The NHL's next big problem
by James Mirtle on Sep 7, 2009 1:18 AM CDT
87 comments
What can Palace Sports and Entertainment do? I’m sure the executors of Bill Davidson’s estate want out of the hockey business, but they have a substantial amount of money at risk. If Palace goes along it will be because the alternative is bankruptcy and they will be effectively repossessing the team. Furthermore, the team is not the same one they sold. The fan support has eroded, they are paying Barry Melrose not to coach, and the team has added well over $100 MM in long term payroll obligations. Palace Sports and Entertainment does not want to own this hockey team.
Who does? If the answer is nobody, Gary Bettman has another big problem on his hands.
I've been keeping a close eye on the Lightning fiasco lately because right now it's the runner-up to the Coyotes in terms of a troubled ownership situation. The league was very leery about taking on the Oren Koules and Len Barrie tag team in the beginning given how much difficulty they had coming up with the purchase price, and financially and on the ice, things have gone about as poorly as one can imagine.
This is the next fire for Gary Bettman to put out, likely as soon as the situation in Phoenix is resolved. And with a rebound beginning to come elsewhere, we're really seeing what the NHL looks like in a recession.
Tom makes a great point in that Palace Sports may be in the worst position here, forced to take back a team they desperately wanted to unload and which has suddenly fallen on hard times after one of the worst cases of front office meddling we've ever seen. (Of course they have some competition in that regard.)
What Koules desperately needs is for this team to start performing again on the ice, and that, at this point, is a coin flip at best. Victor Hedman, Alex Tanguay, Mattias Ohlund — they'll help, but you don't go from where this franchise has been to a raging success overnight.
So, for those keeping score: Phoenix is the NHL's most troubled market, Tampa comes in at No. 2 and the Islanders — desperately in need of a new building — are No. 3. We've also seen signs of financial strain in Columbus lately, and the economics of the team in Florida have been poor every season postlockout (although they appear to have found a new buyer somehow). Atlanta's situation is also very troublesome, but it's worth noting that the group there recoups its losses due to owning both the arena and the local NBA team.
The point? Well, with an incredibly forgiving lease and intelligent new ownership, the small market, low budget Predators just might be in better shape than an awful lot of teams.
All that said, my guess is there are really only nine or 10 NHL teams which make a significant profit on the hockey side of things most seasons, with roughly another 10 breaking even depending on their playoff success. It's amazing that, even with a cap that is effectively only about $47-million** after escrow, the economics of hockey are broken, with the perennial losers (like the Coyotes) doomed to incredible losses.
With only 53 per cent of teams qualifying for the playoffs every year, there are going to be some long-term dogs, and it's far from a coincidence that worst run teams in this league from a wins per dollar perspective are some of the biggest black holes in professional sports.
I don't know how you attain "cost certainty" in a league with a financial structure like this:
** N.B. Nine teams were spending more than that in 2001-02
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Don’t forget about the financial woes in Atlanta and Dallas. And it wasn’t long ago that Pittsburgh was in the toilet.
Not every team can be a fiscally solvent as Toronto, but some of this has to be viewed through the lenses of expansion. Four of those bottom five teams are relatively brand new teams without a lot of success. Worse still, is that success hasn’t helped all of the teams. Yes, the four Stanley cups the Islanders won were at least 25 years ago, but three teams in the bottom 12 (Lightning, Panthers, and Hurricanes) have had recent success, only to still have trouble pulling in enough revenue to make payroll.
Jon Casey fan since '84
by stufflife on Sep 7, 2009 1:46 AM CDT reply actions 0 recs
My point is
Expansion may be the spoils of victory, but over-expansion weakens the entire army. Just ask Caesar.
Jon Casey fan since '84
by stufflife on Sep 7, 2009 1:50 AM CDT up reply actions 0 recs
Or Napoleon or Hitler, after they tried invading Russia.
SNN Sports - A theoretical Oilers blog (i.e. theoretically, I write stuff there)
by Doogie2K on Sep 7, 2009 2:25 AM CDT up reply actions 0 recs
The Panthers have the longest active playoff drought in the NHL. Do we have different definitions of “success?”
SNN Sports - A theoretical Oilers blog (i.e. theoretically, I write stuff there)
by Doogie2K on Sep 7, 2009 2:26 AM CDT up reply actions 0 recs
The problem is the NHL has never, at least publicly, identified its #1 problem. They have only ever identified the symptoms of the problem, such as escalating salaries, and their solution, cost certainty, only partially fixed the symptoms. The real problem with the NHL is, and always has been, revenue disparity. It just isn’t easy, if not impossible, for the Coyotes, Thrashers and Predators to compete with the Leafs, Canadiens and Rangers financially. The salary cap does hold back salaries some but the salary floor forces the small market teams to spend more, sometimes more than they can afford. There is some revenue sharing and that is the only reason some of these teams can stay afloat but it isn’t enough and the restrictions on revenue sharing have forced teams to practically give away tickets just to get to the attendance levels required for receiving revenue sharing. Reducing ticket prices to near giveaway levels devalues your team in the view of your fan base and that is never a good thing.
When Paul Beeston took over the Blue Jays the first thing he did was stop all the ticket giveaways and heavily discounted tickets. The reason is he believes they devalue the produce and in the long run harm the product and no one will buy tickets in advance waiting for the giveaway or discounted price.
Speaking of baseball, MLB has the same problem as the NHL in terms of revenue disparity. In MLB they have chosen to ignore the problem and have basically told teams like the Kansas City Royals that you have little or no chance of winning and the Yankees can have a near $200 million payroll while the Royals attempt to field a team on less than $50 million. The NHL chose not to go this route but instead force teams to spend similar amounts and in doing so essentially forced the NHLPA to accept a cost certainty system but as I mentioned above, cost certainty didn’t fix the revenue disparity problem. The NHL owners could have resolved the problem themselves with very little help from the players if they just instituted a more effective revenue sharing model. If 100% of revenues were shared, there would be no problem teams in the NHL. Of course that won’t happen but until they implement a more significant revenue sharing model or go the MLB route problem teams will continue to exist.
The other alternatives are to contract 4 or so small market teams or to expand significantly into more small market teams in an effort to dilute the big markets teams revenues more and drive down the salary cap. The latter I fear is Bettman’s plan.
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by HockeyAnalysis on Sep 7, 2009 8:35 AM CDT reply actions 0 recs
The difficulty with that (and I agree with you that the revenue disparity is the glaring issue), is that in order to fix the problem the teams with profits must agree to share a lot more of their money with the less-profitable teams, which they will not do because they earned their profits (in some cases, after years of losses and a long time spent building up a team that could make money) and thus have no desire to share them, and also because they likely feel that money given to less-profitable markets is not an investment in the league as a whole that will benefit them in the end, but a series of episodes of throwing money down several deep, dark, consistently unprofitable holes with no end in sight as they must have doubts that some of the markets will ever turn a profit, even if they do manage to ice a consistent winner.
Unless profitable teams can share revenues with less profitable teams without hurting themselves – and several of the profitable teams are probably uncomfortably close to losing money as it is, based on their own economic situation and how important it is to win in general – they will never do so (and I don’t blame them). The collective money pie in the NHL just doesn’t seem large enough to share with all the troubled teams that need more. A few teams suffering a little, with most of the league financially secure, would be a different matter – but with two thirds of the league either losing money or breaking even, the remaining teams can’t support everyone who needs help, even if they wanted to.
"For myself I am an optimist - it does not seem to be much use being anything else." -- Winston S. Churchill
by Baroque on Sep 7, 2009 9:04 AM CDT up reply actions 0 recs
That’s the key argument. There is also the point, however, that the Leafs would be much less profitable if they had no-one to play against – so at least part of their “earned” profits are owed to the rest of the league.
But it’s a difficult case to make. And it would also, looking at Mirtle’s graph, feed the case for contraction. The Leafs would certainly earn just as much revenue in a 26 or even 20 team league; and they wouldn’t need to prop up quite so many bottom-feeders. It’s ironic, because part of what fed expansion in the first place was the ability of the existing teams to pocket several million dollars apiece in bonus revenue. If they now had to pay for those teams’ operating costs the deal wouldn’t look so good.
I've been looking at the sky
by Back In Black on Sep 7, 2009 10:59 AM CDT up reply actions 0 recs
I wouldn’t be surprised if the Leafs could profit just as much if they replaced some of their actual games against less-known opponents with intra-team scrimmages, though. They have extremely devoted fans.
"For myself I am an optimist - it does not seem to be much use being anything else." -- Winston S. Churchill
by Baroque on Sep 7, 2009 12:30 PM CDT up reply actions 0 recs
Even if you contracted the 4 lowest revenue clubs there would still be great disparity between the Leafs the 26th ranked team. The salary cap has leveled the playing field by essentially forcing the Leafs, Wings and Rangers to turn a profit, but the cap floor also mandates an annual fiscal loss for the lower revenue teams when that cap growth is driven by revenue gains happening in other markets. The Leafs have missed the playoffs the last 4 seasons and yet their revenues continue to grow much faster than those in most other NHL markets (which is one reason why I favor a 2nd team in Toronto).
The fundamental solution is some sport of split of gate revenues between the Home and Visiting teams. I’m sure a split 60%-40% would probably eliminate the fiscal instability within the NHL and make most teams profitable. It would transform the NHL into a version of the NFL—where success depends not on your market size but the intelligence of your management team. Of course this would require enormous solidarity among the 2/3rds of the poor owners to get implemented, and the rich ones would fight it tooth and nail.
All things Thrashers + stats: www.birdwatchersanonymous.com
by The Falconer on Sep 7, 2009 9:17 AM CDT up reply actions 0 recs
It would transform the NHL into a version of the NFL—where success depends not on your market size but the intelligence of your management team. Of course this would require enormous solidarity among the 2/3rds of the poor owners to get implemented, and the rich ones would fight it tooth and nail.
The NFL has the buffer of the television revenues, though. In the NHL there is no such buffer and the teams that bring in the revenues at the gate depend on that for the profits. If the share of their gate drops, how many teams that are now profitable wouldn’t be anymore? Toronto, Montreal, and the Rangers might be fine, but how much would Detroit, Dallas, Philadelphia, Vancouver, Boston, et al be impacted (especially considering that some teams have arenas without the same new luxury box and naming rights and PSL revenue streams that some brand new arenas have)? Some of those teams, I’m sure, would not be doing as well if their gate revenues were reduced. Some of the less profitable teams might also be reluctant to give up 40% of the gate to teams that are already profitable and thus travel well enough to pack the visiting rink and be gouged by “premium” or “gold” or other ticket plans. This isn’t to say that either concern is entirely logical, but teams on both ends of the spectrum might have such concerns.
"For myself I am an optimist - it does not seem to be much use being anything else." -- Winston S. Churchill
by Baroque on Sep 7, 2009 10:01 AM CDT up reply actions 0 recs
Any team that fights giving up 40% of their home gate receipts when they are getting 40% back from higher income clubs just failed basic math and logic.
If you look at Mirtle’s chart, you can see that the biggest impact by far would be that the top 3 revenue clubs (TOR, DET, NYR) would sharing substantial chunks with the rest of the NHL in a gate splitting NFL type program. The rest of the upper division would see only a modest loss from the exchange. The biggest beneficiaries would be bottom 5 teams.
I want to point out that an exchange of gate receipts for visiting teams would go a LONG WAY to reducing some of the evils of currency fluctuations. If the 1990s CAN clubs were hurt and then in the 2000s it was USA clubs that saw the cap rise because of currency changes. The NHL faces a more severe currency threat than any other North American sports league precisely because so many franchises deal in CDN dollars. If either the US or CDN dollar were to dramatically shift in relative value, an exchange of gate receipts program would greatly reduce the impact of such change because every team plays a substantial number of games on both sides of the boundary line.
All things Thrashers + stats: www.birdwatchersanonymous.com
by The Falconer on Sep 7, 2009 10:49 AM CDT up reply actions 0 recs
Oh, I didn’t say it would be logical – I just said that might be why they would object. The idea of giving anything up for 41 games while they would be getting back 40% from each of the away cities (some of which might have attendance problems just as severe as their own) would just be too difficult for them to stomach, no matter what the math might tell them.
"For myself I am an optimist - it does not seem to be much use being anything else." -- Winston S. Churchill
by Baroque on Sep 7, 2009 12:28 PM CDT up reply actions 0 recs
Speaking of baseball, MLB has the same problem as the NHL in terms of revenue disparity. In MLB they have chosen to ignore the problem and have basically told teams like the Kansas City Royals that you have little or no chance of winning and the Yankees can have a near $200 million payroll while the Royals attempt to field a team on less than $50 million.
Male cattle excrement. MLB has told the Royals nothing of the sort. Tampa is winning. Minnesota is a successful team. Milwaukee has been to the playoffs. Colorado is successful. St. Louis has a track record almost any team would kill for. There are absolutely no external elements preventing a small market baseball team from being a success.
The Royals, and other teams like the Pirates, are disasters for two reasons. The first is that their owners are simply collecting central revenues and putting them in the bank. Between national TV contracts, MLB Advanced Media, and revenue sharing, the Royals probably received something close to $70 million from the league office. They also have local revenues. Yet they claim they can’t afford more than a $50 million payroll. So, ask youraself, where is all that money going? The problem with all revenue sharing agreements that exist in professional sports is that they subsidize failure. Why should a rich team like the Yankees agree to give away revenues that they have earned just so David Glass can stuff them under his pillow?
The Royals other problem is that they are incompetent. Just this season, Dayton Moore has traded a perfectly good relief pitcher (Leo Nunez) for a complete stiff (Mike Jacobs). He signed a replacement level relief pitcher (Kyle Farnsworth) to a two year, $8 million deal. He signed a crummy utility player (Willie Bloomquist). He traded something of value for Yuniesky Betancourt. If they are making these kinds of moves, I don’t want to hear anyone bitch that the system is preventing them from being successful. They’re cheapskate morons, that’s why they aren’t successful.
by J. Michael Neal on Sep 7, 2009 2:29 PM CDT up reply actions 0 recs
I wondered where Farnsworth wound up. He’s an excellent tackler, at least.
"For myself I am an optimist - it does not seem to be much use being anything else." -- Winston S. Churchill
by Baroque on Sep 7, 2009 2:42 PM CDT up reply actions 0 recs
What's the correlation...
…between payroll and wins in MLB?
All things Thrashers + stats: www.birdwatchersanonymous.com
by The Falconer on Sep 7, 2009 3:08 PM CDT up reply actions 0 recs
it tends to be all over the place in any given season.
The AL East is really the only division where the Cold War-style spending impacts the results. And even then, that’s doesn’t mean playoffs. Last year, the Yankees spent $209 million and out of the playoffs. In the NL East, the Mets have consistently spent outrageous amounts of money and end up failing every year. The AL Central is the Minnesota Twins division to lose. They’re the only team there that is a consistent playoff team (and I swear to god, for years it was because Gardy just wanted to stick to to Pohlad), while the Indians, Tigers, and White Sox yo-yo in the standings each year, with no apparent relation to how much money is spent. And the examples go on and on.
Yes, there are some teams with consistently low payrolls with correspondingly poor results over multiple seasons. But the issue is far more incompetent management (or extreme front office meddling).
by RedBirdie on Sep 7, 2009 3:43 PM CDT up reply actions 0 recs
Payroll Explain Half of MLB Standings
Correlation between Opening Day MLB payroll and Team Wins over the last decade
2000 .323
2001 .324
2002 .442
2003 .385
2004 .541
2005 .493
2006 .536
2007 .491
2008 .327
2009 .501
Over the last half decade $ along accounts for half of the variation in wins among MLB teams.
How could spending disparities NOT have an impact on the standing. To assume that 2 to 1 spending gaps don’t matter is to assume that in there is a league wide failure in the ability to price talent in free agency. While there are bad GMs and bad decisions, I think it unwise to assume that talent is totally mis-priced. If talent is priced accordingly then the spending gaps SHOULD show up in the Final Standings—and they do.
All things Thrashers + stats: www.birdwatchersanonymous.com
by The Falconer on Sep 7, 2009 4:26 PM CDT up reply actions 0 recs
Two things to make clear. The first is that I’m not claiming that there is no advantage to having a lot of revenues. There is. I’m saying that the disparities aren’t nearly as crippling to the small market teams as a lot of people want to argue. Beyond that, I’m not at all sure that there shouldn’t be an advantage for large revenue teams. They generate higher revenues because they have more fans. If the goal of winning is that fans should be happy, there’s a utilitarian argument that big market teams should win. Fortunately, I’m not a utilitarian beyond a certain point, and so I don’t take this to extremes. But I’m also not willing to concede that a perfectly level playing field is the ideal towards which we should strive.*
The second is that Falconer’s table should be approached carefully. First, if those a correlation coefficients, then they don’t represent the amount of variation that can be explained by payroll variation. To get that, you need to square the coefficient, and so you’d get about a quarter of the variation explained. I honestly don’t know whether those figures are the R or the R-squared.
Whichever it is, this is also a perfect example of correlation not equaling causation. It also doesn’t say anything about the direction of causation, if there is any. Do teams win because they have a high payroll? Or do they have a high payroll because they win? As a general rule, the teams with the best players win. Also as a general rule, a team that wins one year is more likely to do well the next year. (Not better, as there is substantial regression to the mean in winning percentage, but above average.) Given the payroll mechanisms in baseball, particularly salary arbitration, players that do well in one season have a strong tendency to be better paid the next. Winning drives up payroll. This doesn’t explain all of the causation, but there is definitely a two-way flow involved, not just money driving winning.
by J. Michael Neal on Sep 7, 2009 8:01 PM CDT up reply actions 2 recs
All sound arguments, though the rec comes simply from stating that correlation does not imply causation. My biggest pet peeve in amateur statistical analysis.
SNN Sports - A theoretical Oilers blog (i.e. theoretically, I write stuff there)
by Doogie2K on Sep 7, 2009 8:55 PM CDT up reply actions 0 recs
I agree that theory should always guide one’s interpretation of correlation. But to suggest that the correlation between payroll and wins a spurious correlation seems absurd to me. In a sports league with free agency teams bid for free agent talent and the most talented players will typically receive more money than the less talented ones. Certainly some teams make some stupid decisions in free agency, but to suggest that is a systemic market failure in evaluating talent would be a very bold claim, it seems to me. As long as there is free agency, I think it is quite reasonable to expect that payroll will be correlated with team winning percentage, when payroll is unconstrained and massive disparities are present.
All things Thrashers + stats: www.birdwatchersanonymous.com
by The Falconer on Sep 7, 2009 10:26 PM CDT up reply actions 0 recs
But to suggest that the correlation between payroll and wins a spurious correlation
Then it’s a good thing no one in the thread has suggested this.
by J. Michael Neal on Sep 8, 2009 6:30 AM CDT up reply actions 0 recs
I agree that payroll should have some effect, I just don’t think that a correlation accounts for confounding factors like management acuity, injuries, luck, and the relative quality of other teams in the division (does baseball have an unbalanced schedule?)
SNN Sports - A theoretical Oilers blog (i.e. theoretically, I write stuff there)
by Doogie2K on Sep 8, 2009 8:50 AM CDT up reply actions 0 recs
(does baseball have an unbalanced schedule?)
Extremely. That’s why Tampa, Toronto, and Baltimore are screwed because they have to play the Yankees and Red Sox so many more times than teams in the other divisions.
And don’t even get me started on the interleague play.
"For myself I am an optimist - it does not seem to be much use being anything else." -- Winston S. Churchill
by Baroque on Sep 8, 2009 11:18 AM CDT up reply actions 0 recs
yeah, the unbalanced scheduling baseball went to a few years ago really screwed the AL East have-nots.
And yet, TB won the division last year. It can be done.
by RedBirdie on Sep 8, 2009 11:35 AM CDT up reply actions 0 recs
It can be done… once every 45 seasons.
I've been looking at the sky
by Back In Black on Sep 8, 2009 2:37 PM CDT up reply actions 0 recs
People seem to forget that the Jays and Orioles ruled this division through the first half of the 90s.
by J. Michael Neal on Sep 8, 2009 11:28 PM CDT up reply actions 0 recs
Jays ruled the division and won the World Series with the highest payroll in baseball. People also tend to forget that fact.
Supporter of the Sergei Berezin "Give and Go" - You give me puck, then you go to hell
by bkblades on Sep 9, 2009 12:31 AM CDT up reply actions 0 recs
Baseball has changed
20 years ago the highest payroll was only 2-3 times as much as the smallest; now it’s more like 7-8 times.
I've been looking at the sky
by Back In Black on Sep 9, 2009 12:40 AM CDT up reply actions 0 recs
That has at least as much to do with teams like the Marlins deciding that they weren’t interested in paying anyone over the minimum and just collecting their checks.
by J. Michael Neal on Sep 9, 2009 10:07 PM CDT up reply actions 0 recs
Even if those values are R^2 values, the more interesting point would be the values for the same correlation in other sports. If other leagues show the same pattern of variation (that is that the payroll variation explains about half of the wins variation), it is less interesting than if the correlation has greater explanatory power in baseball than in other sports.
(Plus the numbers aren’t necessarily statistically significant, but that is a whole other kettle of fish.)
Money means a team has a better chance to pay for their draft picks, to keep around their own stars, and to acquire new ones in a trade or free agency signing. I have no problem with that – after all, not everyone wants to play for the Yankees, and even if they do, the team can’t have an 80 man roster so they can’t use all of the best players anyway. Ichiro is still in Seattle, Vlad Guerrero didn’t want to play in New York and preferred Anaheim, Albert Pujols is very happy knocking balls into orbit from his St. Louis launching pad. All things don’t have to be completely 100% identical to be close to fair.
"For myself I am an optimist - it does not seem to be much use being anything else." -- Winston S. Churchill
by Baroque on Sep 7, 2009 9:42 PM CDT up reply actions 0 recs
In baseball, St. Louis will always punch above its weight. It is, perhaps, the one true baseball city in the US. There are plenty of other cities where baseball does well, but they are generally good sports cities. St. Louis is one place where the football team has trouble getting on sports talk radio.
In addition to this meaning that the Cardinals have more money than teams in similar sized towns, it’s just a great place to be on the team. I think that they have a very good chance to hold on to El Hombre.
by J. Michael Neal on Sep 7, 2009 10:17 PM CDT up reply actions 0 recs
Well, I’m glad to see that you concede there is some effect when rich teams out spend poor ones in excess of a 2 to 1 margin.
The defense of baseball’s marked disparity usually comes in the form of citing exceptional cases (which doesn’t really tell us much about the typical team). “Look a poor team, like Tampa made the playoffs!” These statements are made without any discussion of the COSTS entitled to fans in poor markets. Tampa Bay is a cheap contender in MLB today because they stunk for a full decade and piled up elite (and cheap) prospects.
As soon as their prospects are eligible for arbitration or near free agency Tampa will be forced to have a firesale (like Oakland the last few summers—Tim Hudson, Rich Harden, etc) as they try to turn their rising star into a handful of good cheap prospects.
Even the well managed Oakland A’s are having a much more difficult time contending these days as the rest of MLB has come to appreciation just how valuable prospects are. You can’t flip Rickey Henderson rental for Steve Karsay as easily. Oakland is also no longer able to exploit a market in-efficiency on offense as other clubs now properly value OBP. Smart teams can exploit stupid big spenders, but when the big spenders catch on, the force of superior salary numbers becomes quite powerful.
The “suck and contend” strategy requires fans to support a team through the bad years until “the kids” mature. Assuming all the kids mature on schedule and your star pitching prospect’s arm does go kaput (Mariners prospect Anderson)—even then they only have a narrow window of contention. If the poor team is unlucky and has a key injury to their best player the entire strategy could blow up. And after those years of stockpiling prospects they have nothing to show for it. Is this really the best way for MLB to develop baseball fans? I think not. As a sport baseball would benefit from a more payroll parity.
The MLB numbers I posted are correlation coefficients not r-squared. Here are the post-lockout correlations for the NHL as a point of comparison.
NHL Cap $ to NHL Standings Post-Lockout
2006 .340
2007 .289
2008 .376
2009 .339
Payroll and income are weakly correlated under the current CBA.
re:Yes, there are salary pressures on payroll for winning teams. However, in the long run I suspect that market size (or market share in mutli-team cities) probably accounts for payroll as much as previous season’s wins.
All things Thrashers + stats: www.birdwatchersanonymous.com
by The Falconer on Sep 7, 2009 10:17 PM CDT up reply actions 1 recs
Beyond that, I’m not at all sure that there shouldn’t be an advantage for large revenue teams. They generate higher revenues because they have more fans. If the goal of winning is that fans should be happy, there’s a utilitarian argument that big market teams should win. Fortunately, I’m not a utilitarian beyond a certain point, and so I don’t take this to extremes. But I’m also not willing to concede that a perfectly level playing field is the ideal towards which we should strive.*
This kind of goes to your causation correlation argument. Do they generate more revenue because they have more fans, or do they have more fans because they generate more revenue? I think there’s more of the latter than the former.
If that is the case then new teams, and small market teams (who generate little revenue and have no fan base) should have no chance in a utilitarian argument, as they would merely be there as an opponent to the large revenue teams.
If this were the case, then fans should not support this team, as they have no chance at winning. Driving their revenues down and leaving them even less fans. Once the revenues bottom out then they will either fold, or need financial help from larger revenue teams in order to continue being fodder for them (like college football or English Premier league).
Is this the healthiest environment for a sport to thrive for the long term? I don’t think that question has a solid answer, but I’m inclined to believe it isn’t.
The 2009-10 Colorado Avalanche: Aiming for the Charity Point
Jibblescribbits: C'mon over and waste some time
by Jibblescribbits on Sep 8, 2009 11:55 AM CDT up reply actions 0 recs
If that is the case then new teams, and small market teams (who generate little revenue and have no fan base) should have no chance in a utilitarian argument
Well, yes. That’s probably I said that I am not, strictly speaking, a utilitarian. The argument only holds true to a point.
by J. Michael Neal on Sep 8, 2009 11:32 PM CDT up reply actions 0 recs
They generate higher revenues because they have more fans.
And they have more fans because they’re in bigger, more lucrative markets. That alone shouldn’t be an advantage in terms of what happens on the field.
Blogging on hockey at fromtherink.com
by James Mirtle on Sep 8, 2009 4:33 PM CDT up reply actions 0 recs
Why not? As I said, it leads to a higher aggregate level of fan satisfaction if the teams with more fans win more games.
All of these debates seem to start with the assumption that all teams should have an equal chance to win. This assumption almost never gets challenged. I’m challenging it, because I do not believe that it is true.
by J. Michael Neal on Sep 8, 2009 11:31 PM CDT up reply actions 0 recs
The issue is that many of the non-traditional market teams in a sport like hockey, with minimal revenue sharing, will be basketcases and fail. We’re seeing that right now.
Blogging on hockey at fromtherink.com
by James Mirtle on Sep 8, 2009 11:48 PM CDT up reply actions 0 recs
Should so much revenue be shared that teams don’t ever get forced out of business?
by J. Michael Neal on Sep 9, 2009 10:08 PM CDT up reply actions 0 recs
There shouldn’t be so many poor markets that that’s an issue. If you have three or four teams to prop up, that’s sustainable, but not eight or nine.
The league’s not going to contract, and there’s not really anywhere new to go, so what happens?
Blogging on hockey at fromtherink.com
by James Mirtle on Sep 10, 2009 3:53 AM CDT up reply actions 0 recs
I don’t know. However, I think perpetually propping up failed businesses is not a good idea.
by J. Michael Neal on Sep 10, 2009 8:02 PM CDT up reply actions 0 recs
That’s the bed they’ve made. Phoenix won’t be the last team no one wants to own.
Blogging on hockey at fromtherink.com
by James Mirtle on Sep 10, 2009 8:35 PM CDT up reply actions 0 recs
To some extent, the league as a whole is one business.
I've been looking at the sky
by Back In Black on Sep 10, 2009 11:41 PM CDT up reply actions 0 recs
The Islanders
Other then needing a new Rink, I don’t see how the Islanders are #3 on the list. They have a comptent front office, they have real ownership and for the first time in years they have a GM with a long term plan.
When the Islanders won they were selling out the Colosseum on a nightly basis. They have a market of Rabid fans who just need a good team. Atlanta and Florida both look in a lot worse shape to me.
by WebBard on Sep 7, 2009 10:34 AM CDT reply actions 0 recs
Other then needing a new Rink
No offense, but in this case that’s a little like saying “Other than the cancer, the patient was completely healthy”.
I've been looking at the sky
by Back In Black on Sep 7, 2009 11:02 AM CDT up reply actions 0 recs
No kidding.
There’s a reason Nassau County Colosseum is referred to as the “Mausoleum.” There’s no allure to such a place and the team has been mediocre to poor lately. Fix the place up and make it a place people want to go to and improve the on-ice product and that solution is amended.
by HockeyJoe on Sep 7, 2009 11:11 AM CDT up reply actions 0 recs
That might even boost the product on the ice as well. They wouldn’t feel like they were playing in a lifeless box!
by lightweight on Sep 7, 2009 11:13 AM CDT up reply actions 0 recs
The Islanders are quite likely losing the second most cash a season right now, and without a building, are the second most likely team to relocate in the near future. That’s a problem.
Blogging on hockey at fromtherink.com
by James Mirtle on Sep 7, 2009 12:14 PM CDT up reply actions 0 recs
Revenue sharing with a salary cap is quite ridiculous. The NHL would likely be better off with MLB’s system, wherein top spenders simply go into luxury tax area after spending a certain amount. Hate all you want about the Yankees (and recently, the Red Sox) being consistently good, but the fact of the matter is that baseball has had more parity in World Series champions this decade than the NBA has had with Finals champions or the NFL has had with Super Bowl champions. Baseball’s primary flaw has been how it shares the taxed money and revenue with its lower clubs. Teams like the Pirates profit before selling a ticket – which is why revenue sharing has to be tied to at least some level of expense.
Nevertheless, baseball has had an incredible array of mid-range (spending) teams win titles and make it deep into the post-season and even win the Series. The Yankees havenet even won since 2000, in spite of their payroll.
If Detroit or Toronto or whoever wanted to outspend the Atlanta’s and Nashville’s of the world, who cares? It won’t guarantee them success. And it would allow lower teams to slowly build up their talent and fanbase (a la baseball’s Rays) before jumping into the mid-range and competing for titles.
by VA Libertarian on Sep 7, 2009 12:27 PM CDT via mobile reply actions 0 recs
Playoff appearances by the Yankees in the past 14 seasons: 13.
Playoff appearances by the Red Sox in the past 14 seasons: 8.
Playoff appearances by the Toronto Blue Jays, Baltimore Orioles and Tampa Bay (Devil)Rays, past 14 seasons combined: 1.
Yeah, that’s parity, all right. Fun to watch, too, no matter which team you’re a fan of (as long as it’s the Yankees or Red Sox).
(in a couple of months, btw, that’ll be 14, 9 and 1)
I've been looking at the sky
by Back In Black on Sep 7, 2009 1:40 PM CDT up reply actions 1 recs
I agree w/ what Adam said to a large degree.
It’s worth nothing though that I’m more talking about profitability than parity. NHL teams, aside from the top eight to 12 franchises, just don’t make enough dough.
Blogging on hockey at fromtherink.com
by James Mirtle on Sep 7, 2009 1:46 PM CDT up reply actions 0 recs
True enough. And it’s a fair question whether competitive parity helps or hinders profitability. On the one hand, it’s hard to imagine NHL franchises remaining profitable if they never get a sniff of playoff success – and the five troubled teams on your list are currently mired in the standings basement as well.
On the other hand, baseball seems quite happy with the attention attracted by the Yankee and Red Sox dynasties, and I’ve heard NFL fans grumble about having too much parity.
I've been looking at the sky
by Back In Black on Sep 7, 2009 2:24 PM CDT up reply actions 0 recs
On the other hand, baseball seems quite happy with the attention attracted by the Yankee and Red Sox dynasties, and I’ve heard NFL fans grumble about having too much parity.
Partially because the Yankees and Red Sox pay a lot of money to the league in luxury taxes. I think I read one year that the Yankees’ luxury tax was enough to pay for the entire Tampa Bay payroll. They spend a lot of money, but pull in large ratings on televison, draw a lot of fans when they are visiting teams, and pay to help the other teams.
"For myself I am an optimist - it does not seem to be much use being anything else." -- Winston S. Churchill
by Baroque on Sep 7, 2009 2:28 PM CDT up reply actions 0 recs
As investments pro sports teams are probably offer a lower return than many other options. So why do extremely rich people park their money in them? The added value of a) potentially winning it all b) becoming a celebrity owner c) doing something fun with their money other than count it.
I think the key point with the bottom revenue teams is not that they turn an accounting profit per se, but that the finish near the break even point. Most of these owners will make those losses back when they sell due to franchise appreciation. The annual profitability matters less as long as franchise values keep climbing and annual losses are very great.
All things Thrashers + stats: www.birdwatchersanonymous.com
by The Falconer on Sep 7, 2009 3:07 PM CDT up reply actions 0 recs
To the extent that MLB has a revenue disparity problem, you have just named it, in its entirety. The AL East has issues. I don’t really know how to solve them, other than wholesale realignment. If you swapped the Mets and Phillies into the AL East and moved Toronto and Tampa to the NL East, I think you’d see just about all of baseball’s revenue caused competitive problems vanish.
The Orioles play in a market that’s plenty big enough. They’ve just been grotesquely incompetent. However, Andy MacPhail has them headed in the right direction. I really, really like where the Orioles are going. Wieters, Reimold, Jones, Markakis, Tillman, Matusz, Arrieta: that’s a nice core around which to build.
by J. Michael Neal on Sep 7, 2009 2:34 PM CDT up reply actions 0 recs
Could be, although it may be worth pointing out that the Yankees and Red Sox have also combined to win the “wild card” playoff spot more often than the 9 Central and West division teams put together.
I've been looking at the sky
by Back In Black on Sep 7, 2009 2:51 PM CDT up reply actions 0 recs
If they were in separate divisions they would both win more often than not. At least with one of them getting the wild card, they both don’t have home field advantage in the first round.
"For myself I am an optimist - it does not seem to be much use being anything else." -- Winston S. Churchill
by Baroque on Sep 7, 2009 3:04 PM CDT up reply actions 0 recs
Maybe so, but also irrelevant to a claim that it is impossible for teams to compete. Even if you assume that both of those teams will make the playoffs every year, an assumption at odds with reality, every team would be competing for its division crown. Even as is, every team in the Central has the chance to beat every other team, and go to the playoffs. The same is true of the other four divisions. The only teams that are really screwed by the system are Toronto and Tampa.
by J. Michael Neal on Sep 7, 2009 8:05 PM CDT up reply actions 0 recs
I’d yell at you and say the Orioles are screwed by the system, too, but I think Peter Angelos screws them all by him self. Sigh.
by RedBirdie on Sep 7, 2009 8:58 PM CDT up reply actions 0 recs
I really like the direction MacPhail is taking the Orioles, and Cuban Pete may be too busy planning his estate to get in the way any more. In addition to the guys I mentioned above, I think Josh Bell has a chance to be a very good first baseman, and some of the non-Tillman & Matusz pitchers that came up this year could do well filling out the back of the rotation.
by J. Michael Neal on Sep 7, 2009 10:21 PM CDT up reply actions 0 recs
Tom Boswell had an excellent piece on the Orioles and MacPhail in the Washington Post yesterday (Monday), about the Orioles obvious problems-competing the in AL East-and how MacPhail plans to build the team.
by RedBirdie on Sep 8, 2009 11:37 AM CDT up reply actions 0 recs
The only teams that are really screwed by the system are Toronto and Tampa.
How convenient. The Jays are depressing, and I’m not much of a baseball fan.
Blogging on hockey at fromtherink.com
by James Mirtle on Sep 7, 2009 11:26 PM CDT up reply actions 0 recs
if the Jays were in any other division, they’d be competitive. The problem is the spend-happy nature of the AL East ever since the current Red Sox ownership bought the team and decided that the way to compete with the Yankees and win World Series was to, well, spend like the Yankees. Its creating a nasty cycle. Last year, the Yankees spent over $200 million dollars and didn’t even make the playoffs. The answer? Spend more money!
by RedBirdie on Sep 8, 2009 11:40 AM CDT up reply actions 0 recs
Case in point, a few years ago, the Jays had the 4th best record in the AL, but finished third in the AL East. Tampa has proven that catching lightning in a bottle can lead to success in this division once in a blue moon, but as this season has shown, the window for an AL East team not in New York or Boston is one season. The Rays already had to trade their ace pitcher this year because they just can’t compete.
by Resolute on Sep 8, 2009 12:09 PM CDT up reply actions 0 recs
But their young pitchers this year have shown tremendous potential – the problem is the Tampa bullpen has been blasting away at their own feet with RPGs. If this is the level of pitching they are going to have in their rotation next season, they are going to give the Yankees and Red Sox (as well as everyone else) fits.
But yes, they are at a disadvantage in spending when they share a division with two big spenders.
"For myself I am an optimist - it does not seem to be much use being anything else." -- Winston S. Churchill
by Baroque on Sep 8, 2009 12:22 PM CDT up reply actions 0 recs
And I remember when Halladay, Escobar and Carpenter were going to dominate the AL for years to come.
This is the sad reality of fans in markets that can’t spend with the top teams: your entire existence is based around potential. Always potential. Always the belief that next year will be better than this.
by Resolute on Sep 8, 2009 4:51 PM CDT up reply actions 0 recs
When that potential manifests itself as a good player or two, and the team still struggles, it gets traded for yet more potential. Talk about chasing your tail.
I've seen enough to know that I've seen too much.
by Smoboy41 on Sep 8, 2009 8:35 PM CDT up reply actions 0 recs
Sigh. The one place where I thought I wouldn’t see soul-crushing Jays talk.
Supporter of the Sergei Berezin "Give and Go" - You give me puck, then you go to hell
by bkblades on Sep 8, 2009 10:50 PM CDT up reply actions 0 recs
Make it stop…
Blogging on hockey at fromtherink.com
by James Mirtle on Sep 8, 2009 11:49 PM CDT up reply actions 0 recs
Chin up, lads. This riveting baseball season is almost at an end.
I've seen enough to know that I've seen too much.
by Smoboy41 on Sep 9, 2009 1:12 AM CDT up reply actions 0 recs
It could always be worse. You could be Cubs fans, Pirates fans, or Nationals fans! Toronto has won multiple World Series in fairly recent human memory.
"For myself I am an optimist - it does not seem to be much use being anything else." -- Winston S. Churchill
by Baroque on Sep 9, 2009 5:56 AM CDT up reply actions 0 recs
Someone seems to have beaten into the Nats owners head that they need to back off and let the front office do their jobs. Rizzo pulled off some nice trades to drop dead weight and fill major holes this summer. They might be a .500 club next season, which would be respectable.
And to bring this full circle to hockey, one of the members of the family that owns the Nats is a minority owner of the Caps.
by RedBirdie on Sep 9, 2009 9:22 AM CDT up reply actions 0 recs
So they keep reminding us.
I think people just want the Jays to contend for a playoff spot these days, not win it all. Our expectations are pretty low.
Blogging on hockey at fromtherink.com
by James Mirtle on Sep 9, 2009 12:17 PM CDT up reply actions 0 recs
Of all the Toronto sports teams, the Jays are the closest to being playoff contenders.
I've seen enough to know that I've seen too much.
by Smoboy41 on Sep 9, 2009 1:10 PM CDT up reply actions 0 recs
Naw, it’s way easier to make it in the NHL and NBA. Especially in the East.
Blogging on hockey at fromtherink.com
by James Mirtle on Sep 9, 2009 1:19 PM CDT up reply actions 0 recs
The Jays are still closer.
I've seen enough to know that I've seen too much.
by Smoboy41 on Sep 9, 2009 1:31 PM CDT up reply actions 0 recs
I wouldn’t be shocked if either the Leafs or Raptors made it this year as a very low seed. The Jays have no hope.
Blogging on hockey at fromtherink.com
by James Mirtle on Sep 9, 2009 1:40 PM CDT up reply actions 0 recs
The Rays have Price, Shields, and Garza already proven in the majors, and Davis, Hellickson, Barnese, McGee and some others still in the minors. They have a lot more than wishcasting on three guys.
This is a lot of the difference between the Rays and the Jays. Tampa has done a tremendous job developing young players, as well as dumping the ones that don’t develop off on other teams. Under Ricciardi, Toronto has been terrible at developing players until the last two years. Also watch the differenc ein how they handle their finances. The Rays saw that they have a bunch of young pitching, and decided that Scott Kazmir was a risk they didn’t want to take. So he’s gone. Any luck unloading that Vernon Wells contract?
by J. Michael Neal on Sep 8, 2009 11:40 PM CDT up reply actions 0 recs
The AL East is the exception. In the other 5 division, there’s considerably more parity.
by RedBirdie on Sep 7, 2009 3:45 PM CDT up reply actions 0 recs
Victor Hedman, Alex Tanguay, Mattias Ohlund — they’ll help, but you don’t go from where this franchise has been to a raging success overnight.
I’m not necessarily sure this is the case. The lightning were a lot better once they got rid of Melrose last season. I mean, they were still bad, but not to the level their record would indicate. In December and January, after Melrose but before Smith was hurt, they were 11-13-3. Not great by any standards, but at least competitive.
I don’t think they will make the playoffs, but I think the Lightning will make some strides this season and surprise a lot of people. They still have Lecavielier, St. Louis and Mike Smith, plus the three you mentioned above make for an interesting team.
The 2009-10 Colorado Avalanche: Aiming for the Charity Point
Jibblescribbits: C'mon over and waste some time
by Jibblescribbits on Sep 7, 2009 3:58 PM CDT reply actions 0 recs
I would agree with you for pretty much the reasons you provide here – and overall, their roster looks decent on paper – but I doubt that Tocchet has what it takes to be an NHL head coach.
by Malurous on Sep 7, 2009 4:10 PM CDT up reply actions 0 recs
They are taking a bit of a gamble on him.
by yrmom on Sep 7, 2009 5:05 PM CDT up reply actions 5 recs
cant believe no one rec’d this.
Glen Sather is a Hockey Genius.
http://glensathersucks.com/
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by poploser on Sep 9, 2009 11:32 AM CDT up reply actions 0 recs
Done. I was snickering too hard initially to hit the right button. :)
"For myself I am an optimist - it does not seem to be much use being anything else." -- Winston S. Churchill
by Baroque on Sep 9, 2009 12:01 PM CDT up reply actions 0 recs
I think yrmom gets a big chunk of the rec’s handed out. I didn’t rec this comment because I don’t want him/her to get an inflated sense of self worth, resulting in a decline in the quality if his/her zingers. Gotta keep him/her sharp.
I've seen enough to know that I've seen too much.
by Smoboy41 on Sep 9, 2009 1:14 PM CDT up reply actions 0 recs
yeah who knows how good he is. But I think they will be substantially improved this season.
The 2009-10 Colorado Avalanche: Aiming for the Charity Point
Jibblescribbits: C'mon over and waste some time
by Jibblescribbits on Sep 7, 2009 6:56 PM CDT up reply actions 0 recs
I honestly wouldn’t be shocked if they bottomed out again. Smith has been battling some bad concussion issues for a long time, and they have some depth issues up front, especially if there’s an injury.
Blogging on hockey at fromtherink.com
by James Mirtle on Sep 7, 2009 11:28 PM CDT up reply actions 0 recs
Nassau Colosseum
I fondly recall Gillies v the Lions in the 76-77 A.D. season
by garth the hoser on Sep 7, 2009 4:01 PM CDT reply actions 0 recs
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