Thinking out loud

Some thoughts on the lockout.

One I posted on twitter earlier today.

the biggest difference between the #NHLlockout in 2004-05 and this one - social media. the fans have a much bigger voice this time. #NHL

— Jason Bornstein (@DyHrdMET) September 24, 2012

I wonder that, if the lockout drags on, there will be a bunch of European star players that decide that they've had enough of the NHL (thinking specifically of Gary Bettman and the hard-line owners) and choose to play out their careers in Europe. If that happens, that could be really bad for the NHL. It's one thing to go to Europe to play and stay in shape for when the NHL starts up again, but it's another thing to defect to Europe for good.

Once we reach the point of the NHL cancelling regular season games, the NHL and the NHL owners have no credibility when they say that all games are important. If all games really were important, they'd would have worked towards settling this labor dispute before the September 15 deadline. We're not there yet (of course, this happened in 2004-05 and in 1994-95 also).

What type of message would it send to the league if fans flocked to NHL arenas to stage a protest for the cancelled preseason games (as in, fans show up, wearing their team's jerseys, but there isn't actually a game because it was cancelled)? What type of message would it send to the league if, when the league actually does return to action, fans boycott the respective Opening Day/Night games?

I really do think the front that Gary Bettman and the owners are putting on is not as solid as they make it out to be. Bettman is a lawyer. I really think he has a big ego that's helping to drive this. The owners are primarily businessmen. Businessmen who are in business to make money by their teams playing in hockey games which right now, are not going to happen. Bettman doesn't see that. He's in it to beat someone.

In the end, both sides have to compromise, or one side has to completely break down. NHL players are mostly playing in the AHL, Junior hockey, and in Europe. NHL owners don't have those options.


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Without the Owners, Part 2

Let me play out a new thought process based on a post from a couple of weeks ago where I had some thoughts about what the league would be like if there were no owners.

Putting aside the logistics of the league acting for itself locking out the players, where that last theory ended, for a second, what if there were no owners? I suggested in another recent post what "Hockey Related Revenue" actually is (without having specific numbers).

The original idea was that Hockey Related Revenue (HRR) should be enough to sustain the league's operations and player's salaries. Now, I don't know what that number actually is, and the two sides in the CBA dispute can't agree on the definition, and I have no idea how much money is needed to actually sustain the league.

But let's say that HRR alone is enough to pay players salaries on par with the average ticket fans. Maybe the league's elite get $250,000 and rookies start with $50,000. Nice round numbers. I'd actually have a ton of sympathy for the players if that was the pay scale and the owners were pulling tricks. The league would also make a small profit, maybe a couple million per season. Remember that "profit" is after operating costs for all the teams and the league itself.

Now, we know that elite players earn many millions of dollars per season, and even just average players earn a couple million. So if HRR isn't enough to sustain those salaries, then HRR must be supplemented with other income (that's "income" for the league). That's where the owners come in.

The owners then must be pumping lots of money into the league, collectively, via the 30 teams that make up said league. Just to be able to pay higher salaries to the players. And of course, they'll want some return on their investment (which is where smart business decisions come in). So owners will try to take money back out of that pot. If they didn't, then why own a sports franchise?

So where does this leave us? Players and owners fighting over what is essentially the owner's investment into the league that helps pay for the multi-million dollar salaries of the players, supplementing what HRR cannot do on its own. Of course, there's more to the fight (and I don't mean the different definitions over what "Hockey Related Revenue" actually means, but I think it's pretty clear what it is) than that. But in a nutshell, that's what it all boils down to. Owners investing to help pay salaries while making a return on their investment, and owners deciding they want to give less in order to take back more.


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Hockey Related Revenue

Hockey Related Revenue has been a hot topic in the current NHL CBA negotiations. The two sides can't agree how it should be defined. Let me give it a crack.

Hockey Related Revenue = all the money the NHL and its owners will attain from guaranteed contracts (I believe the NBC TV deal is guaranteed money) + all the money the NHL and its owners won't receive once the season doesn't start.

I think once they decide not to play, it's pretty simple. It's all the money they won't bring in (plus any guaranteed money).


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Follow Me

Follow me on twitter - Follow @DyHrdMET
- where I'm venting some frustration and giving some creative suggestions about the potential NHL Lockout in 140 characters or less. I try to keep the language G-rated.


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Negotiation

Have I mentioned lately, or at all, that the fact that the NHL owners and NHLPA dragged through both the 2011-2012 season and summer of 2012 in this negotiation to the point where they're regrouping with nothing a week before the CBA expires is a total insult to the fans (i.e. paying customers)?

I don't know if one side is more to blame for the schedule of negotiations over the past year than the other (assuming there's blame for both side on that front). But the fact that they'll even let it get down this close, and I'd heard a while back that they'd let this drag into the season and really step it up once the Winter Showcase Classic is in jeopardy, is just insulting to us fans, who are there for the Entire 6 month season, and even more.

In my 20 of so years of being a passionate sports fan, I've lived through (and maybe I don't remember every one of these)

1. an MLB season cut short in 1994 with no World Series
2. an NHL season that had the first half cut out that same fall and into the winter (1994-95)
3. an MLB season that started a little late and had replacement players ready to go (1995)
4. an NBA season that didn't start until January (1997-98)
5. an entire NHL season lost in 2004-05
6. an NFL season that was thought to be in jeopardy, last year, and turned out to only miss 1 preseason game and a small part of training camp
7. an NBA season that didn't start until the Christmas Day showcase (2011)
8. an NFL season going on with replacement officials (ongoing in 2012)

In 4 major sports leagues in US/Canada, that's 1 full season lost, 3 seasons that were approximately half lost, 1 more that started a few weeks late, 1 season that was cut short with no championship, 1 that came very close to having something significant chopped off (preseason doesn't count), and 1 with replacements.

And it always make things cost more money for us (either in ticket prices, parking, concessions, souvenirs, online media, or paying for TV rights from our cable TV bills. When do we go on strike and stop showing up? Well, I don't think that'll happen.

And who loses the most if there's a work stoppage? Those that work for these teams. Those that work the individual game-events that have been and will be cancelled. Ushers, security, ticket takers, office staff, ticket sales, cooks, maintenance crew, TV production crews, vendors, and many more. We just lose the entertainment value, both live and on TV/radio/internet. Those people lose jobs.

Settle already. Split the shit 50/50, and keep it that way. If you don't like that, get out and let someone else in.


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What purpose do NHL Owners serve?

This is just another post of me, a fan and Devils season ticket holder, bitching about the threat of another lockout (the 3rd in the time that I've been an NHL fan, and the 3rd in the time that Gary Bettman has been NHL Commissioner).

I was taking a timeout from watching tennis on Friday, reading some tweets coming across the wire about the breakdown of talks between the NHL Owners association and the NHLPA. And I started to get a bit angry. I had to suppress that anger a bit, since I was out at the USTA Tennis Center and it wasn't the time. But I did have one thought. Maybe I'm off-base here, but I tweeted this on Friday...

what's the purpose of a @nhl team owner? fans, ads, and tv fund the league, right? #NHLLockout

— Jason Bornstein (@DyHrdMET) September 1, 2012

Let me explain my thinking. The biggest thing that I've been hearing in regards to the CBA negotiations is the percentage of revenue split between the owners and players. I keep saying that it should be fixed at 50/50, because without one side, the other side can't really exist. Then in some of my re-channeled frustration, I started thinking, "what would happen if the owners weren't there? could there still be a league?" We know that if the players aren't playing in the NHL, then there is no league. But what if there were no owners? What purpose do they actually serve here?

Someone, probably a combination of the league and its 30 owners, gets revenue from ticket sales, name/logo licensing (jerseys, t-shirts, nick nacks, etc), advertising, and media (mostly television, but there's probably some money from radio and maybe other forms of media). Shouldn't that be enough to pay off the players and run the hockey operations (such as team expenses, arena lease, scouting, office staff, etc.)? I don't know what the total revenue for the league is, nor do I know what the average team costs would be. But doesn't it seem like the revenue should cover the other costs?

Let me think through this radical idea. What if the league were responsible for running all 30 teams (maybe with an oversight committee with representatives from all 30 clubs/markets) that pays salaries to everybody and collects all the revenue. Since you don't have 30 owners funding the league, salaries can't get absurdly high because a) the money really isn't there to pay the players at the absurdly high salaries, and b) because you aren't going to have the league competing with anyone over salaries (at least not until the KHL gets involved) like you have with teams going after a free agent. Some may call that "collusion". Maybe it violates some Anti-trust clause. I'm not a lawyer, so I won't try to argue those points. It's just an idea. Ugh, but then you have 1 league instead of 30 teams trying to grab money from the players (and fans), and it doesn't eliminate the fundamental dispute that we have.

Let me go back to my original question. What if there were no owners? The revenue streams would fund the 30 teams (I could go on about there being too many teams, but that's a whole other post) and league's operations, and that includes players' salaries, as they do today (right?). Then why is there then a need to pay off anyone else (such as an owner investing additional funds in order to try to get a return on that investment)? Especially a collection of people who want over half of the league's revenue. It's an investment. Pay everyone off and hope you make money.

Now, this doesn't in any way solve any of the other issues such as what is revenue, the salary cap, how long before you can be a free agent, etc. Maybe I didn't solve anything here. But I'm clearly not too happy with the NHL's owners these days.


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