The more that time passes, the more another NHL lockout seems like an inevitability.
What’s most unfortunate about all of this is that we, the fans, are the group with the most to lose and the least to gain.
It’s hard not to take a stance on the issue, but I find myself torn between the two conflicting views. While I agree with some of the ideas proposed by the owners – such as getting rid of front-loaded contracts like those of Roberto Luongo and Ilya Kovalchuk that pay out the majority of a long-term agreement in the opening years of the deal – I agree with others proposed by the Players’ Association – like an expanded revenue sharing system that could lead to a more competitive league.
I absolutely love my hockey. From October to mid-June, it is part of my daily routine to put the books away for a couple hours each night so I can unwind and watch some on-ice action, and I refuse to switch back to poker for another year. Making sense of why it might go away, however, has been an arduous task.
The game has never been more financially successful, which may beg the question to some, why try to fix it? From the perspective of the league, the answer is simple. As revenues continue to grow, owners feel they deserve a bigger share, but players are happy to sit on their current allocation of revenue. So here we are.
In the 2011-12 NHL season, players were provided with 57 per cent of hockey-related revenues, a percentage that continues to rise with overall revenues, which last year reached a record $3.3 billion.
Most professional sports leagues sit at or around a 50/50 split in terms of revenues – the NBA has a 50/50 split while the NFL is at 53/47 in the favour of the owners, but retired players receive more money. This has not been the case for the NHL, however. With the new proposal put forth by the league last Tuesday, an even split may be on the horizon within the next four years, that is, if an agreement can be reached.
The league’s new proposal would see the players’ share of revenues drop to 51.6 per cent this season, 50.5 per cent in 2013-14, and 49.6 per cent in 2014-15, after which they would settle at a 50/50 split for the foreseeable future. This is a much more reasonable proposal than the league’s initial suggestion to immediately cut the players’ share to 46 per cent. Since hockey-related revenues are continuing to grow, it could be a viable and acceptable solution for both sides.
With the rise in overall revenues also comes the rise of the salary cap. When the cap was instated following the last lockout in 2005, it was set at $39 million. Under that agreement, the 2012-13 season would have a cap of $70.2 million, nearly double the 2005-06 value.
For big market teams like the New York Rangers, a higher salary cap just means more money to spend on players, which was made evident by their signing of Brad Richards in 2011 for $60 million over nine years – $57 million of which would be paid out over the first six years – and now the blockbuster trade for Rick Nash, who comes with a contract worth $47.4 million over the next six years.
On top of this, as the salary cap rises, the floor increases as well. Under the current agreement, the 2012-13 salary floor would sit at $54.2 million.
Teams in smaller hockey markets are having trouble reaching the floor without spending money they may not have, by providing players with higher salaries than they arguably deserve, just to meet the minimum.
The only other ways for some teams to reach the floor without going into the red under the current agreement would be to provide large performance bonuses that count against the cap regardless of if they are reached, or to find players with expiring contracts whose cap hit exceeds their yearly salary.
The league’s new proposal would see the floor drop significantly to $38.8 million, which would greatly assist smaller market teams and decrease the need for these circumvention options.
Another way that smaller market teams could find financial solace is by expanding the league’s revenue sharing system in a way similar to Major League Baseball – which puts roughly one-third of baseball revenues into a fund for struggling teams.
Right now, the league has a roughly $150 million revenue sharing program, composed of money taken each season from wealthier teams and redistributed amongst struggling teams. The Players’ Association has suggested the inclusion of an industry growth fund that would see an extra $100 million added to this program; intriguingly, the added money would be distributed at the discretion of league commissioner Gary Bettman.
With the recent financial trouble for teams like the Columbus Blue Jackets (according to Forbes.com, Columbus lost $13.7 million last season, while the Toronto Maple Leafs pulled in $81.8 million) the concept of an industry growth fund could be a solution that would keep them in the black, and create for a more competitive league overall.
It’s unlikely that a financially stable team like Toronto (that struggles to reach the playoffs, not the cap) would opt in the favor of this proposal, but the idea provides a promising possibility for many struggling teams in the southern United States.
The sad part is that all of this only scratches the surface of what is on the docket in discussions between the league and the Players Association. That’s not to say it should take this long to reach an agreement.
I remember back in January when Bettman told USATODAY that there was “plenty of time” to reach an agreement, and that he hoped CBA negotiations would be “painless, and quiet, and quick.”
They have been none of the above, and time is running out.
All this being said, if the NHL does in fact lock out come Sept. 15, will I boycott the league? No, I certainly didn’t after the 2004-05 lockout, and I don’t plan to now. Instead I will wait patiently with my fingers crossed for an agreement to be reached, frustrated though I may be.
This is the biggest threat facing fans. The NHL has proof from the last lockout that we will return when the league does, in the case of a hockey hiatus. After the last lockout, fans flocked to arenas and huddled around televisions the moment the NHL returned, and the game is more successful than ever.
When it comes down to it, there is only one thing that I truly want to hear, and that’s the sound of rubber hitting ice in NHL arenas come Oct. 11.
I was once told that hockey fans think about scoring every six seconds, and I wouldn’t place myself outside that category. That’s a lot of red lights left unlit over the next eight months, and I don’t think there’s a single fan in the country that would welcome the television schedule of 2004-05 back into their living rooms. One year of “Texas Hold ‘Em Night in Canada” was enough for me.
