Meeting quotes, part 6

Here’s the last of it. It comes back to the financial problems, although I must issue a disclaimer. They talk about salaries going up, and at the time, sitting in that conference room, I didn’t have access to the fact that the Kings’ payroll has dropped significantly since 2004 (although it has raised slightly since 2003). So what follows might seem like something of an incomplete answer. You can be sure this topic won’t just die out though…

I hope everyone found the quotes from this meeting worthwhile…

———-

Question: Going back to the finances for a minute, and the fact that you’re losiing more money than ever… I thought that’s why we went through the lockout, to avoid that.

(Robitaille:) “You look at it from this point of view. Before the lockout, how many teams were above $50 million (in payroll)? I think it was five or so, and there were some in the 60 (million range), or even 70 or 80 with Detroit and the Rangers. Colorado, Dallas, the Flyers. And there were a lot more teams in the 30s. Now, next year, you’re probably going to have 20 teams in the 50s. That’s the biggest difference. The revenues haven’t changed dramatically. The TV revenues haven’t increased. Ticket prices have gone up some. So the revenues haven’t changed but the salaries have gone up. The (salary-cap floor) next year is going to be at 42 (million) next year. You look at a team like Nashville, and I don’t know what they’re going to do to get to 42 (million). For us, we need to adjust our business.”

(Lombardi:) “With what you asked, the whole purpose of the cap was to (make the league balanced), right? Well, what you have now is a two-tier system within the cap. If that thing keeps going up, let’s say to 56 (million), you’ve got a two-market system within the cap. And that’s interesting. There’s this evolution going into the future. I can see it. There’s no way a lot of these teams can go to $56 or $60 million. So where are the Kings? Where are we going to be? Once we have our core, have our team, where are we within that two-tier system?”

Question: There’s no middle class.

(Lombardi:) “That’s what I’m wondering. So now you have the cap, and what’s different, other than that before, the gap was $70 million? But the gap is growing (now). The thing I find interesting about L.A. is, there’s no way in hell we should be like some (small-market) teams. I think that’s what you’re seeing here. How are we going to define our business operation within those two sides?”

Question: That doesn’t sound good though. I’m not asking you guys to explain the league, but it doesn’t sound good.

(Robitaille:) “They’re trying to improve. The league is making strides and I think in the next five years, we’ll see a lot of changes. They’re restructuring their entire business and they’re marketing differently and trying to do different things. They’re going to work on TV, because everyone is asking what they’re going to do with the next TV deal. I think things will change, but it’s going to take time. It’s at least three or four years away, maybe five.”

(McGowan:) “There are some success stories at the league level. They’ve hired some good people and their sponsorships are better.”

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  • Irish Pat

    I’ll admit that I drink Lombardi’s Kool-Aid and I’m ecstatic about the direction of this franchise. That being said, whenever I hear “AEG” or “Anschutz” muttered by anyone I cringe a little and notice my fists balling up. As a fan I don’t want to hear management bitch about expenses when they overpay for mid-level “bridges” and expect us to be as patient as we have to be to see the riches at the end of this loooooong tunnel.

    Steady as she goes…

  • Mark

    This conversation should make sense that LA shouldn’t be thinking small market when a ticket to a Clippers game cost more than a Kings game. If they can back up the price increases with spending more money in the future on start talent players then I can see how the price increase can be justified. If they continue to spend like a small market but expect to charge like a big market then there’s something wrong. Time to drink the kool-aid for another season. After that we need to compare the upcoming Kings season/business model with the rest of the league and find out if there’s smoke or if management has created fire.

  • anthony

    With the salary cap growing, I wouldn’t want this GM handling the finances.
    Between Blake and Handuz, $10 Million was wasted.
    Then he goes ahead and gives Visnovsky a $5 Million raise.

    Raise your hands if you believe Lubo is worth $7 Million (08-09) after his play last season.

  • Vahe

    I am so sick of this BS.,,I remember when the lockout was over, Tim Lie-weekly promised that now the Kings can compete. Of course it was total BS. They appointed Luc in charge of business ops, reasoning behind that was the Kings would turn on a fan favorite. Well, it is not going to work. If AEG is in charge of the Kings, I plan to boycott this team (and I hope other frustrated Kings fans do the same) All they care about just like Sterling of the Clippers is turning making a buck and not winning.
    If Philadelphia who was 30th in the league last year and they can make it to the conference finals, the Kings can make the playoffs as an 8th seed. But with an incompetent front office, it will never happen. Nashville, who had a fire sale made the playoffs.

    When I saw Tim Lie-weekly sitting next to Denzel at the Laker game yesterday, I almost threw the remote at the tv. Thank God the Buss family doesn’t want to sell the team, because AEG being the biggest minority owner would have the first shot of buying the team

  • shadowalk

    Where does one start, IF the revenues have not grown, then why has the Cap gone up? So what exactly has the Cap done for the league? Det, Dallas, Col and NYR all were big spenders before the lockout, all were regulars to the post season, flash forward, Det, Dal, Col and NYR are in the post season, LA is ….? And I ask once again, looking at what the Kings will look at next season, how much more will the Kings ask us for, for “when we are good”?

  • psycho

    the problems with the NHL can be stated in one word …

    B E T T M A N !

    The guy is a loser who has shown time and time again that he is incompetent and nothing but a stooge.

  • Jimmy Crack Corn

    Could it be argued that one possible reason for losing money is NOT making the playoffs for several years in a row, therefore not generating the extra revenue that playoff games bring?
    Could the Kings recent past be this cyclical simplicity?
    A mediocre team equals no playoff games. No playoff games equals no playoff revenue. No playoff revenue equals a mediocre team…

  • joe

    anthony, come on.

  • Anonymous

    Rich, The meeting quotes were terrific. Thanks to you and Don for keeping the Kings flame alive for a few more weeks. Playoffs would have been better. As for the budget quotes, I’m afraid I’m with the rest of the fans. It’s total BS. I’ve had season tickets for more than 10 years and every year we get shoveled the same story from management. The similarities to the Clippers are too frustrating for words. It’s not the players, it’s the owners and management.

  • Jay Rosenberg

    There are so many variables with the “losing money” argument. AEG gets a ton of money from naming rights and the 10 founding partners, something like $35 million per year. I would bet that zero of theat money goes to the kings.

    However, in San Jose, I bet some of the anming rights goes to the Sharks. AEG has to answer to no one, since they own both the building and the Kings. Additionally, they can allocate various salaries any way they want. They have had many people working for AEG selling Kings tickets. You would have to analyze everything to see if the numbers are real.

    That will never happen.

  • Anonymous

    The NHL business model is flawed when it’s number one revenue source is gate receipts. 14 of 30 teams miss the playoffs every year and just about the same number lose money every year. They need a new plan. Start with more ads on the ice and on the jersey’s but the problem w/ that plan is they need eyes to see the ads in order to convince sponsors to buy them.

  • PSP

    Jimmy Crack Corn, the hockey related revenue that is used to compute the salary cap is regular season revenue, so that’s not the reason that the Kings claim to be losing money. They should take a hard look at their bloated boardroom and their questionable UFA signings instead

    A portion of the playoff revenue is used to fund the equalization program for small market teams

  • Ed

    What I read above and got out of this is that we (Kings) are required to spend at least $42 million on salary next year. That is the bottom of the salary cap.

    That is one of the reason we over spent on the “fillers”. Because our core players are “cheap” right now. Our good young players don’t cost us much $$$.

    We don’t want to drive up the cost of our young players by over paying them. So we spend the required amount on older fillers until our young guys are ready.

    A weird side effect of the current salary cap system.

    So I guess the Kings can’t pay the $42 million on players and additional operation costs without raising the ticket prices. The league don’t have a lucrative TV deal to pay the teams, which leaves the Kings to fend for themselves.

    At the same time expect Rob Blake and other “free” agents to be “overpaid” next couple of years.

  • Goon Squad

    “Raise your hands if you believe Lubo is worth $7 Million (08-09) after his play last season.”

    Anthony, I’ll take that one. Because the decision had to be made before last season. Be mad at Lubo for that one, not Lombardi. EVERYONE wanted Lubo locked up long term. DL did exactly what he should have done. Too bad Lubo responded with a terrible season. Would you have been happy if he didn’t extend Lubo and instead Ottawa got him?

  • voice of reason

    “bloated board room” ?

    Wow, acting like you know something on the internet sure is popular…

    truth is, aside from scouting, the Kings are one of the more front-office personnel lean-machines in the league….

    please continue to play “I pretend to know what Im talking about on the internet”

  • Tito Jackson

    As long as we continue to be entertained by the apparently crowd pleasing bubblecam, why worry about the team?
    Seriously, why do people laugh so much at that?
    I did wear my Kings jersey to a nice resturant, like in the commercial, hoping to be seated immediatly. Didn’t happen :(

  • nykingfan

    Excellent point Goon squad. 20/20 hindsight is a beautiful thing. Anthony, I’m sure you were bitching about the signing when it happened? If not, don’t say anything about it now.
    Is there any way to pull up Anthony’s comments when the Kings signed Handzus and the others? It would be interesting to see the reaction then and now.

    It’s pretty sad what this league has become. They lock out the players to fix the system and the system is as flawed as it was before. Betman is the worst commish in all of professional sports. Hell at this point I’ll take the guy running the PBA tour. He can’t sell this game to the networks..his only interest is making as much $ for the owners as possible. He has no interest in growing the game. When the day comes that the owners profits drop, thats the day Bettman is out on his ass.
    DL can’t answer the questions directly because he knows AEG has said the Kings will be on the bottom end of the cap scale. Middle ground? Not with AEG $.

  • Anonymous

    The Kings have twice as many administrators as they had before Lombardi came onboard. Right now, the Kings list 16 Vice Presidents or similar positions in their Business Operations – Executive section alone. For comparison, the Ducks have 3 listings in comparable positions.

    I’d call that bloated…

  • Anonymous

    Not making money…Losing more money….PLEASE…..I buy season seats because I enjoy hockey and a good night out.. BUT, Kings Management please don’t insult our intelligence with your asinine comments. You raise prices because you can. You will continue to raise prices until season seats renewals go down. We don’t believe the B.S. your trying to push, and I find it quite annoying to read, so please stop. Currently I am undecided on renewing. Which is a sad commentary on the Kings.

  • metalmaster

    NYKingsfan
    Right on about Bettmann. I
    have always thought that
    Stern let him go so that he could keep NHL way behind the NBA and he has.
    The league now has some of the best young players that
    it has had in years and can
    be marketed and promoted much better than it has.

  • Matt Barry

    You know what I don’t understand? Housing is in turmoil, oil is 120 bucks a barrel yet the stock market goes up.

    You know what I also don’t understand? Fans who pay for a consistent cellar dweller.

    It’s like the old joke “I’m just going to walk up to the most beautiful woman I see and buy her a house because in the end, she’s going to get it anyway”

  • Anonymous

    what i don’t get are fans that complaint about a consistent cellar dweller when they know what they are getting.

  • Terry Sawchuck

    Remember the days when an nhl team had to get in a plane crash and wipe out the whole club NOT to make the playoffs? Good times.

  • Timmy Lieweakly

    Rich, here are a few sourced facts you can use the next time you sit down to discuss finances with the braintrust:

    NHL Hockey-Related Revenues
    2005-06 $2.1 billion (*a)
    2006-07 $2.318 billion (*b)
    2007-08 $2.575 billion (*b)(est.)

    L.A. Kings Revenues (*c)
    2003-04 $80 million
    2005-06 $82 million
    2006-07 $84 million
    2007-08 incomplete

    L.A. Kings Payroll
    (per Forbes.com)
    2003-04 $56 million (*c)
    2005-06 $42 million (*c)
    2006-07 $42 million (*c)
    2007-08 $45.6 million (*d)

    Sources:
    (*a) Street & Smith’s Sports Business Journal http://www.sportsbusinessjournal.com/article/55148

    (*b)Larry Brooks, NY Post, http://www.nypost.com/seven/03302008/sports/cap_map_shows_salaries_heading_north_104233.htm?page=1

    (*c) Forbes http://www.forbes.com/lists/2007/31/biz_07nhl_Los-Angeles-Kings_311627.html

    (*d) NHLNumbers.com

    To summarize, since 2003-04 (last season pre-lockout) the NHL’s revenues have increased nearly 25% the Kings’ revenues have increased at least 5%, and the Kings’ payroll has declined almost 20%.

    Yet, management claims that it is losing even MORE money than before?

    I smell B.S.

    And these figures don’t include many of the “hidden” revenue increases that I am sure exist, such as increase in the cost of a Staples Center luxury suite, increased parking revenues, increased revenues from marketing sponsors, and revenues now coming from L.A. Live. My guess is that none of these revenues hit the Kings’ income statement, although none of the property developments could have happened without the Kings being the lead tenant in Staples Center.

  • Anonymous

    psycho

    Uh…calling Bettman a stooge is not only in bad taste…but it’s also insulting Larry…Moe AND Curley…

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