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Is revenue sharing only way to avoid lockout?


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#1 DaneykoIsGod

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Posted 01 August 2012 - 09:45 AM

Interesting read that breaks down revenue sharing across the "big four" North American sports leagues, and why it'll be a primary sticking point for the players this go-around:

Revenue sharing key to NHL CBA talks

At the end of this round of the NHL’s labour negotiations one phrase should become as familiar to hockey fans as the term salary cap did during the 2004-05 lockout – revenue sharing.

This is where the league owners and the NHL Players’ Association have their sharpest difference over a solution to the league’s lingering economic problems.

Seven years after the owners successfully won a hard salary cap based on revenue with a little revenue sharing, there are fewer of the NHL’s 30 teams in serious economic trouble – six in the estimate of one former governor – but the owners are still looking to find the solution in the pockets of the players.

In their first offer to the players earlier this month, the owners demanded the players reduce their share of hockey-related revenue (HRR) from 57 per cent to 46, but also demanded a change in how HRR is defined that would further reduce that share to 43 per cent.

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Both a current NHL governor and a former NHL governor admitted the league`s richest teams are not keen even about the limited sharing the exists now. The former governor said the owners would only accept sharp increase like the NBA owners did if Fehr and the union can convince them every team will become profitable.

“You really have to get whole league profitable for that kind of revenue sharing to work,” said the former governor, who added the league is saddled by several teams in markets that will never work financially. “Otherwise, it`s just moving chairs around the Titanic.”

But a prominent sports agent, who asked to remain anonymous because he is not authorized to speak for the players as a group, said revenue sharing is the only answer to the NHL's problems. He said the NHL’s cap system is doomed to fail because the revenue from the richest teams inflates the salary cap beyond the reach of the poorest teams.

“If the NHL owners were smart, they’d say to Fehr, ‘Help us design a system that works for us and you guys can live with,’ and he would come up with a system,” the agent said. “All the owners do now is grab more money from the players. That works for a year, revenue goes up and the small markets start choking.

“Then they limp to the next collective agreement and Bettman promises more cap money for small markets. This is all just like a Ponzi scheme. Unless you meaningfully share revenue, the small markets will die.”


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#2 Devils Dose

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Posted 01 August 2012 - 05:08 PM

The system could work as is if the lower revenue teams somehow saw a significant increase in revenues without a proportionately matching or larger increase for the big teams. How could that happen?
If the small market teams started winning much more, that would probably do it. But other than by chance, it really can't happen. Spending inequalities (like the kind that almost pried Shea Weber out of Nashville) give high revenue teams the advantage.
If the big markets were already saturated, then it could happen, as only the small markets would have any room to grow. This doesn't sound too likely to happen anytime soon. I wouldn't be surprised if hockey revenues grew more quickly (by percent) in the big markets than in the small since the lockout.
Revenue sharing would force it artificially. But obviously owners of teams like Toronto or the Rangers hate it.
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#3 Mayday

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Posted 01 August 2012 - 05:09 PM

idk
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#4 Dadds

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Posted 01 August 2012 - 05:56 PM

Im for it, especially with the the economic issues that have been swirling around the Devils. As as small market team the devils need some help, especially if the cap keep rising
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#5 Devilsfan118

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Posted 01 August 2012 - 07:45 PM

I think so.

I don't think it'll happen though. Why the hell would some of the unsuccessful northern markets (see: Toronto, Montreal (recently), Calgary, etc..) want to support more successful 'nontraditional' markets?
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#6 DaneykoIsGod

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Posted 02 August 2012 - 07:50 AM

I wonder if a new revenue sharing deal is something Vanderbeek is holding on for. It looks like, the way the current CBA is written, teams in large media markets aren't eligible to receive revenue sharing dollars. The article mentions the Islanders as one money-losing team that's ineligible to receive a slice of the revenue sharing pie because they're in the NY market, but I imagine that also applies to the Devils.
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#7 Devils Dose

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Posted 02 August 2012 - 10:11 AM

I wonder if a new revenue sharing deal is something Vanderbeek is holding on for. It looks like, the way the current CBA is written, teams in large media markets aren't eligible to receive revenue sharing dollars. The article mentions the Islanders as one money-losing team that's ineligible to receive a slice of the revenue sharing pie because they're in the NY market, but I imagine that also applies to the Devils.

That would really suck if it's the criteria, because while we do play in an area covered by an incredibly huge amount of media, it's a media that by and large ignores our team because of its "New Jersey" name. We receive almost none of the benefit you might think there would be playing less than 12 miles from Manhattan. Look no further than this year's playoffs coverage on our sports radio stations. They caught hockey fever late in the Conference Semis and definitely in the Conference Finals. Then the Stanley Cup Finals turned into, "And in hockey, last night's cup finals score was _____. Now let's look again at the Yankees bullpen adjustment after losing Mo Rivera for the season." That said, I'm not 100% sure how to determine where the revenue sharing money goes. They're not going to just put all the money into one pot and divide it by 30, so there has to be some system.
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#8 Devilsfan118

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Posted 02 August 2012 - 11:54 AM

Except the Devils get a pretty sweet deal from MSG network. That's one perk for sure.

TV deal, I mean.
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#9 LucifersDog

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Posted 02 August 2012 - 05:23 PM

Isn't the revenue sharing discussion between the owners and players? Owners want the players to accept a reduction from 57% to 46%. Then the owners want to redefine what is actual NHL revenue and if they get their way it will reduce the players part of the revenue from the proposed 46% to 43%. This will never fly IMO. Guaranteed lockout.
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#10 Triumph

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Posted 02 August 2012 - 05:23 PM

I wonder if a new revenue sharing deal is something Vanderbeek is holding on for. It looks like, the way the current CBA is written, teams in large media markets aren't eligible to receive revenue sharing dollars. The article mentions the Islanders as one money-losing team that's ineligible to receive a slice of the revenue sharing pie because they're in the NY market, but I imagine that also applies to the Devils.


The Devils generate too much revenue to be eligible for revenue sharing.

Edited by Triumph, 02 August 2012 - 05:23 PM.

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#11 maxpower

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Posted 02 August 2012 - 07:35 PM

Yep, they should easily be inside the top 10 this year with the playoff revenue. Revenue is not why Vanderbeek is walking around with a hobosack.
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#12 RowdyFan42

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Posted 02 August 2012 - 10:25 PM

The current revenue sharing rules were definitely written with media market size as a criterion. I seem to remember they were specifically constructed to screw Chicago.
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#13 Matteau#32

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Posted 03 August 2012 - 07:19 AM

It works in the NFL because teams do not have local tv deals for their games, unlike the NHL. The structure of the NHL schedule will never allow for the bulk of the tv revenue to come from the national deals. I completely agree revenue sharing needs to be improved if they want to keep the smaller markets. To do that, going to need teams to give a chunk of their local tv revenue into a centralized pool. Teams like the Rangers and Leafs that own their tv network are making fortunes from their deals, but the networks are "separate" businesses so the league would have to deal with creative accounting. These teams can easily say the network is "paying" the team $100/game for the broadcast rights, thus showing the network is making all the money instead of the team.
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#14 RedArmy8

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Posted 03 August 2012 - 08:29 AM

It works in the NFL because teams do not have local tv deals for their games, unlike the NHL. The structure of the NHL schedule will never allow for the bulk of the tv revenue to come from the national deals. I completely agree revenue sharing needs to be improved if they want to keep the smaller markets. To do that, going to need teams to give a chunk of their local tv revenue into a centralized pool. Teams like the Rangers and Leafs that own their tv network are making fortunes from their deals, but the networks are "separate" businesses so the league would have to deal with creative accounting. These teams can easily say the network is "paying" the team $100/game for the broadcast rights, thus showing the network is making all the money instead of the team.


Great point.
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