YES, it’s time for hockey. No, there’s no professional hockey a la NHL. Of course, if you or your kids play hockey, do you have time or hard-earned money to attend NHL games anyway? Nevertheless , despite the attempts of the lap-dogs in the sports media with their lucrative TV contracts to spin the NHL lockout as a “meaningless squabble” and dish the players, or reduce it to personalities (Bettman, Fehr), there are serious issues, one of which is the attempt of some very rich owners to squeeze the small market teams. Deadspin tries to explain.
By JACK DICKEY*
Wait, did something happen to hockey?
Yeah, it looks like the NHL season won’t start on time. The league locked out the players at 12:01 a.m. on Sept. 16, after the collective bargaining agreement expired, and they haven’t met since Sept. 14. They have an informal meeting scheduled for today (Sept. 24 – ed.), but it would take a miracle for the season to make its scheduled Oct. 11 start.
So players and fans are “out in the cold,” as it were?
Don’t make fun of hockey. Hockey has problems.
OK, fine. Why is there a lockout?
The owners are unhappy with the terms of the old collective bargaining agreement, the one that ended the last lockout back in 2005. Most of the 30 teams in the league lose money or make very little. According to Forbes, more than half of the franchises posted negative operating incomes in 2010-11. Only five teams—four of them Canadian—made more than $10 million. Owners don’t want their several-hundred-million-dollar investments sucking wind, and so they’re looking to pare down expenses.
Hang on, there are 30 teams in the NHL?
Yes, including teams in Columbus and Nashville.
Is there a city called Nashville in Canada?
No, that’s the one in Tennessee.
They like hockey there?
Not really, no. Hence the money problems.
And how do the owners plan to balance their books?
By giving less money to the players. Right now, the NHL’s salary cap and salary floor are tied to overall revenue, which was $3.3 billion last year. Players are supposed to receive 57 per cent of that. According to the Canadian Press, the most recent owners’ proposal cuts the players’ share from 57 per cent to 49 per cent of league revenue next year. That figure would dwindle to 47 per cent at the end of the six-year CBA.
Is 57 per cent a lot?
Sort of. After the NBA lockout last year, basketball players got 51.2 per cent of basketball-related income for 2011-12, and the figure will fall to 49 per cent later in the deal. As of 2011, MLB players got 51 per cent of baseball revenue. The NFLPA said players got 55 per cent of league revenue in 2011.
But if players getting 57 per cent of hockey-related income was good enough for the owners in 2005, why doesn’t it work now?
The league didn’t anticipate the kind of revenue growth it had. In 2005, the players didn’t want their cap linked to revenues, so they offered a flat $49 million cap per team, and the owners rejected it. That was too much. Skip to the present. Based on last year’s league revenue, the 57 per cent share means the NHL’s 2012-13 salary cap would be $70.2 million per team.
So the league has to shut down because it’s making too much money?
The money went to the richest teams, the ones located in places where people have money and like hockey. So they got even richer and drove the cap upward, squeezing the poor teams even harder.
More or less! The league as a whole grew at approximately seven per cent per year since the last lockout. But the new wealth didn’t enrich everyone. Most franchises—especially the usual dogs, the Phoenix Coyotes, Columbus Blue Jackets, Nashville Predators, Tampa Bay Lightning, and the like—entered the past CBA while poor and emerged from it even poorer. The money went to the richest teams, the ones located in places where people have money and like hockey. So they got even richer and drove the cap upward, squeezing the poor teams even harder.
Huh. So it seems like this is really a feud between owners, rather than between owners and players.
The NFL lockout was at least in part a battle between the owners with new, revenue-rich stadiums and those with older buildings and relatively poorer teams…
Exactly. The big-market guys have entirely different priorities than the small-market guys, and we can’t tell which group will dictate management’s stance, because the league has a gag order on everyone who isn’t in the commissioner’s office. Most modern sports lockouts resemble the NHL’s struggle: The NFL lockout was at least in part a battle between the owners with new, revenue-rich stadiums and those with older buildings and relatively poorer teams. The NBA lockout was more of the same, with Jerry Buss and Jim Dolan eager to settle, and Portland and Utah and Denver squawking defiantly. The players had no meaningful hand in building these economic structures—Bettman was the major force behind hockey expansion—but they have to work within them.
But there must be something else to it.
Maybe. Bettman also claims that the league won’t grow at seven per cent per year going forward. He says much of its post-lockout growth came from a strong Canadian dollar and various one-time boons—a TV contract and the Thrashers’ move to Winnipeg—that won’t be around for the next several years.
Where were the Thrashers?
No, seriously, where?
If it was a good idea to relocate the Atlanta Thrashers to a city where people care about hockey (or, you know, sports, period), why don’t they move a few more teams up north?
It would make sense. Phoenix and Tampa and Nashville will never make the money that the Rangers, Maple Leafs, and Canadiens do. There’s only one team in Toronto, only one team in Montreal, and no team in Quebec City. All are markets more fertile than the American South.
The league built the current broken system itself. After the last lockout, the owners could have restructured the league however they wanted. They chose a salary cap tied to hockey revenue, with a high floor and a low ceiling. Systems like that are supposed to equalize the teams. But the NHL begs not to be equalized, because there aren’t 30 viable markets for NHL hockey.
What might work best for the NHL is a system more like MLB’s or the NBA’s, one that gestures toward controlling spending with a soft cap or luxury tax but still allows the big-market teams to lock up all their own players and grab free agents. The game has built-in parity, after all: supremely skilled players can’t influence outcomes in hockey as much as they can in basketball or football.
But this—the expansion to the South and West, and the resulting inequality—is Gary Bettman’s baby.
What are the players proposing?
Well, they don’t want the cap tied to league revenue. The union would like a deal that guarantees the players the $1.8 billion in total salary they received last year, with modest yearly bumps to account for inflation. (If the league continued growing at a rate of seven per cent per year, the owners would come out ahead.) The union also would like more revenue sharing.
Isn’t revenue sharing the obvious fix here?
Yeah. But it winds up encompassing the other issues, because the NHL wants the money for revenue sharing to come from a rollback of the players’ salaries, while the players want the revenue-sharing money to come from the league’s wealthiest clubs.
Whose side should I be on?
You should root for the players, not least because management has been so duplicitous throughout this process. NHL owners, even small-market ones, signed players to massive contracts over the summer while simultaneously advocating for rollbacks. Shea Weber got a 14-year, $110 million deal, and Zach Parise and Ryan Suter got matching 13-year, $98 million deals, and the Predators and Wild have no intention of honouring those deals. The players are the realists in this struggle, the ones who aren’t trying to prop up a bad model they built by asking for more from the other guy.
Will the owners come up with something that really addresses the structural problems?
No chance. The owners’ major victory last time around was that they got a cap—a hard cap. They’re not going to undo their triumph. They just want to shift the figures around so that the next half-dozen years are as pleasant as possible.
How long will it be until the season starts?
It’ll be a while. Some of the Russian stars — Ilya Kovalchuk, Evgeni Malkin, Alex Ovechkin — have already suited up for KHL teams, which makes it clear that they’re not expecting training camp to kick off anytime soon. Negotiations are chilly at this point, although that says more about how little the league cares about missing games than about how far apart the sides are. If neither camp plans to remake the league, then the sides really aren’t that far apart. So we’d expect something like what happened in the NBA last year: a lull, and then a push to have the season start in time for the Winter Classic on New Year’s Day. Donald Fehr and Gary Bettman are grown-ups. They’ll work it out when it counts.
*Jack Dickey is an editor for deadspin.com from which this article is reproduced