The Economy and the NHL

SeawaySensFan wrote:I think Murray and Melnyk will have to spend money to make money. Money in the bank from playoff revenues would do nicely, even if it just sits there.

The cost-cutting is built-in with millions in expiring contracts on the horizon.

Besides, I thought these geniuses bought US currency to insulate themselves from a downturn. I agree that caution is advisable, but icing a non-playoff team will do more to damage the bottom-line than spending relatively little to have a shot at success.

If Melnyk is the owner here to make money then there is a problem. The goal in Ottawa is to win a Stanley Cup, nothing else. Can Melnyk afford to lose money, year after year, defently not, but he has stated the idea here is to win a Cup, making the playoffs this year could turn out to be a step backwards, just as I think crawling into the playoffs on our hands and knee's last year was as well.

We would have taken Karlsson with a if we were picking 5 spots ahead last year anyways, but in the general sense, it did no one any good for the Sens to get bounced in 4.

SeawaySensFan wrote:I think Murray and Melnyk will have to spend money to make money. Money in the bank from playoff revenues would do nicely, even if it just sits there.

The cost-cutting is built-in with millions in expiring contracts on the horizon.

Besides, I thought these geniuses bought US currency to insulate themselves from a downturn. I agree that caution is advisable, but icing a non-playoff team will do more to damage the bottom-line than spending relatively little to have a shot at success.

The problem is, there is no way to "insulate" against a decreasing cap if you have a slew of long term, over paid contracts that are going to chew up more of your cap space as the cap goes down.

Melnyk is saying to Bryan that they need to tread carefully over the next couple of years and be wary of taking on long term, big contracts as tempting as they may be. It's not about "not losing money", it's about ensuring the team will have enough cap space to actually do something later should the cap go down. And "doing something" is not buying out everyone's big contract to clear space.

shabbs wrote:

SeawaySensFan wrote:I think Murray and Melnyk will have to spend money to make money. Money in the bank from playoff revenues would do nicely, even if it just sits there.

The cost-cutting is built-in with millions in expiring contracts on the horizon.

Besides, I thought these geniuses bought US currency to insulate themselves from a downturn. I agree that caution is advisable, but icing a non-playoff team will do more to damage the bottom-line than spending relatively little to have a shot at success.

The problem is, there is no way to "insulate" against a decreasing cap if you have a slew of long term, over paid contracts that are going to chew up more of your cap space as the cap goes down.

Melnyk is saying to Bryan that they need to tread carefully over the next couple of years and be wary of taking on long term, big contracts as tempting as they may be. It's not about "not losing money", it's about ensuring the team will have enough cap space to actually do something later should the cap go down. And "doing something" is not buying out everyone's big contract to clear space.

Wel put, and with the struggles of this team right now and over the last year, the best time to rebuild might be right now. Let the other teams pay the big contracts and compete for the cup for the time being. Do the Sens want to be a playoff team or a Cup conending team.

With the self impossed budget, the struggles of the team, the lack of tallent up front in the system, right now is the time to struggle, that way when the other teams are struggling, we are on the way up.

Thats nonsense.

cash wrote:Thats nonsense.

Care to go a little more indepth?

Back to player salaries. A lot of the blame can be put placed on the players. They are the ones, along with their agents, demanding the money. They give the team an ultimatum, to match or we go elsewhere. In their right mind, Carolina would have offered Staal no more than Spezza... why did he get more?

The players are going to have to start taking huge paycuts sooner than later. At this rate nobody will be able to afford to pay a player $7M+.

Couldn't one argue contraction with expansion? Wouldn't the league want to have more teams bringing in more money? Sure, first relocate the teams that are on the verge of bankruptcy, let owners who want out a chance to sell the team to anyone willing to buy an NHL team at this time, and let them move the team wherever they want.

DashRiprock wrote:Back to player salaries. A lot of the blame can be put placed on the players. They are the ones, along with their agents, demanding the money. They give the team an ultimatum, to match or we go elsewhere. In their right mind, Carolina would have offered Staal no more than Spezza... why did he get more?

The players are going to have to start taking huge paycuts sooner than later. At this rate nobody will be able to afford to pay a player $7M+.

Couldn't one argue contraction with expansion? Wouldn't the league want to have more teams bringing in more money? Sure, first relocate the teams that are on the verge of bankruptcy, let owners who want out a chance to sell the team to anyone willing to buy an NHL team at this time, and let them move the team wherever they want.

How can you blame the players for asking for something then being given it. If you were to ask for 7 million dollars and someone say ok, anything else? NTC, ok anything else? so on, you are going to take it.

Blame the owners and GM's bud, the players are the ones excepting the money. How many cases go to arbitration? how many players sit out because of a contract? Not a whole lot.

Expanding the NHL further will create an even shallower tallent pool, extremely boring hockey and just basically destroy the NHL period. Expansion is the absolute last thing that the NHL should be doing. Also, there is absolutly no where to expand to.

I still think it's a matter of the team giving into the player's demands. Don't for one minute believe Crosby and Ovechkin weren't offered $7 million.

DashRiprock wrote:I still think it's a matter of the team giving into the player's demands. Don't for one minute believe Crosby and Ovechkin weren't offered $7 million.

Not a chance they were when Heatley was signed for 7.5 before them. 0% chance they were offered anything less than 7.5 mil, prob not less than 8.

I was just thinking this one over today:

Players should be negotiating for a guaranteed percentage of the team's cap -- a set percentage -- rather than a yearly salary figure. Instead of signing for a set number of dollars per year, they should sign for a set percentage of the team's total cap space.

E.g.: a $7.5 million player like Heatley signs a contract that guarantees him 13.4% (that is, 7.5/56) of the team's total cap, rise or fall. Even a severe dip in the cap (say, by $10 mil, down to $46 mil) wouldn't be disastrous -- in the Heatley example, he'd still be making over $6 mil a year. Right now, he loses almost the much to the escrow fund, annually, anyway (the number this year is, I think, 10 or 12%). You'd have to think, too, that over the life of these long contracts -- 5-, 6, and 7 years long -- the cap is, on the whole, more likely to rise than to fall.

Such a system would mean that players profit (and lose) at the same rate that the NHL does, which would provide the players with incentive to really sell the game: the better the NHL does, the more money they make, in real dollars, year to year. It would also mean that you could maintain a cap system (which the owners want) and not worry about the ramifications of yearly ups and downs of the cap in terms of keeping a team together or affording players. It would be a problem of real dollars (i.e., not actually being able to pay your players, which is a consequence of poor attendance anyway), and not cap dollars, if you couldn't afford to keep a given team together.

I imagine the NHLPA wouldn't be too hot about the idea, but think about all the hassles it would save everybody -- players included. If the NHL gets into trouble with all these long-term, high-money contracts, they ought to consider something like this. It's a formula for permanent stability, at any rate, which is something that the new CBA doesn't seem to be offering to the extent that everybody thought it would.