Jun 20, 2004
Now that the finals are over, the focus of the NHL and its players will be
centered one thing - a salary cap.
Owners claim they are losing millions and are insisting on a cap, or as Gary Bettman puts it, “cost certainty”, while players - whose average salary has ballooned from $558,000 10 years ago to $1.8 million in 2002-03 - don't want one. The current collective bargaining agreement runs out Sept. 15, and if a deal isn't reached by then, expect the owners to shut down the league for the foreseeable future.
When one looks to the numbers, it's easy to understand why.
According to a February report released by the league, 19 of the league's 30 teams lost a combined $273 million in 2002-03. While American clubs aren't immune, it's safe to assume that a fair portion of that loss came from Canadian clubs, which have been forced to leave hockey's homeland now for years.
Hockey - like no other major professional sport - is primarily a gate-driven business. Most of the money teams make come from ticket sales.
Regardless of where a team is located, though, players are taking huge chunks of what money is brought in at the gate, digging the owners into an even deeper hole.
Players in the NHL eat up 75 percent of all revenues. Compared to the NFL (64 percent), MLB (63 percent) and NBA (57 percent), hockey is way above the norm for professional sports.
At the same time - at least in the U.S. - it is on the bottom rung of the sports ladder as far as popularity goes. Because of this, the game could be severely damaged by a prolonged standoff.
Former Florida Panthers defenseman Paul Laus said the damage baseball suffered after its 1994 lockout will be eclipsed by the NHL if the fight isn't settled quickly.
"This is going to hurt out game more than the baseball strike hurt its game," Laus said. "If it goes a full year there's going to be teams that shut down."
Asked if the Panthers might be one of those teams, Laus said, "If I was a gambling man, I wouldn't bet on them."
Of course the CFO for the Panthers, Michael Yormark, disputed Laus' claim.
"That comment is totally unfounded," he said. "Our franchise has never been healthier."
While it is unclear how healthy "healthier" really is, it probably helped that the Panthers' payroll this season was near the bottom of the league at $20 million. And, though that didn't get Florida anywhere near the playoffs, the Minnesota Wild reached the conference finals last season with a payroll of the same amount.
Interestingly, this year's finalists had similar success with very similar numbers.
The Tampa Bay Lightning had the 19th-ranked payroll at $35.2 million, while Calgary ranked 21st, paying $33.5 million to its players - including star Jarome Iginla's $7.5 million salary. Detroit was the top-paying club this year, shelling out an incredible $78 million.
That number is in stark contrast to the rumored number the league has proposed - a $31 million “cap” for next season, which has sent general managers of the top-tier clubs scrambling.
"I don't think anybody knows how it's all going to work until the CBA is in place and you absolutely know what you're working under," Detroit GM Ken Holland said. "We've got players we want to keep and I'm talking to their agents, making offers based on what I think we're prepared to pay going forward. But I'm really guessing."
That guessing is probably why last summer's free-agent signing period was so slow. Expect this season to be even slower, despite hundreds of players likely being left unprotected by teams declining to extend qualifying offers to their own free agents.
Boston and the New York Islanders each have only five players under contract, and several other teams have less than a dozen signed. Because of this, some players are looking to their native European countries or the World Hockey Association. If an agreement takes too long to reach, the fear is that many of those players who get their families settled in a new home may just decide to stay.
According to NHLPA president Trevor Linden of the Vancouver Canucks, the players have proffered their proposal as well during meetings in October.
The player's association put forward a deal - which the NHL then rejected - that would include a 5 percent rollback in salaries, changes to entry-level salaries and a luxury tax.
"Any time you deal with 700 players, there are a lot of different opinions but hockey players showed in '94 they'll stick together," Linden said. "Hockey players have shown they're fair, too, if there is a solution in the middle somewhere, but they're willing to fight for what they believe in.
"The players are prepared to talk about a market-based system. That's what we're committed to. I think, definitely, guys are very adamant about what we believe in."
Both sides are aware of all these issues. But both are also committed, and realize this fight will not be a clean one.
"The gap is so wide, it's hard for me to contemplate a resolution without both sides inflicting a sizable amount of pain on one another," ESPN analyst and former player Bill Clement said.
"If you want my honest opinion," Colorado center Joe Sakic told the Canadian Press, "I don't think we're going to be starting the season."
NHL general counsel Bill Daly, though, said he is trying to stay positive.
"I'm cautiously optimistic that ultimately reason will prevail because I know both sides are committed to getting a deal done."
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