Lockout Puts NHL In Danger

At times it seems that the NHL was invented only to give credence to Colin Cowherd’s statement about the ability of women and sports to make idiots out of the wisest men. I’m paraphrasing. No one has ever anointed biblical wisdom upon NHL owners and players. That’s not about to change as the league is set to begin its fourth work stoppage since 1992.

As usual, the sticking point is money – specifically, what constitutes hockey-related revenue and how to split the record $3.3 billion the league earned during the 2011-12 season. Owners want the players to drop their percentage to 49 percent this year and 46 percent at the end of the six-year agreement. Under the current collective bargaining agreement, players get 57 percent of revenue. Players want the percentages to remain while upping salary cap levels by 2 percent a year over the next three years.

The other big issue is the players’ plan to increase revenue sharing to help bolster less profitable teams.

As decimating as the lost 2004-05 season was, the result was a more financially stable league with better cost control that produced seven years of record revenue. Any hope of a similar result is just folly, as even a small number of missed regular season games could have devastating effects on the game’s popularity, which even during these good times finds itself desperately clinging to relevance.

Hockey remains a highly regional niche sport that suffers outside of Canada, the upper Midwest and East Coast regions. Ratings for the Stanley Cup Finals were abysmal even though the participants represented large television markets: Los Angeles and Newark/New York. Unlike most sports, NHL television ratings are not tied to geographic population, but rather team popularity. This means that outside of the original six, Philadelphia and Vancouver, no one is watching. Canceling games won’t help.

At least for the time being, fans aren’t taking sides. The old statement of millionaires fighting with billionaires still rings true, but as games are cancelled, as have all September preseason contests, it will be hard for the league to maintain any public relations edge. It is especially difficult to claim poverty after negotiating a 10-year contract with NBC and an off-season where the Minnesota Wild signed super free agents Zach Parise and Ryan Suter to 13-year deals worth a combined $196 million. The season salary cap hit for both is just $15 million, which is not too excessive, but Wild owner Craig Leipold had to feel comfortable with the team’s future revenue projections to commit such a large amount for just two players.

Perhaps, in an effort to overcome the positive economic outlook, Bettman has embraced the bully pulpit by threatening a lockout for months, recently saying even a brief work stoppage would cost more in terms of salary than if the union had taken the owners’ offer. He also has been careful to remind everyone that the average player salary has grown from $1.45 million in 2005-06 to $2.45 million in 2011-12.

No one is expecting another season-long standoff, but unlike in 2004 when players took a more wait-and-see approach, this year they are signing with Russian and Swiss leagues with startling quickness. Stars like Ilya Kovalchuck, Alexander Ovechkin, Pavel Datsyuk, Evgeni Malkin and Joe Thornton have already signed with new clubs, and Sidney Crosby is expected to sign with a KHL club shortly.

A lack of paychecks typically helps bring people back to the negotiating table, but the KHL has made it clear it is willing to spend for big talent, and those paychecks could make players comfortable enough to stand their ground.

A stubborn Bettman and well-paid players could be the death of the NHL – at least as a viable, national sport.