2012 CBA Negotiations Thread

[Peter D.]

Obviously won't happen and if it were proposed, we may never see hockey again, but I'd like to see a luxury tax system in replacement of the salary cap.

Then again, I don't mind seeing teams struggling as it is being forced to meet a minimum salary requirement.  This is what they wanted, so now they can reap the consequences. 

 

[bustaheims]

Personally, I have a hard time coming to grips why anyone should take a haircut in an industry where profits continues to rise.

Well, that's the question - are profits rising, or are revenues rising at a similar rate as expenses? What if, perhaps, expenses are rising faster than revenues? There's been no clear, definite numbers published about league profits, just revenues.

 

[maplesyrup]

Personally, I have a hard time coming to grips why anyone should take a haircut in an industry where profits continues to rise.

Well, that's the question - are profits rising, or are revenues rising at a similar rate as expenses? What if, perhaps, expenses are rising faster than revenues? There's been no clear, definite numbers published about league profits, just revenues.

That's insane.

 

[Kin]

And yes the key right now is these guys getting to the table and being willing to work on it at all.  When they finally do, the path to agreement doesn't seem that insurmountable.

I suppose I'm less optimistic about bridging that gap if the fundamental issue still is whether or not the teams will be on the hook for actually paying out more than 50% in the first few years.

 

[Deebo]

Personally, I have a hard time coming to grips why anyone should take a haircut in an industry where profits continues to rise.

Well, that's the question - are profits rising, or are revenues rising at a similar rate as expenses? What if, perhaps, expenses are rising faster than revenues? There's been no clear, definite numbers published about league profits, just revenues.

I'd have a hard time believing that the lower revenue clubs have had revenues increase enough to keep up with the rising salary floor.

 

[Kin]

Well, that's the question - are profits rising, or are revenues rising at a similar rate as expenses? What if, perhaps, expenses are rising faster than revenues? There's been no clear, definite numbers published about league profits, just revenues.

Although I think it's fair to say that the absence of information on that is a pretty good sign that the league as a whole is profitable. The NBA certainly wasn't shy about telling anyone who would listen all about how much red ink they had as a whole.

 

[bustaheims]

Although I think it's fair to say that the absence of information on that is a pretty good sign that the league as a whole is profitable. The NBA certainly wasn't shy about telling anyone who would listen all about how much red ink they had as a whole.

It may be profitable (though, just because they're not specifically talking about it does not mean they're not in the red), but I definitely have my doubts that, as Sarge put it, profits have continued to rise. We know that, thanks to linkage, the league's biggest expense - player salaries - have risen at the exact same rate as revenues. With that, I'd say it's a perfectly fair question as to whether or not other expenses have risen at a pace that may have minimized or negated any increases in profit.

 

[bustaheims]

I'd have a hard time believing that the lower revenue clubs have had revenues increase enough to keep up with the rising salary floor.

Oh, I'm pretty positive most of the lowest revenue clubs have not.

 

[bustaheims]

Personally, I have a hard time coming to grips why anyone should take a haircut in an industry where profits continues to rise.

Well, that's the question - are profits rising, or are revenues rising at a similar rate as expenses? What if, perhaps, expenses are rising faster than revenues? There's been no clear, definite numbers published about league profits, just revenues.

That's insane.

That doesn't make it any less true. The talk has all been about revenues, not profits.

 

[Kin]

It may be profitable (though, just because they're not specifically talking about it does not mean they're not in the red),

I suppose that's true in an "anything is possible" sense but it strikes me as almost entirely counter-intuitive and fairly far-fetched. "We're losing money" is such a tried and true way for sports leagues to try and position themselves publicly in labour negotiations that leagues try it even when it isn't true. I mean, the NHL certainly claimed it last time around.

but I definitely have my doubts that, as Sarge put it, profits have continued to rise. We know that, thanks to linkage, the league's biggest expense - player salaries - have risen at the exact same rate as revenues. With that, I'd say it's a perfectly fair question as to whether or not other expenses have risen at a pace that may have minimized or negated any increases in profit.

I read that to mean less "continue to rise" in a year-by-year sense and more to encapsulate the differences between, say, the league when they negotiated their last CBA and where they are now.

 

[bustaheims]

I suppose that's true in an "anything is possible" sense but it strikes me as almost entirely counter-intuitive and fairly far-fetched. "We're losing money" is such a tried and true way for sports leagues to try and position themselves publicly in labour negotiations that leagues try it even when it isn't true. I mean, the NHL certainly claimed it last time around.

And, in a way, they're claiming it this time around, as well - just on more of a "the majority of teams are losing money" kind of way.

I read that to mean less "continue to rise" in a year-by-year sense and more to encapsulate the differences between, say, the league when they negotiated their last CBA and where they are now.

I didn't, and I certainly have my doubts he meant it that way. It would also be a fairly disingenuous way of looking at things. Of course, profits have risen in comparison to the previous lockout - player expenses dropped dramatically over-night - but, that's still only a one time increase in profits, not a continued rise in profits.

 

[dappleganger]

Personally, I have a hard time coming to grips why anyone should take a haircut in an industry where profits continues to rise.

I'm fairly sure the league, as a whole, is not profitable right now.

 

[Deebo]

If you were to take the net income or loss of every club and combine them, my guess is that you would see a profit.

I think the profits of the big clubs are bigger than losses of the smaller ones.

 

[Kin]

And, in a way, they're claiming it this time around, as well - just on more of a "the majority of teams are losing money" kind of way.

Right, but speaking to Sarge's point, they're not making any league wide claims which very strongly suggests the league as a whole is in the black which follows along with Forbes' estimates.

I didn't, and I certainly have my doubts he meant it that way. It would also be a fairly disingenuous way of looking at things.

I disagree, especially in the context of collective bargaining. To use a hypothetical, if an industry had a three year period of 20, 25 and then 30 million in profitability and then, after a new CBA, saw a three year period of 61-60-59 million dollars of profitability, it would strike me as looking at the issue pretty narrowly to dispute someone saying that the industry's profits are continuing to rise by pointing out the potentially random year to year fluctuations.

 

[bustaheims]

If you were to take the net income or loss of every club and combine them, my guess is that you would see a profit.

I think the profits of the big clubs are bigger than losses of the smaller ones.

You might, but, I don't think it would a significant one (relative to revenues), nor do I think that number has risen significantly over the life of this CBA, if at all.

 

[Kin]

If you were to take the net income or loss of every club and combine them, my guess is that you would see a profit.

I think the profits of the big clubs are bigger than losses of the smaller ones.

Forbes' most recent estimates have it as the league being up 114 million or so as a whole last year.

 

[Deebo]

If you were to take the net income or loss of every club and combine them, my guess is that you would see a profit.

I think the profits of the big clubs are bigger than losses of the smaller ones.

You might, but, I don't think it would a significant one (relative to revenues), nor do I think that number has risen significantly over the life of this CBA, if at all.

For every dollar that revenues have increased, player costs have risen by 57 cents with it. However, I strongly doubt that other costs have raised by anywhere close to 43 cents for each dollar that revenue has increased. The bulk of the other costs don't seem like ones that would rise due to the source of revenue growth (increased ticket prices, more TV revenue etc.). In order for league profits to be stagnant, non-player costs would have had increased by quite a significant amount.

I would bet that aggregated league profits has increased over the life of the last CBA.

 

[bustaheims]

For every dollar that revenues have increased, player costs have risen by 57 cents with it. However, I strongly doubt that other costs have raised by anywhere close to 43 cents for each dollar that revenue has increased. The bulk of the other costs don't seem like ones that would rise due to the source of revenue growth (increased ticket prices, more TV revenue etc.). In order for league profits to be stagnant, non-player costs would have had increased by quite a significant amount.

I would bet that aggregated league profits has increased over the life of the last CBA.

I wouldn't be so sure. I'd be pretty positive that marketing costs have increased, as have non-NHL roster player costs and travel costs. Non-player salaries have likely increased as well, as have the costs of materials for concessions and merchandise sales. Pretty much everything that the owners have to pay for is almost certainly more expensive now than it was when the most recent CBA was signed almost a decade ago. I really wouldn't be surprised if the changes in profit are marginal at best.

 

[Corn Flake]

If you were to take the net income or loss of every club and combine them, my guess is that you would see a profit.

I think the profits of the big clubs are bigger than losses of the smaller ones.

Forbes' most recent estimates have it as the league being up 114 million or so as a whole last year.

Talk about a razor thin profit margin. Less than 4% of revenue is net profit, based on $3.1b in revenue.  $3.8 mil average per team.  If you then take away the net profit of the top 5 grossing teams, the numbers look gawd awful.

 

[bustaheims]

Talk about a razor thin profit margin. Less than 4% of revenue is net profit, based on $3.1b in revenue.  $3.8 mil average per team.  If you then take away the net profit of the top 5 grossing teams, the numbers look gawd awful.

And, if the Canadian dollar drops more than a few cents against the US dollar, that profit margin is almost all gone. If it drops significantly, the league runs at a loss.