Thursday, September 30, 2004
Not Just Hockey
If you haven’t been following the CBA situation - and by that, I mean the one in the National Lacrosse League - the owners have now said if there’s not a deal between the league and the players’ association by Friday at midnight, the season may be cancelled.
Some fun comparison stats:
Average salary - NHL $1.8mil, NLL $12,836
Percent of league revenues that go towards salary - NHL 75%, NLL 21.4%
Update: NLL agrees on new CBA, ready for new season
Wednesday, September 29, 2004
Bad Economic Theory
The latest trend in some media outlets and blogs is to declare Bob Goodenow’s theory, that salaries don’t affect ticket prices, as gospel. I’m reading this one too many places recently. A Larry Brooks column I expect, given his stance towards the league right now. Everywhere else? Shame on you for not digging into things further or providing statistics that mean very little.
First off, throw out any one-year stat. Teams raised ticket prices and lowered salaries one year. So what? No one ever said salaries were the only things affecting prices, just that they do on some level. Also, a one-year “trend” is not a trend.
Secondly, don’t compare markets to one another. I know it’s tempting to say that the Wild have higher prices and lower payroll, but once again, it doesn’t mean salaries don’t affect prices. It does mean that market has a big influence and you can raise prices when people will still buy them, but that just means management knows how to turn a bigger profit. However, saying that the Rangers charge more for tickets than the Panthers should be a given. Gas and milk are also more expensive in New York. Every cost related to running the team is probably higher in New York - tickets will probably be more expensive in New York. If hockey was the thing in Miami you could certainly raise prices down there and let them sell the same, but it’s not and they can’t (unlike Minnesota). What does any of this have to do with salary? Easy - base price.
When raising and lowering prices is mentioned - where do you think the starting point is made from? These teams aren’t picking numbers out of a hat. They’re doing their best to figure out if they sold a certain amount of tickets to each game, what price would it take to cover costs best? Obviously tickets aren’t the only thing teams use to cover costs, but the NHL is certainly a gate-driven sport. Salaries are certainly the largest expense in running a team. These salaries help set base prices for tickets year in and year out. If the market supports them, then they remain level. If you’re selling out every game, bump ‘em up; if not, you’ll see teams running special after special. This is because they try to create demand in a way where they don’t lower prices and then raise them back up once a certain level of demand is met. Instead they pull the specials and no one thinks prices have changed a bit (it’s just better marketing).
Don’t be fooled by one-line statistics and spite, the largest chunk of money within one industry certainly has an affect on how that money is made.
Thursday, September 23, 2004
Playing Good Cop
What did he say?:
In an interview with radio station KROQ last Friday, Leiweke said among other things that he believes the lockout will last the entire season and called NHL Players Association chief executive Bob Goodenow “a bald-faced liar.” Leiweke said Goodenow had lied to the players by not telling them of the Kings’ financial losses.
So Bettman has fined him for speaking openly and negatively about Bob Goodenow.
One thing out of this has been very clear: Gary Bettman has been excellent at playing “good cop” throughout the lockout and the days leading up to it. Whether it be former players, team executives or Bill Daly being “bad cop”, Bettman continues to look like he’s being fair and just to the everyone involved.
If this lockout were to be settled by who’s winning the PR war, the league wins this thing easy. Too bad it’s not.
Too Many Marketplaces
After reading the latest Canadian Press report about the NHL lockout and NHLPA head Bob Goodenow’s responses to a Canadian television audience, NHLPA boss says no end of lockout in sight unless league chances stance, you really have to wonder where Goodenow’s “marketplace” ends.
This stands out:
“Hockey players are highly paid and they deserve to be highly paid,” said Goodenow. “It is a marketplace and it has worked for many, many decades and we believe that some type of marketplace going forward is the ultimate fair kind of system for fans, players and owners.
“Our proposals and all of our actions so far have gone towards finding a middle ground. To date, Gary Bettman and the owners have said there is only one solution and that is a salary cap.”
How is any of what he deems a marketplace system fair to the fans? How would it even affect them? Goodenow’s stated repeatedly that the PA deems any system that ties salaries to revenues as a cap, and the union won’t accept a cap. Fans only affect revenue. If revenue cannot control salaries, then fans have zero relevance. I’m sure the response would be that it would be up to the owners to control what they spend based on their own revenues. However, relying on individual team revenues doesn’t set up a league where every team can survive because all it takes is one or two out of thirty to warp the system (turn one or two into about five and you have our current situation).
So in Goodenow’s model owners are the marketplace - and that’s it. That leaves us fans to our own marketplace. But hockey isn’t baseball or basketball and it isn’t even close to football. Hockey is a sport that relies on revenue primarily from it’s fans. It’s more of a ticketsales:revenue sport then any other current major team sport. There are no heavy national tv contracts (or even light national tv contracts) in the US. There’s no big pot to split, no long list of advertisers adding cash to a pile. Hockey has its fans and without them there’s almost nothing left. Fans, unlike national tv contracts, are a lot less predictable. Having a cap system lets salaries fluctuate much smoother with interest in the sport. Another problem is that revenue is more localized. The old “the rich get richer and the poor get poorer” problem that may not bother some in “real life”, but certainly has to in a sports context. If you just let the weak teams keep dying off you’re left with no competition. Sports can’t have team monopolies, no explanation needed there.
At some point the union will have to concede that the “marketplace” is more then just the owners’ checkbooks and perhaps that can get some talks going again.
PJ Interviews John Buccigross
PJ posts his Interview with the former host of NHL2night, ESPN’s John Buccigross. More fun then your average Bettman/Goodenow quote.
Wednesday, September 22, 2004
Will the NHL Maintain Elite Status?
Skip Sauer’s post about the NHL being on thin ice leads me to say something too few are talking about. It’s something I keep going back and forth about with any of the hockey people I know. Players aren’t simply signing over in Europe - some are signing for real money.
Yesterday’s story about Stephane Veilleux was simply about picking Russia over the minors money-wise - but Russia is starting to pay a decent sum to its players and already has million dollar contracts; this is merely a stepping stone if the NHL doesn’t resolve this dispute immediately. What happens when the Russian league gets even stronger during this lockout (and Russia’s middle class continues to grow)?
Suddenly you have homegrown players here in North America “defecting” to Russia. Maple Leafs dreams or not, 18-year old Canadian kids will not think twice about cruising around Europe with a few extra million in their pockets.
Where’s the entrepreneurial spirit over there? I’m quite surprised a few owners haven’t met up to try and build some super league over there (despite a few being named “super league”, it doesn’t exist yet). A few of the best teams in each country’s elite leagues and you still have decently easy travel and tons of competition and talent; and most likely a hell of a lot more revenue as well. You don’t have to abandon the lesser teams either. Most of the leagues can survive a drop of a couple of teams, and some could combine their forces as well to create an upper-tier minor league system over there. There’s a ton of opportunity, and it’s not as risky as it may seem - after all, many Europeans have already signed contracts without escape clauses. Lockout or no lockout, they’re staying there now and it’s foolish to let that much talent fade into the European leagues as they stand now.
If you have a case against a cap, this can certainly be on the list and be believable. The NHL is in more danger of not being an elite league then most care to acknowledge. Hockey does not need a soccer situation. Fans over here do not want to pick one of many leagues or attempt to follow all of them.
Side-note: I’m surprised that the only European league (that I know of) to have a North American television contract is the Swedish Elite League (the SEL has a contract with Rogers Sportsnet in Canada). With so many players in Russia and the Czech Republic, and even a couple of stars in Switzerland, I would expect some local sports stations to at least try and grab a few games from a league where the most local talent has surfaced.
Saturday, September 18, 2004
CBA Considerations
Posted CBA Considerations on hockeyfights.com. General article which would have seemed a bit more original if it wouldn’t have taken me so long to post it, but I still needed to focus on some of the things that really need to be addressed besides just cap or no cap.
Wednesday, September 15, 2004
Lockout Starts 12:01AM Tonight
Gary Bettman is currently announcing the owners have voted unanimously to lockout the players when the current CBA expires at midnight tonight.
Some of his statements (not direct quotes):
- 20 teams are losing money
- Owners will leave if economic model is not changed
- We need a system that eliminates disparities in team payrolls
- No quick fixes, no band-aids
- Any system that links revenues to expenses the PA is defining as a “salary cap”, and that their definition is too loose and any system they present will be deemed a “salary cap”
- The new proposal from the PA was almost a “carbon copy” of previous proposals
- Even union admitted under the current CBA that half of teams would still lose money
- Union’s goal is to keep the status quo or get more
- Union never met with Levitt, even when offered
I “watched” it live on www.nhl.com. My stream wasn’t very good, but we don’t have a great pipe here at work. Video was more like a slow flipbook. Audio was alright, sometimes stuttered, but could just be on my end.
Thanks to Mark Brender from the Hockey News for asking Bettman if he’d play hockey in July. A nice underhanded question for us to get a timetable of how late a season could possibly start.
I hope to catch the union’s press conference later, but the afternoon does look busy, if I do, I’ll be sure to post on it. Either way, you can see the full press releases at The Ice Block or hockeyfights.com.
Hockey - People Care?
So today, on the day of the announcement of a lockout, I’ve already read my first “no one’s going to notice” article, along with a sprinkle of “they’re already dead” and a nice helping of “the sooner the better”. No need to link to that.
ESPN is running polls, as they love to do, and SportsNation has 10 questions about hockey.
To my surprise people are currently caring about the sport. There are only a little under 3k votes right now, but if the current results are any indicator of the general sports public, people care a lot more than most media outlets would like to let on.
Current results:
1) Do you care if there is an NHL lockout?
66.4% Yes
33.6% No2) Which do you feel would be better for the future of the NHL?
76.9% Salary cap
23.1% Luxury tax3) When do you expect the NHL to resume play?
58.0% Next season
29.4% This season
12.5% It won’t4) Who do you expect to make the most concessions when an agreement is reached?
67.0% Players
33.0% Owners5) Is the NHL still a Big Four sport?
51.0% Yes
49.0% No6) Which sport would you miss the most if it skipped a season?
66.2% NHL
20.2% PGA
8.9% NASCAR
4.7% MLS7) Would the lack of an NHL season make you more likely to watch or attend an NBA game?
75.6% No
24.4% Yes8) What is the NHL’s biggest popularity problem?
42.1% Fewer people grow up playing hockey
23.5% No problem, it’s just a niche sport
20.0% Expense of attending games
14.4% Doesn’t translate to television9) Has Gary Bettman’s tenure as commissioner been generally good or bad for the NHL?
62.3% Bad
37.7% Good10) Who is the best player in the game right now?
35.6% Jarome Iginla
35.6% Other
26.0% Peter Forsberg
2.9% Markus Naslund
Now, there’s still plenty of time left to gather votes, and some will say “all hockey sites will link to it”, which may be true - but small hockey websites can do very little to impact voting that is linked from the front page of espn.com.
I’ll update later on to see if there’s a swing in vote the longer it stays on the front of the site.
Update: One hour later, and it’s still on the front page, but not the main story anymore (it’s the secondary story, towards the top right).
The results have boomed in number, but outcome for “what matters” has changed little.
1) Do you care if there is an NHL lockout?
67.6% Yes
32.4% No2) Which do you feel would be better for the future of the NHL?
77.2% Salary cap
22.8% Luxury tax3) When do you expect the NHL to resume play?
57.1% Next season
29.3% This season
13.6% It won’t4) Who do you expect to make the most concessions when an agreement is reached?
67.5% Players
32.5% Owners5) Is the NHL still a Big Four sport?
51.4% Yes
48.6% No6) Which sport would you miss the most if it skipped a season?
66.7% NHL
20.4% PGA
8.7% NASCAR
4.2% MLS7) Would the lack of an NHL season make you more likely to watch or attend an NBA game?
76.9% No
23.1% Yes8) What is the NHL’s biggest popularity problem?
41.0% Fewer people grow up playing hockey
24.0% No problem, it’s just a niche sport
19.7% Expense of attending games
15.3% Doesn’t translate to television9) Has Gary Bettman’s tenure as commissioner been generally good or bad for the NHL?
62.6% Bad
37.4% Good10) Who is the best player in the game right now?
35.4% Other
34.9% Jarome Iginla
26.5% Peter Forsberg
3.2% Markus NaslundTotal Votes: 6,563
Tuesday, September 14, 2004
And So It Ends
Canada has just won the World Cup of Hockey. Normally, this would be a nice, fun time to celebrate for all Canadians, but as all hockey fans are aware: tomorrow is Doomsday for the NHL. The collective bargaining agreement expires and NHL commissioner Gary Bettman is expected to announce there is a lockout at 2:30pm edt (you may be able to watch it live on www.nhl.com, the joy).
Will there be any NHL games played this year?
Will there be any fans who come back after an extended break?
Will the NHL be a major sport again?
Will Eric Cartman find out who his father is? (sorry, just saw that episode)
Insert a corny “Bat Channel” line here, and stay tuned…