Season Ticket Renewals

[Stoner]

Here's the thing, ticket sales are unpredictable, and Sabres have to have a schedule to raise revenue by virtue of being in the bottom tier, but if the plan they submit to the players gets approved, but it doesn't actually work, they have still fulfilled their obligation to the players.

 

Teams in the bottom tier don't have to send a plan to the "players" — actually, it would be sent to the league and the Revenue Sharing Oversight Committee made up of three members of the NHLPA including one active player and four members appointed by the league including one owner — unless that team fails to meet the 75% ticket revenue threshold. In that the Sabres have never failed to do that, they've never been required to submit such a plan. It's all in there. You asked me to read it. I did.

 

Now PA seems to think that the Sabres could simply ignore their obligation to have a plan to increase revenues, (we sucked and it feels like an insult) but the players won a hammer in the CBA which amounts to a club financial takeover -

 

49.3 d C - paraphrase - if the Oversight Commitee thinks the Sabres plan to raise revenue is simply a joke - it can appoint a 3rd party to run the consumer and business sales side of the team.

 

So PA is right in thinking Black could simply ignore this, but then Black would no longer be controlling Team sales decisions. A 3rd party appointee would.

 

 

Here's what the CBA says.

 

 

© Based upon the Club's performance, the Revenue Sharing

Oversight Committee may require that the Club retain an outside

consultant to assess the Club's business and to recommend and

implement business recommendations as appropriate.

 

So if you get revenue sharing and you fail to meet the 75%, you have to submit a three year plan to the league and committee. You might get Industry Growth Funds as a grant or loan to help you implement the plan. The committee and league may review and approve it. They may follow it and see how you're doing and your ability to get revenue sharing in future years may be subject to the plan being successful. And there may be that outside consultant. It's all more carrot than stick. A lot of mays. Financial takeover? No.

 

I'm trying to get beyond your misreading of the CBA — I don't want to say distortion, but I'm starting to wonder, because you're a smart guy — and focus on the bigger point. I agree that the teams have an obligation, unwritten as Ted has said, to grow revenues. I understand that everything in life goes up in cost. But, for the love of God, Ted can't get away with saying the Sabres have to raise ticket prices in order to GET REVENUE SHARING. It's not true, and revenue sharing wouldn't be immediately lost if the Sabres didn't raise ticket prices one year. Or ever lost, if you read between the lines of the CBA.

 

You can't tell me there isn't wiggle room in that language for an owner, under extenuating circumstances (think one of the worst seasons and teams in NHL history), to waive any ticket price increase without being, I don't know, taken over financially and having revenue sharing taken away.

[X. Benedict]

Teams in the bottom tier don't have to send a plan to the "players" — actually, it would be sent to the league and the Revenue Sharing Oversight Committee made up of three members of the NHLPA including one active player and four members appointed by the league including one owner — unless that team fails to meet the 75% ticket revenue threshold. In that the Sabres have never failed to do that, they've never been required to submit such a plan. It's all in there. You asked me to read it. I did.

 

 

 

Here's what the CBA says.

 

 

© Based upon the Club's performance, the Revenue Sharing

Oversight Committee may require that the Club retain an outside

consultant to assess the Club's business and to recommend and

implement business recommendations as appropriate.

 

So if you get revenue sharing and you fail to meet the 75%, you have to submit a three year plan to the league and committee. You might get Industry Growth Funds as a grant or loan to help you implement the plan. The committee and league may review and approve it. They may follow it and see how you're doing and your ability to get revenue sharing in future years may be subject to the plan being successful. And there may be that outside consultant. It's all more carrot than stick. A lot of mays. Financial takeover? No.

 

I'm trying to get beyond your misreading of the CBA — I don't want to say distortion, but I'm starting to wonder, because you're a smart guy — and focus on the bigger point. I agree that the teams have an obligation, unwritten as Ted has said, to grow revenues. I understand that everything in life goes up in cost. But, for the love of God, Ted can't get away with saying the Sabres have to raise ticket prices in order to GET REVENUE SHARING. It's not true, and revenue sharing wouldn't be immediately lost if the Sabres didn't raise ticket prices one year. Or ever lost, if you read between the lines of the CBA.

 

You can't tell me there isn't wiggle room in that language for an owner, under extenuating circumstances (think one of the worst seasons and teams in NHL history), to waive any ticket price increase without being, I don't know, taken over financially and having revenue sharing taken away.

 

The Sabres HAVE to Qualify for their Revenue sharing obligations. (not because it is nice, or because they need money, or because of built-in incentives)  but because they have a contract with the players to do so. 

 

They sure as HELL  have an obligation to have a viable plan to increase revenues.  In Buffalo, because demand for tickets is inelastic, a high school textbook could prove by the Total Revenue Test  that the only viable plan to raise revenues is to raise prices. TR = P X Q 

 

The wiggle/unwritten part is the plan itself: 

 

In a market such as Arizona....where demand may be highly price elastic, you could conceivably lower ticket prices to raise revenue. That is, lowing prices to true market level.

 

The Sabres don't have that option. They have a waiting list of 3000 people.  (inelastic demand).

 

As for the Sabres.....it is obvious. They have to have a plan to increase revenue. The law of Supply and Demand isn't written into the CBA. But don't mistake it.The Sabres have an obligation to the players Union to submit a plan to raise prices, because in the Buffalo market that is the only thing that will increase revenue.

 

As for the below language....how can you willfully miss it?

 

© Based upon the Club's performance, the Revenue Sharing

Oversight Committee may require that the Club retain an outside

consultant to assess the Club's business and to recommend and

implement business recommendations as appropriate.

 

If a third party is IMPLEMENTING outside business recommendations......the Sabres/Black  would no longer be in control of the business of  pricing Hockey Related Revenues.  

This is the Hammer in the language that FEHR put in the CBA  to prevent clubs from pricing below market levels. 

 

Unions win. 

 

 

[nfreeman]

 

 

As for the below language....how can you willfully miss it?

© Based upon the Club's performance,the Revenue Sharing

Oversight Committee may require that the Club retain an outside

consultant to assess the Club's business and to recommend and

implement business recommendations as appropriate.

If a third party is IMPLEMENTING outside business recommendations......the Sabres/Black would no longer be in control of the business of pricing Hockey Related Revenues.

This is the Hammer in the language that FEHR put in the CBA to prevent clubs from pricing below market levels.

Unions win.

Game, set and match.

[Stoner]

Game, set and match.

Uh oh, Dad's home. Everybody off the computer.

The Sabres HAVE to Qualify for their Revenue sharing obligations. (not because it is nice, or because they need money, or because of built-in incentives)  but because they have a contract with the players to do so. 

You don't do anything to qualify for revenue sharing other than have low revenues.

 

 

 

They sure as HELL  have an obligation to have a viable plan to increase revenues.  .... The Sabres have an obligation to the players Union to submit a plan to raise prices,

And I sure as hell hope any business has a plan to raise revenues. But the CBA doesn't require that the Sabres submit such a plan to the "players" unless they become "delinquent." As I pointed out, the RSOC isn't "the players" anyway. We're down the rabbit hole. It's not even that important an issue. It just bugs me that you seem to be making stuff up. One more time, copy and paste from the CBA to prove your point.

 

 

 

 

As for the below language....how can you willfully miss it?

 

© Based upon the Club's performance, the Revenue Sharing

Oversight Committee may require that the Club retain an outside

consultant to assess the Club's business and to recommend and

implement business recommendations as appropriate.

 

If a third party is IMPLEMENTING outside business recommendations......the Sabres/Black  would no longer be in control of the business of  pricing Hockey Related Revenues.  

This is the Hammer in the language that FEHR put in the CBA  to prevent clubs from pricing below market levels. 

 

That sounds like a hammer with a giant felt tip. © is the last thing that can happen. You might call it the final straw. Are you seriously suggesting that if the Sabres hadn't just raised ticket prices, the league and NHLPA gestapo would be marching into the arena on Monday — or on a Monday next year or in three years, to be more accurate — to take over control of the business?

[Eleven]

Game, set and match.

 

SIlly nfreeman.  You thought this was over?  We're talkin' Terry here.  Hell no, it's not over.  

[SwampD]

 

You don't do anything to qualify for revenue sharing other than have low revenues.

 

 

This is correct. So my thinking is that Black mispoke. Maybe he meant that they have to raise prices to NOT qualify.

 

Quick question, you said that the Sabres have never fallen below the 75% mark, but haven't they received revenue sharing before? How could they have if they didn't fall below that mark or was it under a different CBA?

Edited May 2, 2015 by SumpfV

[Eleven]

Nowhere in there does it say you have to make more next year than you did the last. All it says is that the the teams that fall under the 75% of the league average have to submit a 3 year plan to improve their revenue. And that only pertains to regular season gate revenue.

 

I'll ask it again. Does anyone know positively that if the Sabres didn't raise their prices, would they fall into that category and be subject to this revue?

 

This is a valid point that PA brings up.

 

This list does not distinguish between HRR and all revenue, and it is undated, but it's at least some indication of where the Sabres are:

 

http://www.forbes.com/nhl-valuations/list/

[SwampD]

This list does not distinguish between HRR and all revenue, and it is undated, but it's at least some indication of where the Sabres are:

 

http://www.forbes.com/nhl-valuations/list/

 

Well, some quick math says we didn't fell below the 75% mark of league average that year.

Edited May 2, 2015 by SumpfV

[Ghost of Dwight Drane]

There was the exact same "debate" a year ago.

 

A valid 3 year plan to increase revenues can mean anything. You don't have to increase ticket prices.

 

"Dear Mr. Bettman......given that the Buffalo Sabres have had 2 consecutive seasons that rank near the most pitiful results in the history of the NHL, we feel that it would be imprudent at this time to raise ticket prices on our product given the loyalty and patience of our fanbase. By not raising prices this year, we feel we will retain a higher level and happier fanbase going forward, and given our recent outreach into the trade market and drafting a probable franchise level player, we expect our product on the ice to improve leaps and bounds in the near future, and the excitement and appreciation from our fanbase should spring revenues going forward. Thank you as always........Terry"

[X. Benedict]

 

 

 

 

 

That sounds like a hammer with a giant felt tip. © is the last thing that can happen. You might call it the final straw. Are you seriously suggesting that if the Sabres hadn't just raised ticket prices, the league and NHLPA gestapo would be marching into the arena on Monday — or on a Monday next year or in three years, to be more accurate — to take over control of the business?

IF the Sabres  hadn't planned to  raise prices, absolutely, they could have turned the revenue side of the Sabres over to a third party in an audit type of situation. The Revenue side, not the hockey side. 

 

A third party could conceivably do an independent study/audit and prove that the Sabres are well below market price and raise Season Tickets 10-15%

[Stoner]

This is correct. So my thinking is that Black mispoke. Maybe he meant that they have to raise prices to NOT qualify.

 

Quick question, you said that the Sabres have never fallen below the 75% mark, but haven't they received revenue sharing before? How could they have if they didn't fall below that mark or was it under a different CBA?

At the end of the season, NS comes down from Nova Scotia and makes a list of NHL teams and ranks them by revenue. If you're low enough, you qualify for revenue sharing. Once you're getting that revenue sharing, if you don't meet that threshold of 75% of the league average gate for ticket sales, you have to submit the plan, be subjected to oversight etc. Under the old CBA, instead of ticket revenues, they required teams receiving revenue sharing to have total revenue growth more than the league average and to reach a minimum attendance mark. It is complicated but kind of fan if you want to delve into the CBA. Then you can intelligently call other members' BS.

SIlly nfreeman.  You thought this was over?  We're talkin' Terry here.  Hell no, it's not over.  

 

Meh. This one's not about Terry. I've taken pains to point out how he didn't want to raise prices in 2011. I don't think he cares about any of this stuff. He's probably been bamboozled like everybody else into thinking he has no choice.

 

This is all about Ted Black behaving slimily, using the CBA as cover. He's done it time and again. I don't know why he can't say, look, the damn tickets are too low, we're going to raise prices every year and we don't believe in making any symbolic "sorry, thank you" statements to our fan base with ticket prices.

Edited May 2, 2015 by @fakegorbyportwinestain

[Eleven]

At the end of the season, NS comes down from Nova Scotia and makes a list of NHL teams and ranks them by revenue. If you're low enough, you qualify for revenue sharing. Once you're getting that revenue sharing, if you don't meet that threshold of 75% of the league average gate for ticket sales, you have to submit the plan, be subjected to oversight etc. Under the old CBA, instead of ticket revenues, they required teams receiving revenue sharing to have total revenue growth more than the league average and to reach a minimum attendance mark. It is complicated but kind of fan if you want to delve into the CBA. Then you can intelligently call other members' BS.

 

Meh. This one's not about Terry. I've taken pains to point out how he didn't want to raise prices in 2011. I don't think he cares about any of this stuff. He's probably been bamboozled like everybody else into thinking he has no choice.

 

This is all about Ted Black behaving slimily, using the CBA as cover. He's done it time and again. I don't know why he can't say, look, the damn tickets are too low, we're going to raise prices every year and we don't believe in making any symbolic "sorry, thank you" statements to our fan base with ticket prices.

 

1.  Even with the CBA, we have incomplete information--we don't have the numbers--so no one here can intelligently call out anyone.

 

2.  I will take you at your word on this one.

 

3.  Black strikes me as kind of a transparent, fan-oriented guy, from what I've heard on radio and from reading, on this forum, various posters' personal interactions with him.  I'm gonna need more before I call him a liar.

 

That said, I am not happy that they are raising season ticket prices this year.  Not after what I had to pay for last near. 

[Stoner]

1.  Even with the CBA, we have incomplete information--we don't have the numbers--so no one here can intelligently call out anyone.

When people make factual statements that this or that is in the CBA, when they aren't, yes, you can intelligently call that person out.

 

 

3.  Black strikes me as kind of a transparent, fan-oriented guy, from what I've heard on radio and from reading, on this forum, various posters' personal interactions with him.  I'm gonna need more before I call him a liar.

I didn't say liar. I think he's taking full advantage of the fact that virtually no one in the media or in the fan base will ever look in the CBA. His statement that the Sabres had to raise ticket prices to qualify for revenue sharing was a doozy, but he's been more likely to cleverly use the word "jeopardize." Not raising prices would jeopardize revenue sharing, which is technically does. It sounds scary, innit?

[shrader]

No, "unwritten obligation" and the quote about having to raise ticket prices to qualify for revenue sharing are from 2013. New CBA. (The old CBA looked at a team's Hockey Related Revenue, which had to be increasing at a rate above the league average for a team to continue to receive revenue sharing at 100%.)

Oops, for some reason I keep thinking the lockout was 2013-2014.

[X. Benedict]

 

 

I didn't say liar. I think he's taking full advantage of the fact that virtually no one in the media or in the fan base will ever look in the CBA. His statement that the Sabres had to raise ticket prices to qualify for revenue sharing was a doozy, but he's been more likely to cleverly use the word "jeopardize." Not raising prices would jeopardize revenue sharing, which is technically does. It sounds scary, innit?

Why a doozy?

 

Revenue sharing is the correct term. That's the guts of the CBA.  Clubs have to raise revenues so the players get their contractual 50% split. The Sabres have a contractual obligation as a Club party to the CBA. 

 

You imagine it is a money grab or that the Sabres can opt out. Really, the Sabres, from a players point of view,  have been reluctantly compliant with the Revenue Sharing Oversight Committee and are only doing their due diligence, forming a plan,  and satisfying their contractual requirements. 

[SwampD]

Why a doozy?

 

Revenue sharing is the correct term. That's the guts of the CBA.  Clubs have to raise revenues so the players get their contractual 50% split. The Sabres have a contractual obligation as a Club party to the CBA. 

 

You imagine it is a money grab or that the Sabres can opt out. Really, the Sabres, from a players point of view,  have been reluctantly compliant with the Revenue Sharing Oversight Committee and are only doing their due diligence, forming a plan,  and satisfying their contractual requirements. 

You keep saying this, but that is not what the CBA says, unless it's somewhere else. It says that clubs that fall below the 75% of league average have to come up with a plan to raise revenue. Those are two completely different things and since the Sabres didn't fall below that mark, there is nothing that says they have to raise ticket prices.

[Stoner]

Why a doozy?

 

Revenue sharing is the correct term. That's the guts of the CBA.  Clubs have to raise revenues so the players get their contractual 50% split. The Sabres have a contractual obligation as a Club party to the CBA. 

 

You imagine it is a money grab or that the Sabres can opt out. Really, the Sabres, from a players point of view,  have been reluctantly compliant with the Revenue Sharing Oversight Committee and are only doing their due diligence, forming a plan,  and satisfying their contractual requirements. 

The 75% target isn't about qualifying for revenue sharing.

 

I guess I missed the news about the Sabres having any dealings with the RSOC. When did they miss their 75% target?

[Taro T]

Here's my take on it.

 

If the Sabres' gate receipts fall below 75% of leaguewide average gate receipts, they do fall under supervision of the league & the RSOC. That supervision will require a business plan be submitted and approved. Once an approved plan is submitted, how well it was followed gets reviewed in 1 year and if the team didn't follow it then the operation will be turned over to a 3rd party.

 

The word "may" means that the league and RSOC can do this. If they can, they most definitely will.

 

As the teams know what everybody else is doing, & they have a HUGE incentive to keep above 75% of the average (never met a businessman (or businesswoman, for that matter) that wanted control of any portion of THEIR business turned over to someone else); I'd be very surprised to see any small market club not make adjustments designed to keep pace w/ what they expect the leaguewide average increase to be. W/ a team w/ a waiting list for tix, the only way to do that is by increasing prices by what they expect leaguewide average prices to go up.

 

It's interesting that this is based off gate receipts. My guess as to why that 1 measure was chosen is that not all teams will have control over other items such as concessions and there are league guidelines for how teams handle their media rights, so they don't necessarily have full control over those as well.

[tom webster]

You can all go on and on about what's in the CBA what is required and what isn't what Black says or said or didn't and what Terry implied when he bought the team. While I have clearly stated my opinion on the matter I understand what the others are saying even if I question their motivation.

What I think is indisputable, however, is that as party to a CBA that stipulates a split in hockey related revenue, the Sabres have a fiduciary responsibility to maximize said revenues. 

[Stoner]

You can all go on and on about what's in the CBA what is required and what isn't what Black says or said or didn't and what Terry implied when he bought the team. While I have clearly stated my opinion on the matter I understand what the others are saying even if I question their motivation.

What I think is indisputable, however, is that as party to a CBA that stipulates a split in hockey related revenue, the Sabres have a fiduciary responsibility to maximize said revenues. 

I know the Leafs don't receive any revenue-sharing (ha), but what is their penalty for not maximizing their ticket revenues next season?

[Stoner]

Here's my take on it.

 

If the Sabres' gate receipts fall below 75% of leaguewide average gate receipts, they do fall under supervision of the league & the RSOC. That supervision will require a business plan be submitted and approved. Once an approved plan is submitted, how well it was followed gets reviewed in 1 year and if the team didn't follow it then the operation will be turned over to a 3rd party.

 

The word "may" means that the league and RSOC can do this. If they can, they most definitely will.

 

As the teams know what everybody else is doing, & they have a HUGE incentive to keep above 75% of the average (never met a businessman (or businesswoman, for that matter) that wanted control of any portion of THEIR business turned over to someone else); I'd be very surprised to see any small market club not make adjustments designed to keep pace w/ what they expect the leaguewide average increase to be. W/ a team w/ a waiting list for tix, the only way to do that is by increasing prices by what they expect leaguewide average prices to go up.

 

It's interesting that this is based off gate receipts. My guess as to why that 1 measure was chosen is that not all teams will have control over other items such as concessions and there are league guidelines for how teams handle their media rights, so they don't necessarily have full control over those as well.

Has any team suffered the fate of being turned over to a third party? I'm not saying it wouldn't happen, but it's hard to believe that anyone at the league or NHLPA would want this scenario to play out except as a last resort. The issue here is whether it would happen to the Sabres if they fell short of the 75% target one time under extenuating circumstances (The Make Believes Scenario).

 

I just find it dishonest the way Ted talks about this. Even under the old CBA, the penalty for the Sabres not raising ticket prices after 2010-2011 and seeing their hockey related revenue lag behind the league average would have been only a 25% reduction in their revenue sharing check. That's assuming it would have been the first year they lagged. Yet he still framed it as having to raise prices in order to qualify for revenue sharing.

[tom webster]

I know the Leafs don't receive any revenue-sharing (ha), but what is their penalty for not maximizing their ticket revenues next season?

 

No one has ever questioned the Leaf's contribution to the bottom line. The same cannot be said about the Sabres. When Buffalo has the highest priced ticket in the league, they can take a year off from raising their prices also. That is one of those consumer things I find amusing. If the Sabres just raised their prices 27% when TP took over and didn't raise them again for 7 years everyone would be singing their praises instead of vilifying them.

Has any team suffered the fate of being turned over to a third party? I'm not saying it wouldn't happen, but it's hard to believe that anyone at the league or NHLPA would want this scenario to play out except as a last resort. The issue here is whether it would happen to the Sabres if they fell short of the 75% target one time under extenuating circumstances (The Make Believes Scenario).

 

I just find it dishonest the way Ted talks about this. Even under the old CBA, the penalty for the Sabres not raising ticket prices after 2010-2011 and seeing their hockey related revenue lag behind the league average would have been only a 25% reduction in their revenue sharing check. That's assuming it would have been the first year they lagged. Yet he still framed it as having to raise prices in order to qualify for revenue sharing.

It is like you said earlier. He didn't lie he just spun it which is exactly what a marketing guy is supposed to do. 

[Taro T]

Has any team suffered the fate of being turned over to a third party? I'm not saying it wouldn't happen, but it's hard to believe that anyone at the league or NHLPA would want this scenario to play out except as a last resort. The issue here is whether it would happen to the Sabres if they fell short of the 75% target one time under extenuating circumstances (The Make Believes Scenario).

 

I just find it dishonest the way Ted talks about this. Even under the old CBA, the penalty for the Sabres not raising ticket prices after 2010-2011 and seeing their hockey related revenue lag behind the league average would have been only a 25% reduction in their revenue sharing check. That's assuming it would have been the first year they lagged. Yet he still framed it as having to raise prices in order to qualify for revenue sharing.

They (the league & NHLPA) definitely don't want a team to have outsiders running it. Except for a team being in bankruptcy, can't think of an example of outsiders running an NHL squad. But there is no way any team owner nor management group wants to have anyone looking over their shoulder if they can help it.

 

And I'd agree w/ X & TW that the Sabres have the players as partners.

 

As to your last statement, my reading of 49.3.d is that the league & committee can withhold revenue sharing after it determines a team isn't following the plan. It isn't limited to just reducing the revenue sharing by a % age. So, it's true, but TB is seriously playing politician.

[Stoner]

As to your last statement, my reading of 49.3.d is that the league & committee can withhold revenue sharing after it determines a team isn't following the plan. It isn't limited to just reducing the revenue sharing by a % age. So, it's true, but TB is seriously playing politician.

I was referring to Ted's statement in 2011, when the old CBA was in effect. The only hammer then was reducing the revenue sharing amount by 75, 60 or 50 percent.

[Taro T]

I was referring to Ted's statement in 2011, when the old CBA was in effect. The only hammer then was reducing the revenue sharing amount by 75, 60 or 50 percent.

Thanks for the clarification.