NHL loses almost $300 million last year

Wow!

I guess the MLS has got a long way to go before it can be considered a "real" sports league like the NHL. What did the NHL use for a business model? The NASL?

 

You lost me here. Their last year?

 

before a crippling strike.

of course they predicted a crippling strike for baseball last year and it never came off. but the horizon doesn't look too promising for hockey at the moment.

 

I'd LOVE to see these books. I bet some of the losses would rival "There's Something About Mary" for comedic value.

Franchise values, peoples. Franchise values...

 

Offhand, I don't think I'd put much stock in that figure - or in any claims about the size of losses made by owners in a league that's about to negotiate a collective bargaining agreement.

 

That was an increase of 35 percent from the $218 million in operating losses incurred by the league last year.

Two years and half billion dollar later in loses. If MLS does it right in the next 10 years, you can kiss hockey good bye as the "fourth" major sport. As soon as the general population perceives soccer as "major league" (I.e. close to or better than foreign leagues), the floodgates will open...

 

You think?

From the article:

"The losses are blamed on soaring player salaries."

Now there's a shock. NHL ownership going to the media blaming player salaries for huge losses. I can't believe it.

 

Thanks. That makes more sense.

 

Here's some links:

Here's Forbes listing of the values of NHL franchises since 1998:

http://www.hockeyresearch.com/mfoster/business/franchisevalues.html

Here's the one they did in December of last year:

http://www.forbes.com/free_forbes/2002/1223/098tab.html

The key column in the latter link is the fifth one "Annualized Change in Value" which basically tells you on average the percentage in value the team has gained per year since the current owner purchased the team.

Forbes also estimates that the NHL lost 300 _thousand_ dollars last year before "interest, taxes and depreciation." "Interest, taxes and depreciation" roughly translates to "things that aren't real operating losses, but the league claims they are in its official statements."

 

There's an analyst on Sportsnet that states that as many as 5 teams could go under. That is just a conservative estimate.

Players salaries are to blame, but so are owners who aren't willing to draw a line in the sand.

 

If they conspire to limit player salaries, I think that equals collusion. The only way is to get the players to agree to it. Of course they have to get a salary cap. A hard cap, not a half measure like baseball. I'm hopeful that they can resolve this peacefully, with the current clubs intact.

 

I'm as skeptical of the NHL figures as I was of the MLS figures. Namely, it's in both leagues' interest -- heck, any league's interest -- to plead poverty as a tactic.

That in no way, shape or form means that the NHL doesn't need to change the way it does business, because it does. But in this chess game of negotiations, the NHL moved a pawn.

From what I recall reading, teams are already sitting on their checkbooks and not opening them as wide for this summer's free-agent market, so as not to get caught in any salary cap bind for 2004-05. I wish I had a link to provide for that, but I can't find one at the moment.

As for a lockout ... it could happen, and it could wipe out a whole season. But if baseball avoided a work stoppage, so could the NHL. This will be an interesting story to watch.

 

There's a report out there somewhere from a Kings fan (with knowledge of accounting) who was given an opportunity to examine their books. His assessment was not at all rosy -- as best I recall his diagnosis, a lot of clubs built up an overreliance on expansion fees, which have dried up with the league at (or even past) its maximum size.

I'd be surprised if the $300 MM figure wasn't inflated, but when you consider recent happenings in Buffalo and on Long Island, I don't think the league is at all healthy.

The Boston Bruins are the most extreme example of setting contracts up with a new CBA in mind... at one point, they had arranged so that they didn't have any contracts crossing the expiration of the current CBA.

 

Of course it would, but they're supposed to be competitors. (Plus I'm unsure whether collusion is forbidden by their CBA like it is in MLB) Nothing's stopping the Red Wings from spending less on player salaries. If they were _really_ going broke, it would seem they would have no choice but to do so.

I'm not saying there's not some work that the NHL can do to more equitably distribute revenues (IE: teams keep the share of the revenue they themselves create for the league), but there's no way the league has really lost a half a billion dollars the last two years. There would be no league if that was the case, and franchise values sure as hell wouldn't have outpaced the stock market.

 

Just to clairify, the players are not going on strike, it's the owners who will be locking out the players.

I think evenutally there has to be a cap. Players should be paid based on performace. Like how can Holik be paid 10 million??? Players want like 3-4 million dollar raises after 1 good year. Then they have problems scoring.... example, Igilna.
There has to be a cap, otherwise this trend will continue of teams like the Rangers who spend 10 million+ on one player and teams like the Wild and Flames spend 30 million for the whole team!!!

Players are going to have to realize that a cap will be a must. What are their other options? play in the WHA? (who has a cap), play in Europe? (where teams don't play much), or just sit at home (and get paid nothing)....

 

Collusion doesn't need to be prohibited by the CBA -- it's prohibited by federal law.

 

This is what happens when players make millions of dollars a year but interest in the league isn't high. I am not a fan of NHL, and I don't know many people who are. When I see hockey highlights on ESPN, I see tons of empty seats. This does not surprise me at all.

 

Does anybody else this this "news" -- combined with WUSA's demise -- as a bargaining chip MLS can use with the MLSPA? I would think the spors league doom and gloom we've been hearing about would be in the minds of the players when/if they sit down with MLS to hammer out a CBA.

 

I think MLS and the the new MLSPa will try to work out smaller yet significant issues such as:

* Raising the minimum salary.
* A "Larry Byrd" exception for veteran players.
* A limited form of free agency.
* Possible pension plan.

I think MLS players are aware of the state of sports leagues in the US, the economy as well as their playing options. I doubt if they'll shoot for the moon.

If the NHL wants to dump 5 clubs, my guess is that two of them'll come from Canada (Edmonton, Calgary and possibly Ottowa). I wonder what are the other teams on the bubble?

 

Is it? If it is, it's part of anti-trust law. There is no law that prevents collusion in baseball. It's written into the CBA.

 

That's a historical anomaly. It's in the CBA because baseball has a congressionally-created exemption from federal anti-trust laws. Sports otherwise aren't exempt from the anti-trust laws. A federal court found that the NFL owners were conspiring to restrain trade (with regard to players' salaries).

 

I do know that the baseball owners lost a couple of arbitrations over the collusion issue in the 80's, and had to pay the players a huge pot of money.

 

Jersey for rent
With the NHL reporting US$300-million in losses, it may not be long before the players become human billboards for advertisers.

http://www.nationalpost.com/sports/story.html?id=039F46EC-6E9A-49CD-847B-4169BF54A6E7