January 8, 2013 at 3:55 pm

Gregg Krupa

NHL's next stoppage may not be far off

The fans have their game back. NHL hockey is about to be played.

But before we get too far down the road, it would be a mistake not to consider what the four-month owners' lockout taught about the finances and marketing of the league.

Lessons unlearned, or soon forgotten, often evolve into big problems in the long run. And as they evaluate the current caretakers of the game, including commissioner Gary Bettman, the owners, the players, Donald Fehr and other leaders of the players association, the best measurement for fans is how well they have nurtured the 98-year-old NHL.

Unfortunately, from the emerging picture of the new collective bargaining agreement, what fans can conclude is that beyond their great displeasure with another half-canceled NHL season lies another unattractive prospect: The result may do little to solve the financial problems of the league, the very issue that supposedly caused Bettman and the owners to take an onerous, hard line in negotiations.

With 18 of 30 teams reportedly losing money, little of the revenue from the big money makers shared with the losers, and owners nonetheless furiously outbidding each other for the highest-priced talent, Bettman and the owners were out to repair a broken business model.

It is galling to consider that, despite the huge disruption in the sport, they may have fallen short.

Floor debate

In fact, there is already speculation that even though it was the players who demanded a shorter term for the collective bargaining agreement, it may well be the owners who opt to end it after eight years, instead of the maximum 10 — if not sooner.


In part, the new salary floor is set 12.9 percent below the salary cap, so that in the second year of the proposed collective bargaining agreement the cap will be $64.3 million and the floor $44 million. That structure, which requires each of the 30 teams to spend something within the established range on total salaries, will grow with revenues.

If revenues eventually increase at about the pace before the lockout, as James Mirtle of Toronto's Globe & Mail reported on Monday, owners may eventually have to spend a minimum of $70.2 million on salaries by the 10th season, 2021-22.

Last season, the floor was $48 million.

Simple arithmetic reveals that the growth of the floor outpaces the growth in revenue throughout the life of the deal. Within half the lifetime of the agreement, franchises like the Coyotes, Blue Jackets, Islanders, Hurricanes, Predators, Panthers and Lightning may have trouble meeting the salary floor.

That is one reason some observers call the exercise that the NHL just put its fans through the stupidest lockout in the history of pro sports.

Want more evidence?

As he apologized profusely Sunday for the "disappointment and frustration" it caused, Tom Stillman, a new owner of the Blues, underlined why work stoppages are dreadful for both new owners and owners of marginal franchises — the very sort of activity on which the current business model of the NHL depends.

"As you can imagine, the last thing our new ownership group wanted in our first year was a lockout and no Blues hockey," Stillman told the fans.

Troubled transitions

Stillman is not alone.

The NHL owned the Coyotes last year when they beat the odds and played in the Western Conference Finals. As the much troubled franchise segues to new ownership this season, it would have been nice to have the memories both fresh and unclouded by the third lockout in 19 years.

The same is true of the Kings, who hoped their Stanley Cup championship would help them emerge from the shadow of the Lakers in a market in which people have many entertainment alternatives.

But the lockout prevented valuable marketing strategies.

At least Bettman and the owners did not also say what they said last time: that the new deal would drive down the price of tickets.

We did not have to hear that baloney this time around.

The owners and players seem further from a constructive relationship than ever. But before the next big conflagration, in eight years, or 10 years — or even sooner, if the two sides agree to renegotiate the current deal before it comes to term — it is highly advisable that the NHL and the players association embrace at least three areas of common purpose:

First, agree to begin the bargaining one year before the expiration of the collective bargaining agreement.

Second, come to a definition and delineation of "hockey-related revenues" which is acceptable to both sides, within one month of the start.

Third, develop a business plan for the long-term viability of all NHL franchises, to which both sides generally agree, and which can provide a context for the negotiations.

Without a similar initiative, it will be only a short time before the owners cry poor and seek billions of dollars from the players and their families to bail them out, again.

Eight years can pass pretty quickly, especially if it ends up being even less than that because no one likes the agreement they just negotiated.


Gary Bettman, foreground, undoubtedly did some damage to the NHL with the lockout, and might not have solved any problems. / Chris Johnston/Associated Press
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