You've got to love a falling US Dollar

[Knightrider]

Cap goes to $56.7M

[Ghost of Dwight Drane]

Bettman is going to have to cave and let Balsillie take a team soon. There will be a few franchises on the ropes this year. Buffalo will support the Sabres through this, but 2008-09 will be known for exposing Bettman as the clown when his sunbelt teams start going under.

 

There will be a team in Winnepeg soon....and it would be pretty funny if it was Phoenix that went back.

[Guest Sloth]

Cap goes to $56.7M

 

And the separation between the large and small markets is on its way back...

The NHL will begin hurting this season, though. People aren't going to able to afford as many tickets or as much merchandise as they have in the past couple of years. Maybe the salary cap will fall back to 50 million for 09/10 season? Is the salary cap even allowed to go down? <_<

[tom webster]

And the separation between the large and small markets is on its way back...

The NHL will begin hurting this season, though. People aren't going to able to afford as many tickets or as much merchandise as they have in the past couple of years. Maybe the salary cap will fall back to 50 million for 09/10 season? Is the salary cap even allowed to go down? <_<

 

Given that the cap is a percentage of gross revenues, the cap can indeed go down.

 

As for all the doomsayers with regard to the pending apocolypse, I have heard from the days Andy Messersmith signed with Atlanta followed soon after by the attempted sale of Joe Rudi, Reggie Jackson and Vida Blue to the Yankees that pro sports is eating its yound and is doomed to oblivion. Give me a call when one of the leagues disband or one of the owners has to apply for food stamps. Nobody is loosing "real" money. There are certainly different degrees of revenue streams. Florida, Atlanta and Nashville may struggle but Kansas City, Seattle and Las Vegas along with a couple of new wealth Canadian cities will be there to pick up the slack and no matter how much you all hate Bettman, he will continue to be in charge of an industry bringing in more revenue then they ever thought possible.

[Guest Sloth]

Given that the cap is a percentage of gross revenues, the cap can indeed go down.

 

As for all the doomsayers with regard to the pending apocolypse, I have heard from the days Andy Messersmith signed with Atlanta followed soon after by the attempted sale of Joe Rudi, Reggie Jackson and Vida Blue to the Yankees that pro sports is eating its yound and is doomed to oblivion. Give me a call when one of the leagues disband or one of the owners has to apply for food stamps. Nobody is loosing "real" money. There are certainly different degrees of revenue streams. Florida, Atlanta and Nashville may struggle but Kansas City, Seattle and Las Vegas along with a couple of new wealth Canadian cities will be there to pick up the slack and no matter how much you all hate Bettman, he will continue to be in charge of an industry bringing in more revenue then they ever thought possible.

 

You overanalyzed my post. I was simply asking if the salary cap can go down if the NHL isn't making as much money. I never mentiond anything about the league disbanding or losing teams.

[shrader]

no matter how much you all hate Bettman, he will continue to be in charge of an industry bringing in more revenue then they ever thought possible.

 

I hate this logic so much. Someone else could easily do the same thing and in fact, probably make the owners even more money. Unfortunately, the owners will never realize that.

[Goodfella25]

I hate this logic so much. Someone else could easily do the same thing and in fact, probably make the owners even more money. Unfortunately, the owners will never realize that.

 

Not to mention look like less of a slimeball.

[Ghost of Dwight Drane]

Given that the cap is a percentage of gross revenues, the cap can indeed go down.

 

As for all the doomsayers with regard to the pending apocolypse, I have heard from the days Andy Messersmith signed with Atlanta followed soon after by the attempted sale of Joe Rudi, Reggie Jackson and Vida Blue to the Yankees that pro sports is eating its yound and is doomed to oblivion. Give me a call when one of the leagues disband or one of the owners has to apply for food stamps. Nobody is loosing "real" money. There are certainly different degrees of revenue streams. Florida, Atlanta and Nashville may struggle but Kansas City, Seattle and Las Vegas along with a couple of new wealth Canadian cities will be there to pick up the slack and no matter how much you all hate Bettman, he will continue to be in charge of an industry bringing in more revenue then they ever thought possible.

 

I'll give you a call in 2010!

 

It isn't about moving the cap today, it is about throwing teams into growing economies to take advantage of wealth, but not doing enough to build a stable fan base.

 

As the rug that is the economy gets pulled from underneath us all, the NHL will be the first league to feel the pinch to the point of possible extinction. The NFL will lose the most out of this, and there is a good possibility that the Bills will stay in Buffalo because nobody will be able to get the financing to move an NFL team, or by the time Ralph goes, want to finance one.

 

Be VERY careful about the future of the Sabres. You seem to have an inside beat, but I predict this team will be sold by next year at this time. That doesn't mean they will move right away, but if you gave me 3-1 odds on the team being sold...I would take it. When the public starts figuring out how much it really will cost them to go to a Sabres game on a regular basis, the reality will sneak in.

 

Larry and Tommy haven't been in the bunker for no reason.

[tom webster]

I'll give you a call in 2010!

 

It isn't about moving the cap today, it is about throwing teams into growing economies to take advantage of wealth, but not doing enough to build a stable fan base.

 

As the rug that is the economy gets pulled from underneath us all, the NHL will be the first league to feel the pinch to the point of possible extinction. The NFL will lose the most out of this, and there is a good possibility that the Bills will stay in Buffalo because nobody will be able to get the financing to move an NFL team, or by the time Ralph goes, want to finance one.

 

Be VERY careful about the future of the Sabres. You seem to have an inside beat, but I predict this team will be sold by next year at this time. That doesn't mean they will move right away, but if you gave me 3-1 odds on the team being sold...I would take it. When the public starts figuring out how much it really will cost them to go to a Sabres game on a regular basis, the reality will sneak in.

 

Larry and Tommy haven't been in the bunker for no reason.

 

I think they might have an agreement in principle to sell the team before the season starts. I also think that the Sabres are well on their way to becoming one of the leagues stronger franchises especially if new ownership is able to further take advantage of Southern Ontario.

[tom webster]

I hate this logic so much. Someone else could easily do the same thing and in fact, probably make the owners even more money. Unfortunately, the owners will never realize that.

 

Its the same logic that this company was built on. Its all about being in the right place at the right time. Way back when I worked in retail, a manager that they were trying to force out was made to take over a store in Niagara Falls, New York. He went kicking and screaming. Then we had the first wave of Canadian shopping spike and he was a hero and made a small fortune.

You are probably right about someone being able to do it better. However, examples of Board of Directors having the stones to remove the CEO while business is flourishing are few and far between.

[Ghost of Dwight Drane]

I think they might have an agreement in principle to sell the team before the season starts. I also think that the Sabres are well on their way to becoming one of the leagues stronger franchises especially if new ownership is able to further take advantage of Southern Ontario.

 

If they have a short term sale of the team ready to go, there is no way they will sign Miller or Pominville before that due to taxes.

 

This has been my beef all along. The team was not making moves the past few years because of a potential sale. If they were carrying Drury and Briere on the roster, that alone would cost Golisano $15 million in taxes if they get sold this year. It makes sense for them to be as bare bones as possible. I still don't understand how people blindly defend the front office when they basically hid in their offices all year.

 

I hope a strong owner is coming to town, but I don't trust Quinn a bit. I still say his long term goal is to own the Sabres on his own, and he can do that if the team leaves but he gets to keep the arena for bargain basement prices, then waits until his state subsidised corporations build up the area around the arena. He is close enough to Bettman to pull off getting an expansion franchise ala the Cleveland Browns a few years down the line if Balsillie moves the team north.

[tom webster]

If they have a short term sale of the team ready to go, there is no way they will sign Miller or Pominville before that due to taxes.

 

This has been my beef all along. The team was not making moves the past few years because of a potential sale. If they were carrying Drury and Briere on the roster, that alone would cost Golisano $15 million in taxes if they get sold this year. It makes sense for them to be as bare bones as possible. I still don't understand how people blindly defend the front office when they basically hid in their offices all year.

 

I hope a strong owner is coming to town, but I don't trust Quinn a bit. I still say his long term goal is to own the Sabres on his own, and he can do that if the team leaves but he gets to keep the arena for bargain basement prices, then waits until his state subsidised corporations build up the area around the arena. He is close enough to Bettman to pull off getting an expansion franchise ala the Cleveland Browns a few years down the line if Balsillie moves the team north.

 

You've talked about the tax implications of long term deals before and I didn't respond. I broached the topic with someone whose opinion I trusts and he tells me that you have taken a very simplistic approach to the subject and are assuming things you couldn't know with regard to how they internally account for certain things. Furthermore, it is his belief that since these deals are essentially written as a series of one year contracts (in a legal sense) your point is moot.

[Strow]

And the separation between the large and small markets is on its way back...

The NHL will begin hurting this season, though. People aren't going to able to afford as many tickets or as much merchandise as they have in the past couple of years. Maybe the salary cap will fall back to 50 million for 09/10 season? Is the salary cap even allowed to go down? <_<

As is the 'old' NHL way of calling games. It sad to see this happening all over again, larger market teams being able to spend the money and then holding, interference, and refs not calling anything in the 3rd is all back. We lost a year to have 1.5 years of "improved" hockey.

[Ghost of Dwight Drane]

You've talked about the tax implications of long term deals before and I didn't respond. I broached the topic with someone whose opinion I trusts and he tells me that you have taken a very simplistic approach to the subject and are assuming things you couldn't know with regard to how they internally account for certain things. Furthermore, it is his belief that since these deals are essentially written as a series of one year contracts (in a legal sense) your point is moot.

 

It's not how they account internally.....it's how these guys account for it....

 

IRS Sale of Sports Franchise

 

Beware...it's 126 pages, but the info is there.

[Ghost of Dwight Drane]

Specific is chapter 10.....and the real nitty gritty is 10-10.

 

There may be a way to build in the "punishment" in the sales price if the buyer has money growing on trees, but 2 logical investors would have to match numbers and both would try to be crafty in the opposite direction.

 

The BIG tax winfall is the capital gains tax that is now 15% but will go from anywhere between 28-40% under Obama. He said so already. If you start talking $160 million profit...that is a $20-$40 million tax hit that Golisano will have to take under an Obama administration.

 

You are correct that the player contract issue is not as big as the macro issue, but considering Quinn removed HSBC ATM machines from an arena named after the bank so the team could take in the $2 transaction fees.....then I believe contract signings are an issue for a sale.

 

Bottom line....we both agree that a sale is probable. Hopefully it gets done before Quinny is crying about oil again.

[tom webster]

Specific is chapter 10.....and the real nitty gritty is 10-10.

 

There may be a way to build in the "punishment" in the sales price if the buyer has money growing on trees, but 2 logical investors would have to match numbers and both would try to be crafty in the opposite direction.

 

The BIG tax winfall is the capital gains tax that is now 15% but will go from anywhere between 28-40% under Obama. He said so already. If you start talking $160 million profit...that is a $20-$40 million tax hit that Golisano will have to take under an Obama administration.

 

You are correct that the player contract issue is not as big as the macro issue, but considering Quinn removed HSBC ATM machines from an arena named after the bank so the team could take in the $2 transaction fees.....then I believe contract signings are an issue for a sale.

 

Bottom line....we both agree that a sale is probable. Hopefully it gets done before Quinny is crying about oil again.

 

Another reason to expedite the sale. Pretty amazing that the actual dollar amount of capital gains tax may exceed the amount of actual new money he put into the team. Remember, a significant portion of his purchase price was reported to be assumption of debt, some of which was forgiven, some of which was paid for out of team and arena revenue.

[Ghost of Dwight Drane]

Another reason to expedite the sale. Pretty amazing that the actual dollar amount of capital gains tax may exceed the amount of actual new money he put into the team. Remember, a significant portion of his purchase price was reported to be assumption of debt, some of which was forgiven, some of which was paid for out of team and arena revenue.

 

Certainly. There is real cash on the line over the next year for Golisano.

 

I don't know for sure, but I would think Quinn's political connections gave Golisano the edge from day one to buy the team. While many like to paint Golisano as a savior, he really just walked into a sweetheart deal as the lender of last resort. I don't blame these guys for making money...Quinn is very good and sneaky in his dealings. That is why my radar has constantly been on with him.

 

The numbers I'm thinking are that they put up $60 million or so, have made $20 million or so in REAL profit, and will walk out selling the team for $220-250 million. The operating profits wipe out the tax of the sale, and Golisano nets a 200% profit after giving Larry Quinn his cut.

[Ghost of Dwight Drane]

I have to correct myself on Obama. He's backed off in recent months on the long term tax talk. Now he says he won't raise it to over 28%. We'll call that $20 million to Tommy G!

[Eleven]

Bettman is going to have to cave and let Balsillie take a team soon. There will be a few franchises on the ropes this year. Buffalo will support the Sabres through this, but 2008-09 will be known for exposing Bettman as the clown when his sunbelt teams start going under.

 

There will be a team in Winnepeg soon....and it would be pretty funny if it was Phoenix that went back.

 

Amen except for the Balsillie part. And it would be awesome if the Jets went back to Winnipeg.

[nfreeman]

...The NFL will lose the most out of this, and there is a good possibility that the Bills will stay in Buffalo because nobody will be able to get the financing to move an NFL team, or by the time Ralph goes, want to finance one.

 

Be VERY careful about the future of the Sabres. You seem to have an inside beat, but I predict this team will be sold by next year at this time. That doesn't mean they will move right away, but if you gave me 3-1 odds on the team being sold...I would take it. When the public starts figuring out how much it really will cost them to go to a Sabres game on a regular basis, the reality will sneak in.

 

Larry and Tommy haven't been in the bunker for no reason.

 

 

I think they might have an agreement in principle to sell the team before the season starts.

 

 

If they have a short term sale of the team ready to go, there is no way they will sign Miller or Pominville before that due to taxes.

 

This has been my beef all along. The team was not making moves the past few years because of a potential sale. If they were carrying Drury and Briere on the roster, that alone would cost Golisano $15 million in taxes if they get sold this year. It makes sense for them to be as bare bones as possible. I still don't understand how people blindly defend the front office when they basically hid in their offices all year.

 

I hope a strong owner is coming to town, but I don't trust Quinn a bit. I still say his long term goal is to own the Sabres on his own, and he can do that if the team leaves but he gets to keep the arena for bargain basement prices, then waits until his state subsidised corporations build up the area around the arena. He is close enough to Bettman to pull off getting an expansion franchise ala the Cleveland Browns a few years down the line if Balsillie moves the team north.

 

I'm calling BS on about 90% of this thread, specifically:

 

1. There will be no new Canadian teams as long as Bettman is on the scene. None of the owners (US or Canadian) wants this.

 

2. Balsillie will not become an owner as long as Bettman is the commissioner, largely because of #1 above, but also because he royall ticked the other owners off by trying to strongarm his way into moving the Predators to Hamilton.

 

3. Golisano will not sell the Sabres within the next year or the next 3 years for that matter (unless he buys the Bills and is forced by the NFL or economic need to sell the Sabres as part of that purchase). He didn't get into this to make money. He just has no interest in subsidizing recurring multimillion dollar losses. This is classic WNY paranoia/fear and loathing of the wealthy.

 

4. Quinn will not EVER become the sole or majority owner of an NHL franchise. He doesn't have that kind of cash.

 

5. The Sabres' attendance will continue to be strong as long as the team is competitive. The WNY economy has been in the tank for a generation, but the fans have ALWAYS come out for competitive teams.

 

6. The Bills are a far greater threat to be moved than the Sabres.

 

7. I would like to hear a coherent explanation of why giving players long-term contracts results in an increased tax hit if the team is sold, and how this notion can be reconciled with the long-term contracts given to Vanek, Roy and Hecht (and, I'm guessing, about to be given to Miller and Pommer). This sounds like nonsense on its face.

[tom webster]

The NFL will lose the most out of this, and there is a good possibility that the Bills will stay in Buffalo because nobody will be able to get the financing to move an NFL team, or by the time Ralph goes, want to finance one.

 

Be VERY careful about the future of the Sabres. You seem to have an inside beat, but I predict this team will be sold by next year at this time. That doesn't mean they will move right away, but if you gave me 3-1 odds on the team being sold...I would take it. When the public starts figuring out how much it really will cost them to go to a Sabres game on a regular basis, the reality will sneak in.

 

Larry and Tommy haven't been in the bunker for no reason.

I'm calling BS on about 90% of this thread, specifically:

 

1. There will be no new Canadian teams as long as Bettman is on the scene. None of the owners (US or Canadian) wants this.

 

2. Balsillie will not become an owner as long as Bettman is the commissioner, largely because of #1 above, but also because he royall ticked the other owners off by trying to strongarm his way into moving the Predators to Hamilton.

 

3. Golisano will not sell the Sabres within the next year or the next 3 years for that matter (unless he buys the Bills and is forced by the NFL or economic need to sell the Sabres as part of that purchase). He didn't get into this to make money. He just has no interest in subsidizing recurring multimillion dollar losses. This is classic WNY paranoia/fear and loathing of the wealthy.

 

4. Quinn will not EVER become the sole or majority owner of an NHL franchise. He doesn't have that kind of cash.

 

5. The Sabres' attendance will continue to be strong as long as the team is competitive. The WNY economy has been in the tank for a generation, but the fans have ALWAYS come out for competitive teams.

 

6. The Bills are a far greater threat to be moved than the Sabres.

 

7. I would like to hear a coherent explanation of why giving players long-term contracts results in an increased tax hit if the team is sold, and how this notion can be reconciled with the long-term contracts given to Vanek, Roy and Hecht (and, I'm guessing, about to be given to Miller and Pommer). This sounds like nonsense on its face.

 

1) None is probably over the top.

2) I would take that bet.

3) He will. NFL could care less if he owns the Sabres. I agree he didn't get in it to make money, but he also didn't realize the kind of net return he could realize in such a short amount of time. Getting out now allows him to make a huge return, leave with some if not most people considering him a savior and able to continue his charitable work.

4) No doubt, but it would not surprise me if he is again part of new ownership group.

5) Agree. As stated before, I believe this area is in for a huge rebirth as well which will allow revenue to rise exponentially.

6) Its all relative, but agreed.

7) Getting a coherent explanation out of anything in the tax code is almost impossible, but people I know don't believe it adds significantly to the tax bill. I think Dwight's contention has to do with acceleration of depreciation of assets but I too would like to hear his theory without having to read 150 pages of the tax code.

[nfreeman]

1) None is probably over the top.

2) I would take that bet.

3) He will. NFL could care less if he owns the Sabres. I agree he didn't get in it to make money, but he also didn't realize the kind of net return he could realize in such a short amount of time. Getting out now allows him to make a huge return, leave with some if not most people considering him a savior and able to continue his charitable work.

4) No doubt, but it would not surprise me if he is again part of new ownership group.

5) Agree. As stated before, I believe this area is in for a huge rebirth as well which will allow revenue to rise exponentially.

6) Its all relative, but agreed.

7) Getting a coherent explanation out of anything in the tax code is almost impossible, but people I know don't believe it adds significantly to the tax bill. I think Dwight's contention has to do with acceleration of depreciation of assets but I too would like to hear his theory without having to read 150 pages of the tax code.

 

1. You are right -- none is an exaggeration. Still, I would bet that the vast majority of NHL owners are not interested in another Canadian franchise.

 

2. You would probably be wise in taking the bet -- that was probably another exaggeration on my part. Still, I'd bet you $50 to the charity of the winner's choice that Balsillie doesn't close a deal and become an owner in the next 2 years (how's that for a backpedal?).

 

3. You could be right about this (and you may have inside info to support your position), but from the outside, I am quite skeptical.

[tom webster]

1. You are right -- none is an exaggeration. Still, I would bet that the vast majority of NHL owners are not interested in another Canadian franchise.

 

2. You would probably be wise in taking the bet -- that was probably another exaggeration on my part. Still, I'd bet you $50 to the charity of the winner's choice that Balsillie doesn't close a deal and become an owner in the next 2 years (how's that for a backpedal?).

3. You could be right about this (and you may have inside info to support your position), but from the outside, I am quite skeptical.

 

It me six months to close a deal on the purchase of a small restaraunt. However, I'll take that bet.

[Ghost of Dwight Drane]

Here is a key chart in finding out the weak stepchildren of the NHL.

 

Anyone with debt/value of 50 or over and in firm negative territory on revenues is a clear at risk franchise.

 

NHL Financials

 

We all know how NJ and the Islanders have poor crowds. Imagine what it will be like when half the Wall St. workers are out of jobs and firms cut luxury items.

NJ has a new arena to support and I don't know how deep the pockets are.

The Islanders have a nice cable deal, but play in an old arena.

The Kings look solid with the owner filthy rich and owning the arena.

St Louis....DANGER! Hopefully the Dutch love American hockey as much as their beer once they get a hold of Budweiser!

Phoenix...DANGER! They price games like Buffalo, and the city is getting hit by the economic crunch.

Carolina..So/SO...they are in tough to begin with

Atlanta..Trouble...big money shrinking a bit down there

Florida...WALKING DEAD! These guys were in trouble the last few years. While their team always seems to have prospects, their owner has to be losing patience. The Economy got Blown Up down there.

 

 

Remember, in Buffalo alone it is going to cost you 20-30% more to go to a game this year.

 

Let's say Joe Blowsabrefan lives in Orchard Park and has 2 season tickets. He usually goes with his wife or one of his brothers. They like to have fun at the game.

 

2 tickets @ $40 now 2 @ $46

30 mile round trip @ $3/gallon now $5/gallon

$10 parking....$15 parking? (could stay same)

6 beers @ $5.50 now 6@ $6.50 (soid guess)

4 hot dogs @ $3.25 now @ $4.00

 

It doesn't seem like much, but you go from $142 per game last year to $172 a game this year. If you are a faithful fan that goes to every game, that's an extra $1,200 to go on top of your extra $2,000 to drive and $1,500 for food....etc. Things are going to add up for many people and some decisions will have to be made. In cities like Atlanta and So. Florida that have been inflated by corporations rolling in cash.....this could be a BAD year. Just look at the names of these sponsors....Banks, Brokerages, GM+Ford, Delta+United.......

 

I'm not picking on the NHL, because we are all feeling a pinch. There just isn't much room for error for a league built on no big television contract and revenue sharing.

[nfreeman]

Here is a key chart in finding out the weak stepchildren of the NHL.

 

Anyone with debt/value of 50 or over and in firm negative territory on revenues is a clear at risk franchise.

 

NHL Financials

 

We all know how NJ and the Islanders have poor crowds. Imagine what it will be like when half the Wall St. workers are out of jobs and firms cut luxury items.

NJ has a new arena to support and I don't know how deep the pockets are.

The Islanders have a nice cable deal, but play in an old arena.

The Kings look solid with the owner filthy rich and owning the arena.

St Louis....DANGER! Hopefully the Dutch love American hockey as much as their beer once they get a hold of Budweiser!

Phoenix...DANGER! They price games like Buffalo, and the city is getting hit by the economic crunch.

Carolina..So/SO...they are in tough to begin with

Atlanta..Trouble...big money shrinking a bit down there

Florida...WALKING DEAD! These guys were in trouble the last few years. While their team always seems to have prospects, their owner has to be losing patience. The Economy got Blown Up down there.

Remember, in Buffalo alone it is going to cost you 20-30% more to go to a game this year.

 

Let's say Joe Blowsabrefan lives in Orchard Park and has 2 season tickets. He usually goes with his wife or one of his brothers. They like to have fun at the game.

 

2 tickets @ $40 now 2 @ $46

30 mile round trip @ $3/gallon now $5/gallon

$10 parking....$15 parking? (could stay same)

6 beers @ $5.50 now 6@ $6.50 (soid guess)

4 hot dogs @ $3.25 now @ $4.00

 

It doesn't seem like much, but you go from $142 per game last year to $172 a game this year. If you are a faithful fan that goes to every game, that's an extra $1,200 to go on top of your extra $2,000 to drive and $1,500 for food....etc. Things are going to add up for many people and some decisions will have to be made. In cities like Atlanta and So. Florida that have been inflated by corporations rolling in cash.....this could be a BAD year. Just look at the names of these sponsors....Banks, Brokerages, GM+Ford, Delta+United.......

 

I'm not picking on the NHL, because we are all feeling a pinch. There just isn't much room for error for a league built on no big television contract and revenue sharing.

 

 

Certainly if the economy goes into a full-blown recession, people will have less disposable income for things like sporting events. But that is a far cry from predicting the demise of the sun belt NHL franchises. The NHL wants those teams to succeed -- this was one of the key drivers behind the revenue sharing structure. In any case, the story with those teams is the same as in the NBA and MLB: if the teams win, they will do fine at the box office (like, e.g. Tampa and Dallas have done); if the teams stink every year, then they won't do well financially either. There are very few NHL markets where that is not the case.

 

As for the NYC/NJ teams, they will be more than fine. To suggest otherwise is ridiculous.