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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