So the Sabres lose revenue sharing after this season, right? Hello, is this thing on?

[PASabreFan]

I've been saving this one up for awhile. Whenever the Sabres raised ticket prices after a season, it was conventional wisdom from the Pegula-ites that they had to do it — they didn't want to do it, but they had to... to continue to receive revenue-sharing, a critical thing for a small market team. The Sabres never came out and said it so starkly, but Ted Black among others was always willing to encourage the idea with sneaky, lawyerly language.

Of course, it was never true. You don't lose revenue-sharing when your ticket revenues drop to a certain point.

It's a theory we're about to test. The Sabres surely will see ticket revenues drop to below 75% of league average, for the first time under this CBA (that's a fair assumption given attendance totals and yearly ticket increases pre-pandemic).

Those who blithely toed the company line might be confused when revenue sharing doesn't go away after this season.

Some background:

If the Sabres were to fall under the benchmark, which is 75% of the average league gate, they'd have to submit a corrective three-year business plan to the league and Revenue Sharing Oversight Committee, which is made up of three NHLPA members and four league reps.

The RSOC may review, approve and evaluate the plan going forward. "A club's continuing eligibility to receive Distributions may be conditioned on successfully executing on such plan," according to the CBA.

My source here is the CBA, Section 49.3(d)(i).

 

[K-9]

I suspect COVID might be cited as a mitigating factor and I wonder if there is some type of force majeure language in the CBA. 

[PASabreFan]

49 minutes ago, K-9 said:

I suspect COVID might be cited as a mitigating factor and I wonder if there is some type of force majeure language in the CBA. 

Why would the Sabres have to cite Covid or look for some out in the contract? So they wouldn't have to write the corrective plan? Maybe they should have to. Maybe the first paragraph should be about preventing the owner(s) from meddling.

Edited December 11, 2021 by PASabreFan

[PromoTheRobot]

1 hour ago, PASabreFan said:

I've been saving this one up for awhile. Whenever the Sabres raised ticket prices after a season, it was conventional wisdom from the Pegula-ites that they had to do it — they didn't want to do it, but they had to... to continue to receive revenue-sharing, a critical thing for a small market team. The Sabres never came out and said it so starkly, but Ted Black among others was always willing to encourage the idea with sneaky, lawyerly language.

Of course, it was never true. You don't lose revenue-sharing when your ticket revenues drop to a certain point.

It's a theory we're about to test. The Sabres surely will see ticket revenues drop to below 75% of league average, for the first time under this CBA (that's a fair assumption given attendance totals and yearly ticket increases pre-pandemic).

Those who blithely toed the company line might be confused when revenue sharing doesn't go away after this season.

Some background:

If the Sabres were to fall under the benchmark, which is 75% of the average league gate, they'd have to submit a corrective three-year business plan to the league and Revenue Sharing Oversight Committee, which is made up of three NHLPA members and four league reps.

The RSOC may review, approve and evaluate the plan going forward. "A club's continuing eligibility to receive Distributions may be conditioned on successfully executing on such plan," according to the CBA.

My source here is the CBA, Section 49.3(d)(i).

 

So you're advocating for the Sabres to increase ticket prices to hit that revenue mark?

[PASabreFan]

23 minutes ago, PromoTheRobot said:

So you're advocating for the Sabres to increase ticket prices to hit that revenue mark?

I'm embarrassed for the person who liked your post.

[K-9]

38 minutes ago, PASabreFan said:

Why would the Sabres have to cite Covid or look for some out in the contract? So they wouldn't have to write the corrective plan? Maybe they should have to. Maybe the first paragraph should be about preventing the owner(s) from meddling.

I don’t want to turn this into a protracted discussion about bad ownership that meddles. The Pegulas have screwed the pooch, that’s where we are, and all I can do is hope Adams and Co. can get it turned around. 

My only point was that COVID has had a negative, perhaps devastating impact on league wide gate revenues for two+ seasons now and I’m simply wondering if that could be cited by teams facing the loss of revenue sharing. 

[PASabreFan]

7 minutes ago, K-9 said:

I don’t want to turn this into a protracted discussion about bad ownership that meddles. The Pegulas have screwed the pooch, that’s where we are, and all I can do is hope Adams and Co. can get it turned around. 

My only point was that COVID has had a negative, perhaps devastating impact on league wide gate revenues for two+ seasons now and I’m simply wondering if that could be cited by teams facing the loss of revenue sharing. 

My point is that those teams aren't actually facing the loss of revenue-sharing.

This CBA sure looks a lot more supportive in case of revenue-decline than punitive, as appeared to be the case in the previous CBA.

I really don't like talking about this stuff. It's not why I'm a sports fan. I just like the idea of finally shooting down the idea that the Pegulas HAD to raise prices. They raised prices because they thought the market would bear it.

[nfreeman]

@PASabreFan -- do you not think the Sabres, or any team, would prefer to avoid having to submit the 3-year corrective action plan to the league?

And do you not think the CBA sections you quoted create the possibility of losing revenue sharing?

[Norcal]

Revenue sharing exists so teams can be in cities like Buffalo.

If they go, the Sabres go so playing with people's emotions like that wasn't fair.

Same goes for the Bills. Jerrah is tired of sharing and thinks the new stadium will help him keep more of his money. 

I suppose it's not the point of this thread but plenty of nhl franchises have skirted or are skirting the edge of the minimum requirements of the league to varying degrees of success, err failure for years.

Just not to the level this team is about to reach.

11 years, no playoffs. Damn.

 

[kas23]

To me, it looks like Ted Black and any other slimy henchmen were correct. If you don’t raise tickets prices, you may lose revenue sharing. This is correct, as spelled out clearly in the CBA. What is also correct is that if you continue to raise prices, the specter of losing revenue sharing is completely removed. 

[K-9]

30 minutes ago, Norcal said:

Revenue sharing exists so teams can be in cities like Buffalo.

If they go, the Sabres go so playing with people's emotions like that wasn't fair.

Same goes for the Bills. Jerrah is tired of sharing and thinks the new stadium will help him keep more of his money. 

I suppose it's not the point of this thread but plenty of nhl franchises have skirted or are skirting the edge of the minimum requirements of the league to varying degrees of success, err failure for years.

Just not to the level this team is about to reach.

11 years, no playoffs. Damn.

 

Aside from the 40% of gate revenue that goes to the visiting team, Jerruh gets to keep all of the local (unshared) revenue he generates all to himself which is upward of $600m according to some reports I’ve seen. All national revenue is shared equally but it’s not like Jones is losing money in that scenario because it’s just not part of the local revenue he keeps anyway. 

New stadiums that generate more local revenue streams even the playing field a bit however, because in terms of percentage of revenues that go to player costs, the Bills of the world are spending spending much more than the Cowboys and Patriots of the world. It is a real competitive disadvantage to generate so much less local revenue. 
 

 

[Weave]

2 hours ago, nfreeman said:

@PASabreFan -- do you not think the Sabres, or any team, would prefer to avoid having to submit the 3-year corrective action plan to the league?

And do you not think the CBA sections you quoted create the possibility of losing revenue sharing?

I think he thinks its a mostly empty threat, Ownership knows its an empty threat, and they’ve been using an empty threat to deflect blame for raising prices so the fans don’t get mad at the owner when he decides to increase revenue via raising prices.

It has merit.

[PASabreFan]

3 hours ago, nfreeman said:

@PASabreFan -- do you not think the Sabres, or any team, would prefer to avoid having to submit the 3-year corrective action plan to the league?

And do you not think the CBA sections you quoted create the possibility of losing revenue sharing?

It wouldn't go to the league.

Possibility, yes.