Wednesday, 17 September 2008

Je Suis Fatigué

I've been a little tired lately. When it comes to "being a nighthawk", "burning the candle at both ends", "burning the midnight oil", or whatever cliché you want to use, I tend to put sleep off as much as possible in every circumstance when I have things to do. Work has become increasingly demanding due to a few people resigning and moving on to bigger projects. Volleyball starts next week for me, and hockey begin in a couple of weeks. Basically, my time is at a premium, and I tend to try to give to others at a discount price while totally neglecting myself.

This is the main reason there was no addition to the blog yesterday. I got home, I sat down and began planning an article, and I don't even remember dozing off. I do remember, however, waking up at 3AM and wondering what had happened in the last eight hours after falling asleep around 7PM.

Anyway, I'll proceed with the article tomorrow and we can all pretend that yesterday didn't happen. Ok? Alright.

Bob McKenzie posted an interesting article yesterday on TSN's website, and spoke about it on SportsCenter. The "bonus cushion" - an allowance that allowed teams to spend up to 7.5% more than what the salary cap allowed - has disappeared this season due to the NHLPA's clause to have the ability to opt out of the current CBA if they choose.

Basically, it means that, despite the salary cap increasing by $6.4 million this off-season, all of that "additional" cap room is eaten up by performance bonuses in players' contracts. All of the contracts signed by players become hard cap numbers instead of having that "bonus" room to add to players' salaries.

Teams like Chicago have certainly felt the weight of this problem. Deals signed by Jonathan Toews, Patrick Kane, and Cam Barker will now cost the franchise $9.3 million instead of $2.709 million. That bonus-laden contract that Steven Stamkos signed with Tampa Bay? The Lightning will pay him $3.75 million this season instead of the rookie-minimum contract amount of $850,000.

Can I ask why we have a salary cap again?

Look, I'm all for signing players based upon performances, and paying out bonuses when players achieve certain accolades. It happens in my job, it happens in other jobs, so it should be the same with an NHL job. However, most companies that I know of - Enron and Worldcom not included - budget for these bonus payments accordingly during their budgeting process. Yet the NHL has a "bonus cushion"? Why do we have a salary cap again?

Here's another scenario. The NHL announced that several NHL teams will be playing in neutral sites during the preseason. One of these sites is Winnipeg, where Phoenix will play Calgary. The idea, from what Gary Bettman has indicated, is that the NHL is trying to grow the game in markets where an NHL team is not located. Las Vegas and Kansas City are two other venues where exhibition games will be played.

The problem is that the tickets for this preseason game in Winnipeg range from $39 to $119 per ticket. For a preseason game. To watch players who will be playing in the same arena in a few weeks later when the Quad City Flames and San Antonio Rampage visit the Manitoba Moose. Don't get me wrong - I love the NHL. Winnipeg still wants a team, and they'll probably sell this game out due to the overwhelming sense of wanting to be part of that NHL clique that won't die in Winnipeg citizens. But $119 to watch the Coyotes' B-team?

What about all that rhetoric that Bettman hit us with about the cap making the game affordable again, and how ticket prices will be much more affordable for families? It's been four years since the NHL closed its doors to get itself back to some sort of fiscal responsibility, yet the NHL wants to charge $119 for a preseason ticket? A PRESEASON TICKET! In a city that doesn't have an NHL team? In a city that would love to have one back, but will never be able to afford it? Want to know why the New York Islanders play to sparse crowds when Florida and Atlanta come to town, and, in turn, lose $25 million in the salary cap era? $119 to watch a glorified practice should tell you something.

I don't know why the NHL thinks that its current accounting practices aren't questionable. Hiding money in "bonus cushion" accounts, inaccurate disclosure about bonus monies paid, and pulling wads of money out of hats is nothing more than illusions and trickery when it comes to accounting. Pricing yourself completely out of range in terms of the market you're playing in is the best way to lose piles of money.

Supply and demand are how tickets are sold, NHL, and your product just isn't in demand in places like Atlanta, Long Island, and Miami. Do you really think that you'll be the major draw in places like Quebec City, Winnipeg, and Saskatoon when it costs $476 for a family of four, plus applicable taxes and fees, to attend an exhibition hockey game? In a one-off situation, you'll probably sell out because these cities want to see the NHL. But if you think you can sustain this sort of business in these cities for 41 home dates, you're completely out to lunch.

The cap is more than twice the amount of the Winnipeg Jets' salary when they left Winnipeg. And now you're talking about expanding to Europe? Are you out of your mind? Until you can have every team turn a profit for five consecutive years, the word "expansion" should be considered a cuss word.

Theorizing about strengthening your league and actually demonstrating it are two very different things. There has been absolutely no demonstration of this fact from the individual teams, and the steps the league and NHLPA have taken are also questionable when some franchises are hemmorhaging red ink. But no one seems to care. The NHL's "Marketing Machine" seems to have no interest in helping the Islanders attract more fans which make me question as to whether or not the NHL even cares.

I have no idea how the NHL balances its books. You can usually get a pretty good sense of how a business operates behind the scenes when they talk openly and honestly about the state of their business. However, the NHL never seems to grasp this openly and honestly policy, and continues to operate in secrecy and with rogue bank accounts. I'm not entirely sure how or when this started, and I'm not sure how it will end.

But it's almost like the NHL, the premiere hockey league on this planet, answers to no one when it is us, the fans, who make it such a great league. Do you really think that major corporations keep their shareholders in the dark?

Until next time, keep your sticks on the ice!

1 comment:

Kirsten said...

Bob McKenzie is so awesome. I dream of being as cool as he is/having a tiny fraction of his hockey knowledge.