Jeremy Laura: League revenue lower than I thought

It's hard to come to an agreement when you're not even talking. It feels reminiscent of 1994 and 2004. Not good.

It's hard to come to an agreement when you're not even talking. It feels reminiscent of 1994 and 2004. Not good.
- gergeswillems

Good point

Great stuff! Thanks for sharing, I didn't realize the deficit was so large.

Great stuff! Thanks for sharing, I didn't realize the deficit was so large.
- TommyGTrain

Thanks for stopping by! I was a little shocked myself

When hockey gets closer to resuming:

Seems like Yzerman could reach a mutually beneficial trade with JBB that would only involve players that they wished to get off their rosters and no picks involved..
Why not Tyler Johnson ($1M retained) and Alex Killorn ($.45M retained) for Franz Nielsen $2.625M retained
Tampa gets $5.375M more cap space without giving up a pick or prospect and has ample cap space to sign Cerilli to a 3x $4M bridge deal and only needs to clear $1M more to sign Cernak to a 2x $2.1M deal. Franz can even be buried for more space or utilized in a bottom 6 role. Stevie gets 2 very serviceable middle 6 players and a space for the new center at 2C. Seems like a win-win!
I know TB people do not want Franz but would you rather sacrifice a high pick or prospect? Would Stevie give up on acquiring a high draft pick for something like this?
or

It's difficult to imagine how anyone didn't realize the full revenue impact of a short season with little to no fans in the seats. The handwriting on the wall was pretty easy to read.

Jeremy’s been talking about this for several months, often to ridicule by interlopers. Not saying he’s a sooth-sayer, but he called this a while ago.

The time for posturing, with-holding crucial financials, and blustering has passed. What happens to the players whose teams go under? How much more do players think they’re worth? How can some of these “players” sleep well knowing they make more in one quarter of a year than many of us make in 20yrs? How can owners justify flat out LYING by omission to players AND fans about financials? I know my 1st installment of NHL Center Ice has been paid, I know that the TV contracts are predicated on a set number of games, which fell woefully short this year and will be even more impacted in the upcoming season.

This shirt is embarrassing. Shirt or get off the pot, “professionals” save the game for the sake of the game and ditch you GD egos. 😡🤬🤦🏼

It's difficult to imagine how anyone didn't realize the full revenue impact of a short season with little to no fans in the seats. The handwriting on the wall was pretty easy to read.
- Iago

Remember, they made the new deal last June. Projections had fans in buildings by fall. They also thought the playoffs would bring in a boost to the missing revenue. The season was slated to start in November, then December, now January. Original planning had them waiting to come back until fans could be a part of it. From last June a lot has changed. The losses mounted instead of being helped by playoffs. The season kept getting pushed back. Payouts have happened to players with teams having no new revenue since March. That’s almost 9 months of no money coming in and most clubs kept staff on through the summer being paid. The supercedes everything they thought could happen last June, and the “bubble” is a major money pit.

Jeremy’s been talking about this for several months, often to ridicule by interlopers. Not saying he’s a sooth-sayer, but he called this a while ago.

The time for posturing, with-holding crucial financials, and blustering has passed. What happens to the players whose teams go under? How much more do players think they’re worth? How can some of these “players” sleep well knowing they make more in one quarter of a year than many of us make in 20yrs? How can owners justify flat out LYING by omission to players AND fans about financials? I know my 1st installment of NHL Center Ice has been paid, I know that the TV contracts are predicated on a set number of games, which fell woefully short this year and will be even more impacted in the upcoming season.

This shirt is embarrassing. Shirt or get off the pot, “professionals” save the game for the sake of the game and ditch you GD egos. 😡🤬🤦🏼
- mcmastermike1968

Thanks for that. The other TV issue is that NBC deal is up. I have to imagine that center ice isn’t getting many subscribers while there is no hockey. I subscribe to the app and cancelled it out. I’d still be paying monthly if i hadn’t. Yeah, the time for a “poker face” is gone. All cards on the table fellas. Let’s do this

It is more fun to talk hockey than talk hockey finances.....

But is rather necessary to state "the state of the game" and besides the love of the game both owners and players would not be there if there was no money to be made. I remember the stories of legends like Gordie Howe and Bobby Hull having to work summers at home on their relatives' farms. All of these players likely have not worked another job or least not for long and likely not full time. Hockey is a year-round sport where if you don't have the ice time you certainly must have the gym time. I wished that when was playing in high school I would have trained in the off season. I was seriously winded in the 3rd period of many games and found myself having to stay on the defensive side of the game so as not getting beaten by a better conditioned guy from the other team. Needless to say I rarely got on the score sheet in the 3rd.
Hopefully these shut-down guvs are forced into allowing some fan participation soon, I really think one could allow a 6th or fifth or the capacity to start. (That would be a record in the Panthers' arena!) These businesses need to have some thing soon! I mean, Sweden has a system to allow fan participation and never shut down!

It's all a negotiation tactic

It is more fun to talk hockey than talk hockey finances.....

But is rather necessary to state "the state of the game" and besides the love of the game both owners and players would not be there if there was no money to be made. I remember the stories of legends like Gordie Howe and Bobby Hull having to work summers at home on their relatives' farms. All of these players likely have not worked another job or least not for long and likely not full time. Hockey is a year-round sport where if you don't have the ice time you certainly must have the gym time. I wished that when was playing in high school I would have trained in the off season. I was seriously winded in the 3rd period of many games and found myself having to stay on the defensive side of the game so as not getting beaten by a better conditioned guy from the other team. Needless to say I rarely got on the score sheet in the 3rd.
Hopefully these shut-down guvs are forced into allowing some fan participation soon, I really think one could allow a 6th or fifth or the capacity to start. (That would be a record in the Panthers' arena!) These businesses need to have some thing soon! I mean, Sweden has a system to allow fan participation and never shut down!
- HenryHockey

Conditioning is so next level any more. Bobby Hull said he would alternate hands while he was pitching hay in the summer to work both sides. Now the guys all have nutritionalists and training groups etc. (well, most of them). The kids get hyper focused at such a young age too. It wasn’t THAT long ago that guys would still smoke in the locker rooms....

The 650 million dollar check the owners are getting this summer from Seattle covers about two-thirds of that billion dollars you are talking about needing to find. Owners probably don't want that included in the calculation, players undoubtedly do.

With every day that passes, I’m starting to think more and more that the whole season is simply cancelled. I also expect at least 2-3 teams to fold/re-locate.

No matter how much Bettman pretends, NHL hockey is just not on the same U.S. national level as MLB, NBA and especially the NFL. In fact, except for the northeast, the upper Midwest and a few other spots here and there, it’s probably also behind golf, college football and basketball, and nascar in overall popularity.

Too many teams are still vitally dependent on gate revenue to make playing in empty arenas viable. It sucks, but it’s just the reality of the situation

Great blog Jeremy.
I really enjoy reading your level-headed takes!

Seems pretty clear to me the Players need to take a dose of reality medicine, as horrible as it tastes.

The 650 million dollar check the owners are getting this summer from Seattle covers about two-thirds of that billion dollars you are talking about needing to find. Owners probably don't want that included in the calculation, players undoubtedly do.
- Antilles

That check was paid out more than a year ago. The franchise fee was collected and distributed when the franchise was approved. I’ve talked about this a bit before, it does not go to HRR, and that money is all gone. Keep in mind that 650 divided by 30 teams isn’t enough to do player salaries for even half a season.

With every day that passes, I’m starting to think more and more that the whole season is simply cancelled. I also expect at least 2-3 teams to fold/re-locate.

No matter how much Bettman pretends, NHL hockey is just not on the same U.S. national level as MLB, NBA and especially the NFL. In fact, except for the northeast, the upper Midwest and a few other spots here and there, it’s probably also behind golf, college football and basketball, and nascar in overall popularity.

Too many teams are still vitally dependent on gate revenue to make playing in empty arenas viable. It sucks, but it’s just the reality of the situation
- BiggE

I hope that’s not the case, but it feels like we’re walking a tightrope. All the owners have to be on board (they’re not yet). You’re absolutely right. Hockey just doesn’t have the numbers

Great blog Jeremy.
I really enjoy reading your level-headed takes!

Seems pretty clear to me the Players need to take a dose of reality medicine, as horrible as it tastes.
- IonSabres

To be kind about it, at least realize that this season and next are going to be a completely different setup. Everyone is taking a hit, the priority is to try and retain fans and keep the sport alive at this point. The other option is to lower the salary cap to reflect this past year’s revenue and this coming year. That could end up being a 60% drop in the salary cap, and everyone would be up a creek. The deferment and escrow keep everyone from having to do that

That check was paid out more than a year ago. The franchise fee was collected and distributed when the franchise was approved. I’ve talked about this a bit before, it does not go to HRR, and that money is all gone. Keep in mind that 650 divided by 30 teams isn’t enough to do player salaries for even half a season.
- Jeremy Laura

Larry Brooks proposal indicates the fee has NOT been collected yet:

If the NHL needs another $300 million in order to proceed with the 2020-21 season — and that is essentially what Sixth Avenue has represented to the NHLPA — why don’t Gary Bettman, Bill Daly and the Board of Directors simply ask Seattle to advance up to half of the $650 million expansion fee that is currently due before the Kraken’s inaugural 2021-22 season?

Wouldn’t that take care of it, and more appropriately than the owners approaching the players with hands out claiming that the league had massively miscalculated the impact of the pandemic even though the league ran models calculating the impact of the pandemic before agreeing to a six-year collective bargaining agreement extension four-plus months ago?

https://www.hockeybuzz.co...e-revenue-issue/89/108498

Larry Brooks proposal indicates the fee has NOT been collected yet:




https://www.hockeybuzz.co...e-revenue-issue/89/108498
- HenryHockey

I’ll have to double check, but part of getting the whole ball rolling was a partial payout right from the start with another payout that has already been collected. Larry Brooks has been around a while, but his approach is insanely over simplistic. You’re still talking about 1.5 billion in debt from the past season plus an initial payout of player contracts that’s already happened. 300 million between 30 teams is 10 million per, right? How far is that going to go for a team that has a cap of 80 million? It won’t even cover the signing bonuses for some teams. I appreciate the follow up, but I do disagree with Brooks on both the timing of payments that have already been made and the pragmatism of the situation. That entire franchise fee would cover about a third of last season’s short fall. It won’t do anything to move forward

Larry Brooks proposal indicates the fee has NOT been collected yet:




https://www.hockeybuzz.co...e-revenue-issue/89/108498
- HenryHockey

One last thought, expansion fees aren’t considered HRR. Of course Brooks wants to make it look like the owners don’t care. Players have individual sponsorships (some very lucrative) that doesn’t go toward HRR either. On the flip would be owners trying to get those outside sources of income and applying it to the budget. It probably wouldn’t go over well

One last thought, expansion fees aren’t considered HRR. Of course Brooks wants to make it look like the owners don’t care. Players have individual sponsorships (some very lucrative) that doesn’t go toward HRR either. On the flip would be owners trying to get those outside sources of income and applying it to the budget. It probably wouldn’t go over well
- Jeremy Laura

I was just saying that according to Brooks, the $650M fee was not paid yet. I don't really agree with Brooks take on it, but I am intrigued by the proposal and a portion of this fee might subdue the civil war that is brewing between the players and the owners. Maybe $125M could be used to get a season under way and then the players might escrow another say 5%.....that would equal another $125M

I was just saying that according to Brooks, the $650M fee was not paid yet. I don't really agree with Brooks take on it, but I am intrigued by the proposal and a portion of this fee might subdue the civil war that is brewing between the players and the owners. Maybe $125M could be used to get a season under way and then the players might escrow another say 5%.....that would equal another $125M
- HenryHockey

I’m not saying it wouldn’t help, but if I remember correctly, there was a down payment at the beginning when the franchise was approved, as well as subsequent payments.

I’m all for peace in this. You know I have a lot of concern on the player’s take home pay and how much gets carved out. Part of the issue is still the debt from almost 9 months of no fans. All the proposals are in the hope of a “break even” season. There still aren’t actual venues approved or even a schedule. The players have no idea if there will be 65 games or 48 or less. There seems to be a massive disconnect here. How on earth can anyone come together if there really isn’t anything in place? The next set of paychecks are coming, and still no hockey. The hole is just getting bigger and bigger. The other problem is, they’re looking at the franchise fee as the lump sum. It’s not. It’s split into 31 pieces. Maybe Toronto and New York can forego that cash, but there are a lot of other teams swimming in debt. The league is actually 31 separate businesses (more than that depending on ownership groups). Not everyone is in great financial shape. In fact, any groups that own a basketball or baseball team as well are getting hit with mounting losses from both. Lumping everyone together as a single business that once did 5 billion and now down to 2 billion isn’t really a clear picture. At the top are the giants who bring in tons of revenue. At the bottom are smaller companies that are contemplating closing their doors. Too much gets lost in these negotiations and it isn’t helping anyone.

I’m not saying it wouldn’t help, but if I remember correctly, there was a down payment at the beginning when the franchise was approved, as well as subsequent payments.

I’m all for peace in this. You know I have a lot of concern on the player’s take home pay and how much gets carved out. Part of the issue is still the debt from almost 9 months of no fans. All the proposals are in the hope of a “break even” season. There still aren’t actual venues approved or even a schedule. The players have no idea if there will be 65 games or 48 or less. There seems to be a massive disconnect here. How on earth can anyone come together if there really isn’t anything in place? The next set of paychecks are coming, and still no hockey. The hole is just getting bigger and bigger. The other problem is, they’re looking at the franchise fee as the lump sum. It’s not. It’s split into 31 pieces. Maybe Toronto and New York can forego that cash, but there are a lot of other teams swimming in debt. The league is actually 31 separate businesses (more than that depending on ownership groups). Not everyone is in great financial shape. In fact, any groups that own a basketball or baseball team as well are getting hit with mounting losses from both. Lumping everyone together as a single business that once did 5 billion and now down to 2 billion isn’t really a clear picture. At the top are the giants who bring in tons of revenue. At the bottom are smaller companies that are contemplating closing their doors. Too much gets lost in these negotiations and it isn’t helping anyone.
- Jeremy Laura

"The $650-million expansion fee will be divided up between 30 NHL teams. Vegas does not get a cut of the money and is exempt from the expansion draft." Dec 4, 2018.