Just When You Thought Bettman Couldn't Sink Any Lower

[bustaheims]

yeah because they can't spend money on raising the cap, but they can spend it on going to court and forcing the PA into using the escalator.

You're right, they can't spend money on raising the cap, because that's not how the cap works. The fact that they're spending money on pursuing this lawsuit has absolutely no relation to the cap, or to whether or not the PA uses the escalator - which is also not something the league can force them to do.

 

[rdowdall]

Bettman aside, if they want to waste time and resources pursuing a legal claim, why is that a problem?

Ooooooooh look at that flat cap.

Ooooooooh look at that irrelevant point.

yeah because they can't spend money on raising the cap, but they can spend it on going to court and forcing the PA into using the escalator.

I believe the cap is based on what the net of hockey related revenue is before expenses.  So it doesn't matter what the league spends it's money on.  It is based on how much money the league is making before expenditures.  There is a list somewhere that determines what is hockey related revenue and what isn't. 

 

[bustaheims]

There is a list somewhere that determines what is hockey related revenue and what isn't.

It's in the CBA, and very detailed and complex. There are limited expenses that can be taken out of HRR - but they're basically exclusively related to costs associated with merchandise and concessions stands.

 

[Kin]

Regardless, the NHL already employs lawyers. It's not like those lawyers doing stuff costs the league extra money.

 

[rdowdall]

There is a list somewhere that determines what is hockey related revenue and what isn't.

It's in the CBA, and very detailed and complex. There are limited expenses that can be taken out of HRR - but they're basically exclusively related to costs associated with merchandise and concessions stands.

Yeah, I figured it would have to be in the CBA, but I wasn't sure if they would have broken it out in to something else.  I thought that they might have put in a clause where another document would contain what was considered HRR and what wasn't and that the other document could be updated pending approval by both the NHL and NHLPA to account for emerging markets, like streaming and such.

I also wasn't sure if it was net or gross, but I figured it had to be net if they weren't going to expenses in to account.   

 

[rdowdall]

Regardless, the NHL already employs lawyers. It's not like those lawyers doing stuff costs the league extra money.

That as well.  It's not like Regular Joe who has to go in to a lawyers office and ask someone to represent them.

 

[bustaheims]

I also wasn't sure if it was net or gross, but I figured it had to be net if they weren't going to expenses in to account. 

It's sort of a hybrid - it's mostly gross revenue, as defined by what is and what isn't included in HRR, but, in a few cases, it's net.

And, not that's it's relevant to this conversation specifically, but is to how the cap is calculated in general - expansion fees are not included in HRR. So, whatever decision is made on expansion will not have an impact on the cap - other than the calculations for the cap ceiling being made by splitting the players' share of HRR by 31 or 32 instead of by 30 (though, that probably won't happen until the season after expansion).

 

[TBLeafer]

Yes we all know going to a court for a corporation is free.  :

 

[bustaheims]

Yes we all know going to a court for a corporation is free.  :

No one is saying it's free. We're saying it has no impact on how the cap is calculated - because it has no impact on how the cap is calculate. The league is free to do whatever they want with their half of HRR.

 

[TBLeafer]

Yes we all know going to a court for a corporation is free.  :

No one is saying it's free. We're saying it has no impact on how the cap is calculated - because it has no impact on how the cap is calculate. The league is free to do whatever they want with their half of HRR.

But if they have enough HRR to frivolously spend taking a settled case to court, I think they can project well enough on the back of the centennial with the added revenue of the World Cup to raise the cap a little, yes?

 

[rdowdall]

Yes we all know going to a court for a corporation is free.  :

No one is saying it's free. We're saying it has no impact on how the cap is calculated - because it has no impact on how the cap is calculate. The league is free to do whatever they want with their half of HRR.

But if they have enough HRR to frivolously spend taking a settled case to court, I think they can project well enough on the back of the centennial with the added revenue of the World Cup to raise the cap a little, yes?

Actually they can't.  It has nothing to do with projection.  It has to do with a hard mathematical formula.  They plug in the numbers from the last year, and the new cap number comes out.  There is no way of getting around it.  That's actually what the players wanted so that teams couldn't hide revenue from them.

 

[bustaheims]

But if they have enough HRR to frivolously spend taking a settled case to court, I think they can project well enough on the back of the centennial with the added revenue of the World Cup to raise the cap a little, yes?

Also not how it works. The cap is based on the previous season's HRR, not future projections. The World Cup, the Leafs' centennial, etc., cannot be factored in to the 16/17. They will be factored in to 17/18 (to the extent that they can be - I'm not sure how the World Cup gets included there). I also don't think the Leafs' centennial is going to have a significant impact, either. Any increases to the league's revenue it will have will have to be halved and then split 30 (or 31/32) ways. It take an increase of $60M-$64M in revenue to raise the cap $1M.

 

[rdowdall]

But if they have enough HRR to frivolously spend taking a settled case to court, I think they can project well enough on the back of the centennial with the added revenue of the World Cup to raise the cap a little, yes?

Also not how it works. The cap is based on the previous season's HRR, not future projections. The World Cup, the Leafs' centennial, etc., cannot be factored in to the 16/17. They will be factored in to 17/18 (to the extent that they can be - I'm not sure how the World Cup gets included there).

It looks like it isn't figured in to the cap at all:

"The league expects this World Cup to generate over US$100 million in revenue. All profits count outside of hockey-related revenue and is split 50/50 between the league and NHLPA."

From here:
http://www.theglobeandmail.com/sports/hockey/nhl-announces-that-world-cup-of-hockey-will-return-in-2016-with-new-format/article22623402/

 

[Kin]

Yes we all know going to a court for a corporation is free.  :

Typically the court costs for a corporation come from hiring outside counsel, experts and the like. If you already have attorneys and are just using them, what do you think it costs them?

 

[bustaheims]

It looks like it isn't figured in to the cap at all:

"The league expects this World Cup to generate over US$100 million in revenue. All profits count outside of hockey-related revenue and is split 50/50 between the league and NHLPA."

From here:
http://www.theglobeandmail.com/sports/hockey/nhl-announces-that-world-cup-of-hockey-will-return-in-2016-with-new-format/article22623402/

Yeah, that's what I thought, but I wasn't 100% sure.

 

[TBLeafer]

Yes we all know going to a court for a corporation is free.  :

No one is saying it's free. We're saying it has no impact on how the cap is calculated - because it has no impact on how the cap is calculate. The league is free to do whatever they want with their half of HRR.

But if they have enough HRR to frivolously spend taking a settled case to court, I think they can project well enough on the back of the centennial with the added revenue of the World Cup to raise the cap a little, yes?

Actually they can't.  It has nothing to do with projection.  It has to do with a hard mathematical formula.  They plug in the numbers from the last year, and the new cap number comes out.  There is no way of getting around it.  That's actually what the players wanted so that teams couldn't hide revenue from them.

Funny how that projection keeps changing through as each season progresses then.  It was still at $74 in March, down from just $74.5 in December even with the weaker dollar.

Now it's $69.5 just three months later?  Did the hard mathematical formula suddenly change? 

 

[rdowdall]

Yes we all know going to a court for a corporation is free.  :

No one is saying it's free. We're saying it has no impact on how the cap is calculated - because it has no impact on how the cap is calculate. The league is free to do whatever they want with their half of HRR.

But if they have enough HRR to frivolously spend taking a settled case to court, I think they can project well enough on the back of the centennial with the added revenue of the World Cup to raise the cap a little, yes?

Actually they can't.  It has nothing to do with projection.  It has to do with a hard mathematical formula.  They plug in the numbers from the last year, and the new cap number comes out.  There is no way of getting around it.  That's actually what the players wanted so that teams couldn't hide revenue from them.

Funny how that projection keeps changing through as each season progresses then.  It was still at $74 in March, down from just $74.5 in December even with the weaker dollar.

Now it's $69.5 just three months later?  Did the hard mathematical formula suddenly change?

No it's because they don't know what the HRR is until the end of the season.  So the projections are based on how they think the teams are going to do.  Then when the actual numbers come in, that's when they set the cap.  That's why you hear about "Experts expect cap to be set at XXXX" because they are basing it on the early projection on what the HRR number is going to be at the end of the year.

 

[TBLeafer]

But if they have enough HRR to frivolously spend taking a settled case to court, I think they can project well enough on the back of the centennial with the added revenue of the World Cup to raise the cap a little, yes?

Also not how it works. The cap is based on the previous season's HRR, not future projections. The World Cup, the Leafs' centennial, etc., cannot be factored in to the 16/17. They will be factored in to 17/18 (to the extent that they can be - I'm not sure how the World Cup gets included there).

It looks like it isn't figured in to the cap at all:

"The league expects this World Cup to generate over US$100 million in revenue. All profits count outside of hockey-related revenue and is split 50/50 between the league and NHLPA."

From here:
http://www.theglobeandmail.com/sports/hockey/nhl-announces-that-world-cup-of-hockey-will-return-in-2016-with-new-format/article22623402/

Thanks.  This is why I join Leafs forums.  Because people question things and I learn stuff.  8)

 

[Kin]

Funny how that projection keeps changing through as each season progresses then.  It was still at $74 in March, down from just $74.5 in December even with the weaker dollar.

Now it's $69.5 just three months later?  Did the hard mathematical formula suddenly change?

Or, like in every business, revenue projections aren't a hard science.

 

[Bullfrog]

The CBA is clear. They won't be arguing that an arbitrator's decision isn't binding, but that in this instance, the arbitrator acted outside of his authority. In essence, they're trying to limit an arbitrator's authority on these matters.

From a league perspective, this is absolutely something they should pursue.