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Major issue: What exactly is hockey-related revenue?

Oct 17, 2012, 12:30 PM EDT

Kevin Bieksa Getty Images

In a letter to the players, NHLPA chief Donald Fehr raised concerns that the NHL’s new 50-50 offer may not be quite what it seems.

The league, Fehr says, wants to “clarify” hockey-related revenue. And since the players would receive 50 percent of that HRR, it’s rather important they know how HRR is defined.

“It is not immediately clear what ['clarify'] means, but so far all of [the NHL’s] ideas in this regard have had the effect of reducing HRR, and thereby lowering salaries,” wrote Fehr.

Canucks defenseman Kevin Bieksa echoed Fehr’s sentiments.

“I think people have to be cautious about this 50/50 split,” Bieksa said Tuesday, as per canucksarmy.com. “This is, as far as I’m concerned, a PR gimmick: it sounds great on paper but everyone should be asking themselves ‘50/50 of what?’ Everything’s relative, it sounds great but if there’s omissions by them from what’s included in HRR then we’re making 45 per cent.

“You have to be careful when you hear the words ‘fifty-fifty’. I don’t really like it. For them it’s a PR gimmick.”

Suffice to say, if the NHL wants to significantly alter the definition of HRR, there could be a significant problem. Because while the 50-50 split is in line with leagues like the NBA and NFL – and, as such, sounds fair to the fans – each league defines revenue differently.

Economist Andrew Zimbalist explains.

“You have to be very cautious when you start doing cross-league comparisons because the definition of revenue and even the definition of compensation differs from league to league,” Zimbalist told The Star-Ledger. “To simply believe, as [commissioner Gary Bettman] seems to believe, the other leagues went down to 50-50 and that’s where [the NHL] needs to be is not a very persuasive argument.”

In addition, if the NHL wants to dramatically re-define HRR, the NHLPA may in turn request its own changes to the formula. For example, it may demand the players get a share of expansion/relocation fees. They didn’t under the last CBA, and with potential expansion/relocation to places like Toronto, Quebec City and Seattle, the league could be looking at a windfall in the neighborhood of $1 billion.

Related: Fehr has a few issues with the NHL’s new offer

  1. id4joey - Oct 17, 2012 at 12:56 PM

    Yep! Both sides have to agree on the definition of HRR. The owners, I’m sure are looking to minimize HRR so they can cash in, which is ok, but the players need to know up front what it will cost them.

  2. semin28 - Oct 17, 2012 at 1:21 PM

    I agree^

  3. fortwaynekomets - Oct 17, 2012 at 1:42 PM

    take the 50-50 and start playing hockey already!

    come on PA, step up to the plate!

    • kitshky - Oct 17, 2012 at 3:31 PM

      50-50 of what…?

      Will the HRR include relocation fees, beer sales, parking revenue, losses placed on the books of the franchises (potentially from the owners other businesses), and so on and so on.

      It’s a $3B negotiation … it’s not as simple as “just take it”.

  4. rtookey - Oct 17, 2012 at 1:45 PM

    50% of anything is better than 0% of anything… SIGN ITTTT…

    I really will never understand why people go on strike. You sit around fighting for a minimal raise, meanwhile, you’re losing your salary for the entire time you’re striking and the raise, if they choose to accept and give it to you, will take 10 years to make up for the lost money while you were sitting on strike. If the players “Just wanna play” then sign the deal and play. The Cap has DOUBLED since the last CBA, you’re making big money as it is.

    • davebabychreturns - Oct 17, 2012 at 2:06 PM

      The players are not on strike, for the record. They are locked out. And they offered to play without a CBA so it’s tough to pin the current stoppage on the PA.

      Anyway you could make the exact same argument against the owners locking the players out (ie. “why do they lose money it just to get concessions that won’t be enough to recover from the losses for several years?”). If it doesn’t apply then neither does the argument against the players taking labour action to protect their interests as the stakes are the same for both sides.

      Let’s not forget that the players refusal to accept any offer better than “0% of anything” has already caused the league to increase compensation in its initial offer by about 15% and to remove several of the wackier stipulations from their initial offer as well. So you could say that this labour action is already paying dividends for the players.

      Taking a step back from the context of pro sports, people going on strike has had enormous benefits to everyone in our society; both in terms of workers improving their own compensation and in terms of improving conditions for society as a whole. Sure it’s not always the best thing for everyone (and it’s frequently very inconvenient for some) but suggesting that it’s never a good thing is way off the mark.

      • phillyphanatic77 - Oct 17, 2012 at 9:23 PM

        Couldn’t agree more with all you just said.

      • blomfeld - Oct 18, 2012 at 1:41 AM

        Well I couldn’t disagree less !

        Eloquent words no doubt, by comrade Babych. Nonetheless, his vain attempts to paint these NHL players as “heroes at the ramparts, fighting for the people” make about as much sense as Dairy Queen opening up a new store in Antarctica ! So what if Ovechkin can’t upgrade his driveway from two Ferrari’s to three Lamborghini’s ! I say to hell with these entitled parasites ! They “should and will” accept that which “Reich” Commissioner Bettman offers them. That’s the deal man and there’s no getting away from that !

      • davebabychreturns - Oct 18, 2012 at 10:50 AM

        Your reading comprehension is obviously sorely lacking, if you can’t see the segue into a far more general discussion of labour action in my comment then there’s simply no helping you.

        But hey feel free to imply that I’m a communist (a simply laughable ploy in the year 2012.. you know the cold war has been over for 20+ years right?) because I have a grasp of what organized labour has meant to our society.

        While I am on the subject of hilariously dated references, I have a feeling that if Gary Bettman ever stooped to read one of your posts he would probably not be impressed at your use of Nazi-ish terminology to refer to him. “Reich”? The guy is jewish, you know that right?

        Anyway…

        (In case you miss the segue again I’m going to resume talking about this specific CBA negotiation, instead of continuing to address your clumsy attempts to argue with me)

        ..The players are in this dispute for themselves only, as they should be. Just like the owners are in this for themselves. Thankfully the two sides have extensive common interests so once the animosity and posturing is put aside they should be able to come to an agreement fairly quickly.

      • davebabychreturns - Oct 18, 2012 at 10:54 AM

        PS.

        “I couldn’t disagree less” actually means that you agree with me, by the way. Generally double negatives are frowned upon in the English language.

      • blomfeld - Oct 18, 2012 at 11:33 AM

        touche friend ! :)

  5. elvispocomo - Oct 17, 2012 at 1:51 PM

    I love the phrasing of ‘clarify’ from the NHL. Was the HRR definition ambiguous to begin with? If so, why wasn’t it corrected as a part of the old CBA? They want to further enhance their part of the pie behind the scenes while putting on a pretty face and saying, “Look, we came up to 50% from our first proposal of 43%. See how hard we’re trying?”

    Make no mistake, the NHLPA won’t be able to keep 57% and the current HRR definition. they’ll have to concede a little of one or both to make this happen eventually, or else they’re just as bad as the NHL.

  6. hsnepts - Oct 17, 2012 at 2:05 PM

    Maybe the owners should ask for player endorsements to be part of HRR.

    just kidding. all im trying to say it both the owners and players are allowed to have their own personal revenue streams.

    i dont think expansion fees should go to players. those expansion fees are to represent that the current owners are getting diluted – its basically like when a publicly traded company issues more shares. think of the TV revenue – expansion means the tv revenue is now divided among more teams – thus expansion makes the current owners poorer. It absolutely does NOT make the current players poorer – it actually makes them richer since expansion means more jobs for players.

  7. rpiotr01 - Oct 17, 2012 at 2:21 PM

    This is why the two sides need to be talking to each other face to face about these very questions, instead of, you know, leaking your hopes, dreams, concerns and nightmares to the media.

    The NHL offer could be legit, and it looks to be at first glance. Or there could be stuff in there that makes it a non-starter. The two sides need to meet and figure all that out. If the PA walks away from this framework they should then explain to the public why they did so.

  8. dannythebisforbeast - Oct 17, 2012 at 2:35 PM

    And there’s the poison pill. I absolutely believe the offer was a PR move and hockey will start in December if your lucky.
    If i remember correctly determining what exactly makes up the HRR going forward was an issue that was never rectified and apparently still isn’t

    • blomfeld - Oct 17, 2012 at 4:11 PM

      “what exactly makes up the HRR going forward?” …

      BINGO, BONGO, ROBERTO LUONGO ! :)

      There’s a reason why the owners decided in the last CBA that team salary caps ought to be determined by a percentage HRR. And that reason is quite simple … it allows for total BS ! There’s no way the NHLPA will ever be able to keep tabs on the owner’s “hidden” revenues or “over-inflated” costs. Theses people are “private businessmen” running “private businesses” and so to believe otherwise would frankly be a bit naive on the player’s part. Regardless, it’s amazing that Bieksa is the first person to address this transparent yet “massive” consideration ?

      An analogy could be made to a female shopper who goes “berserk” at the site of a “50% OFF” sign. Instantly her brain is scrambling to compute the potential savings, all the while being completely oblivious to the fact that the seller simply marked up the original base price before applying the 50% discount.

      Anyway, Kevin “Bieska” is an excellent person in my opinion ! He’s a true warrior on the ice and he’s a thoughtful and decent man off of it. Here in Vancouver last year, he was the spokesman for a “Depression Awareness” campaign in the lower mainland … and tonight he hosts his terrific “Kevin & Friends” charity hockey game up at UBC. He, along with other excellent people like the Sedin brothers, Schneider, Burrows, Kesler and Edler, are the reason why I have a genuine respect for this team.

      GO KEVIN GO !!! (ie: though please don’t “go” as much as the Kings, eh?) :)

  9. id4joey - Oct 17, 2012 at 5:55 PM

    Bloomfeld, so you don’t like the French and think women are clueless when it comes to shopping during a sale. what other non related hockey characteristics do you want to share about yourself on PHT?

    • blomfeld - Oct 17, 2012 at 11:54 PM

      Person A: who is this id4joey person anyway ?

      Person B: I’m not sure friend, though I suspect it may be some “French” woman ? …

      id4joey – I’m not sure what your angle is here ? But in reply, allow me to say that I love women and I do greatly admire the French, perhaps even more so than my own bloodlines ? (ie: that’s referring by the way to the “real” French in France, not the Pepsi’s in Quebec or Cajuns down south) In my opinion, this fake “purported” disdain by so many for the French and their culture, is rooted in nothing more than pure “envy” ! Anyway, besides that, I’m a passionate supporter of the LA Kings, in addition to having a keen fondness for Elvis, animals, the USA and “all” that is good ! :)

      *** special video selection for ID4joey ! ***

  10. id4joey - Oct 17, 2012 at 5:58 PM

    Bottom line, players just need to know how much they will loose with this offer. Everything else they don’t care.

  11. id4joey - Oct 18, 2012 at 6:12 AM

    Wow! Now you refer to the Québécois as a Pepsi. The “real French in France” you wrote. You should read your own posts.

    blloomfeld, Oct 13, 2012, 8:41 PM EDT
    Eric Lindros was “wrong” for not reporting for duty with the Quebec Nordiques. And I say that as one whose bloodlines have been antagonists with the French for centuries, so a Frenchie lover I am not !

    • blomfeld - Oct 18, 2012 at 11:49 AM

      Friend, I said that I greatly “admire” the French, which is not the same thing as “loving” them … anyway, you’ll also note that I come to PHT here in the spirit of “good times” and having some fun … unfortunately there are many who either “can’t” or “won’t” share that same happy attitude … oh well, “C’est la vie” eh ? :)

  12. id4joey - Oct 18, 2012 at 1:26 PM

    Bloomfeld, lets be funny by keeping jokes gender and race neutral. there are a lot of social issues around these and other topics which should be considered before making jokes. Anyway! Enough said about this. I look forward to your hockey related posts because they are always relevant and interesting.

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