peetie12
01-18-2004, 02:02 AM
Well if Mike knows what is good for him, he will officially put the IIHL out of its misery. There is now not one person who was affiliated with the league that thinks it can survive. Mike is slightly disillusioned at this point thinking that he can save it on his own. The IIHL as we know it is done. So now it is time to reflect on what we've learned and proceed.
I don't think that anybody can deny that the concept behind the IIHL was a good one. In fact, I think one could even go as far as to say that if Mike Killbreath was not involved in any of the decision making processes, the league would have been a success. It would be unfortunate if the concept died along with the leauge. We all must remember that virtually every minor professional hockey league is struggling at some level now too. Heck, even the NHL has some major issues to deal with in the near future.
The problem simply is that somewhere along the line the owners and players forgot that when we are talking about hockey we are talking about a game. Not a business. At some point hockey became totally irrelevant and it was all about making money. True, this was, and is not the case for every owner or every player involved in pro hockey, but all it takes is a couple self-interested people to start the demise of the whole system. In an effort to make more money, owners raised ticket prices. Then the players got out their calculators and figured that their share of the wealth should increase as well. The owners then turned around and raised ticket prices again. This vicsious cycle has brought us to where we are today. It's time that everybody recognizes this and declares that its time to "do-over." And that's not just a cosmetic change; the entire system is in dire need of an overhaul.
What is the point of a start-up league charging people a massive franchise fee in order to be in the league? Let's say that I had some extra money lying around and was interested in starting a team in the IIHL. According to the rules Mike had set up, I would have had to pay the league $90,000 just to be awarded a franchise. Why does the league need $90,000 from each new team? That takes a huge chunk of money out of my hands that I could have used to fund the team's start-up. It makes no sense when you are trying to get a league off the ground to create what we business people like to call a "barrier to entry".
So I've got an idea...a proposal if you will. The proposal doesn't directly affect me since I have pretty much no money (and am in debt for the time being because of Mike), but then again this proposal would still allow for people like me to get involved. I don't know how original of an idea this is, but I'm pretty sure that I've never seen this anywhere before.
Start a new public venture. Let's call it the BRHL - the Better-Run Hockey League, incorporated. I know, setting up an IPO these days is no small task, but bear with me - it can be done. For the initial offering set up about a million shares of the league. Par value - $10. Give 10,000 shares to each team that starts in the league. Each team pays $1 per share, or $10,000 for their shares that have a par value of $100,000. Reserve about 500,000 shares to be given to the teams in this way (so there could be up to 50 teams in the first go-around), reserve another 100,000 for the league itself, and make the other 400,000 shares available on the market - $4 million (par value, of course).
Each team takes its 10,000 shares and divides them up something like this: 100 each to 20 players, 200 each to 10 management personnel, 1000 to the owner or the group that bought the shares from the league for $10,000. Keep the other 5000 as reserve or to delve out into the community.
Now just because these shares have a $10 par value doesn't mean that they are worth $10. In fact, they will more than likely be worth less than that when the league starts. But if I'm a player and I own 100 BRHL shares, the value of those shares will go up only if the ENTIRE LEAGUE is successful, not just my team. If I'm a businessman and I own some shares in the league I'll probably want to chip in for the same cause. And the owners will only get rich if they stop stabbing each other in the back, and create insentives to make the company, the league itself, a good investment in the public market. Everyone will want to put a positive spin on everything surrounding the league and its teams.
Not only that, but you also eliminate the barriers to entry that the IIHL had set up with its $90,000 franchise fees. Sure, the BRHL is going to require $10,000 to start up; but not only is that much more reasonable, you get 10,000 shares in the league in return. As opposed to the IIHL where your $90,000 bought you the priviledge of getting kicked in the sac.
I'm not saying that $10,000 is all it will take to start up a new team, though. A new team still is going to need equipment, uniforms, tickets, marketing materials, etc. There should also be enough cash up front to pay for 3/4 of the year's expenses. A team that cannot finance 1/4 of its expenses with the revenues generated over an entire year probably will never be able to completely cover its costs. But based on the information that I know about the situation in Athens, $4000 buys a team quality (but by no means exceptional) equipment, $1000 buys ample sticks for the year, $15,000 should buy at least 15 weeks worth of ice, $1000 buys jerseys and socks, and $500 will easily get half of the year's tickets printed. $30,000 total covers all these and other general expenses. There are other costs, too, and some are major (isurance, for example), but even after ALL that, we are nowhere near the $90,000 franchise fee for the IIHL.
Other concepts about the IIHL that were good were in fact the pay structure. $125 a week is poverty line, and I won't dispute that fact. However, $125 a week working 20 hours is definitely a part-time job too. The BRHL would have to mandate that it can require no more than 20 hours per week of the players' time so that they can have ample time to get another part-time or full-time job if they wish to do so. Now we're not talking about $125 a week as a salary, we're talking about $125 a week in extra income.
Ticket prices for the IIHL were probably unrealistic. I know in Athens, the club hockey team would have beaten the snot out of the Ice Cats, and yet the Ice Cats tickets cost more money. This makes no sense. Tickets for the BRHL should be closer to the $5 range, unless people will come for more.
Well, its an idea I guess. I know its feasible too, but I'm a student for the time being and I'm just throwing the idea out there and hopefully somebody with good business sense runs with it. And, just as importantly, hopefully the Killbreaths stay out of it. Let me know what y'all think.
I don't think that anybody can deny that the concept behind the IIHL was a good one. In fact, I think one could even go as far as to say that if Mike Killbreath was not involved in any of the decision making processes, the league would have been a success. It would be unfortunate if the concept died along with the leauge. We all must remember that virtually every minor professional hockey league is struggling at some level now too. Heck, even the NHL has some major issues to deal with in the near future.
The problem simply is that somewhere along the line the owners and players forgot that when we are talking about hockey we are talking about a game. Not a business. At some point hockey became totally irrelevant and it was all about making money. True, this was, and is not the case for every owner or every player involved in pro hockey, but all it takes is a couple self-interested people to start the demise of the whole system. In an effort to make more money, owners raised ticket prices. Then the players got out their calculators and figured that their share of the wealth should increase as well. The owners then turned around and raised ticket prices again. This vicsious cycle has brought us to where we are today. It's time that everybody recognizes this and declares that its time to "do-over." And that's not just a cosmetic change; the entire system is in dire need of an overhaul.
What is the point of a start-up league charging people a massive franchise fee in order to be in the league? Let's say that I had some extra money lying around and was interested in starting a team in the IIHL. According to the rules Mike had set up, I would have had to pay the league $90,000 just to be awarded a franchise. Why does the league need $90,000 from each new team? That takes a huge chunk of money out of my hands that I could have used to fund the team's start-up. It makes no sense when you are trying to get a league off the ground to create what we business people like to call a "barrier to entry".
So I've got an idea...a proposal if you will. The proposal doesn't directly affect me since I have pretty much no money (and am in debt for the time being because of Mike), but then again this proposal would still allow for people like me to get involved. I don't know how original of an idea this is, but I'm pretty sure that I've never seen this anywhere before.
Start a new public venture. Let's call it the BRHL - the Better-Run Hockey League, incorporated. I know, setting up an IPO these days is no small task, but bear with me - it can be done. For the initial offering set up about a million shares of the league. Par value - $10. Give 10,000 shares to each team that starts in the league. Each team pays $1 per share, or $10,000 for their shares that have a par value of $100,000. Reserve about 500,000 shares to be given to the teams in this way (so there could be up to 50 teams in the first go-around), reserve another 100,000 for the league itself, and make the other 400,000 shares available on the market - $4 million (par value, of course).
Each team takes its 10,000 shares and divides them up something like this: 100 each to 20 players, 200 each to 10 management personnel, 1000 to the owner or the group that bought the shares from the league for $10,000. Keep the other 5000 as reserve or to delve out into the community.
Now just because these shares have a $10 par value doesn't mean that they are worth $10. In fact, they will more than likely be worth less than that when the league starts. But if I'm a player and I own 100 BRHL shares, the value of those shares will go up only if the ENTIRE LEAGUE is successful, not just my team. If I'm a businessman and I own some shares in the league I'll probably want to chip in for the same cause. And the owners will only get rich if they stop stabbing each other in the back, and create insentives to make the company, the league itself, a good investment in the public market. Everyone will want to put a positive spin on everything surrounding the league and its teams.
Not only that, but you also eliminate the barriers to entry that the IIHL had set up with its $90,000 franchise fees. Sure, the BRHL is going to require $10,000 to start up; but not only is that much more reasonable, you get 10,000 shares in the league in return. As opposed to the IIHL where your $90,000 bought you the priviledge of getting kicked in the sac.
I'm not saying that $10,000 is all it will take to start up a new team, though. A new team still is going to need equipment, uniforms, tickets, marketing materials, etc. There should also be enough cash up front to pay for 3/4 of the year's expenses. A team that cannot finance 1/4 of its expenses with the revenues generated over an entire year probably will never be able to completely cover its costs. But based on the information that I know about the situation in Athens, $4000 buys a team quality (but by no means exceptional) equipment, $1000 buys ample sticks for the year, $15,000 should buy at least 15 weeks worth of ice, $1000 buys jerseys and socks, and $500 will easily get half of the year's tickets printed. $30,000 total covers all these and other general expenses. There are other costs, too, and some are major (isurance, for example), but even after ALL that, we are nowhere near the $90,000 franchise fee for the IIHL.
Other concepts about the IIHL that were good were in fact the pay structure. $125 a week is poverty line, and I won't dispute that fact. However, $125 a week working 20 hours is definitely a part-time job too. The BRHL would have to mandate that it can require no more than 20 hours per week of the players' time so that they can have ample time to get another part-time or full-time job if they wish to do so. Now we're not talking about $125 a week as a salary, we're talking about $125 a week in extra income.
Ticket prices for the IIHL were probably unrealistic. I know in Athens, the club hockey team would have beaten the snot out of the Ice Cats, and yet the Ice Cats tickets cost more money. This makes no sense. Tickets for the BRHL should be closer to the $5 range, unless people will come for more.
Well, its an idea I guess. I know its feasible too, but I'm a student for the time being and I'm just throwing the idea out there and hopefully somebody with good business sense runs with it. And, just as importantly, hopefully the Killbreaths stay out of it. Let me know what y'all think.