Lockout: Players or owners?

[offsides]

I guess I am a beneficiary of asset appreciation. My house value has at least quadrupled since I bought it (1978), but I sure don't want to sell it just to get the money. just sayin.

[Steve]

I don't know if there are alot of owners who really don't care if they turn a profit. Many of these franchises are owned by corporations or partnerships, have minority interests etc, or in the Pens case, multiple owners.

As for asset appreciation - it would be interesting to see a comparison against returns of similar risk investments - if that's even possible.

[BurghersAndDogsSports]

I don't know if there are alot of owners who really don't care if they turn a profit. Many of these franchises are owned by corporations or partnerships, have minority interests etc, or in the Pens case, multiple owners.

As for asset appreciation - it would be interesting to see a comparison against returns of similar risk investments - if that's even possible.

The issue is that it is not comparable. A single owner type (even with investors or multiple owners in theory is no different - money going back to ownership) is not nearly the same as a company with stock options. The business side, the %'s, the payouts, the overall businesses couldnt be more different. Plus a team in the NHL is run with extremely high expenses with limited returns (except for a handful of the big money teams) and very limited tangible assets (not in an accounting sense but in a real dollar value sense).

Most teams own very little. They lease buildings, their products are their players and so forth. Their net value is someone buying the right to own the name, agreement with the NHL/NHLPA and things like a lease. If the NHL folded tomorrow there would be nothing to sell by individual teams other than leftover white out tshirts.

[Steve]

I don't know if there are alot of owners who really don't care if they turn a profit. Many of these franchises are owned by corporations or partnerships, have minority interests etc, or in the Pens case, multiple owners.

As for asset appreciation - it would be interesting to see a comparison against returns of similar risk investments - if that's even possible.

The issue is that it is not comparable. A single owner type (even with investors or multiple owners in theory is no different - money going back to ownership) is not nearly the same as a company with stock options. The business side, the %'s, the payouts, the overall businesses couldnt be more different. Plus a team in the NHL is run with extremely high expenses with limited returns (except for a handful of the big money teams) and very limited tangible assets (not in an accounting sense but in a real dollar value sense).

Most teams own very little. They lease buildings, their products are their players and so forth. Their net value is someone buying the right to own the name, agreement with the NHL/NHLPA and things like a lease. If the NHL folded tomorrow there would be nothing to sell by individual teams other than leftover white out tshirts.

Good info, thanks. Owning a team is the same as owning any other business though - you either acquire an existing franchise, or start a new one via expansion (and I assume, a hefty franchise fee to the NHL). For me, it would be interesting to see how they gauge, financially, how their investment is doing - especially for those who may be reporting to a board of directors, for example. Yeah, I'm a nerd sometimes haha.

[MRandall25]

The difference is, most people own businesses to make a living. Owning a sports team is a luxury.

[Steve]

I don't think that's true. If its just a luxury, I don't understand why they would deprive themselves of that luxury via a lockout, while justifying the lockout with purely financial reasons. I could be wrong of course, but it doesn't add up for me.

[MRandall25]

But you can't argue that it's not purely a business, money-making venture on their part. They don't rely on their team to provide them with a living.

[Steve]

Well, I haven't done research on the owners and their intentions etc - but I don't agree in that definition - that it's not a business decision just because they don't rely on it to provide a living. If it was just a luxury, they wouldn't have battled for a salary cap etc - they wouldn't be locking out players for what now seems to be the entire season.

[Sarcastic]

1. Many people willingly lose money. What do you call hobbies, spouses, children, pets etc? Rich people find more expensive ways to lose money because they can. You can't take it with you after all.
2. The rich can have multiple businesses and not all of them make money. Many rich people will have their spouse run a business that never makes a dime, and they just write off the losses.
3. If the world's gonna be wiped out by a plague then your wealth means nothing. Lots of people have long term investments & I'm pretty sure they don't worry about those possibilities.

1. I won't even tackle that one. I feel like I just lost a few brain cells.
2. Do yourself a favor. Don't ever go into business.
3. The amazing thing is that you have somehow completely missed the reason there is a lockout.

Again. If the few of you feel you can find a group of rich guys to buy these businesses knowing full well they won't be self-sustaining, at the least, go ahead and find them. Have the NHL advertise this glorious opportunity of team ownership that results in loss of money. From what I read, there were only 3 teams in the league that made good money. If you guys don't see a problem with that then there is not much else I can tell you.

[shmenguin]

Is the idea that owners expect to lose money year to year actually based on any evidence, or is it just a wild guess?

Smells funny in here

[Gaucho]

Is the idea that owners expect to lose money year to year actually based on any evidence, or is it just a wild guess?

Smells funny in here

They certainly know it's a very real possibility. Is that better?

[no name]

Is the idea that owners expect to lose money year to year actually based on any evidence, or is it just a wild guess?

Smells funny in here

They certainly know it's a very real possibility. Is that better?

In all sports there are some owners who worry more about winning than losing money. If they worried more about losing money salaries would never be what they are now. But in sports competing with the Jones' is the name of the business/

[shmenguin]

Is the idea that owners expect to lose money year to year actually based on any evidence, or is it just a wild guess?

Smells funny in here

They certainly know it's a very real possibility. Is that better?

Yeah, that's better.

But to boil this down to the point at hand...do owners think their team is an investment or a business? How often do pro sports teams change hands because of the owner wanting to cash out? Rarely, right? Even though some owners are moments away from the grave, they still hold on to their teams. I don't believe they approach ownership like people are saying. They want to be owners. They like being owners. They want their families after them to be owners. Where is this idea that they're just waiting to flip their assets coming from?

[interstorm]

As for asset appreciation - it would be interesting to see a comparison against returns of similar risk investments - if that's even possible.

on average, NHL team appreciation from 2005 to current day did much better than ownership of the average stock on the Dow in the same time period. don't take my word -- go crunch some numbers.

here are some specifics (again) on NHL franchises:

Rangers bought for $195M in 1997 and estimated at $750M now. This is an increase of $555 million in 15 years ($37M per year).
Canucks bought for $207M in 2005 and estimated at $342M now. This is an increase of $135 million in 7 years ($19.29M per year).
Oilers bought for $170M in 2008 and estimated at $225M now. This is an increase of $55 million in 4 years ($13.75M per year).
Senators bought for $92M in 2003 and estimated at $220M now. This is an increase of $128 million in 9 years ($14.22M per year).
Penguins bought for $107M in 1999 and estimated at $288M now. This is an increase of $181 million in 13 years ($13.92M per year).
Flyers bought for $150M in 1996 and estimated at $336M now. This is an increase of $186 million in 16 years ($11.63M per year).
Devils bought for $125M in 2004 and estimated at $205M now. This is an increase of $80 million in 8 years ($10M per year).
Capitals bought for $85M in 1999 and estimated at $250M now. This is an increase of $165 million in 13 years ($12.69M per year).
Kings bought for $113M in 1995 and estimated at $276M now. This is an increase of $163 million in 17 years ($9.59M per year).
Sharks bought for $147M in 2002 and estimated at $223M now. This is an increase of $76 million in 10 years ($7.6M per year).
Ducks bought for $70M in 2005 and estimated at $192M now. This is an increase of $122 million in 7 years ($17.43M per year).
Hurricans bought for $48M in 1994 and estimated at $162M now. This is an increase of $114 million in 18 years ($6.33M per year).
Islanders bought for $130M in 2000 and estimated at $155M now. This is an increase of $25 million in 12 years ($2.08M per year).

Being fair:
Predators bought for $174M in 2007 and estimated at $167M now. This is an increase of $-7 million in 5 years ($-1.4M per year).
Wild bought for $225M in 2008 and estimated at $218M now. This is an increase of $-7 million in 4 years ($-1.75M per year).
Panthers bought for $200M in 2009 and estimated at $170M now. This is an increase of $-30 million in 3 years ($-10M per year).
Blue Jackets bought for $173M in 2011 and estimated at $145M now. This is an increase of $-28 million in 1 years ($-28M per year).

Overall you can see, though, appreciation has done quite well. Some such as Burger will say this is due to appreciation since the cap and doesn't count (whatever that means -- i'll take a hundred million of not counting money any day). Let's look at his stance in detail:

Rangers 2003 estimate is $272M, up from $195M in just 6 years.
Flyers 2003 estimate is $252M, up from $150M in just 7 years.
Capitals 2003 estimate is $130M, up from $85M in just 4 years.
Kings 2003 estimate is $183M, up from $113M in just 8 years.
Hurricans 2003 estimate is $109M, up from $48M in just 9 years.

...Looks like good appreciation there too.

Yeah - I keep posting this (and I know Forbes isn't an authority -- but it is what we have to work with). Others counter with just their "gut" and boo-hooing reality.

Then again - this is a message board. In the history of forums, probably 75% of posts are argumentative and .01% of the time does anyone ever change their mind.

[interstorm]

1. Many people willingly lose money. What do you call hobbies, spouses, children, pets etc? Rich people find more expensive ways to lose money because they can. You can't take it with you after all.

1. I won't even tackle that one. I feel like I just lost a few brain cells.

maybe you never heard of this: http://www.forbes.com/sites/billions/20 ... ricas-cup/

“It’s absolutely an awesome feeling,” said Ellison, who has spent more than $100 million over the years chasing the cup. “I’m really proud to be part of this team. I couldn’t be more proud.”

(also don't forget the tax shelter that "losing" franchises provide owners)

[shmenguin]

As for asset appreciation - it would be interesting to see a comparison against returns of similar risk investments - if that's even possible.

on average, NHL team appreciation from 2005 to current day did much better than ownership of the average stock on the Dow in the same time period. don't take my word -- go crunch some numbers.

here are some specifics (again) on NHL franchises:

Rangers bought for $195M in 1997 and estimated at $750M now. This is an increase of $555 million in 15 years ($37M per year).
Canucks bought for $207M in 2005 and estimated at $342M now. This is an increase of $135 million in 7 years ($19.29M per year).
Oilers bought for $170M in 2008 and estimated at $225M now. This is an increase of $55 million in 4 years ($13.75M per year).
Senators bought for $92M in 2003 and estimated at $220M now. This is an increase of $128 million in 9 years ($14.22M per year).
Penguins bought for $107M in 1999 and estimated at $288M now. This is an increase of $181 million in 13 years ($13.92M per year).
Flyers bought for $150M in 1996 and estimated at $336M now. This is an increase of $186 million in 16 years ($11.63M per year).
Devils bought for $125M in 2004 and estimated at $205M now. This is an increase of $80 million in 8 years ($10M per year).
Capitals bought for $85M in 1999 and estimated at $250M now. This is an increase of $165 million in 13 years ($12.69M per year).
Kings bought for $113M in 1995 and estimated at $276M now. This is an increase of $163 million in 17 years ($9.59M per year).
Sharks bought for $147M in 2002 and estimated at $223M now. This is an increase of $76 million in 10 years ($7.6M per year).
Ducks bought for $70M in 2005 and estimated at $192M now. This is an increase of $122 million in 7 years ($17.43M per year).
Hurricans bought for $48M in 1994 and estimated at $162M now. This is an increase of $114 million in 18 years ($6.33M per year).
Islanders bought for $130M in 2000 and estimated at $155M now. This is an increase of $25 million in 12 years ($2.08M per year).

Being fair:
Predators bought for $174M in 2007 and estimated at $167M now. This is an increase of $-7 million in 5 years ($-1.4M per year).
Wild bought for $225M in 2008 and estimated at $218M now. This is an increase of $-7 million in 4 years ($-1.75M per year).
Panthers bought for $200M in 2009 and estimated at $170M now. This is an increase of $-30 million in 3 years ($-10M per year).
Blue Jackets bought for $173M in 2011 and estimated at $145M now. This is an increase of $-28 million in 1 years ($-28M per year).

Overall you can see, though, appreciation has done quite well. Some such as Burger will say this is due to appreciation since the cap and doesn't count (whatever that means -- i'll take a hundred million of not counting money any day). Let's look at his stance in detail:

Rangers 2003 estimate is $272M, up from $195M in just 6 years.
Flyers 2003 estimate is $252M, up from $150M in just 7 years.
Capitals 2003 estimate is $130M, up from $85M in just 4 years.
Kings 2003 estimate is $183M, up from $113M in just 8 years.
Hurricans 2003 estimate is $109M, up from $48M in just 9 years.

...Looks like good appreciation there too.

Yeah - I keep posting this (and I know Forbes isn't an authority -- but it is what we have to work with). Others counter with just their "gut" and boo-hooing reality.

Then again - this is a message board. In the history of forums, probably 75% of posts are argumentative and .01% of the time does anyone ever change their mind.

So just because something appreciates means that

A) the owner wants to sell it
B) the owner finds it acceptable that is loses money every year

?

[BurghersAndDogsSports]

I never said it doesn't count. I said they were bought on the cheap and we saw major growth in the sport. It was a perfect storm and won't continue.

I also said those are estimated values and not real numbers.

I also said the pens making that money is hilarious, since they were bought at rock bottom prices and had pretty much everything to their way, their yearly increase will slow way down now.

Not to mention many teams lost upwards o $10 million per year, some more.
So your large increase when put in total numbers looks great but it seems you missed a huge piece of the pie.

Why not figure out everyone's losses and instead of casually mentioning losses or focusing on a yearly dollar amount post the totals over those same years?

We all know Toronto makes bank, same with by rangers. But overall the league business model is failiing if we need 3 teams to support the entire league.

[interstorm]

So just because something appreciates means that

A) the owner wants to sell it
B) the owner finds it acceptable that is loses money every year

?

...nope - the owner can keep it (if they want money, you know they can get loans against it -- right?) and for some teams like Anaheim that Forbes estimates lost $10 million a year -- what we don't see is that overall the team has appreciated over $17 million a year. So "losing" money many not really be true if one looks holistically at the franchise.

I'm still for a 50/50 split in revenue -- but as I've said all along, I think the owners have been disingenuous in painting this picture that their franchises are failing and the league is nearing economic collapse at the hands of the players. I think the "hill we die on" rhetoric is harmful and their so-called compromises only look charitable when cast against their original offer.

I cannot even fathom a group of people asking for contract length limits (again, to protect themselves from themselves) after how they signed so many long term ones this year and i really lose respect for these people who are looking to break their promise (contract) that they willingly gave (because redefining HRR in their own interest to pull the contract value back down is just underhanded).

[interstorm]

Why not figure out everyone's losses and instead of casually mentioning losses or focusing on a yearly dollar amount post the totals over those same years?

...hey - i've contributed plenty of numbers. here's a novel idea -- how about YOU figure these out! you're the one who supposedly wants it!

[BurghersAndDogsSports]

So just because something appreciates means that

A) the owner wants to sell it
B) the owner finds it acceptable that is loses money every year

?

...nope - the owner can keep it (if they want money, you know they can get loans against it -- right?) and for some teams like Anaheim that Forbes estimates lost $10 million a year -- what we don't see is that overall the team has appreciated over $17 million a year. So "losing" money many not really be true if one looks holistically at the franchise.

I'm still for a 50/50 split in revenue -- but as I've said all along, I think the owners have been disingenuous in painting this picture that their franchises are failing and the league is nearing economic collapse at the hands of the players. I think the "hill we die on" rhetoric is harmful and their so-called compromises only look charitable when cast against their original offer.

I cannot even fathom a group of people asking for contract length limits (again, to protect themselves from themselves) after how they signed so many long term ones this year and i really lose respect for these people who are looking to break their promise (contract) that they willingly gave (because redefining HRR in their own interest to pull the contract value back down is just underhanded).

It's not about protected themselves from themselves it's about cutting out loopholes to prevent a gap in competitive balance.

Lesser market teams have two choices in the past (see penguins Crosby contract): pay out bonuses and spend dollar amounts yearly that exceed that cap or fall back into the land of mediocre.

[BurghersAndDogsSports]

Why not figure out everyone's losses and instead of casually mentioning losses or focusing on a yearly dollar amount post the totals over those same years?

...hey - i've contributed plenty of numbers. here's a novel idea -- how about YOU figure these out! you're the one who supposedly wants it!

You brought it up for the 30th time and provided only one set of numbers. The rest of have seen them all before, 1000 times in these two threads.

[interstorm]

Why not figure out everyone's losses and instead of casually mentioning losses or focusing on a yearly dollar amount post the totals over those same years?

...hey - i've contributed plenty of numbers. here's a novel idea -- how about YOU figure these out! you're the one who supposedly wants it!

You brought it up for the 30th time and provided only one set of numbers. The rest of have seen them all before, 1000 times in these two threads.

ok - so what's holding you back from getting new numbers? it's ok - the internet won't bite...

[BurghersAndDogsSports]

Why not figure out everyone's losses and instead of casually mentioning losses or focusing on a yearly dollar amount post the totals over those same years?

...hey - i've contributed plenty of numbers. here's a novel idea -- how about YOU figure these out! you're the one who supposedly wants it!

You brought it up for the 30th time and provided only one set of numbers. The rest of have seen them all before, 1000 times in these two threads.

ok - so what's holding you back from getting new numbers? it's ok - the internet won't bite...

Because its been discussed at length, they have been posted 1000 times and again you are the one seemingly focused on one side of the argument.

And even if it had actually turned out that all teams other than a few big markets who made money, broke even every year your numbers only look aIng when you post the total

Teams averaging a profit of $10 million per year using your numbers with no losses yearly is actually perfectly acceptable. The owners deserve to make a little bit too? Sinceoat lost money you can see their yearly profits even with your smoking gun are not all that major.

That's the point.

[BurghersAndDogsSports]

And also your numbers are not real they are guesses. There is nothing that says the pens would sell close to $300 million.

Also in terms of overall business model compared to other %'s since these are individually owned corporations, not many businesses would sell for $300 million cash to a single owner, with the hopes of making barely any yearly profits all the while hoping you can sell and recoup.

These aren't houses.

[interstorm]

Why not figure out everyone's losses and instead of casually mentioning losses or focusing on a yearly dollar amount post the totals over those same years?

...hey - i've contributed plenty of numbers. here's a novel idea -- how about YOU figure these out! you're the one who supposedly wants it!

You brought it up for the 30th time and provided only one set of numbers. The rest of have seen them all before, 1000 times in these two threads.

ok - so what's holding you back from getting new numbers? it's ok - the internet won't bite...

Because its been discussed at length, they have been posted 1000 times and again you are the one seemingly focused on one side of the argument.

So you're asking for information and then, when pushed to get said information, you simply dismiss it saying we're already discussed it and it is readily available. Ok - I see how interested you are in having a real conversion (no need to reply - it's obviously a dead-end like the others we've had).

Side note:

What makes this message board worthwhile? Anyone who comes trolling along just to start an argument really, in my mind, diminishes the value of this place (and no, Burger, I am not pointing any fingers here so calm down). It is perfectly fine to have differences of opinion -- quite often that is actually preferable because with so many people and so many different thoughts we can actually learn something here. That is the crux, though. When posting here (or any message board), it is really useful to actually bring something to the table.

Look at Mikey -- he came up with a fun game (so to speak) and is literally pouring his guts out for our benefit in that thread. We're learning something thanks to his efforts. His dedication, and all of those who bring new information to this message board (whether we agree with it or not) is greatly appreciated.

Look at Canaan - he posts some really funny stuff and takes the time to make some hilarious observations.

How about Jesse dropping his thoughts on player development and prospects...

How about Netwolf with his training camp updates...

The people who post custom Photohopped images...

...they're all adding to this community and bringing something here. We may not agree with them (look and you'll see both Mikey and Canaan and I have disagreed on plenty) but they add to LGP. That is something that makes this place better and something we should all try to strive for.