March 30, 2004

Dissecting the Levitt report: An economist and a hockey fan looks at the Levitt report.

posted by owl to hockey at 07:25 PM - 6 comments

Amazing how a post like this a few weeks ago would have drawn a crowd, but after Bertuzzi it seems less important. While he has many good points it's not very professionally written. At least from my point of few if your going to spend that long going through the report there should be references (not just the odd hyperlink somewhere, but actually references ). He certainly doesn't look like he went into with an open mind either. That being said I could have told you that this is a publicity move by the league. You don't need a audit to see that the numbers are out of whack in the NHL, but the report makes for great 30 second segments in the news. The way I see it there is no way that a NHL teams make anything close to what the other 3 pro sports do (NFL, MLB, NBA). It is not even in the same ballpark. However NHL salaries are about the same or even greater than those leagues. The only conclusions you can make from that is that owners in the other 3 leagues are making way more than they should at the expense of their players or the NHL overpays it players. Take you pick... it has to be one those. I just want the NHL and NHLPA to stop yapping to the media, lock themselves in a room and figure this out.

posted by camcanuck at 09:29 AM on March 31

He's right about the fact that very few people are going to read the report. But if the 75% figure is true (and let's pretend it is), that's not so much a problem with player salaries as it is the lack of a TV contract. If the two sides can hammer out an agreement before next season (and every single day I light a candle for this very thing), then they can focus their energy on procuring a decent TV contract (or re-upping with ESPN/ABC and promoting harder), which will naturally and immediately bring the economic scale of the league closer to level. See, it's the foolish hope for things that ain't gonna happen that makes you get old before your time.

posted by chicobangs at 09:50 AM on March 31

i don't think it was that poorly written, but i will agree he does not come across as someone who had an open mind about the numbers going in. that being said, what each player gets is irrelevant. what is relevant, to be profitable, is to keep salaries at some percentage of gross income. the nfl sets that at 64%, the nba sets it at 48%, but half of the teams pay luxury taxes that kick in at 61%, so they are kind of comparable. the nhl claims that salaries are 75% of gross income, which is out of whack to the other leagues. the article linked points out some dubious accounting practices that even with limited access to data suggest its closer to 72%, and that other factors could lower it even more. in that case, we are looking at comparable percentages accross all the sports, _independant_ of what the source of gross income is. eg, tv deal or not, although loss of that income would obviously change things. so yeah, chicobangs, i agree, lets get a decent tv contract.

posted by owl at 11:37 AM on March 31

here's a short synopsis of some other essays Dubi, huh-huh, has written. and, I'm not sure if anyone has noticed, but the mood continues to chill between the NHL and the ESPN

posted by garfield at 11:52 AM on March 31

Out of the other 3 major leagues the NHL is probably most comparable to the NBA. The NBA sets their %salaries at 48%. Even if the 75% from the NHL is 'out of whack' it isn't anywhere close to 48%. What is really sad is no matter what the league says the NHLPA has said that they will not accept salaries that are tied to league revenue because that would be a salary cap. Even if the NHLPA could audit every team, and compile their own numbers they still won't EVER agree to a salary cap. The owners on the other had have said they MUST have a salary cap. This whole percentage of salaries idea seems like a non-starter if you ask me. The new TV contract for the NHL is going to just plain suck. I've heard that the NHL will only get 1/4 of what they got before or maybe less.

posted by camcanuck at 01:34 PM on March 31

camcanuck, the nba sets them at whatever rate they want and nobody plays by the i noted half of the teams pay luxury taxes, and they kick in at 61%. it sure does look like the tv deal is going sour. but a lot of teams are developing their own distribution channels, they should make up some of the difference.

posted by owl at 04:45 PM on March 31

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