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Blame both sides
Sep 24, 2004

Hockey can be an obsession with many Canadians. Some Canadians live and breathe hockey to the exception of all other interests. They discuss hockey at school, at the office watercooler and in coffee shops. Whatever the original conversation, the topic invariably turns to hockey.

But while Canadians are dedicated to the sport, there is no such loyalty in the NHL where hockey is nothing more than a job opportunity or a business endeavour. The NHL does not express Canadian ideals nor does it even attempt to seriously court Canadian hockey fans. It is an American institution run by Americans. It has been that way for decades and this  position was reinforced when the NHL moved its head office from Toronto to New York years ago. 

The fact that the league is in the midst of a lock-out because of massive financial losses is ironic in the land where the streets are supposedly paved with “sports entertainment” gold. 

The NHL got into big trouble because it panders to an American market which doesn’t want its product. Most Americans, especially in the Deep South where the NHL has been trying its darndest to grant more money-losing franchises, are mystified by the game. 

We may consider hockey the world’s greatest team sport, but Americans are more interested in professional and college football, basketball, baseball and a myriad of other sports. TV ratings for the recent live broadcasts of the World Cup of Hockey were surpassed by reruns of the World Series of Poker on ESPN. Still, the New York head honchos keep trying and failing miserably to attract more American interest in hockey.

It’s no surprise that Bettman announced the owners’ lock-out last week. It was inevitable. The NHL gamble in the U.S. just isn’t paying off. Once the league expanded beyond traditional American hockey centres in the Midwest and New England, there simply weren’t enough people who knew enough about the game to fill the seats in arenas. 

Phoenix Sun columnist Craig Harris said the lock-out was a godsend for the Coyotes who are better off not playing, since they will lose less money because they don’t have to pay the team’s $35-million payroll (all figures in US dollars). The former Winnipeg-based team, which is co-owned by Wayne Gretzky, reported losses of $100 million since 2001.

The NHL will not admit its overly-optimistic expansion has been devastating to the league’s bottom line, so it sought and found an excuse — the lack of a salary cap (apparently the proposal is for US $31 million per team).

The players’ salaries are definitely exorbitant for a league which doesn’t have a major TV contract and relies upon gate receipts to exist. And sure, the players can be called greedy — they are — but the owners are just as much at fault for creating the salary monster. Team management continually rewarded players with champagne contracts when revenues were more suited to beer tastes. 

The average player’s salary has gone up 252 per cent since 1991-92 to a staggering $1.8 million. The league’s highest paid player is Jaromir Jagr at $11 million. In the meantime, league revenues have only increased by 163 per cent (the NHL says 75 per cent of all revenues goes to pay players’ salaries). By the NHL’s own math, the league has lost $1.8 billion since 1994. The loss was $224 million last year with 20 of 30 teams apparently losing money.

The losses were compounded by the collective bargaining agreement signed between the owners and the NHLPA in 1994 to end the last lock-out which lasted 103 days (the projection is that this lock-out will wipe out an entire season or more). The arbitration process accepted in the CBA was heavily skewed in favour of the players with little regard to actual on-ice performance. The agreement thus contributed directly to escalating salaries.  

Massive losses aren’t sustainable, which is something the NHL Players’ Association has yet to recognize. The NHLPA has told the league brass that they will not be held accountable for the owner’s stupidity in doling out overly-lavish contracts to players — they will not take a pay cut, at least not the 36-per-cent proposal from the owners that would result in a US $31-million salary cap per team. 

A proposal from the NHLPA would see the implementation of a luxury tax — the top revenue gainers would subsidize money-losing teams. This would be without a  salary cap in place, which means that salaries would eventually continue their upward climb. The NHLPA proposal is but a brief respite from the economic reality of the league, and not much of one at that.

Apparently, pay cuts are only for the working stiff in Thompson earning $40,000 (Cdn), who is told by his employer that his take-home pay will decrease by 25 per cent next week or he’s out on the street because of a downturn in the price of nickel. The economics of professional hockey is basically no different than mining. A no-growth or dwindling market means sacrifices have to be made or forget about economic viability. 

The stubbornness of NHLPA executive director Bob Goodenow means that the players are now out on the street. The working stiff in Thompson would have taken the pay cut, since he has mouths to feed at home and still has to pay his cable bill so he can watch the Toronto Maple Leafs every Saturday evening of the nearly year-long NHL season. Oops! The NHL is off the air, so he’ll have to switch to less bone-crunching fare.

The real dilemma of the lock-out is that the longer it runs, the more frustrated existing fans from Victoria to St. John’s will become, and the more bitter they will become that billionaire owners and millionaire players couldn’t reach an agreement. If the lock-out drags on for 18 months or two years, even hard-core fans may opt for a divorce from the NHL when the owners and players renew their vows in a new contract.

Meanwhile, the marginal U.S. hockey fans in cities like Nashville and Tampa Bay will simply look for somewhere else to spend their entertainment dollars and be lost forever to the NHL.

Bettman said “the status quo” could not continue because it means millions of dollars in losses for the NHL clubs and bankruptcies in Buffalo, Ottawa, Pittsburgh and Los Angeles as well as increasing ticket prices for fans. “Our game and our fans deserve better.”

For the time being, most Canadian fans support the owners (52 per cent), according to an Ipsos-Reid poll. Only 21 per cent fully support the players. Another 19 per cent blame both parties for the labour impasse.

Fans have obviously bought into the Bettman argument that the players’ union “doesn’t seem to care about the problems, the game or our fans.”

Actually, there’s plenty of blame to go around. The owners and players have both caught a bad case of denial. They’re wincing in agony, but haven’t admitted they need to share a cab and go to the hospital together for treatment. 

And, forget about the assurances by Bettman on CBC-TV last Tuesday night that a new deal may present an opportunity for Winnnipeg to regain its NHL franchise — it was nothing more than a publicity stunt to benefit the league’s bargaining position by gaining fan support against the players’ union. The NHL’s priorities lie in the U.S, not in the Great White North.