Canadians and/or Hockey Fans: Explain the Lockout

[DeltaSigStan]

There may be some GCers who don't understand the current NHL situation and/or too lazy to do a web search. So, I'm giving hockey afficionados the chance to wax some expertise. Who's at fault? How'd we get to this point? Aren't there enough minor leagues to keep intrest, especially in Canada?

The prevailing voice I'm hearing is that if owners weren't so easy to give big money contracts back in the 90s when the NHL doesn't make the revenue, we wouldn't be here. That true?

Ready...set...go...

[Lady Pi Phi]

I think most people are blaming the owners.

I don't really know who's at fault here. My opinion is that both parties are at fault. The owners don't want to pay the big bucks anymore, and the players are bitching about the lack of salary, when they really have no right to complain, and they fail to realize that the fans/ticket hodlers are actually the ones paying their salaries. Anyhoo.

For Canadians, hockey will continue to thrive because fans of the game are not just fans of the NHL (unless of course your from Toronto, where we only care about major league sports). Most fans of the game can no longer afford to attend matches or do not have an NHL team anywhere near them (I'm speaking just about Canada now) so they have taken to supporting the local teams.
In places like Brandon, Manitoba there isn't much else to do other than cheer on the Wheat Kings.
I think this might actually be good for the OHL, QMJHL, AHL, WHL, etc, etc.

Toronto, is actually getting the Baby Leafs in 2005-2006. It sucks for Newfoundland, but I think it'll be great for the hockey fans in Toronto who will get a chance to possibly see future Leaf stars for half the cost.

[kappaloo]

http://www.cbc.ca/sports/indepth/cba/

That website has a lot of information on the issue, but if you scroll down on that particular webpage they have a FAQ which says the following:

What is at the root of this burgeoning crisis?

Like most labour negotiations, this is about money. Bettman argues that NHL revenues aren't keeping up with increasing player salaries and that has to change if the league is to survive.

According to Bettman, players' salaries have increased 240 per cent since 1995, while revenues have increased only 160 per cent. The average NHL salary in 1994-95 was $733,000 US. Coming into the 2002-03 season, it's just shy of $2 million per season.

Owners say that, mainly due to the rapid increase in player salaries, many of the NHL's teams are in financial trouble. A recent report in the Wall Street Journal claimed that more than two-thirds of the NHL's 30 franchises suffered losses last season.

The league says total losses amounted to nearly $300 million US last season. Those numbers were seemingly confirmed by Arthur Levitt, a former chairman of the U.S. Securities & Exchange Commission, who issued a report on the NHL's finances in early February.

Levitt's study, commissioned by the NHL, found league's teams combined to lose $273 million US last season. The NHLPA characterized the report as "simply another league public relations initiative." They also questioned the legitimacy of the report because Levitt was paid by the NHL.

In the past, the NHL's players union has been skeptical of Bettman's claims, saying that teams have under-reported the money they bring in by tens of millions of dollars.

In an interview with the Los Angeles Times, Ted Saskin, the union's director of business affairs, said the financial numbers being put out by the League are "garbage in and out."

All 30 NHL teams are required to provide a detailed list of hockey-related income and expenses. Saskin claims some of those reports weren't comprehensive.

"There are a number of significant categories missing," he told the paper. He also added that "a number of teams understated cable revenues and didn't report concessions."

Levitt said he believed that NHL teams were accurately reporting revenues.

[NeonPi]

The revenues they USED to have in the 90's were padded by the glut of expansion teams (ie. expansion money) that were started throughout the 90's.

Of course, now they don't have the expansion money anymore to share, and yes salaries did go up.

It is an unfortunate situation - as Don Cherry said on The Fan 590 radio this morning "They'll be back in January, but if they aren't, I have heard it won't be until the NEXT January" (06) . It really depends on who blinks first (most likely? owners)

*now I take my semi-professional opinion hat off*

Originally posted by kappaloo
Bettman argues that NHL revenues aren't keeping up with increasing player salaries and that has to change if the league is to survive

[DeltAlum]

"There are a number of significant categories missing," he told the paper. He also added that "a number of teams understated cable revenues and didn't report concessions."

And while I'm sure he didn't mean to, he stated a big problem himslef -- "cable revenues." Not TV revenues. The NHL doesn't have a major onair network TV deal. That's a big problem because other sports have national deals. Most of the NHL deals are regional until the Stanley Cup.

Less money. Less exposure.

[RACooper]

Well I do know that there is a national TV deal through the CBC in Canada, but of course the major chunk of revenue comes from US sales.

The owners let salaries get out of control, and are paying for their short term thinking now. I'm also sure that the NHLPA wouldn't budge on pensions for current and past players... always been a big issue with them to ensure a stable financial future for all members of the NHLPA.

[CanadianTeke]

***Firmly affix's conspiracy theory hat***

Gary Bettman is driving this lockout in order to collapse smaller market teams that are bringing down the overall revenues of the game, as well as the overall skill level. He has realized the error of his expansion ways, and is looking to get out with out to much pie on his face. once 6 teams collapse (I'm betting, Columbus, Pittsburgh, Carolina, Florida, Pheonix, Anaheim) they will resolve the contract disputes and hockey will be back to it's 24 team glory days.

***removes hat***

IF the above is not true, than i think the the ownus to settle is shared, the league can't continue with no salary cap/luxury tax, the status quo won't work, that being said there has to be a system that allows for some breathing room for the NHLPA. The only way they will find it is if they sit down and are willing to bend. Neither side can be pig headed about this. I think binding arbitration is the way to go. Let an unbiased third party come up with a solution.

[kappaloo]

Don't forget to add Atlanta to that list too...

Binding Arbitration won't happen for a while. Can you imagine them negotiating on the terms?

[DeltAlum]

Originally posted by RACooper
Well I do know that there is a national TV deal through the CBC in Canada, but of course the major chunk of revenue comes from US sales.

You're right. I should have said US TV contract.

[RACooper]

While this is a bad event for NHL fans... it could be a good event for minor/school hockey. About two years ago some of the larger sports broadcasters expressed some interest in broadcasting more minor league and university hockey... now already my brother (he's a coach) has dealt with three different broadcasters asking about broadcasting UofT games. Maybe a short-term lock-out could prove benifical to hockey venues that normally are left out of the public eye...

[kappaloo]

Bettman did a town hall meeting, and it's summarized here.

http://www.cbc.ca/story/sports/natio...nhl040921.html

I had a point with what he said about third party arbitration:

"Ultimately, we and the players' union are going to solve this. We are the best equipped. We are the ones that understand the economics and the operation of our business better than anyone else. And ultimately, we are the ones who are going to have to live with this agreement."

I disagree. I mean, if the NHL is losing billions of dollars like they said, the arbitration would rule in their favour based on economics alone. The fact that Bettman is so against the idea makes me suspicious.

[KSig RC]

Originally posted by kappaloo
I disagree. I mean, if the NHL is losing billions of dollars like they said, the arbitration would rule in their favour based on economics alone. The fact that Bettman is so against the idea makes me suspicious.

The players union is against it as well.


And in re: to folding under up to six teams:

OK - actually, it's not that far-flung, but the owners are in on this too, remember, so they'd have to be receiving huge amounts of the supposed "Lockout Fund." Conceptually, it is interesting, but the Union (not to mention those six owners) would never allow it to happen. We're talking about 150 jobs here (just at the NHL level).

Also - Columbus is doing quite well at the gate, if I recall . . . Calgary would be gone way before c-bus, in terms of attendance over the past 3 years (not including the playoff revenue, which may have saved the franchise).

[RACooper]

From the team's point of view I can see why they would want some sort of limit placed on player's salaries or, at least up here, some sort of break given to them to reduce costs... so while the PM has weighed in hoping for a swift resolution and mentioning third party arbitration, the government (federal, provincial, or local) to ease the tax burden or costs for each of the teams.

From the player's point of view I can see why they want to avoid a salary cap, not only for personal reasons, but also for pension (NHLPA pension) as it stands now a portion of each player's salary goes towards the pensions of all those retired players... while recently some players have secured their financial future many retired players (a number that continues to grow) are in need of financial aid. Now the NHLPA has been discussing increasing the percentage that is taken from salaries to increase the cash flow to the pension fund, this would hurt the lower end (pay wise) players more than the stars pulling in the big bucks, so the majority of the players would oppose this.

Now that all being said the entire arguement isn't solely about money, but also the level of input that the teams and the players have in any changes to the game under the current system. This is something that I agree with... I don't trust Bettman at all; he's to focused on the business and not on the game - basically he comes across as someone more concerned about the cash and not about the actual game. I don't like hearing about all these propossed changes that come down from the head office, things designed to make the game "more watchable".... that and Bettman personally comes across as a snake in the grass....

[kappaloo]

Maybe I am just having a hard time understanding the owner's position and some of their statement/actions just seem really unorthodox for a company which is in labour negotitations. The players' association's position is obvious, and while I disagree with portions of it, I can understand where they are coming from and their tactics currently seem pretty typical unionwise.

[RACooper]

Originally posted by kappaloo
Maybe I am just having a hard time understanding the owner's position and some of their statement/actions just seem really unorthodox for a company which is in labour negotitations. The players' association's position is obvious, and while I disagree with portions of it, I can understand where they are coming from and their tactics currently seem pretty typical unionwise.

I'm very suspicious myself... I can understand there being a gag order on disucssing the negotations; but that also prevents us from hearing if its about more than money. That fact that NHL-HQ is against the arbitration and disclousure of what the stumbling blocks leads me to suspect that salaries aren't the only major issue between the two parties. It should be interesting to see what comes out eventually...