Monthly Archives: September 2012

NHL LOCKOUT – HOCKEY RELATED REVENUE

Gary Bettman NHL

By captcanuk (NHL Comissioner Gary Bettman on Flickr) [CC-BY-3.0], via Wikimedia Commons

I don’t pretend to know much about the economics of the NHL lockout – or economics in general – and that’s why I haven’t spent much time or energy, beyond one post really, on discussing whyexactly the NHL is currently in a state of disarray.  In the article linked to, I talked about how one of the main sticking points in this whole shit-show, is the definition of Hockey Related Revenue.  As a very quick recap, HRR is what pays the players’ salaries, and comes out of things like ticket sales etc., and currently the players receive a 57% share of that, and the owners take home 43%.

People who support the owners have argued that owners have to pay for costs (e.g. travel expenses for the team) and employees salaries out of that 43%, so the owners don’t actually take much of that for themselves at all.  My counter to that at the time, and I still stick by it, is don’t forget the non-Hockey Related Revenue.  Whilst probably nowhere near the amount that HRR brings in, I expect it’s still a significant chunk of cash.

Elliotte Friedman, a terrific columnist for CBC, has a piece up from last week which sheds some further light on hockey related revenue, and how it’s not as cut and try as 57-and-43.

Among the main points:

  • Owners can deduct a percentage of costs from HRR.  This happens before the 57/43 split between Owners and Players.  As Friedman explains, Hockey Related Revenue is a NET FIGURE, i.e. “revenue minus costs”.
  • The most important paragraph might be this:

It’s complex stuff. But what it comes down to is that when NHLPA executive director Donald Fehr says the players don’t really get 57 per cent of HRR, these cost exemptions are what he’s talking about. As revenues rise to last season’s record of $3.3 billion, the value of those direct costs increases as well because they’re all percentage-based. I’ve seen the NHLPA use 51 per cent as the actual number.

When Bettman says the owners only have 43 per cent of the revenues to pay their costs, it drives the NHLPA insane because it feels the league’s already subtracted enough from the equation and any further issues are simply mismanagement. Clearly, the NHL and its owners feel otherwise.

  • Concessions are an interesting item in HRR.  They bring in a lot of revenue for the teams, as people buy a ton of food and drink at games.  Friedman states that owners can deduct up to 54% of the revenue brought in from concessions to pay towards costs, and then essentially I suppose the remaining 46% is then divided up 57/43 between the players and the owners.  So, if I’m reading this right (correct me if wrong), the owners essentially receive 54% of revenues from concessions (which is HRR) to pay for costs, and then nearly another 20% on top of that which can be used how they see fit (i.e. to them or towards costs).
  • On the other hand, as Elliotte explains, premium/club seats and Luxury Suites sold in arenas, which bring in a vast amount of revenue, are only allowed to have very low amounts deducted from them (less than 4% for club/premium seats and 0% for Suites).  So obviously the share on these IS a lot closer to 57/43 – at least in theory.  Apparently owners are getting around this due to the fact that a lot of these seats are sold in packages, for example with free parking (which has a deductable amount of 30%) and/or some free concessions.  As the concessions have a far larger amount of revenue to be deducted for costs, owners will transfer the costs of these seats/suites onto the concessions/parking costs, so they can claim more.  The players see this as cheating the system; to be fair it seems like a loophole that any business savvy person would likely exploit, but I understand completely why the players don’t like the idea of it.
  • The Luxury Suite issue doesn’t end there.  There’s the further issue of how the arenas in the league are used.  Some are home to one team, i.e. just an NHL team, whilst some are home to two, i.e. an NHL and an NBA team.  Arenas with only an NHL team must submit 65% of luxury suite earnings to HRR, whilst 35% goes directly back to the owners.  Arena’s with an NHL and an NBA team, must only allocate 32.5% of luxury suite earnings to HRR.  The players understandably think this is a bit low, and according to Friedman would like to see these figures rise to to 100% and 50%, respectively.
  • To put that in simpler terms, and again if I’ve got this right, at the moment 35% of luxury suite earnings for one-team arena’s goes back directly into the owners pockets; the remaining 65% does NOT go to the players but is submitted as Hockey Related Revenue, which is then divided again into the 57/43 percentages.  That means for sure that the owners are getting significantly more than the 57/43 split suggests they are, likely a lot closer to 50%.

In my opinion, the argument that owners have to pay costs out of their 43% whilst players don’t is invalidated in light of the above evidence; I would think that by the time HRR is calculated, most of – or at least a good deal of – costs have already been paid for, and the rest is basically take-home pay for the owners.  Remember that in most cases, the owner is just one man – that’s a lot of money going to one man.  And good on him, he’s built his empire and taken the risk with a sports team, putting up his own money, thus he deserves to get the biggest chunk of the pie.  The reason I say the biggest chunk of the pie, even though on the surface it looks like the players get more, is that the 57% the players get is split between many players – not just one or two, but nearly 800 players league-wide as opposed to just 30 owners.

In terms of numbers, look at it this way: for arguments sake lets say HRR amounted to $2 billion this past year; the players share would amount to $1.14 billion, whilst the owners would receive the remaining $860 million; split the $1.14 billion between 800 players, and that’s an average of $1.425 million per player; split the $860 million between the 30 owners and that’s $28.67 million per owner, after a good deal of costs and plus non-HRR.  That’s a massive difference on a man-to-man basis, over a 1900% increase in pay.  And let’s also not forget that these owners have their own businesses that brought them their millions or billions in the first place, the money they receive from their sports teams is basically just a nice little side-earner anyway.  I get that it’s not as black and white as that, and my figures might be out a bit, I don’t know, but from my point of view the argument that owners don’t get enough is a non-starter.

Anyways, check out the CBC article and make your own minds up, but I think the NHLPA has a legitimate point about not giving up too much of their current 57% share, as it’s not a true representation of what they actually get in comparison to the money made by the league.

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EIHL BREAKING NEWS: NHLer ANTHONY STEWART SIGNS WITH NOTTINGHAM PANTHERS

Anthony Stewart NHL Carolina Hurricanes

By Benjamin Reed (Anthony Stewart) [CC-BY-SA-2.0], via Wikimedia Commons

As per the EIHL website, NHL 4th Line Forward for the Carolina Hurricanes Anthony Stewart has joined the Nottingham Panthers here in Britain, on a short term contract in case the NHL lock-out ends before the end of the season.  Here is a description of Stewart from my Carolina Hurricanes 2012/13 Season Preview:

The not-quite-so-talented brother of St Louis Blues forward Chris Stewart, Anthony did nonetheless manage to put up solid production playing limited minutes (8:07 per game) in a 4th line role.  He’s big and physical and is capable of putting some points on the board, though he needs to improve his shot differentials, as they weren’t good playing against soft competition.  A half-decent 4th liner, there are worse players out there, but I’d rather have someone a bit more reliable from a defensive standpoint.

Whilst Stewart is not exactly the “NHL Star” they paint him to be in the press release, it is a small coup for the British League, managing to snare a guy who has lots of very recent NHL experience.  He has only been full-time in the NHL for the last two seasons, but he has been playing sporadically in the league since 2005-06, has lots of AHL experience, and is a former 1st rounder, so is certainly not without skill or hockey playing ability.  He should certainly be one of the better players in a league like the EIHL.

He should be making his debut tonight against the Cardiff Devils.

Exciting day for Nottingham fans!

HALL VS SEGUIN VS SKINNER: THE STUPIDEST NHL DEBATE OF THE LAST TWO YEARS (PART 4)

Previously, we saw how Seguin made a huge leap forward in his second season, leading this talented trio – as well as his own entire team – in scoring.  We also saw Hall improve significantly but still continue to struggle with injuries, and Skinner also had injury troubles coupled with worse luck than his rookie year and subsequently struggle to put up as many points, though he still had a solid season.

This instalment is going to take a look at their overall careers so far and how they match up.  Seeing as Skinner won the first bout, and Seguin took the title in the second, will this be Hall’s moment to shine?  It might not be that simple.  Let’s take a look.

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HALL VS SEGUIN VS SKINNER: THE STUPIDEST NHL DEBATE OF THE LAST TWO YEARS (PART 3)

Jeff Skinner NHL Carolina Hurricanes

In the last instalment, we left off with Jeff Skinner having hands-down won the Calder Trophy over the likes of Taylor Hall and Tyler Seguin in the 2010-11 season, despite having been drafted slightly later and being nowhere near as highly touted as those two.  This led to a sudden surge in the number of people declaring Skinner the winner of the Taylor vs. Tyler debate (!), and a surprising number of daft suggestions that Hall and Seguin were busts and Skinner should have been the number 1 pick.  Riiiiiiight.  It is absolutely safe to say that Skinner came out of nowhere that season; no-one, absolutely no-one could have expected that kind of season.  Skinner even earned comparisons with Justin Bieber, for crying out loud.  I bet he loved that.

As I pointed out in the conclusion of the last instalment, I believe that Skinner was in the perfect situation to succeed, and that is certainly not to take anything away from him.  How can you?  If a guy puts up those numbers, how can you complain?  I won’t complain about the fact the Jordan Eberle suddenly put up 76 points in 11-12 – but that doesn’t mean a lot went right for him to have that kind of season.  Skinner got the ice time benefit that Hall had over Seguin, and the better-team advantage that Seguin had over Hall.  Not to mention he was helped by a pretty high 14.4% shooting percentage that year; that total isn’t really high, like Eberle’s this past year, but it is well above average.  You can’t judge a player’s true shooting ability after 1 or 2 seasons, you have to see at least 3 or 4 years of a sustained shooting percentage in the same range.  And this year, his percentage dropped – as we shall see later.

So, there was a new entrant to the competition, making it Taylor vs Tyler vs Jeff.  Not quite as catchy, but a popular debate nonetheless.

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TSN’S BOB MCKENZIE RELEASES PRELIMINARY 2013 DRAFT RANKINGS

We may be in the midst of (yet another) lockout, but that doesn’t mean other forms of hockey in North America and around the globe aren’t still going about their business.  For the next group of 17/18 year old players around the world, the most important year of their lives so far is coming up.

Bob McKenzie, who has earned a reputation as the most connected man in hockey, has compiled his preliminary rankings of the Top 10 Draft Prospects for the 2013 NHL Entry Draft.  The list is not McKenzie’s own thoughts and scouting reports, but rather a consensus list put together after talking to scouts from around the world and getting their lists, and combining them into one.  Whilst this list could be quite different to the one he’ll put together just before the draft takes place, it’s very interesting to follow each of these prospects throughout the year to see who rises to the challenge, and who falters.  For example, last year Windsor Spitfires d-man Nick Ebert was one of the most talked about prospects in a year that had many great defensive players, and was initially ranked inside the Top 10.  However, he had an awful year and ended up being the very last player drafted, at 211th Overall by the LA Kings.  That said, by the time you get to the final list, you could disregard your own team’s scouting reports and go by McKenzie’s, and come out with some damn good players.  It’s great stuff for a Draft Nerd like me.

So without further ado, here is the list, along with 11-12 scoring stats:

1.       NATHAN MACKINNON – C – HALIFAX MOOSEHEADS (QMJHL)

58 GP

31 G

47 A

78 P

2.       SETH JONES – D – PORTLAND WINTERHAWKS (WHL)

52 GP

8 G

23 A

31 P

3.       SEAN MONAHAN –  C – OTTAWA 67s (OHL)

62 GP

33 G

45 A

78 P

4.       ELIAS LINDHOLM – C – BRYNAS J20 (JUNIOR SEL)

36 GP

14 G

35 A

49 P

5.       RASMUS RISTOLAINEN – D – TPS (SM-LIIGA)

40 GP

3 G

5 A

8P

6.       ALEKSANDER BARKOV – C – TAPPARA (SM-LIIGA)

32 GP

7 G

9 A

16 P

7.       ANDRE BURAKOVSKY – RW – MALMO J20 (JUNIOR SEL)

42 GP

17 G

25 A

42 P

8.       JACOB DE LA ROSE – C – LEKSAND J20 (JUNIOR SEL)

28 GP

4 G

9 A

13 P

9.       CURTIS LAZAR – C – EDMONTON OIL KINGS (WHL)

63 GP

20 G

11 A

31 P

10.     KERBY RYCHEL – LW – WINDSOR SPITFIRES (OHL)

68 GP

41 G

33 A

74 P

  • I think just about everybody wants to see how MacKinnon will do this year.  The comparisons with Crosby are rife:  they’re both from Cole Harbour, Nova Scotia; they both attended Shattuck St Mary’s boarding school in Minnesota; and they both played and were drafted 1st Overall in the QMJHL at age 16. MacKinnon isn’t quite as dominant at the same age as Crosby was, at least in terms of eye-popping scoring totals, but MacKinnon is without a doubt a stunning prospect and at this point the consensus no.1 pick.
  • Seth Jones has an interesting story, being the son of former NBA star Popeye Jones, but he is an outstanding athlete in his own right.  He’s big, mean, and dominating.  If he turns out like his scouting report suggests he should, this kid will be a hell of a player.
  • A nice number of centres on the list following last year’s heavy amount of d-men, particularly the Canadian contingent of MacKinnon, Monahan and Lazar.
  • The fact that an amazing talent like Hunter Shinkaruk of the Medicine Hat Tigers (WHL) didn’t even get into the Top 10 (yet) speaks to the potential quality of this draft.  Shinkaruk had 49 goals and 91 points last year, in a league that is generally regarded as more difficult to score in than the other two CHL leagues.  He might be slightly small in stature, but I can’t ignore those numbers.
  • I love Swedish players but I can never figure out the young ones.  Very few put up good totals in the SEL, and it’s tough to gauge the quality of the Swedish junior system.  The fact that Filip Forsberg was so highly rated last year despite mediocre scoring totals in the Swedish 2nd Division just baffles me, but then I guess that’s why scouts go to games and don’t just sit at home reading stats like me!  It’ll be interesting to see what Lindholm, Burakovsky and De la Rose can do this year, and if they can make it to the SEL proper.
  • Nice to see some Finns in the Top 10 aswell, they’re among my favourite players – an Oiler’s team has never won a Cup without a Finn in the lineup! – and it’s about time there were some really highly rated ones in the draft.  Maatta and Teravainen were the only two last year, and they were ranked as mid-first rounders generally.  The year before, in 2011, Joel Armia was the only Finn drafted in the entire first round.
  • The one guy I’ll be really following is Lazar.  Not only is he based in Edmonton, but he’s been highly rated for a couple of years now and hopefully he really takes a leap forward this year.  He’s a physical, stocky guy with high-end talent, but has only shown flashes of it so far, although he did turn it up a notch in the playoffs, tying for the team lead in points with 19 in 20 games, as the Oil Kings romped to the WHL Championship.

NHL LOCKOUT: MORE PLAYERS MOVING OVERSEAS

As per TSN, the following players have moved to professional leagues in Europe:

  • Artem Anisimov (KHL)
  • Patrik Berglund (SEL)
  • Ilya Bryzgalov (KHL)
  • Roman Cervenka (Czech)
  • Logan Couture (Swiss)
  • Viktor Fasth (Swedish-2)
  • Andrew Ference (Czech)
  • Valtteri Filppula (SM-Liiga)
  • Jesse Joensuu (SM-Liiga)
  • Radek Martinek (Czech)
  • Michal Neuvirth (Czech)
  • Lennart Petrell (SM-Liiga)
  • Tomas Plekanec (Czech)
  • Luca Sbisa (Swiss)
  • Vladimir Sobotka (Czech)
  • Tomas Tatar (Slovakia)
  • Semyon Varlamov (KHL)
  • Jakub Voracek (KHL)
  • Marek Zidlicky (Czech)
  • Roman Josi (Swiss)

BRITISH ICE HOCKEY FANS, FOLLOW THIS LINK: THE HISTORY OF TONY HAND’S DOMINANCE

All fans of British Ice Hockey, or any ice hockey fans for that matter, must read this excellent piece from Ben Massey, one of the writers at the terrifyingly brilliant Copper N Blue blog, on British legend Tony Hand.  It talks about placing into context just how good he was and for how long.  Definitely worth a read.

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