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A Maple Leaf Fan’s Thoughts On Revenue Sharing
by PuckStopsHere on 02/12/09 at 01:16 AM ET
Comments (17)
I chose to write this piece from the point of view of a hypothetical Toronto Maple Leaf fan. That allows me to fill in a few details that are team specific. The general argument is the same for any large market team, but a few specifics must be changed to suit the market (for example one might remove the problem of missing the playoffs).
Toronto Maple Leafs tickets are the hottest ticket in town. It is almost impossible to buy tickets. As an example, I went to the Toronto Maple Leafs site through Ticketmaster and attempted to buy two tickets to the March 12th game against the Tampa Bay Lightning. This is a midweek game against a bad team that is a month away. The best seats available were standing room only for that I get to pay over $76 for the two seats when including the Ticketmaster “convenience charge”.
How do I get tickets where I can actually sit down? I will have to use a ticket broker to buy “re-sold” tickets. The cheapest I could find for the mid-week game against Tampa Bay that is a month away is $144 for the two seats. That would put me in the upper deck in the corner behind one of the goal lines. To sit a centre ice in the 11th row (the best seats available) would cost me ten times that or $1440.
I am jealous when I hear about other markets where seats are available. There are seats available and they are cheap. The Florida Panthers have a “first timer” promotion where anyone with a Florida driver’s license can get two free seats to a Panthers home game. They also offer two seats, free parking, two pizzas and two cokes for $50 for people who are not getting in free. There are several other ticket deals available in the South Florida market.
In Atlanta, you can buy marked down ticket plans and half of your purchase price is credited toward a further purchase next season. If I were to spend $300 on tickets (which would get me to 10 games!) then I would have a $150 credit for next season.
I am jealous of those cities. People can actually get to NHL hockey games and they can get there cheaply. The jealousy ends when I realize that the reason they can get there cheaply is I am paying for it. That is the beauty of the NHL’s revenue sharing program. The larger market teams like my Toronto Maple Leafs send money to these markets that offer cheap (and giveaway) tickets. In fact, they are encouraged to do so by the revenue sharing program. In order for teams to qualify for revenue sharing, there are several targets that they must hit. One is the number of tickets sold for their games. This leads to cheap and giveaway tickets. This can lead to teams buying their own tickets to ensure enough sales to get a welfare cheque from the league. This is a welfare cheque that I pay for.
The revenue sharing pool comes from four places. Central league revenue (from TV, sponsorships, merchandising etc.) funds up to 25% of the total (assuming this revenue stream hits certain minimum size). There is a small addition of leftover escrow monies from the ten biggest revenue teams (a group that certainly includes Toronto). This pushes the total from 25% up to a maximum of 33%. The remainder of the funding is split 50/50 between direct funding by the ten top revenue teams and proportional to the margin their revenue is larger than the 11th revenue team. The Toronto Maple Leafs contribute a large portion of this money. The other half of the funding comes from the playoffs. Teams are taxed on playoff ticket sales (50% for the top 10 revenue teams, 40% for the middle 10 and 30% for the bottom ten). The Maple Leafs are basically exempt from this. They haven’t made the playoffs since the revenue sharing system came into existence. Nevertheless, they are one of the largest payers of revenue sharing money in the league.
The playoff funding is an odd thing. The financial reward for making the playoffs is reduced. Is it good to ever reduce incentives to make playoffs? Further assuming they make playoffs, the Florida Panthers and Phoenix Coyotes are actually paying into the revenue sharing pot as well as drawing from it. Is that even sensible?
I am well aware that ticket prices won’t go down in my Toronto market if revenue sharing is abolished. What might go down is the number of games played against teams I do not care about that are relatively recent additions to the NHL. If these teams fail (and they may fail even with revenue sharing) they won’t be around to play the Leafs. That leaves more games against the teams I care about.
I am upset because I am funding ticket price reductions in markets that don’t care enough about hockey to sell tickets. In Toronto, we love hockey. We love it to the point that tickets are scarce with a losing team. Imagine what would happen if the Leafs ever start winning. In some of the failing markets, tickets are plentiful and almost given away and nobody cares. Seats still remain empty. They see the same product that I would see if I went to a Leaf’s game for far cheaper. Why should I pay so that somebody in Florida gets a cheap game?
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Tags: Atlanta+Thrashers, Florida+Panthers, revenue+sharing, Toronto+Maple+Leafs,
Comments
Thank you for writing this article. It’s nice to see someone outside of us “typical Red Wing fans” expressing this point of view. When we said this sort of stuff, we were just the fans of “the Yankees of hockey” that “wanted to buy championships”.
The Ilitches have done a decent job of getting some cheap tickets in. They have limited $9 tickets for certain games. They always have $25 tickets, but those are the back few rows of the upper bowl. With most seats being $50+, I’d at least like that money I’m spending as a fan to go to re-signing Hossa, Franzen, and Hudler. And Mike Ilitch would gladly do it. But the cap prevents it.
And just as a point to those Wing-haters—Franzen and Hudler (and Datsyuk, Zetterberg, Holmstrom, Lidstrom…) are home-grown products. Drafted and developed by the Wings, for the Wings. That’s not “buying a championship”.
The salary cap is a joke. It punishes the teams in viable markets, and is hardly even effectively subsidizing the bad teams in bad markets. So basically, it’s taking the money of the Flyers, Wings, Ranger, Leafs, and all the Canadian teams, giving it to the Coyotes, Thrashers, and Predators, and those teams in bad markets are still barely getting by. Great waste of money.
Posted by Nathan from the scoresheet! on 02/12/09 at 08:17 AM ET
The cost of a salary cap was revenue sharing. The Leafs now have a limit on how much they can spend on their player salaries no matter how much revenue they generate. The cost of unlimited income and fixed cost is spreading the wealth a little. Whomever bought the owners Kool-Aid that ticket prices would decrease if there were a salary cap didn’t understand that each individual market drives the cost of attending a game. In Toronto they really don’t care how much a person is willing to pay for a ticket in Pheonix or South Florida. Isn’t it a great system where owners that are making huge profits do not have to re-invest in their product and count on a monoply in their market to keep the customers coming back?
Posted by Hockey1919 from Montreal on 02/12/09 at 09:18 AM ET
This truly is an outstanding piece and should be required reading for those sunbelt team “fans” who seek to deflect such criticisms by citing an imaginary Canadian media bias. The fact of the matter is that not only in essence are Canadian ticket buying fans right now subsidizing the ticket prices for"fans” in Phoenix and teams elsewhere in the sunbelt, but the revenue sharing money received by some of those teams enables them to compete against against the others for free agent signings.
Ridiculous. Many of us are outraged by this, but none of it is reported.
Posted by Tiny from Frozen Hole on 02/12/09 at 10:04 AM ET
Good post (As always). Life in Toronto isn’t easy that’s for sure. We have a baseball team that has 0 chance of being competitive. The raptors were given the worst expansion deal in sports history with respect to ability to build. The leafs suck simply because of their own ineptness to build properly.
As a fan I can tell you however that your take on inability to get seats is misguided. The market is flooded with seats. Any game you want, there are always good seats available at face price. Face is expensive but Toronto is an expensive city. Tickets to see the leafs are on par with events like concerts at various outlets. The people who bitch about prices are the same ones who complain about the Jays not spending up to the likes of the yankees and red sox. If Toronto fans supported the Jays in the same fashion as they do the leafs (and I include corporations in that group) the Jays would be able too.
If you need help finding tickets let TSM know!
Posted by torontosportsmedia.com from toronto on 02/12/09 at 10:13 AM ET
One thing… why didn’t you find a Leaf fan and ask them to write this themselves?
Posted by Karina on 02/12/09 at 11:08 AM ET
Ticket scarcity and high ticket prices in Toronto have nothing to do with revenue sharing.
If revenue sharing were removed from the CBA, tickets in Toronto would still be just as hard to get and just as expensive.
Posted by mf37 on 02/12/09 at 12:39 PM ET
Ticket scarcity and high ticket prices in Toronto have nothing to do with revenue sharing.
If revenue sharing were removed from the CBA, tickets in Toronto would still be just as hard to get and just as expensive.
That’s enitrely true. But with revenue sharing, the Toronto fan who pays those high prices is subsidizing cheap tickets in the smaller markets. Is that fair? Why should somebody get a deal to see an NHL game that the Toronto fan helps to pay for, when those deals are never going to be available to that Toronto fan?
Posted by PuckStopsHere on 02/12/09 at 12:44 PM ET
Why did all of the big market teams agree to greedily suck up expansion fees and then complain about revenue sharing in markets that can’t sustain themselves?
Posted by Hockey1919 from Montreal on 02/12/09 at 01:00 PM ET
Ticket scarcity and high ticket prices in Toronto have nothing to do with revenue sharing.
If revenue sharing were removed from the CBA, tickets in Toronto would still be just as hard to get and just as expensive.
True. But the point is that without revenue sharing, or a cap, MLSE would be able to turn around in re-invest their superior income in making the on-ice product better. Now, since MLSE is a bunch of morons, it wouldn’t get better. Maybe a better example is the Red Wings—it would give Ilitch and company the ability to use their earned money to keep their drafted and developed talent with the club.
Why did all of the big market teams agree to greedily suck up expansion fees and then complain about revenue sharing in markets that can’t sustain themselves?
There are more small market teams in the league than big market teams. Heck, even after the initial expansion of the game after the original six, they went to some small markets (at least by hockey standards). The owners in the big markets like Detroit and Philly are going to do pretty well with or without a cap, and with or without revenue sharing.
Being that they were up against a larger group of small market owners, would it have done a lick of good to complain? Doubt it. And frankly, I don’t recall any owner speaking outside of Gary and Jeremy Jacobs’ party line during the lockout. There wasn’t complaining. At least not externally. I’m sure the big market owners let Gary have a piece of their mind, but in the end, in-fighting amongst the owners only would’ve kept the lockout going longer, which is something the big market owners couldn’t afford because they actually had successful business based on their hockey clubs.
Posted by Nathan from the scoresheet! on 02/12/09 at 01:21 PM ET
The reason why Toronto fans are paying more for tickets is because you knuckleheads are willing to pay exorbitant prices to watch a team that hasn’t won a Cup in 42+ years. Call it the “Cubs syndrome”, but don’t blame the CBA. Leafs ownership doesn’t know how to put together a winning team, but they do know how to take you fools through the wringer.
Posted by Bill on 02/12/09 at 01:53 PM ET
But with revenue sharing, the Toronto fan who pays those high prices is subsidizing cheap tickets in the smaller markets. Is that fair?
I guess that depends on whether or not it’s “fair” that the Leafs just happen to play in Canada’s largest city, media market and corporate centre. It’s not like MLSE has really earned the resources at hand.
Why should somebody get a deal to see an NHL game that the Toronto fan helps to pay for, when those deals are never going to be available to that Toronto fan?
If you remove revenue sharing (or even the cap) from the CBA, demand for Leaf tickets will not abate, nor will prices.
I see three options:
Remove revenue sharing from the CBA, MLSE keeps their profits;
Keep revenue sharing, other teams pocket the proceeds;
Keep revenue sharing, other teams pass on ticket savings to fans.
I know which option is the lesser of three evils to me.
Posted by mf37 on 02/12/09 at 02:26 PM ET
I see three options:
Remove revenue sharing from the CBA, MLSE keeps their profits;
Keep revenue sharing, other teams pocket the proceeds;
Keep revenue sharing, other teams pass on ticket savings to fans.I know which option is the lesser of three evils to me.
Call me greedy, but I see which option is not only the most ethical, but the most beneficial to my hometown team.
Posted by Nathan from the scoresheet! on 02/12/09 at 02:59 PM ET
The reason why Toronto fans are paying more for tickets is because you knuckleheads are willing to pay exorbitant prices to watch a team that hasn’t won a Cup in 42+ years. Call it the “Cubs syndrome”, but don’t blame the CBA. Leafs ownership doesn’t know how to put together a winning team, but they do know how to take you fools through the wringer.
I think there’s a misunderstanding here. I don’t think anyone is claiming that the the CBA is the cause of high ticket prices (I am certainly not). The claim is that the high ticket prices lead to more revenue, and that’s revenue that won’t directly benefit the team that generates it. It’s a form of fans of team A paying more money than fans of team B, and team B is then given that money to go do whatever with (such as improve their roster), perhaps making them better than team A.
Let’s face it—we go to games because it is fun, but we also go to games because we want to see our team win. We want that $50 ticket to help sign the right player or pay the right coach, at least I do.
Posted by Nathan from the scoresheet! on 02/12/09 at 03:01 PM ET
Call me greedy, but I see which option is not only the most ethical, but the most beneficial to my hometown team.
Any benefits the elimination of revenue sharing might bring will accrue to MLSE shareholders not the on ice product or the fans.
Posted by mf37 on 02/12/09 at 03:17 PM ET
One of the problems with revenue sharing is that it isn’t doing what it was supposed to, which was actually help the smaller-market teams as they tried to build up their fan base and local profile. By taking money from the larger market teams (and honestly, I think all playoff revenues should be exempt from revenue sharing - if you want a piece of playoff money, then get your butts in there yourselves by PLAYING BETTER like the teams that actually make it!) the larger market teams are hurt to some extent (less for some teams, of course) but it isn’t enough to help the smaller markets, which still have to keep up with the salary floor and are on life support. No one is actually being helped in any substantial way at all.
Some of the teams are like vampires, only managing to stay in business with constant infusions of dollars from the larger markets, and if that spigot was turned off they would be screwed. The worst thing is that it doesn’t seem like some of the teams will ever be able to survive without revenues from other teams. How long are they going to continually siphon cash from other teams?
Posted by Baroque from Michigan on 02/12/09 at 07:23 PM ET
Revenue sharing is a joke, because owners of failing clubs don’t plow sharing money back into the roster, they use it to abate losses.
What the NHL would do if it was smart would be to a) either abolish the cap floor or significantly increase how far it is from the ceiling and b) get rid of revenue sharing.
If a team wants to have a 20 million dollar payroll, great. They make their own bottom line. All the cap floor has done is force GMs to make stupid decisions with long term deals.
Without revenue sharing, and I’m specifically talking about the part of revenue sharing which takes money out of the pocket of one team to put it in anothers, there’s more of an emphasis on making the playoffs. Without a cap floor, or with at least one farther from the ceiling, playoff gate has a much greater impact on a club and rather than being something which breaks a team even for the year, might actually get a few teams in the black.
Posted by HockeyinHD on 02/13/09 at 08:26 AM ET
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During the lockout in 2005 I knew alot of Maple Leaf fans that supported the owners and the salary cap, I never understood why.
Likewise in Calgary, people loved the level playing field and the salary cap. Then Calgary became a rich city and now they’re whining that the Flames won’t be able to retain a guy like Cammalleri at 5 million/year because of the salary cap.
I never understood why people support a salary cap and mediocrity.
Posted by Tracy from Calgary on 02/12/09 at 01:43 AM ET