What the NHL needs to fix its labour problems: more Canada

So who’s to blame? There is no disguising the obvious candidate

by From the editors

What the NHL needs to fix its labour problems: more Canada

Stefania D'Alessandro/Getty Images

Canada has made two significant contributions to professional sporting success: the Stanley and Grey Cups. Too bad these storied trophies are heading in opposite directions.

This year marks the 100th anniversary of the Grey Cup and the league has commissioned a specially designed train to mark the occasion with a cross-country journey bringing this momentous event closer to fans. Over at the National Hockey League, things aren’t as celebratory, historic, or fan friendly.

Hockey’s current collective bargaining agreement is set to expire and, with no progress in sight, Canadian hockey fans must now steel themselves for a third lockout in just 18 years. So who’s to blame?

The obvious candidate is NHL commissioner Gary Bettman. As Maclean’s national correspondent Jonathon Gatehouse details in his upcoming book The Instigator: How Gary Bettman Remade the League and Changed the Game Forever, since coming to power in 1993 Bettman has ushered in an era of tremendous change for the NHL, including massive revenue increases, huge player contracts and a controversial expansion across the southern United States. The league today is very much Bettman’s vision.

Under his guidance, the owners dominated the players during the 2004 lockout. At the cost of a lost season, the owners successfully forced players to accept a salary cap. Their victory was so complete it led to the immediate departure of players’ association head Bob Goodenow.

Having tasted success, the owners are now back looking for more. The initial offer from the NHL this summer proposed to take the players’ cut of total revenues from the current 57 per cent to 43 per cent. A subsequent proposal has offered players something closer to 46 per cent of the action. Not surprisingly, negotiations have broken down.

The owners’ argument is that the economics of hockey have changed substantially since their last victory, and thus many teams are now struggling to survive. Of course such a situation is entirely of Bettman’s making. The teams in the weakest financial condition are those in unlikely U.S. locations such as Columbus or Phoenix. There is no Canadian financial crisis in hockey.

Players have responded with a scheme that would see owners share revenues in order to prop up financially weaker teams, plus a three-year reduction in players’ share of revenues.

We thus have two distinct and competing visions of hockey economics. One entails a new, lower salary cap to keep poor clubs afloat. The other sees a more financially integrated league with a temporary reduction in costs. What’s best for fans? Whatever plan avoids the need for a lockout every time a collective bargaining agreement expires. That means healthy and sustainable hockey economics at every arena.

The problem with Bettman’s current scheme is that its advantages vary hugely from city to city. Cutting the salary cap from the current $70.2 million per team to $58 million, as the NHL’s latest offer contemplates, may bring temporary financial relief to teams in Phoenix or Columbus, where fans are scarce. However, for currently profitable teams that play to sellout crowds (the Montreal Canadiens or Toronto Maple Leafs), such a cost-cutting move will be nothing short of a cash bonanza.

The ultimate goal of the NHL should be to see all teams make a comfortable profit. Simply lowering the salary cap without changing other features of the league will only entrench the financial disparities between teams. We can also expect this approach to lead to further demands for lower salary caps in the future if teams in poor locations continue to limp along.

The only real, sustainable answer to hockey’s tricky economics is to ensure every team is in a city with fans prepared to support their team. And that inevitably means less Sunbelt hockey.

Last year, prior to the Atlanta Thrashers’ move to Winnipeg, the Mowat Centre for Policy Innovation at the University of Toronto calculated Canada could support up to 12 NHL teams. Such a conclusion was based on the fact hockey depends for the most part on gate revenues and Canadian television rights. The report noted the five (at the time) Canadian teams produced a third of total NHL revenues. Want to fix hockey? Give Canadian fans more teams to cheer for.

From this perspective, the player proposal comes out the winner. It requires Bettman and the owners to take proper responsibility for the strategic flaw of creating so many weak teams in the first place and offers the league a three-year transition period to fix it. This ought to be plenty of time to arrange moving notices for U.S. teams that will never be profitable whatever the salary scale. Oh, and Quebec City’s new NHL-sized arena should be open by 2015. Just saying.




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What the NHL needs to fix its labour problems: more Canada

  1. I think the “more Canada” idea is great–how can we start at the top and replace Gary Bettman with a Canadian who really understands this game?

  2. Bettman and the owner’s have decided for some time now that they want a lockout up until x-mas to launch the Winter Classic. Why? Because Bettman’s cares about the
    10yr/$2billion deal he signed last year with NBC Sports and the network is tolerating this inconvenience in their fall lineup because generally our neighbours south of the border are too busy watching football and almost anything else to care about hockey between Oct-Dec. Also team owners in the US outside traditional markets don’t make much money and in a number of cases lose money in the fall so they will in fact benefit from not paying player salaries over the next few months.

    However, NBC Sports and owners will care if the lockout leads to the cancellation of the Winter Classic which is a big draw for the network. So why would Bettman put in jeopardy his precious network contract that he has been working on since the last lockout??? Simple, he is arrogant and thinks by December, the players will be begging for a deal. Worked last time… should work again – right… not necessarily.

    The players got destroyed during the last lockout so they hired a mercenary in labour relations this time around Donald Fehr. Very smart cat and no push over. He recognizes Bettman is playing a high risk game with the network and owners; so what has he done over the last month and half… United the players so they are all speaking from the same songsheet and doing everything possible from a PR angle to persuade the fans in thinking the NHLPA wants the season start on time… what’s the latest this weekend… The NHLPA complaining to the Quebec and Alberta provincial labour boards about owners illegally locking out players in Montreal, Calgary and Edmonton… Those evil obstructionist owners!!!! I hate them already!

    Reality check – Fehr is hoping for an extended lockout to watch Bettman’s plan blow up in his face.

    So what can we fans expect between now and x-mas… a cat and mouse game… however, in the end, I think Bettman has a real deadline to strike a deal and that will mean Fehr and the players will probably come out of this negotiation in much better shape than in the 2004-2005 lockout so long a Fehr can keep NHLPA members patient and focused. Tough task; but Fehr has so far done a good job.

    All to say, as a fan, I look forward to a few more months of silly talk and non-genuine efforts on both sides to get something done. Good times.

  3. And if the Canadian dollar goes down the League crashes.
    Fantastic idea from someone who clearly did not bother to research the issue….

  4. Americans should not be allowed to either watch or play hockey, its speed and sophistication are way too much for them. They should stick to American football where the actual playing time averages 6 seconds between 60 second intervals of ads and talk, or baseball where some activity occurs about once per 3 hour game. Of course there is basketball, it has a little more actual activity, but then it was invented by a Canadian as a joke on his American employers.

    • American football provides some of the best sporting analysis and tv coverage of any sport. Granted, there is WAY more time for it than in hockey it is true, but fooball analysis is quite sophisticated. It is hockey analysis, commentary and use of camera angles that are neolithic in comparison to just about every other sport in the world.
      Not sure why this is. Perhaps because the global market for hockey is so relatively small. But reverting to ignorant Canadian anti-Americanism is not likely the answer.

      • While I agree that hockey’s commentary and replay/presentation is lacking, I would say your argument regarding the global market is blattantly ignorant. The NFL market is strictly a North American one. No one else watches it, whereas hockey is also played all over Europe. I would say that the complete mis-management if the NHL by it’s commissioner and owners is the reason they are so far behind. The nfl plays to the needs of its fans, the nhl rarely does.

      • n-p, Its called humor. Sorry you missed it.

  5. Villifying Bettman seems to be the popular thing to do but a few years ago when all of the Canadian teams were struggling except for the Leafs and the the Canadian dollar was in the tank. Bettman helped to save the Ottawa and Edmonton teams and helped prop up the rest..
    He doesn’t like to see any teams relocate if it is all all possible to save them,
    In fact all this blaming of Bettman and exonerating the NHLPA is childish.

    • The league has watered the hockey desert in Phoenix with cash for a decade, basically paying the team to stay out of Canada, but didn’t lift a finger to save Winnipeg in the first place.
      Why? Because Bettman won’t admit the failure of his “vision” which is that hockey teams can be created by marketing and survive without an actual fan base. You want to talk childish, how about refusing to admit you are wrong after more than a decade?

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