Wille is correct. Let me attempt some math. Assume each team buys out one player who has 20 million remaining on his contract. 30 teams times 20million each is 600 million dollars. Spread out that 600 million over ten years of the new CBA deal = 60 million per year that the players will lose from their 50/50 revenue split.
As far as I know, amnesty buyouts would follow the same formula that are applied to buyouts now, they just wouldn't have the accompanying cap hit. So, contracts would not be paid out in full. Players under 26 years-old would receive only 1/3 of their remaining contract value. Players over 26 would receive 2/3 of their remaining contract value. The interesting question for me, though, is how the buyout will be applied to the players' share if it indeed is.
Currently, buyouts offer a lowered cap hit for teams by using the lowered payment (1/3 or 2/3 depending on age) spread over double
the number of years bought out. What I would like to know is if the NHL is proposing they apply the amnesty buyouts against the players' share spread over double the number of years bought out per contract (meaning significant portions would be paid for by players who got no say in this CBA and making for some seriously complicated accounting), or are they proposing to make players pay for the buyouts entirely out of their already reduced revenue from a partial season, seriously diminishing what every player will get?
While it may not apply to the specifics of the cap hit/players' share hit, Cap Geek has a nifty Buyout Calculator that would at least let you get a better idea of how much any player would get.http://www.capgeek.c...out-calculator/
The players have to be willing to share the risk with the owners when it comes to league revenue's. Players and owners have to work together to grow revenues. Everyone wins.
The problem is the idea that "owners take all of the risks" is a myth based on the misconception of what it means to own a business. Owners risk their initial investment in a company, nothing more. Companies are incorporated to legally separate the owners' property and moneys from that of the company, so even if a company goes bankrupt due to an owner's bad management the owner will never lose more than the money they willingly put into the company. (And, if they actually worked at the company they could have been being paid a huge salary while there, further limiting or even completely offsetting their loses.) That is considered the average risk of buying a business. However, a sports franchise isn't an average business and they actually face even fewer risks than owners of regular businesses.
NHL team owners buy into a business that is given every advantage to succeed, far beyond what other businesses get. They get a closed system with limited competition, territorial rights (meaning no other NHL team can move into their city and take their business..unlike the real world where anyone can put a store just like yours next door and drive you out of business), and massive amounts of control over their employees the likes of which are rarely seen outside of sports. They don't even have to do the work to generate all of their own revenue. They have the NHL to sell merchandise and secure TV deals from which they receive revenue.
Further more, all teams receive huge luxury tax breaks beyond what almost any other business receives and the NHL is (literally!) classified as a not-for-profit to allow them to keep millions they owe American taxpayers each year. On top of that, many teams (like Tampa Bay) operate in arenas built in part or wholly with taxpayers' money while the billionaire owners of the teams get to keep the lion's share of profits for themselves. Worse still, some teams actually get paid by taxpayers to operate the arena, even though the taxpayers get little if any
return on their yearly investment! Do you know of another business that's true for? The auto industry, responsible for tens of thousands of jobs had to repay the loans they got, but NHL franchises are given millions of taxpayers' dollars every single year.
If that weren't enough, very few owners have ever lost money by owning a NHL franchise. Even owners of franchises that lose money year in and year out end up making a tidy profit when they sell the team because almost all teams are continuing to increase in value almost yearly. Tampa Bay, for example, was purchased in 2010 for $93M but, despite being notorious for losing money, is currently valued by Forbes at $174M. Even if you assume a major overestimation by Forbes, that still means the owners of a franchise known for losing money year in and year out could sell and make dozens of millions of dollars after only a few years.
Outside of sports, it's almost unheard of for a company to lose money year after year but still make the owner millions when they sell, but the NHL is full of examples of money losing teams making owners millions in value increase:
- St. Louis was just purchased for $120M this year. It's already valued by Forbes (in November) as being worth $130M.
- Carolina was purchased in 1994 for $48M but Forbes puts its current value at $162M.
- Anaheim was purchased in 2005 for $70M but Forbes puts its current value at $192M.
- Buffalo was purchased in 2011 for $165M but Forbes puts its current value at $175M.
- New York Islanders was purchased in 2000 for $130M but Forbes puts its current value at $155M.
- San Jose was purchased in 2002 for $147M but Forbes puts its current value at $223M.
- Washington was purchased in 1999 for $85M but Forbes puts its current value at $250M.
In fact, in the NHL it's far more common for money losing teams to make owners nice profits after only a few years than it is for a team to drop in value. Looking only at teams losing money (because obviously those not losing money are generating yearly profits for the owners, allowing them to recoup their initial investment and then make profit after that), there are only 5 teams that have dropped in value: Phoenix, Florida, Columbus, Minnesota, and Nashville. (NOTE: I only included Columbus because Forbes lists a 2012 purchase price of $173M, but I don't believe that's accurate. The team, currently valued at $145M, was purchased in 1997 for $80M. Earlier this year the company Nationwide purchased 30% of the team for $52M, which should make the total purchase price $132M. I think the Forbes 2012 purchase price might also include the $42.5M taxpayers paid for the arena in order to allow Columbus to lease it for FREE, saving the team $9.5M a year in rent.) (Source
I'm sure no one is surprised to see Phoenix on the list of teams that have dropped in value since being purchased last, but what may be surprising is that Forbes still values the team at $134M, which is barely below the $140M the NHL paid for it in 2009. (Taxpayers have paid the NHL $25M a year to operate the arena since they purchased the team.) Even more surprising is the news that the NHL was asking $170M. The guy most likely going to buy the team, Greg Jamison, only wanted to pay $150. (Source
) So, even at the lower price, this sinkhole of a team often held up as an example of all that is wrong with the NHL business mode is still going to sell for more than Forbes values it at and make the NHL a handsome $10M profit.That's NHL owner style "risk" in a nutshell