wprager wrote:There are lots of things that are taken off the top line when calculating HRR. Usually as a percentage of some sort. That's why the owners were "crying" because some costs had risen dramatically (cost of fuel drives travel expenses, for example).
Ok. Didn't know they did it that way.
Here's an article that goes into some detail:
For those of you who didn't pay attention in math class (raising my hand, too), HRR is a net number, ie. revenue minus costs. And in the now-expired CBA, teams were able to deduct certain amounts from HRR before the players were given their share.
If you go to Article 50 in the 2005 CBA, you can find all of these direct costs. While sources were reluctant to provide exact numbers, it appears the deducted amounts (yes, the jet fuel and massages) were getting closer and closer to the maximums -- probably hitting them -- during recent seasons. Here are some other examples:
Concessions is a major revenue generator for teams and, by extension, for players. Clubs are allowed to deduct 54 per cent towards their costs. Some might not deduct that much; others may go over. But the league-wide average cannot exceed 54.
I'm no concessions expert like Boston Bruins owner Jeremy Jacobs, who, I assume, negotiated that figure. That may be a very fair total when you factor in worker salaries and buying the necessary machinery. But if you're a player, you're seeing a big bite taken out of your financial burger.
Then there's club/premium seating and luxury suites, which are enormous issues for the teams. These are obviously large numbers in the revenue game and the cost caps are very low (3.75 per cent for club/premium) or non-existent (zero for suites). The NHL and its members despise these figures. It's a big win for the players. But teams have found a way to get some of that back.
If you've bought some kind of package for these seats, you might get free parking or a bit of free food and drink. Well, the direct cost allowances for food (54 per cent, as mentioned above) and parking (30 per cent) are much higher. So teams began putting some of the costs of these seats towards those other two figures, giving themselves a break.
It's not just the Ilya Kovalchuk contract capologists who can be creative for NHL clubs. If you're an owner, you're giving the person who came up with this a promotion. If you're a player, you think it's cheating.
Hey, I don't have all the answers. In life, to be honest, I've failed as much as I have succeeded. But I love my wife. I love my life. And I wish you my kind of success.
- Dicky Fox