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Farce of the Predators

Nashville's in the news again, and along with that comes more grumbling from those on the top end of the NHL's revenue rankings.

From Thursday's Tennessean:

As they battle to make hockey a long-term success story here, the Nashville Predators' owners might buy thousands of unsold tickets so they can qualify for a full share of the NHL's revenue-sharing plan, the team's lead owner confirmed Wednesday.

The response from a few other governors?

One source among the NHL governors says he and some of his peers are not happy that clubs can buy tickets to hit revenue-sharing targets. They are also not pleased that some low-revenue clubs have started offering larger discounts and more incentives such as merchandise and free trips to people buying single-game or season tickets.

It is all done with an eye to raising enough revenue to land a full share of revenue sharing, which comes out of the pockets of other clubs.

No kidding.

With all due respect to Dirk Hoag, a Preds blogger and fan who I've got a great deal of time and respect for, this is a joke. There's no problem with some of the NHL's more well-heeled clubs paying out some cash to keep things a bit more equal, but when ticket sales are being distorted and ownership groups are forking out good money for unused tickets in order to beget cash from other franchises?

I've got no qualms with the ownership "doing everything they can to make the NHL a long-term success" in Nashville, as Hoag puts it, but not at the expense of other clubs. If Freeman and company want to legitimately prop up their team, their money should be better spent on either marketing the team or improving its chances on the ice.

As it stands, they might be spending it on thin air (as in what will be occupying all those seats purchased at the Sommet Center).

The NHL is on record saying that a team buying its own tickets is a legitimate way to boost itself into revenue-sharing targets, but the question really is: Should it be?

No way.

And don't think those complaints from on high will go ignored forever. The league knows where its cheques are cashed — and it's not Tennessee.

UPDATE There's a flip side to this as well. Brian Burke makes a decent point in this story about the Blue Jackets losing their revenue sharing this summer.

In a lot of ways, the CBA is designed to kick franchises when they're down. (That said, ownership agreed to the terms here.)

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One point that really honks me off about the Tennessean piece is that the fact that paid attendance is actually up by ~750 per game is overlooked. It’s likely that the owners won’t have to shell out $$$ to hit the 14K mark, considering the typical trend in attendance now that football season is over.

Last year at this time, average paid was 12,975, finishing the season at 13,429.
This year they’re at 13,744, which leads me to believe that 14K is certainly attainable.

As to owners engaging in these types of schemes, it’s certainly odd, but not uncommon. NFL teams do this often in order to get a “sellout” so that they can air games on local television.

More fun than a stick to the face!

by Dirk Hoag on Jan 22, 2009 11:41 PM CST reply actions   0 recs

1) As many of us were saying during the second Bettman lockout; Before the owners start to ask the players for consessions, etc, they may want to first get together among themselves and get their own house in order with respect to revenue sharing, etc,
2) Now that salaries are directly tied tio revenues the players can’t be happy with the struggling franchises now using loopholes to stay afloat.
3) Can’t imagine that buying own’s own tickets can be allowed. There should also be a limit on the number of ‘comped’ tickets distributed. Total joke if true.

by Fauxrumors on Jan 23, 2009 7:44 AM CST reply actions   0 recs

“The players can’t be happy”?

You have to be kidding, Faux. The players are nothing but benefitted by the practice.

[The following is not directed at you, faux]

I have to say that I have long ago grown pretty accustomed to the lack of business sophistication of hockey fans, but the latest is yet another example of the poor quality of thought of NHL fans when confronted with this type of story.

by Gerald on Jan 23, 2009 10:02 AM CST up reply actions   0 recs

1) Gerald: Why would the players be happy with this? Can the owners call selling tickets to themselves income? If not (and it doesn’t sound Kosher if they can) then there is decreased overall league revenue, and thus less of the financial ‘pie’ to share. No?

by Fauxrumors on Jan 23, 2009 10:44 AM CST up reply actions   0 recs

They would be happy because:

1. It is in fact part of HRR.

2. Keeping franchises “afloat” (your term) means more jobs for union members;

3. Keeping franchises afloat means increased HRR through greater value for league sponsorships (which is based on dispersal spreads of markets), greater value for US TV deals (same as above), and less negative publicity that would be garnered by a league with folding teams.

4. It would not mean less league revenue, as the tickets that were purchased would be tickets that would not have been sold in any event.

by Gerald on Jan 23, 2009 11:08 AM CST up reply actions   0 recs

The players aren't happy...

not because of this trick (franchises buying own tickets to inflat revenue artificially), but because of the fact there are some franchises that are struggling to grow their business (and revenue, of course). The players would be fine if such teams moved to locations where higher revenue is probable (theoretically speaking). The players might even be fine a few of those teams went out of business. Yes, there would be less HRR overall, but there would be less people (players) sharing the HRR, and the remaining players might get a better average salary (from the higher average HRR per team) because the team(s) folding would have to be much below average in terms of revenue AND likely the worst draw(s) when visiting other teams (including TV ratings). I highly doubt that the size of the US TV deals or league sponsorships would be significantly impacted if the league lost a couple of worst performing teams.

by SJKel on Jan 23, 2009 11:49 AM CST up reply actions   0 recs

One thing to remember here is that from the players’ perspective, this could be a short-term bonus. Tickets purchased = more “hockey related revenue”, of which they get their 50%+ cut. Comped tickets handed out by teams don’t have that effect.

Again, I doubt they’ll even have to resort to this step to reach 14K.

I do agree that the NHL needs more of a long-term approach to revenue sharing. Rather than the two schemes we’ve seen so far (the propping up of Canadian teams in the 90’s, and the small-market boost of today) I’d think a more straightforward, gate-revenue sharing model would achieve multiple goals at once; it would unite the interests of the owners towards league-wide growth, it would help spread out the currency risk rather than have that burden solely rest on the Canadian clubs when the Loonie declines vis a vis the Greenback, and it would also support small-market teams to some extent. It’s done in many other sports, and there’s no reason it couldn’t work in hockey.

To me, the biggest structural problem the league has is that it acts more like 30 fiefdoms squabbling, rather than a single federated organization like the NFL or MLB.

More fun than a stick to the face!

by Dirk Hoag on Jan 23, 2009 8:21 AM CST reply actions   0 recs

To me, the biggest structural problem the league has is that it acts more like 30 fiefdoms squabbling, rather than a single federated organization like the NFL or MLB.

I think that is a serious concern and an annoying league trait. But it’s also much easier for those other leagues to act as a cohesive front when they have the revenue of the major U.S. TV deal to draw from.

The NHL really does have a number of fascinating variables those leagues don’t face. Not just the TV issue but the currency issue you mentioned (and the fact that a higher loonie makes a few “small-market” teams very strong while accentuating the burden on “small-market” U.S. teams), even the fact that the Leafs have a monopoly in a giant market (It’s like New York having just one NFL or MLB team).

For the long-term, it certainly makes sense to grow the game and fanbase in non-traditional population centers. But not everyone who’s invested has that kind of time horizon in mind.

Lighthouse Hockey: an SB Nation New York Islanders blog with hip issues.

by Dominik on Jan 23, 2009 11:15 AM CST up reply actions   0 recs

For the long-term, it certainly makes sense to grow the game and fanbase in non-traditional population centers. But not everyone who’s invested has that kind of time horizon in mind.

Thank you for pointing that out. Judging by the draft picks coming from regions such as southern California and Texas, it is clear that hockey can take hold in these markets – the problem is when an owner of such a team is unable or unwilling to lose money for a decade or more while trying to establish a presense in the region. If he can, then he will realize the rewards eventually – but if he can only lose money for a few years before he gets in trouble, then you have unstable ownership and teams that are likely to be yanked out of a market before they have a chance to be successful.

The league really needs to have all the owners decide what kind of entity they want to be a part of – are they all going to commit to helping the smaller market teams to survive, or are they only going to give them a few years to show improvement, or what? They need to make up their minds and then act accordingly instead of yanking the league in several different directions based on their present local interests.

"A vacuum is a hell of a lot better than some of the stuff that nature replaces it with." -- Tennessee Williams

by Baroque on Jan 23, 2009 1:11 PM CST up reply actions   0 recs

Unbelievable.

The sheer gall is apalling.

I fully understand ownership’s desire to prop up the team but geez….the Jeremy Jacobs’ of the world aren’t going to stand for this.

The Litter Box: Your SBNation Florida Panthers Blogging Colossus

by Donny Rivette on Jan 23, 2009 9:06 AM CST reply actions   0 recs

The article below shows an opposite approach, and the financial impact on the BlueJackets

http://www.dispatch.com/live/content/sports/stories/2008/07/01/jackets_revenue01.ART_ART_07-01-08_C1_0NAKLAM.html

by cubanpuckstopper on Jan 23, 2009 9:12 AM CST reply actions   0 recs

Squabbling about revenue sharing has always existed in sports leagues: the history of baseball is replete with it, in the 1890s when the league almost came apart over revenue sharing, in the 1960s when Walter O’Malley claimed that "socialism" was killing the game. The NFL avoids conflict simply because there is enough money to go around for even the greediest owner.

I suspect that some wealthy teams (Toronto) complain about revenue sharing in order to deflect fans’ attention from rising ticket prices. If the Leafs pay out $12 million in revenue sharing and half of their reported revenues (Forbes) of $160 million comes from gate receipts, then that’s $6 million towards revenue sharing or 7.5 % of gate receipts. Yet ticket prices have risen 35% since the lockout and the Leafs player payroll has decreased by $16 million since the lockout due to the salary cap.

I wonder who gets to keep the baseball hats and chintzy fleece blankets the Preds distribute on promotional Nights, given that management is buying back tickets. We know that Pete Weber and Terry Crisp can take care of the excess hot dogs on Hot Dog Night.

by Big Picture Guy on Jan 23, 2009 9:30 AM CST reply actions   0 recs

From a competitive standpoint, I’m very much in favour of revenue sharing. I have no desire to go back to an era where a handful of teams were perennial contenders in large part due to their financial advantages (not that it helped the Leafs or Rangers much).

Certainly, however, this current situation is a joke. Especially if you consider the proposition that the current ticket-selling difficulties are in large part caused by the dismantling of a roster that was a contender a few years ago, in order to shed contracts and bump short-term revenue and make the team more attractive to sell, despite the fact that it was eventually sold for much less than the largest bid, while incorporating the ridiculous Del Biaggio in the ownership group, and meanwhile the original owner who caused this mess received an inside track on acquiring stake in a different franchise.

On one hand it looks like Nashville really does deserve to be denied revenue sharing, but on the other hand all of this activity was league-sanctioned and in some cases league-encouraged, so it might as well be league-paid for.

I've been looking at the sky

by Back In Black on Jan 23, 2009 11:22 AM CST reply actions   0 recs

All of that might be relevant if indeed there was a “ticket-selling difficulty”. In fact, ticket sales are up dramatically over last year. Accordingly, the basis of your “proposition” is ill-founded.

Is there any possibility of a moratorium on the use of the phrase “_______ is a joke” in hockey discussions? It is really shorthand for “I don’t really understand much of this, and I am too inarticulate to express my actual vaguely-felt objections, but man I sure do feel PASSIONATE about this topic”. Not to pick on Back In Black, as the term is now used twice in this thread, and it adds less than nothing.

by Gerald on Jan 23, 2009 11:38 AM CST up reply actions   0 recs

The Preds are right in the basement in terms of selling tickets. That strikes me as ‘difficulty.’

by James Mirtle on Jan 23, 2009 12:43 PM CST up reply actions   0 recs

And I seem to be missing out on whatever sage wisdom you’re offering on the topic in the thread here.

by James Mirtle on Jan 23, 2009 1:04 PM CST up reply actions   0 recs

It wouldn’t be the first time, James. ;-)

In honesty, there is not really much to respond to in this thread that is particularly stimulating. That said, I think my contributions in the middle of the thread are worthwhile.

by Gerald on Jan 23, 2009 1:14 PM CST up reply actions   0 recs

It wouldn’t be the first time I pondered throwing you out of here for good.

All you said was that the players would be fine with the practice … that’s not really what’s covered in the post. At issue here is other owners in a huff over the practice of a team buying unused tickets.

What’s an example of the poor thought quality of NHL fans? Why can’t this practice be considered “a joke”? Where on earth do you add anything to the discussion without first insulting someone?

by James Mirtle on Jan 23, 2009 1:35 PM CST up reply actions   0 recs

You'll have to excuse me

for not doing enough research. I assumed that a team having revenue problems in a league with revenues dominated by ticket sales – and whose owners are reportedly considering the purchase of “thousands of unsold tickets” – must be having trouble selling said tickets. You must understand, it was an easy conclusion to draw.

As for “is a joke”, really now, I followed that with an entire paragraph (or at least, a deliberate run-on sentence) explaining why I felt that way. If I’d called it a farce instead, would that have been articulate enough for you?

I've been looking at the sky

by Back In Black on Jan 23, 2009 2:44 PM CST up reply actions   0 recs

This reminds me of the 49ers buying blocks of tickets so there games will not be blacked out on television. The Raiders? There is no pretense, there home games are always blacked out.

by pj48 on Jan 23, 2009 8:12 PM CST reply actions   0 recs

Boots?

Another side issue: If the Preds average 14,000 tickets, doesn’t the ownership group have the right to buy out Boot’s share? To the NHL, it might be worth letting this slide to avoid a bankruptcy judge getting involved with ownership rights in the team.

And they are right about kicking teams when they’re down. Perhaps a more stepped, sliding scale disincentive is needed, so teams who are 98% to guidelines don’t get docked all the way to 75% payments.

There's no use being pessimistic, it won't work anyway.

by Mike in MN on Jan 24, 2009 9:05 AM CST reply actions   0 recs

Both Rich and Poor Teams Exploit CBA

Another point to take from this story is that the poor teams have ways to exploit the CBA just like the rich ones do. A team like Philadelphia or the Rangers can out-bid and over-pay to capture the top UFA prize (Briere, Gomez, Drury, etc) with the knowledge that if the player suffers a decline they can send that player to the minors and pay them “off the books” salary cap wise.

I want a NHL where the most astute GM is rewarded for making intelligent offers to UFA each summer. The current system provides a “opps” fudge factor for some teams but not others.

Now the poor clubs have figured out how to engage in their own questionable behavior to give them a better shot. I don’t like the idea of buying your own tickets but if the CBA allows it (as it allows the hiding of UFA mistakes in the minors) then they should take advantage of this.

I would like to see BOTH of these issues addressed in the NEXT CBA. I’m not at all surprised that there are holes in the current CBA. The thing is very long and written very quickly. Hopefully the next labor negotiations will be more about tweaking the existing agreement to fine tune things—rather than say starting from scratch.

by The Falconer on Jan 24, 2009 11:43 AM CST reply actions   0 recs


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