Let’s start off with a little math:
If each team in the NHL had spent just enough to reach the salary cap floor in 2011-12, 57 percent of hockey-related revenue would’ve gone to the players.
Last year, 57 percent of hockey-related revenue was $1.87 billion.
On the other hand, if each team in the NHL had spent to the salary cap ceiling in 2011-12, 57 percent of hockey-related revenue would’ve gone to the players.
Last year, 57 percent of hockey-related revenue was $1.87 billion.
Sometimes it seems like not everyone understands this. Or, they’re choosing not to publicly.
“We’re agreeing to pay our players a certain percentage of our revenues. That’s a fixed dollar amount,” deputy commissioner Bill Daly told FAN 590 earlier in the week.
Again, “That’s a fixed dollar amount.”
In the new, yet-to-be-negotiated CBA, the NHL wants a reduction in the percentage of revenues going to the players because the league thinks 57 percent is too high. Such a reduction would result in the loss of salary for players via escrow, which is used to reconcile any “shortfall” or “overage” to the players as it relates to the revenue split.
Losing money to escrow would not be a new thing for the players. Five times since the 2005 CBA was introduced the players haven’t received as much as their contracts said they were supposed to receive.
Of course, twice they received more than their contracts said they were supposed to receive. You just don’t hear them talk about that very much.
Not once have the players received the exact amount their contracts said they were supposed to receive, because another contract – the CBA – overrides all.
So to those arguing it’s the damn owners that are paying the players too much, the owners, as a group, don’t have a choice. Last year, the players were going to get $1.87 billion, regardless of what total player salaries added up to on paper.
As individual teams, however, the owners have a choice. Take the case of the Minnesota Wild, which now boasts one of the league’s highest payrolls thanks to the massive contracts the club awarded Zach Parise and Ryan Suter.
That, for lack of a better term, may have been dumb. Minnesota is a mid-level market; it’s not Toronto or New York.
“Some clubs may spend poorly,” admits Daly.
But Wild owner Craig Leipold believed it was the kind of investment that needed to be made in order to reconnect with fans, get the team back into the playoffs and kick-start future revenue growth. And the only way he was going to get those players was to give them the kind of front-loaded deals the NHL wants to do away with.
Absolutely Leipold was hoping to claw back some of that salary in a new CBA. Was it distasteful? Perhaps. But Parise and Suter knew the score. So the players can spare us with the babe-in-the-woods routine (h/t FBI agent in Goodfellas).
From a public-relations standpoint, what Leipold did looked awful, and you can bet Gary Bettman wasn’t pleased. Most everyone would agree that owners who take massive financial gambles should have to feel serious financial hurt if they don’t work out. That’s business. And no owner should be guaranteed a profit every season.
But it’s unfair to throw Leipold in with all the other small- to mid-market owners that adhere to their self-imposed budgets. It’s those owners that need help, be it through more revenue sharing or reduced player expense. Chances are it will be through both. To which degree of each is the question.
Ultimately a new CBA won’t guarantee every team a profit, and nor should it. If an owner spends his money poorly, then that owner should lose money.
But as it stands, there are owners that could spend their money well and still lose money, and that’s not a sustainable model.
Fortunately, a deal is possible -- this isn’t a broken industry.
Which is what makes all this so frustrating. We can see the deal through all the rhetoric and posturing and pandering to fans.
It just needs to happen.