Re: nhl tables new offer
posted at 10/18/2012 4:41 PM EDT
In response to Bookboy007's comment:
It's more complicated than "supply and demand". Arbitration, comparables, and even the salary floor artificially inflate salaries above the level of 'supply and demand'. Then there's the artificial bump from the threat of losing sunk costs in a player's development when or if he leaves as an RFA. Teams making offers will inflate the price in order to discourage a match - by definition, you pay significantly more than the asset is worth as a way of discouraging a match. Teams will match anyway because the costs already sunk into a player you've planned to have as a key part of your team, and of finding a way to replace that player, are now added to the value of the player's talents. So Dustin Penner's salary shoots up and becomes the new benchmark in arbitration for inconsistent, often lazy "power forwards". "My guy put up comparable numbers to Penner!" "Your guy doesn't work hard enough for teh at kind of money." "And Penner does?!!?!"
The real supply and demand question is about the HRR. They'll keep raising ticket prices as long as the building is full. As long as revenue grows, the players will push for more.
The underlined is pretty much in play for every business in the hemisphere. Why should sports team owners get a pass from reality. There are also examples right in front of us, where teams figured out that there is much more to running a successful sports business than simply being "the highest bidder". It's no guarantee of success, never has been, and probably never will be. I agree with your inference about arbitration, but feel the problem is not the process, but the aptitude of the decision makers. Work on the judgement factor....get smarter
Yes, they "will" keep raising ticket prices, and that's where I run out of sympathy for the league. They want what they spend capped....but not what I spend. How come the the players can't get paid market value, but I get charged it. With a 30 million cap, prices will still skyrocket if there's a sold out rink. When ticket and beer prices get capped, my stance will soften a bit.
And....... revenues "have" increased dramatically, the players have not asked for more.