Sabres cap season ticket sales

[tom webster]

Let's hope this isn't happening with the rest of the league. This coupled with the rumored talks with ESPN and Jim Balsillie possibly throwing another $200 million into the league coffers could send the cap spiraling upward.

 

While the last paragraph may be ramblings of a man who believes that the impending Cap drop is part of a management propaganda campaign, it should be noted that part of getting a full share of revenue sharing requires teams to make every effort to increase their revenues in line with the rest of the league which would seem to run counter to the league assertion that league revenues could dip significantly. Time will tell.

[Taro T]

Let's hope this isn't happening with the rest of the league. This coupled with the rumored talks with ESPN and Jim Balsillie possibly throwing another $200 million into the league coffers could send the cap spiraling upward.

 

While the last paragraph may be ramblings of a man who believes that the impending Cap drop is part of a management propaganda campaign, it should be noted that part of getting a full share of revenue sharing requires teams to make every effort to increase their revenues in line with the rest of the league which would seem to run counter to the league assertion that league revenues could dip significantly. Time will tell.

Franchise purchases aren't considered "revenues" under the CBA. Balsillie could drop $0.5B and it wouldn't affect the salary cap.

 

The article you reference doesn't appear to have been linked, so I'm not certain what ramblings you refer to. But yes, to qualify for a "full share" of revenue sharing, teams have to have their individual revenue grow at a rate at least at the league average. (There are also minimum paid attendence levels as well.) There is nothing in the CBA specifying how the revenue %age increases are calculated regarding revenue changes due to fluctuation of the exchange rate. The 1st year you miss, you can get 75% of the calculated revenue sharing share, the 2nd year, 60%, and after that it is capped at 50%. So, depending on just where a team's revenues fall, it may behoove it to "tank" revenues one year if it thinks it will miss qualifying for a full share when it could push some of those revenues into the next year (by ticket price increases, targeting particular years for new logos/unis/3rds, etc).

[tom webster]

Franchise purchases aren't considered "revenues" under the CBA. Balsillie could drop $0.5B and it wouldn't affect the salary cap.

 

The article you reference doesn't appear to have been linked, so I'm not certain what ramblings you refer to. But yes, to qualify for a "full share" of revenue sharing, teams have to have their individual revenue grow at a rate at least at the league average. (There are also minimum paid attendence levels as well.) There is nothing in the CBA specifying how the revenue %age increases are calculated regarding revenue changes due to fluctuation of the exchange rate. The 1st year you miss, you can get 75% of the calculated revenue sharing share, the 2nd year, 60%, and after that it is capped at 50%. So, depending on just where a team's revenues fall, it may behoove it to "tank" revenues one year if it thinks it will miss qualifying for a full share when it could push some of those revenues into the next year (by ticket price increases, targeting particular years for new logos/unis/3rds, etc).

 

I am not talking about the franchise fee but rather the relocation fee rumored to be $225 to 265 million. I think the NHLPA could make the case that these are hockey related revenues and thus would impact the cap.

 

By the way the ramblings I refer to are my own and I don't really think that Balsillie will pay that much but I really do think that the cap will not go down by anything significant and may in fact go up.

[nfreeman]

This is a different point, but if the Sabres capped season ticket sales, that seems to answer definitively the claim that they are cooking the season ticket books.

 

Now, if they would just give us something good in return for our loyalty and hard-earned money...

[nfreeman]

I am not talking about the franchise fee but rather the relocation fee rumored to be $225 to 265 million. I think the NHLPA could make the case that these are hockey related revenues and thus would impact the cap.

 

Pretty sure I've read that this fee would not be shared with the players.

[Taro T]

I am not talking about the franchise fee but rather the relocation fee rumored to be $225 to 265 million. I think the NHLPA could make the case that these are hockey related revenues and thus would impact the cap.

 

By the way the ramblings I refer to are my own and I don't really think that Balsillie will pay that much but I really do think that the cap will not go down by anything significant and may in fact go up.

I truly doubt that the NHLPA could successfully make the case that relocation fees are hockey related revenues (HRR). While rights fees counting as HRR or not is not specifically addressed (unless they had been included in the 2002-03 "Unified Report of Operations"), there are several provisions regarding what ISN'T HRR that cover items that are similar to relocation fees. (Note: if they were addressed, and I just missed reading them, then disregard the rest of this post.)

 

Items that are specifically not HRR include:

 

Revenues from the sale/purchase of a new/existing team (50.1.b.ii). (No mention that the revenues have to be directly for/to that particular team.)

 

Revenues from the sale of club personal property (50.1.b.iv). (The territorial rights could easily fall under this category.)

 

Dues, loans, advances, etc. to the NHL, NHL Enterprises, or NHL Clubs (50.1.b.vi). (The rights fee could rather easily fall under this category as well.)

 

Proceeds due to legal proceedings (50.1.b.xii). (I could easily see where this matter could end up in court to get settled.)

 

Revenues from sales / leasing of real estate (50.1.b.xiii). (Real estate pertains directly to tangible property. The territorial rights, while not technically real estate, are tangible property. Obviously this one isn't as clear cut in favor of not considering the teritorial rights fees, but taken with the others, it does support that position IMHO.)

 

Anything of value received in connection w/ a new / refurbished arena (50.1.b.xv). (See previous comment.)

 

And finally, "(a)ny thing of value that induced or is intended to induce a Club either to locate to or relocate (e.g. amounts paid to enable a Club to buy-out its lease obligations or enable it to pay any relocation fee) or remain in a particular geographic location such that it will enable the Club or its Club Affiliated Entity to enhance categories or revenue streams constituting HRR, so long as such things of value or other revenues are not reimbursements for operating expenses of the Club" (50.1.b.xvi).

 

It seems to me, that territorial rights fees would be excluded from HRR. I'm interested to see why you think they would be HRR. (I could very well be missing something.)

[spndnchz]

I truly doubt that the NHLPA could successfully make the case that relocation fees are hockey related revenues (HRR). While rights fees counting as HRR or not is not specifically addressed (unless they had been included in the 2002-03 "Unified Report of Operations"), there are several provisions regarding what ISN'T HRR that cover items that are similar to relocation fees. (Note: if they were addressed, and I just missed reading them, then disregard the rest of this post.)

 

Items that are specifically not HRR include:

 

Revenues from the sale/purchase of a new/existing team (50.1.b.ii). (No mention that the revenues have to be directly for/to that particular team.)

 

Revenues from the sale of club personal property (50.1.b.iv). (The territorial rights could easily fall under this category.)

 

Dues, loans, advances, etc. to the NHL, NHL Enterprises, or NHL Clubs (50.1.b.vi). (The rights fee could rather easily fall under this category as well.)

 

Proceeds due to legal proceedings (50.1.b.xii). (I could easily see where this matter could end up in court to get settled.)

 

Revenues from sales / leasing of real estate (50.1.b.xiii). (Real estate pertains directly to tangible property. The territorial rights, while not technically real estate, are tangible property. Obviously this one isn't as clear cut in favor of not considering the teritorial rights fees, but taken with the others, it does support that position IMHO.)

 

Anything of value received in connection w/ a new / refurbished arena (50.1.b.xv). (See previous comment.)

 

And finally, "(a)ny thing of value that induced or is intended to induce a Club either to locate to or relocate (e.g. amounts paid to enable a Club to buy-out its lease obligations or enable it to pay any relocation fee) or remain in a particular geographic location such that it will enable the Club or its Club Affiliated Entity to enhance categories or revenue streams constituting HRR, so long as such things of value or other revenues are not reimbursements for operating expenses of the Club" (50.1.b.xvi).

 

It seems to me, that territorial rights fees would be excluded from HRR. I'm interested to see why you think they would be HRR. (I could very well be missing something.)

Call me Mrs Wilbur. There is intelligence on this board.

 

I'd think the NHLPA would try to get everything they could under league revenue. Even though the cap has stayed relatively the same, the players are giving more of their salaries back to the league recently. If they can reduce the "give back" percentage they'd be in a sense getting their "cap raise".

[Taro T]

Call me Mrs Wilbur. There is intelligence on this board.

 

I'd think the NHLPA would try to get everything they could under league revenue. Even though the cap has stayed relatively the same, the players are giving more of their salaries back to the league recently. If they can reduce the "give back" percentage they'd be in a sense getting their "cap raise".

They'd be crazy NOT to try to include territorial rights fees in HRR. (Actually, Paul Kelly would be negligent/incompetent if he didn't attempt to include them.) I just don't see how they can pull it off.

[Hawerchuk]

Great! Now CAP IT OFF by getting a Centerman. But the Sabres will have to spend to the CAP! :o

[deluca67]

This is a different point, but if the Sabres capped season ticket sales, that seems to answer definitively the claim that they are cooking the season ticket books.

 

Now, if they would just give us something good in return for our loyalty and hard-earned money...

What is the advantage to capping season ticket sales? If they could sell out 82 games before the season why not do it?

[nfreeman]

What is the advantage to capping season ticket sales? If they could sell out 82 games before the season why not do it?

I think there are 2 principal reasons:

 

1. they charge more for game-by-game tickets than they do for season tickets.

 

2. they want to make tickets available to fans who aren't able to spring for season tickets.

[inkman]

But the Sabres will have to spend to the CAP! :o

They are going to be close anyway. They were at 48.639 before macArtur, Sekera, Stafford, and Ellis.

 

1 mill for Andrej

reportedly 1.4 for Clarke

.475 for Ellis

and 2+ mill for Drew

 

leaving the Sabres 53.5ish. maybe 2 or 3 million short. I'd hardly call that pinching pennies.

[deluca67]

I think there are 2 principal reasons:

 

1. they charge more for game-by-game tickets than they do for season tickets.

 

2. they want to make tickets available to fans who aren't able to spring for season tickets.

Any idea how many sell outs the Sabres had last year?

[tom webster]

I truly doubt that the NHLPA could successfully make the case that relocation fees are hockey related revenues (HRR). While rights fees counting as HRR or not is not specifically addressed (unless they had been included in the 2002-03 "Unified Report of Operations"), there are several provisions regarding what ISN'T HRR that cover items that are similar to relocation fees. (Note: if they were addressed, and I just missed reading them, then disregard the rest of this post.)

 

Items that are specifically not HRR include:

 

Revenues from the sale/purchase of a new/existing team (50.1.b.ii). (No mention that the revenues have to be directly for/to that particular team.)

 

Revenues from the sale of club personal property (50.1.b.iv). (The territorial rights could easily fall under this category.)

 

Dues, loans, advances, etc. to the NHL, NHL Enterprises, or NHL Clubs (50.1.b.vi). (The rights fee could rather easily fall under this category as well.)

 

Proceeds due to legal proceedings (50.1.b.xii). (I could easily see where this matter could end up in court to get settled.)

 

Revenues from sales / leasing of real estate (50.1.b.xiii). (Real estate pertains directly to tangible property. The territorial rights, while not technically real estate, are tangible property. Obviously this one isn't as clear cut in favor of not considering the teritorial rights fees, but taken with the others, it does support that position IMHO.)

 

Anything of value received in connection w/ a new / refurbished arena (50.1.b.xv). (See previous comment.)

 

And finally, "(a)ny thing of value that induced or is intended to induce a Club either to locate to or relocate (e.g. amounts paid to enable a Club to buy-out its lease obligations or enable it to pay any relocation fee) or remain in a particular geographic location such that it will enable the Club or its Club Affiliated Entity to enhance categories or revenue streams constituting HRR, so long as such things of value or other revenues are not reimbursements for operating expenses of the Club" (50.1.b.xvi).

 

It seems to me, that territorial rights fees would be excluded from HRR. I'm interested to see why you think they would be HRR. (I could very well be missing something.)

 

 

Sorry for the delay. My wife actually had me working. Anyway, my short brief;

 

1) When making their case in bankruptcy court, I am sure that in calculating the relocation fee they will make the case that part of the relocation fee will actually be an indemnification fee payable to Toronto and Buffalo. The theory of course will be that by placing a team in Hamilton, the Maple Leafs and the Sabres will suffer harm to their ability to generate the revenues that they now have access to because their markets will be changed.

 

2) The NHLPA will argue that if these fees are in lieu of lost future revenues they should then be included in HRR.

 

Its obviously more complicated but this would be my position in a nutshell.

[Taro T]

Any idea how many sell outs the Sabres had last year?

26 out of 41.

 

They only drew less than 18k on 2 occassions, the 2nd TO game and the pricey Moe-ray-all game.

 

Sorry for the delay. My wife actually had me working. Anyway, my short brief;

 

1) When making their case in bankruptcy court, I am sure that in calculating the relocation fee they will make the case that part of the relocation fee will actually be an indemnification fee payable to Toronto and Buffalo. The theory of course will be that by placing a team in Hamilton, the Maple Leafs and the Sabres will suffer harm to their ability to generate the revenues that they now have access to because their markets will be changed.

 

2) The NHLPA will argue that if these fees are in lieu of lost future revenues they should then be included in HRR.

 

Its obviously more complicated but this would be my position in a nutshell.

Should it come to pass that Balsillie eventually does land a franchise, it'll be interesting to see how that all plays out.

 

The counter argument (and likewise there is far more detail than expressed in this short paragraph) will be that over the lifetime of the (presumed) Hamilton franchise that those revenues foregone by the Sabres and Loafs will actually be earned by the Hamilton team and the NHLPA will get their 57% of those revenues when they are actually received. Those fees are not designed to cover revenues that will be lost to the league - the people that live in the Hamilton region that would have bought Sabres and Loafs' tix and merchandise are not being removed from the landscape (it's not like they are being forced to buy into the Islanders). Those people will still support NHL hockey. The fees are a transfer payment for (essentially) the sale of the portions of the Sabres and Loafs' markets that are being obtained by the Hamilton Dingleberries.

[tom webster]

26 out of 41.

 

They only drew less than 18k on 2 occassions, the 2nd TO game and the pricey Moe-ray-all game.

Should it come to pass that Balsillie eventually does land a franchise, it'll be interesting to see how that all plays out.

 

The counter argument (and likewise there is far more detail than expressed in this short paragraph) will be that over the lifetime of the (presumed) Hamilton franchise that those revenues foregone by the Sabres and Loafs will actually be earned by the Hamilton team and the NHLPA will get their 57% of those revenues when they are actually received. Those fees are not designed to cover revenues that will be lost to the league - the people that live in the Hamilton region that would have bought Sabres and Loafs' tix and merchandise are not being removed from the landscape (it's not like they are being forced to buy into the Islanders). Those people will still support NHL hockey. The fees are a transfer payment for (essentially) the sale of the portions of the Sabres and Loafs' markets that are being obtained by the Hamilton Dingleberries.

 

 

Exactly, and if I'm the NHLPA, I want those revenues when the league receives them, not at some future date.

[deluca67]

Exactly, and if I'm the NHLPA, I want those revenues when the league receives them, not at some future date.

Wouldn't something like this already be determined by the CBA? I would think the CBA would outline what is considered revenue. If expansion fees or relocation fees are not listed as part of revenue the NHLPA should have no claim. IMO.

[Taro T]

Exactly, and if I'm the NHLPA, I want those revenues when the league receives them, not at some future date.

We agree that the NHLPA will want them.

 

Where we disagree is, I don't see a way how those are HRR and I don't think they will get them. The NHL and NHLPA agreed that they didn't spell out every possible source of HRR and non-HRR in the CBA. They also agreed that those revenue streams would be treated in the same manner as the ones they most closely resemble that were addressed. I didn't see a category of HRR that they mirror but saw several non-HRR streams that they could fall under.

 

While those payments don't fall under sponsorship and advertising revenue, the CBA is clear that sponsorship monies collected up front on a multiyear deal will get counted as revenue on a straight line basis over the life of the contract. So the PA has already agreed that revenues should accrue to the season they are for. Even if an arbitrator/judge ruled for the players that those revenues won't be double counted when the HD's actually receive them (which I doubt would happen, but considering I am not a lawyer, I won't say it definitely won't happen), then there would only be an additional $10MM or so added to the total revenue pie as I'd expect the $200-300MM would be the discounted value of all future lost revenue streams and would get spread over a 30 year (IIRC, that's the largest allowed in the CBA; it might be 20) period.

[LabattBlue]

What am I missing here? Haven't the Sabres capped season ticket sales for a few years now?

[SwampD]

What am I missing here? Haven't the Sabres capped season ticket sales for a few years now?

...and didn't they actually raise the number of season tickets by about 2.5%(500 seats) this year? I guess we're running out of things to complain about...damn summer heat.