a horrible investment. I picked them intentionally as they are a pretty decent picture of an average NHL team in terms of revenues and stability.
Guest 4350 said it best, an investment in any original 6 team or Canadian team is sound. Any other investment in the NHL is an extremely high risk at best.
That has been my point from the start.
Daniel Alfredsson is the MVP of the universe. All hail the Ottawa Senators!!!!!
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Guest4377
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Posted - 11/14/2012 : 19:05:09
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If I had $160 million to burn, the FIRST thing I would do is buy a sports franchise, and in particular, a hockey team. The whole idea of having money to burn is that you can afford to lose it.
Most owners of sports franchises do not have their entire wealth tied up in that one enterprise. And most owners of sports franchises do not depend on the profitability of one such enterprise to maintain or sustain their standard of living.
But owners of pro franchises are not stupid, and while they can afford to lose money owning a sports franchise, they don't like losing a lot of money (and year after year) or making very little money.
That's kinda the point of what's taking place with the lockout. When the majority of teams make less than what they pay their highest player (just one player, not the entire team), something's out of whack!
The owners have a right to make more money, and forget about whether this is their "right," it is definitely their prerogative.
If I had a net worth of a billion dollars or more, I would like to think that I would feel privileged to own a pro sports team, and that I would be okay breaking even or losing $5-$10 million per year as an owner of an NHL hockey team.
Knowing also that it's possible to recoup 5-10 years of collective losses by the gain in the asset value of the team. No guarantees of course, but when you're worth a billion or more dollars, what's $50-$100 million in losses over ten years, if you're a hockey fan with deep roots in your community, and the pride which goes with owning your local hockey team?
And guess what? To some extent, the players (and NHLPA) know this fact. How else can you explain the low rates of return delivered to the owners of NHL teams (and/or the continuous losses incurred)?
When you think about it, there are two parties (the owners and the players) who want, but don't need, to make more. On both sides, they think they deserve more, and when two competitive forces collide, that's the motivating force. |
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JOSHUACANADA
PickupHockey Veteran
Canada
2308 Posts |
Posted - 11/14/2012 : 19:56:18
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| I relooked at the Forbes, Globe and Mail articles listed above and using there math the outlook is not so bad. Winnipeg was on the fix, NYI look to have improved with a change in venue but that Charles Wang is such a loopey fellow he could screw up in Toronto, Pheonix is the Leagues problem to fix and has a payroll, expenses and ownership problems, Columbus has a payroll location problem, same with Nashville, St Louis as mentioned prelockout had a brighter outlook going forward, most of the other teams dont look so bad. One of the teams mentioned Pittsburg appreciated pretty well last year and over the course of the last decade. They could have fixed there own problem by spending less but they want to win another cup in Pittsburg year, after year, after year. I dont see this as all doom and gloom. I hope they sign some meaningful CBA soon, I dont care what the revenue split is and drop the puck soon. |
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Guest4350
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Posted - 11/15/2012 : 06:40:30
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quote:
Originally posted by Guest4377
If I had $160 million to burn, the FIRST thing I would do is buy a sports franchise, and in particular, a hockey team. The whole idea of having money to burn is that you can afford to lose it.
Most owners of sports franchises do not have their entire wealth tied up in that one enterprise. And most owners of sports franchises do not depend on the profitability of one such enterprise to maintain or sustain their standard of living.
But owners of pro franchises are not stupid, and while they can afford to lose money owning a sports franchise, they don't like losing a lot of money (and year after year) or making very little money.
That's kinda the point of what's taking place with the lockout. When the majority of teams make less than what they pay their highest player (just one player, not the entire team), something's out of whack!
The owners have a right to make more money, and forget about whether this is their "right," it is definitely their prerogative.
If I had a net worth of a billion dollars or more, I would like to think that I would feel privileged to own a pro sports team, and that I would be okay breaking even or losing $5-$10 million per year as an owner of an NHL hockey team.
Knowing also that it's possible to recoup 5-10 years of collective losses by the gain in the asset value of the team. No guarantees of course, but when you're worth a billion or more dollars, what's $50-$100 million in losses over ten years, if you're a hockey fan with deep roots in your community, and the pride which goes with owning your local hockey team?
And guess what? To some extent, the players (and NHLPA) know this fact. How else can you explain the low rates of return delivered to the owners of NHL teams (and/or the continuous losses incurred)?
When you think about it, there are two parties (the owners and the players) who want, but don't need, to make more. On both sides, they think they deserve more, and when two competitive forces collide, that's the motivating force.
This entire post is a contradiction in a of itself. Wow.
That's like saying I voted for Obama but wanted Romney to win. |
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Guest4178
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Posted - 11/15/2012 : 10:35:32
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It's hard to know what motivates professional sports franchise owners. Pride? Prestige? Ego? Making money? Sense of community involvement? A combination of things?
Here' an interesting article about ten billionaire owners of NHL teams. The article is a year old, but not much has likely changed in the net worth of these tycoons.
I really like the comment about the owner of the Buffalo Sabres, "who made his $3.2 billion fortune in the gas drilling business, and spent most of it on Christian Ehroff."
And how about minority team owner Philip Falcone of the Minnesota Wild? (I believe he owns 40% of the team.) He was a pretty good hockey player in his day. (He played for the Harvard varsity team, and he played pro hockey for Malmo in Sweden for a short period of time.) As the article states, he has a potbellied pig for a pet, which has its own room in his Manhattan townhouse. A bit eccentric perhaps, but to each their own.
I would suggest that he has no regrets in signing Zach Parise and Ryan Suter to their huge contracts.
I wonder if he's supportive of the lockout? And I wonder if he's in favour of the make whole provision which the league is proposing as part of a new CBA?
The more I think about things, I think Gary Bettman does an amazing job representing the variety of NHL owners in the manner in which he does. If Bettman is following the directions of the team owners, how can you blame him for executing the very wishes of his collective group of bosses?
Anyway, here's the article if you're interested:
http://prohockeytalk.nbcsports.com/2011/11/01/forbes-profiles-the-nhls-billionaire-owners/ |
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Beans15
Moderator
Canada
8286 Posts |
Posted - 11/15/2012 : 11:22:29
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Joshua, I am growing tired of this argument as I don't believe you can see that your criticism of me 'disregarding your sound argument" is the exact same thing that you have done, repeatedly I might add, in not believing the financials released by the owners. For one example, you said on 11/5 – “I for one trust those quotes less than I would a signed contract value in the current NHL.”
The difference is that you are disputing stated financial fact. I am disputing your opinion.
Secondly, one of your most recent posts shows a wonderful job of cherry picking quotes and side-stepping key arguments against your opinion. One of your last statement about the optimism towards NHL teams. You quoted, “There was a prior article in this Forum which said pretty much that any NHL franchise was worth at least $200 million, word for word.”
You are correct, that was the word for word statement. Too bad you missed a whole lot more words after that discussing the actual purchase cost of franchises in recent history. Perhaps that is because it would completely contradict your opinion of this ‘rosy’ financial picture of the NHL.
Here is the exact full quote about the $200 million franchise values.
Three years ago NHL commissioner Gary Bettman told me not a single NHL team was worth less than $200 million. But money-losing teams are being sold for much less. In February Forbes 400 member Terrence Pegula bought the Buffalo Sabres, who lost $5.6 million last season, for $165 million. The St. Louis Blues and Carolina Hurricanes, two other teams losing money, are being shopped at prices well below $200 million. And the New Jersey Devils, who sank 17% in value to $181 million, are in such bad shape financially that there is speculation the team could be headed for bankruptcy and a court supervised sale like the Dallas Stars.
In closing, unless I will not continue with this argument unless something new and factual is brought to the argument. Every single posted financial and statistical measure for the NHL paints the same picture and it has been argued ad nauseum. You continuously choose to not believe the stated financials so I choose to stop arguing against your factless opinion.
Daniel Alfredsson is the MVP of the universe. All hail the Ottawa Senators!!!!! |
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JOSHUACANADA
PickupHockey Veteran
Canada
2308 Posts |
Posted - 11/15/2012 : 12:04:51
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Well, let look at what I actually did for a second. I answered one of your questions in one post and what you believed to be the real question in another. You are taking this personal and have provided personal shots, so I returned in kind. Sorry I don't see your point of view only. Looking at the below article, do you believe the value of these franchise is recessed. Do you believe with a fix to the CBA, if the puck is dropped soon enough not to erode fan support, the value of these franchise will increase if they get cost certainty and a lower payroll. Why dont you answer my question? I have used the factual numbers raised in Forbes and the quoted article below as well as a few I have also read. I just dont agree with you point of view verbatim. quote:
Originally posted by Beans15
Joshua, I am growing tired of this argument as I don't believe you can see that your criticism of me 'disregarding your sound argument" is the exact same thing that you have done, repeatedly I might add, in not believing the financials released by the owners. For one example, you said on 11/5 – “I for one trust those quotes less than I would a signed contract value in the current NHL.”
The difference is that you are disputing stated financial fact. I am disputing your opinion.
Secondly, one of your most recent posts shows a wonderful job of cherry picking quotes and side-stepping key arguments against your opinion. One of your last statement about the optimism towards NHL teams. You quoted, “There was a prior article in this Forum which said pretty much that any NHL franchise was worth at least $200 million, word for word.”
You are correct, that was the word for word statement. Too bad you missed a whole lot more words after that discussing the actual purchase cost of franchises in recent history. Perhaps that is because it would completely contradict your opinion of this ‘rosy’ financial picture of the NHL.
Here is the exact full quote about the $200 million franchise values.
Three years ago NHL commissioner Gary Bettman told me not a single NHL team was worth less than $200 million. But money-losing teams are being sold for much less. In February Forbes 400 member Terrence Pegula bought the Buffalo Sabres, who lost $5.6 million last season, for $165 million. The St. Louis Blues and Carolina Hurricanes, two other teams losing money, are being shopped at prices well below $200 million. And the New Jersey Devils, who sank 17% in value to $181 million, are in such bad shape financially that there is speculation the team could be headed for bankruptcy and a court supervised sale like the Dallas Stars.
In closing, unless I will not continue with this argument unless something new and factual is brought to the argument. Every single posted financial and statistical measure for the NHL paints the same picture and it has been argued ad nauseum. You continuously choose to not believe the stated financials so I choose to stop arguing against your factless opinion.
Daniel Alfredsson is the MVP of the universe. All hail the Ottawa Senators!!!!!
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Edited by - JOSHUACANADA on 11/15/2012 12:09:25 |
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JOSHUACANADA
PickupHockey Veteran
Canada
2308 Posts |
Posted - 11/15/2012 : 12:17:19
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| My belief that the financials are not the entire picture is also brought into question in a few of the above articles, where owners are using 1 time or questionable expenses against the bottom line. They are also not including the profit sharing numbers that the bottom teams receive once the revenues have been calculated. It makes sense if you look at it from a write off stand point and if you wish to convey that your revenue to expenses needs fixing when your seeing record revenue growth. I work in finance and when a commercial or contractor customer shows me his or her tax forms, I see more losses than record net income. Screw the tax man! Makes it harder to receive financing and most customers dont understand this. |
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Beans15
Moderator
Canada
8286 Posts |
Posted - 11/15/2012 : 15:01:06
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A few new things so I will respond:
1 - I don't 100% believe the full numbers from the NHL either. However a) they are not that far off (laws and accounting rules can only be bent so far), and b) the numbers show more poor teams than rich teams and a huge gap between the two groups.
2 - No, I don't believe the value of the franchises climb under a new agreement. It is a START to the system being fixed and in my opinion the first fix has to be the CBA. However, for a true sustainable business with reasonable financial growth (not just revenue but also reduced debt load and increased franchise value) there will also need to be changes to the structure of the internal NHL process as well as a certain amount of contraction/relocation. A 24 team league in proper markets is sustainable long term. A 30 team league with at least 6-8 poor or oversaturated markets is not sustainable under any revenue sharing system. A proper revenue sharing system between owners is also needed as well as continued improvement to things like TV deals and other marketing to drive increased league revenues.
3 - I never once expected you do agree with my point of view. We are all entitled to our own opinions. My issue is and always has been the cherry picked arguments and what appears to be the dismissing or discrediting any statistical information and replacing it with opinions lacking factual information. If I have attacked you personally though this, it was not my intention. Any offense you have taken by my posts I sincerely apologize for.
Daniel Alfredsson is the MVP of the universe. All hail the Ottawa Senators!!!!! |
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Guest0657
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Posted - 11/15/2012 : 17:59:48
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quote:
Originally posted by Beans15
1 - I don't 100% believe the full numbers from the NHL either. However a) they are not that far off (laws and accounting rules can only be bent so far), and b) the numbers show more poor teams than rich teams and a huge gap between the two groups.
After taking a shot at me, I'll let it slide but you still haven't acknowledged any of my questions. I agree with you and the other guest. As a business for making money I wouldn't invest in most teams.
As a person with more money than I know what to do with and don't mind losing a few million here or there, a hockey fan and the cachet of hanging out with some celebs, I'd own a team.
As for the above quote, man those Enron and convicted ponzi schemers dudes would have loved you as a jury member or as a investigator that believes everything they say. It takes a very longtime to do forensic accounting or to even catch any illegal manipulations of a company. Especially a private business like that of teams. |
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Beans15
Moderator
Canada
8286 Posts |
Posted - 11/16/2012 : 09:07:06
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Ponzi scheme??Enron?? What are you talking about?? Are you trying to say that the NHL has cooked the books so bad that all their numbers are wrong and they are somehow cheating the system??
I would love to answer your questions, but looking back I can only see 3 you have asked and I answered all of those ones. If this last post was a question, please help me understand where the question was so I can answer it.
Daniel Alfredsson is the MVP of the universe. All hail the Ottawa Senators!!!!! |
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Guest0657
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Posted - 11/16/2012 : 19:01:32
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quote:
Originally posted by Beans15
Ponzi scheme??Enron?? What are you talking about?? Are you trying to say that the NHL has cooked the books so bad that all their numbers are wrong and they are somehow cheating the system??
Well take a look at this:
http://ordinaryleastsquare.typepad.com/dubi/2004/03/reading_compreh.html
and tell me if you understand the financial mumbo jumbo.
As for my question I thought I asked it on a previous post but removed it during the edits. If the league is a business, then why won't management run it like one and cut its losses on dead franchises (Phoenix)? |
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nuxfan
PickupHockey All-Star
3670 Posts |
Posted - 11/17/2012 : 11:13:41
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quote:
Originally posted by Guest0657
Well take a look at this:
http://ordinaryleastsquare.typepad.com/dubi/2004/03/reading_compreh.html
and tell me if you understand the financial mumbo jumbo.
The "financial mumbo-jumbo" is the author giving his feedback and opinion regarding the audit that Levitt did on all NHL teams back in 2003. There is not a lot that is of note here (other than the fact that the author is highly suspicious of the findings) - Levitt performed audits on all the teams (including teams that had not been audited before), found some inconsistencies and corrected them, and made sure that teams were correctly declaring and reporting income and expenses related to their NHL business, and generated a report with his findings.
This is what auditors do. Every company in the world has to do audits on their business - public companies must do it for regulatory issues with the stock exchange and corporate registries in their province, and private companies normally do one so the investors know that their money is being spent properly.
In all cases, the company that gets audited pays the auditor to do it - the same as the NHL did here. Are you suggesting that all audits are biased because the auditors are paid by the group that they are investigating? If so, exchange everything you have for guns and gold, put on your tinfoil hat, and find a bunker to wait out the coming armageddon.
quote:
As for my question I thought I asked it on a previous post but removed it during the edits. If the league is a business, then why won't management run it like one and cut its losses on dead franchises (Phoenix)?
Good question. There are probably teams that would love nothing more than to cut the dead weight and have a leaner more profitable NHL - removing the bottom half of the NHL would certainly improve profit margins. There are also certainly some owners - ie, the ones that stand to lose 100% of their investment - that are not so keen to do so. There might be good (legal) reasons why the NHL cannot do this - lease agreements with stadiums or other infrastructure, financial guarantees to cities in exchange for tax breaks, even personal guarantees to new owners that the NHL must let them run for x number of years. Hard to say. But the fact that it hasn't even been mentioned once in this CBA negotiation seems to indicate that neither side really wants to see this happen. |
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Guest0657
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Posted - 11/17/2012 : 17:08:36
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quote:
Originally posted by nuxfan
The "financial mumbo-jumbo" is the author giving his feedback and opinion regarding the audit that Levitt did on all NHL teams back in 2003. There is not a lot that is of note here (other than the fact that the author is highly suspicious of the findings) - Levitt performed audits on all the teams (including teams that had not been audited before), found some inconsistencies and corrected them, and made sure that teams were correctly declaring and reporting income and expenses related to their NHL business, and generated a report with his findings.
In all cases, the company that gets audited pays the auditor to do it - the same as the NHL did here. Are you suggesting that all audits are biased because the auditors are paid by the group that they are investigating?
Good question. There are probably teams that would love nothing more than to cut the dead weight and have a leaner more profitable NHL - removing the bottom half of the NHL would certainly improve profit margins. There are also certainly some owners - ie, the ones that stand to lose 100% of their investment - that are not so keen to do so. There might be good (legal) reasons why the NHL cannot do this - lease agreements with stadiums or other infrastructure, financial guarantees to cities in exchange for tax breaks, even personal guarantees to new owners that the NHL must let them run for x number of years. Hard to say. But the fact that it hasn't even been mentioned once in this CBA negotiation seems to indicate that neither side really wants to see this happen.
No one of the bigger question raised in the report for me is that the owners don't calculate revenue and expenses like other businesses. It makes up sort of similar sounding terminology that doesn't mean what you think it means. Then use these new terms as part of the 76% player salaries of revenue. How about the fact that insured players get double counted from their insurance premium and also their salary? There are some other big doozie irregularities in the calculations too?
As for the second part, wouldn't that be a bigger hammer to ask for to make the players cave? Take a cut or we cut teams which means your brothers union members go bye bye. I'll start with cutting 4 teams and you can have 52%HRR. What's that you'd like 57%? No problem I'll cut 8 teams.
Heck McDonalds' and Starbucks cut unprofitable franchises very quickly. |
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2012 CBA News and Comments 
