tl.
- Irish Blues

link to the constitution you are using please.

the only one I easily found was from 09 and still had EIG as the owners of the Oilers...and anything you said about contraction was not in the section you were citing...may be minor but there could be changes in wording.

From the constitution I read it is obvious that it cannot be an Involuntary Termination. It will need to be Voluntary. In this case the assets of the team will be liquidated and all debt to the league shall be paid. The member will then receive all remaining monies.

Go back and look at the context my comment was made in
- Irish Blues[would the players agree to contraction in exchange for ______]. Yes, I agree with you though - if an owner wants to fold his team tomorrow there's nothing the NHLPA can do about it.

Which is my point. You speak about it as if the league need to negotiate with the players.

This is Business 101. Even if Columbus is losing $17 million a year, the franchise still has value. The physical assets that belong to the team
- Irish Blues[player contracts, merchandise, equipment, office furniture, etc.] is the easiest to recognize, but each franchise also has some intrinsic value. The Blue Jackets existence in Columbus, its association with the other 29 teams, the potential for growth in the fan base and future profits, current and future business relationships with local companies, ... all of those things have some amount of value that cannot be directly measured. The fact that any team is losing $X does not mean the team is worthless.

Absent egregious violations of the NHL Constitution or the League By-Laws, the NHL doesn't have the power to kick a team out at its whim; as such, no owner is going to voluntarily take a zero on his investment in a contraction scenario. [Commentary about how that ability could damage the values of all franchises omitted for the time being.] In a liquidation, the value of some assets is written down to zero and the value of other assets is written down markedly; in the scenario everyone is describing, the owner is giving up the ability to sell the team [along with all of the intrinsic value embedded in the franchise] for future gain or to limit current losses. No one is going to just hand that over for free because someone asks "pretty please."

I never said the team was worthless, but Business 101, as you said, will tell you that you are in it for the purpose of making money with a viable business. After spending x to purchase the franchise, the team is losing money to the tune of 20 million every year, there is a limit as to the amount of losses. Those losses will equal the initial cost of investment in a short amount of time. That is bad business.

Through liquidation the member keeps all monies earned after the league has been paid whatever debt is owned to them.

Irish keeps bringing up how contraction does not do anything because if you contract the bottom 2 then that will just push the cap around making other teams fall into the "have-not" section.
- OilHorse

Correction: I stated that contracting doesn't fix the problem of needy franchises and actually puts some teams in a worse position.

Very simple example: say the current average revenue/team is $100 million, the two lowest teams have revenues of $50 million, and the cap is $65 million [.57 x $100M + $8M] with the floor at $49M. If the lowest two teams are cut, the average revenue/team moves up to $102.87M and so the cap moves up to $66.6M and the floor to $50.6M. Every other remaining team who needed help now has a higher cap floor to work with, which means they need more help than before. The money "saved" by cutting 2 teams is partially lost by additional need from the remaining teams; depending on how revenues are distributed, the #15 team may now qualify for [and receive] revenue sharing as well. While there will be some savings, it won't be dollar-for-dollar.

The only way to eliminate revenue sharing is to either (1) have all teams generate revenues in a range narrow enough to not require revenue sharing, or (2) pool some sources of revenues outright to help accomplish 1. Even if you decrease the players share to 50%, if you don't make any other changes to how the cap is calculated that are realistic, as long as a handful of teams generate most of the revenue and they grow revenues faster than everyone else, it's inevitable that at some point the cap floor will once again move higher than what low-revenue teams can afford.

Which is my point. You speak about it as if the league need to negotiate with the players.
- OilHorse

I was responding to Chinaski's comment, where he was asking if there was a scenario where the players would agree to contraction in exchange for something. While you're right that the players have no say in whether contraction takes place or not [and I don't think I've indicated otherwise], my point was that the players would not agree to any scenario where they lose 100 jobs now in exchange for an IOU that doesn't get realized until years from now [if ever]. I wasn't approaching this from the "would the league negotiate" side, since it was brought up from the players POV.

Hope that clears this point up.

I never said the team was worthless, but Business 101, as you said, will tell you that you are in it for the purpose of making money with a viable business. After spending x to purchase the franchise, the team is losing money to the tune of 20 million every year, there is a limit as to the amount of losses. Those losses will equal the initial cost of investment in a short amount of time. That is bad business.

Through liquidation the member keeps all monies earned after the league has been paid whatever debt is owned to them.
- OilHorse

By and large, I'd rather lose $5 million a year now knowing that in 10 years I'm going to make $150 million instead of making $3 million a year for 10 years, then getting another $10 million. That's the premise some owners work under. Some owners look at owning a team as an expensive hobby, and so losses are largely a matter of indifference. Sure, few people want to go lose money intentionally [unless you're trying to buy your way to a title], but it may be cheaper to lose money on an annual basis than to close up shop completely - especially if you think you can make money going forward.

Columbus? The team has been terrible for 10 of its 11 years. It has had exactly one (1) season where the team scored more 82 or more points, has a moron for a GM, and just watched its franchise player get shipped out. If you're in the area, do you want to plunk down $50 per to see that team? It would be one thing if they were putting up 95-100 point seasons, making the playoffs, and still losing $17 million per year - but there's lots of reasons to think that team can be profitable. Is now really the time to throw in the towel? If anything, it's the time for some prospective owner to swoop in and buy cheap.

I was responding to Chinaski's comment, where he was asking if there was a scenario where the players would agree to contraction in exchange for something. While you're right that the players have no say in whether contraction takes place or not
- Irish Blues[and I don't think I've indicated otherwise], my point was that the players would not agree to any scenario where they lose 100 jobs now in exchange for an IOU that doesn't get realized until years from now [if ever]. I wasn't approaching this from the "would the league negotiate" side, since it was brought up from the players POV.

Hope that clears this point up.

Which was a question to Yost's comment about the Union's likely objections to contraction if it was being considered.

So, basically, the way this plays out is that the League doesn't need to negotiate contraction with the Union (original question). However, if they felt it was their best option going forward, it would negatively impact the negotiations since the Union would object, but have no say, in losing the jobs via contraction.

Is that a fairly accurate summary?

link to the constitution you are using please.
- OilHorse

Same one you're looking at.

the only one I easily found was from 09 and still had EIG as the owners of the Oilers...and anything you said about contraction was not in the section you were citing...may be minor but there could be changes in wording.
- OilHorse

I didn't say anything about contraction in Article 3, because it's not mentioned there. At best, it's in 3.7 under "Voluntary Termination" though the league has no power to arbitrarily kick out teams "because we feel like it" or "for the good of the game" or any other such reason.

From the constitution I read it is obvious that it cannot be an Involuntary Termination. It will need to be Voluntary. In this case the assets of the team will be liquidated and all debt to the league shall be paid. The member will then receive all remaining monies.
- OilHorse

See above. The Constitution doesn't spell out what happens in a contraction; if the team is otherwise in good standing and hasn't done anything to warrant its termination under 3.9(b)(i)-(x), the NHL has no power to kick it out.

Which was a question to Yost's comment about the Union's likely objections to contraction if it was being considered.

So, basically, the way this plays out is that the League doesn't need to negotiate contraction with the Union (original question). However, if they felt it was their best option going forward, it would negatively impact the negotiations since the Union would object, but have no say, in losing the jobs via contraction.

Is that a fairly accurate summary?
- Chinaski

Pretty much - but see my comment on the power the NHL has to contract teams without cause.

Same one you're looking at.
- Irish Blues

I am doubting it...

I didn't say anything about contraction in Article 3, because it's not mentioned there. At best, it's in 3.7 under "Voluntary Termination" though the league has no power to arbitrarily kick out teams "because we feel like it" or "for the good of the game" or any other such reason.


See above. The Constitution doesn't spell out what happens in a contraction; if the team is otherwise in good standing and hasn't done anything to warrant its termination under 3.9(b)(i)-(x), the NHL has no power to kick it out.
- Irish Blues

No? You never said anything about Section 3.12?

Oh?

The League has the right to revoke a franchise only if specific events take place
- Irish Blues[specific violations of the Constitution or League By-Laws, or a violation of either that an owner refuses to remedy]. Even so, Section 3.12 of the Constitution specifies that if the team is dissolved by order of the League, the owner of that team receives monies left over after all assets are sold and all expenses are paid. The MSG/NHL fight never got anywhere close to "do it or we'll revoke your franchise" level, so any attempt to make that jump is a misrepresentation of what was really "at stake."

However, 3.12 applies to any involuntary termination. Nothing in the NHL Constitution gives the NHL the power to revoke a franchise "because we feel like it." If the league goes asking franchises "could you please drop out?" no one is going to do so and take a voluntary zero and walk away; they're going to want to be reimbursed for the value of the assets in the team and the intrinsic value of the franchise. Perhaps assets cover some of the cost - but no team [not even the Leafs or Canadiens] has assets worth more than the value of the franchise.

Twice you mention section 3.12 of the Constitution in regards to Franchise Termination. There is no Section 3.12.

So which Constitution are you using? I begin to think that while you use many words you use them not to actually make a point, but to distract from the fact that you don't know as much as you say.

The league cannot force a contraction on a team that has not broken its good standing, but they can contract easily if a team is willing.

You posted:

By and large, I'd rather lose $5 million a year now knowing that in 10 years I'm going to make $150 million instead of making $3 million a year for 10 years, then getting another $10 million. That's the premise some owners work under. Some owners look at owning a team as an expensive hobby, and so losses are largely a matter of indifference. Sure, few people want to go lose money intentionally
- Irish Blues[unless you're trying to buy your way to a title], but it may be cheaper to lose money on an annual basis than to close up shop completely - especially if you think you can make money going forward.

A) Many of these teams that are in the contraction discussion are losing more than 5mil...some have recently won a Cup...All have paid more than 150mil for their teams...so to add that losing 5mi (on a cheap end of the stick) every year is an ok proposition is not entirely a fair conclusion.

We all understand that these owners have these teams as a hobby, and their wealth is not tied directly to the franchises. But there comes a time when losing 10+ million year after year will cause enough disillusionment in the hobby to want out.

In the case of Phx, and probably CBJ, there is not enough interest to buy these teams, or there are too many hoops to jump through to make it worthwhile.

If CBJ contracts (willingly since I doubt they are not in good standing and thus the league cannot force them out) then it all gets sold off, the league gets what is owed to them and then the owner gets the remainder. There is no reason to believe that there may not be a potential deal worked out where the liquidation is split in a more favourable way for the owner to ease the pain of losing his franchise. Maybe after the payment of the arena lease is paid and small % is sent to the league and the lion's share to paid to the owners.

Trust me, I do not think the league will contract. Obviously there is a reason why Phx is still a franchise, even if 99% of the people do not understand it. Still, contraction is a better idea to help close the sieve that is the bottom teams on the coffers of the league.