Wednesday, March 07, 2007

 

Ask Matty - just don't expect an answer that makes sense...

Radjeep Kandola:
Q. You've said the Oilers were stretched to have their payroll at $40 million but how is that possible when most of the other teams in the league have a higher payroll but fewer gate receipts? The Oilers were eighth in NHL gate receipts (from October to Dec. 31) and Calgary, which is spending about $3M more in payroll, is ninth in gate receipts?

White House Press Secretary Oilers PR Director Edmonton Journal Hall-of-Fame Hockey Writer Jim Matheson:
A. Eight teams had lower payrolls than the Oilers in the latest accounting after the trade deadline. You're right that they fill the building every night and their ticket prices are in the top third and going up, but, don't forget, this is still a team that was spending about $33 million a year pre-lockout before coming up to $40 million US now. The Flames are going to be really squeezed after next season to keep their payroll in line with Dion Phaneuf, Jarome Iginla, Miikka Kiprusoff, Daymond Langkow and Kristian Huselius's contracts all up, and we'll see how their payroll looks. Some teams are spending above their means, if you're talking gate receipts solely, like the Blackhawks ($43.3M payroll) for a team that draws flies, but owner Bill Wirtz makes a truckload off the concessions, etc. The Oilers ownership group feels $40M is plenty for now, although when the salary cap goes up to, say, $48M next year, we're going to get another Haves and Have-Nots situation because rich teams will push the ceiling, leaving more disparity between clubs.

[forehead slap] I'm not even sure what's weirdest here:
  1. Bill Wirtz (!) is spending above his means... because the flies who attend Hawks game drink a hell of a lot of beer, or something...
  2. The Flames have a lot of contracts expiring next season... great players... so their payroll might go... down? Or something...
  3. The final sentence, which might as well have been replaced with "If you think you're frustrated now, just wait!"
The fatalism in Matty's non-answer is jarring. Guess what, Edmonton? Despite being 8th in the league in gate receipts, you're a Have-Not, and P.S. it'll keep getting worse.

When the push for public funding of a new arena begins in earnest, you're going to hear plenty (again) about the intangible value of being a "major league city". At that point, someone might want to Ask Matty why the Oilers are so willing to negate this value to anyone who's paying attention by behaving like The Littlest Market That Barely Could.

UPDATE: It might be worth pulling Colby Cosh's mid-lockout cri de coeur out of the memory hole here:
...now Oilers boss Pat Laforge wants us to believe, after witnessing a month-long orgasm three hours south of us, that our club can't compete in this town under current conditions. Pat--you're a marketing genius who has outfaced his predecessors and colleagues with brilliant Veeckian ideas, and I wouldn't replace you with your weight in gold, and I can even respect what Bettman is trying to achieve, but fuck you for letting this affluent, growing, hockey-mad city be used as some kind of po-faced poster boy for management struggles.


UPDATE: Avi has a brilliant new post up at SportsMatters on this very issue. Some highlights:

"How to reconcile the two? Simple: player salaries would be rolled-back by 14.1%. For Ryan Smyth junkies, that means a contract with a paper salary of $5.5 million would result in a pay cheque for $4.725 million."

or
"The reconciliation also helps put the Oilers player spending in perspective. Right now they're projected to finish the year at $41.9 million in cap salaries. That figure creates the illusion that they're spending close to the cap. In fact, their player compensation is below league average.

Factor in the adjustment, and what they'd actually pay would be $35 million, or roughly $1 million below the league-average team budget of $36 million."

Comments:

Eight teams had lower payrolls than the Oilers in the latest accounting after the trade deadline. You're right that they fill the building every night and their ticket prices are in the top third and going up, but, don't forget, this is still a team that was spending about $33 million a year pre-lockout before coming up to $40 million US now.

I'm not even sure this is in English.

My hands are actually shaking, I'm so upset.
 


Sports writing HAS to be better.

We should start an email campaign any time a local sports writer is especially dumb, and CC the editor.

Just a thought.
 


You forgot perhaps the best part of the Coshian rant, Matt.

"You asshole owners and their shills can't seem to make up your minds whether cities that don't care about hockey or cities that do care about hockey are the problem."

Seems especially poignant since Matheson is already crying haves and have-nots. What the hell was the point of the lockout again?
 


Not a bad idea mike w. At the very least we'll stop the disingenuous practice of print media types posting their email addresses. ;)

Thank heavens for small off-ice victories. If it wasn't for those we'd have nothing at all.
 


but owner Bill Wirtz makes a truckload off the concessions, etc.

I've only ever attended one game at Rexall Place. It was a complete snoozer against the Canucks back in October, but it sure seemed to me that they sold ice cold beverages to the patrons. Surely I wasn't the only one fooled by the fantastic marketing of RP... having pretty girls selling cheap beer at exorbitant prices. For my $13, I received two tasty beverages, and I'm sure many others did the same.

Or perhaps the fans in Edmonton were just enjoying the crowded, noisy concession area.

Not purchasing anything at all. Nope.
 


Good god. I feel like I'm wading in molasses after reading that.

Let's take just one "fact" used in the comparison: owner Bill Wirtz makes a truckload off the concessions, etc.

Mr. Matheson needs to be reminded that the Oilers make plenty off concessions too. As I summarized back in November, the team receives: all concession revenues for Oilers games, parking revenues north of 118 Avenue, $2.2 million of the $2.8 million ticket surcharge that formerly went to the City (an amount the City has indexed to inflation through to 2014), and ownership of the naming rights to the building (the rights were sold to Skyreach for $1.2 million a year, and later to Rexall). It also pays just $878,000 of the operating costs for Rexall, with the City covering the Northlands' deficit.
 


One other thing... I guess Matty should just stick to the softballs. You know, like the questions you can answer with google or hockeydb.

It shouldn't be any surprise that the first real question we see in Matheson's mailbag gets such an illogical answer.
 


...just what is the point that Matheson is trying to make here? It's such a buckshot of apparently random rhetoric that I sort of know he's trying to defend management but I'm unsure how, precisely.
 


Check out Avi's new post on the issue of payroll at SportsMatters:

"The reconciliation also helps put the Oilers player spending in perspective. Right now they're projected to finish the year at $41.9 million in cap salaries. That figure creates the illusion that they're spending close to the cap. In fact, their player compensation is below league average.

Factor in the adjustment, and what they'd actually pay would be $35 million, or roughly $1 million below the league-average team budget of $36 million."
 


What the hell was the point of the lockout again?

Oh! I know! I know! Was it this?


Fans expect an end to the salary dumps disguised as trades that have resulted in a parade out of town - led by Doug Weight, Bill Guerin, Janne Niinimaa and Roman Hamrlik.
...

In the long term, Lowe will be able to avoid the cycle of having to dump players as soon as they get any good and price themselves out of his budget: Weight, Guerin and on and on ...

"It's been our expectation through this process this would allow us to keep players like Weight, for instance," said Lowe.
...

"A lot of great players have come and gone in this organization because of salaries," said Smyth.

"To get back to the level of tradition we've had would be special. I grew up an Oilers fan as a kid. To win a Stanley Cup here, that would be the ultimate."

 


The Journal's publisher is a neighbor of mine, so if youse guys want me to deliver a 50-lb. bundle of hate mail about Matheson and their reporting in general to her doorstep...
 


"The Oilers ownership group feels $40M is plenty for now, although when the salary cap goes up to, say, $48M next year, we're going to get another Haves and Have-Nots situation because rich teams will push the ceiling, leaving more disparity between clubs."

I can't believe he has the balls to suggest the Oilers are gonna become a have-not. I mean our ticket prices took the highest jump in the league at around 20-something % (right?). What a bunch of bull, he sounds like he's already making excuses for next year, which is a bad sign.

temujin: I've only ever attended one game at Rexall Place. It was a complete snoozer against the Canucks back in October...

I was at that game! It was exciting for all of 10 minutes, the only good thing is the Oilers won (2-1). Was that Thoresen's last goal? And yes, very expensive beer.

metrognome: ...just what is the point that Matheson is trying to make here? It's such a buckshot of apparently random rhetoric that I sort of know he's trying to defend management but I'm unsure how, precisely.

Exactly. As an Oilers fan, I'm trying to stay optimistic. But when you have Matheson already crying wolf over the increased salary cap for next year, it makes you wonder.

Anyone have any info on the finances for the Oilers? Even with missing the playoffs this year, I'd be surprised if they lost money.

ChrissyT
 


I'm going to give Matheson the benefit of the doubt here. Because the alternative is stunning.

EIG members will read this and think "He's doing what he has been told to do. This is fine."

Burly, angry welders in coffee rooms today will read this and think "What the fuck!!!"

I mean maybe he is a complete idiot, or maybe he has managed to walk a fine line.

How many other Oiler shills have brought Bill Wirtz's name into a conversation voluntarily?
 


but, don't forget

That one has a running gag quality to it.

As in
"Sure, the Oilers have high ticket prices, but don't forget the beer, while light tasting, is actually quite filling."

Or

"Ryan Smith thinks he should be paid like an elite player; but don't forget, Hockey Hall of Famer Dick Duff was never an unrestricted free agent."
 


Matheson would have been much better off answering the question this way:

"But don't forget, Chris Pronger is out with an injury again."

I would have agreed with everything else he said after that point.
 


I don't think I can comment on his comments until I get a babble-to-English translation.

Help!
 


The reply is absurd in it's pointlessness, and quite frankly everyone who reads it as anything other than a joke should be insulted. Is there any way that any can think of that would allow for an actual looksee into the finances of the Oilers in comparison with other franchises? I mean, 3rd in ticket prices (I believe) and 8th in ticket receipts, how are we not at least in the top half of league revenue? How much of a difference in TV income can their really be?

Anyway, on something of a tangent, did anyone read the front page of the Journal today? It was something along the lines of "Wild nights on whyte avenue: 2006 playoff mayhem by the numbers." It then lists all the gruesome damage and mayhem associated with the playoff run, almost as if to imply "Thank God we don't have to go through that this year, maybe it's best that we take a year off." Unbelievable. Statistics concerning increased revenues for restaurants, sports bars, and merchandising stores were noticeably absent.
 


Q. You've said the Oilers were stretched to have their payroll at $40 million but how is that possible when most of the other teams in the league have a higher payroll but fewer gate receipts? The Oilers were eighth in NHL gate receipts (from October to Dec. 31) and Calgary, which is spending about $3M more in payroll, is ninth in gate receipts?

A: In a garden, growth has its season. There is spring and summer, but there is also fall and winter. And then spring and summer again.
 


The escrow point is a good one.

What happens to the escrow funds? This is covered under 50.11(d), “Procedures in the event of an overage.”

They’re paid out in three parts. First, escrow dollars owed to the ten highest-revenue teams are used to fund up to 1/3 of the league’s redistribution scheme. In addition, another 21% of the redistribution scheme monies come from the ten highest-revenue clubs' regular-season revenues. How much money will be required to fund the redistribution scheme this year is unclear, as is the net impact on the Oilers. The more effective the low revenue teams have been at bringing revenue closer to the mean, the less is paid out in redistribution.

Next, the funds are distributed to any club that has a salary less than the midpoint of league payroll. Guess what? If a team is below the league midpoint, they get topped-up to the $36 million mark, or less is the top-up would cause them to exceed the 54% relationship between salaries and revenue.

Then finally, the remaining funds are divided equally between the 30 clubs.

This is muddy enough that it looks on the surface like the Oilers would be net losers from the overage payback, but I find it hard to be sure.
 


If the Oiler brass saw this, they might be of the belief that ticket prices have a higher ceiling yet. (via Off Wing Opinion)
 


They can't seriously expect us to swallow that tripe.

Now as a special treat courtesy of our friends at the Meat Council (Edmonton Oilers), please help yourself to this tripe.
 


The Flames are going to be really squeezed after next season to keep their payroll in line with Dion Phaneuf, Jarome Iginla, Miikka Kiprusoff, Daymond Langkow and Kristian Huselius's contracts all up

Yeah, because with an oil boom underway and the salary cap going up and extra money from the '04 playoff run (and at least 6 home games between the '06 and '07 playoffs), Calgary is going to be hard up for cash this summer.
 


Lowetide,
Chauncey Gardener reference +1
 


This story from CP today also had a misdirecting note:

Despite the backlash against the Oilers in the wake of Smyth deal, fans are still coming out. Wednesday's game was the 67th consecutive regular-season sellout at Rexall Place...

The writer does know the trade was done last week, right, and that the tickets in all likelihood were sold before that?
 


The argument we hear again and again that professional sports teams all lose money for their owners drives me absolutely crazy. I refuse to be convinced that the Flames/Oilers ownership groups are in it for the good feeling they get out of community charity. They aren't. They are in it to make money, and even pre-lockout, they make a shitload of it.

You only have to (as the English say) do the maths to see that this is so.

The Saddledome has 19,000 folks in the seat at every game. The average ticket price, including club seats, has to be around $100. And you can gross that up 50-150% for the playoffs.

That's a game day gate of about $1.9 million, times 45 (there are 4 preseason games) is revenue from ticket sales only of $85.5 million. Those beers they sell at the Dome for $6.75? They can't cost more than a buck each to pour. In fact, I expect the plastic cup costs the Flames more than the beer inside it does. Conservatively, the gross profit per beer has to be $5. I bet they sell 10,000 of those every game. Plus food. Plus parking. That all has to add at least $200,000 to the game day profits.

The Flames boast they paid $3.5 million for their new scoreboard. And it is beautiful. it is also covered with advertising and they run commercials on it during commercial breaks at the game. I'm guessing the scoreboard paid for itself 3 or 4 games in. All that advertising on everything? All those red and navy jerseys? More profit. And that is just the revenue at the Dome. There's merchandising outside the Dome, TV revenue, that Flames restaurant if they ever actually finish it.

Face it, these are both $100 million plus plus annual businesses. By far their biggest cost is player salaries at $50 million or so (adjusting for US dollars) but can the cost of the rest of their operations be more than $10 million? I doubt it.

Even if I am wrong by 20% on every number, we are looking at two pretty profitable operations. There are no 'small markets' there are only big and bigger markets.

[/end rant]
 


I'm not on the EIG are money grubbing assholes bandwagon, but that article was painful.

The Hawks make their money on concessions, etc? Fuck off.
 


Incidently, shouldn't legally binding revenue figures be available due to the new CBA being tied to it?
 


What? No Tampa Bay post-game?

Ah-ha-ha-ha-ha-ha.
 


Or pre-game, for that matter.
 

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