Magazine

An Entire Season In The Penalty Box?


On Oct. 30, Columbus Blue Jackets center Todd Marchant should be skating against the Dallas Stars at a packed American Airlines Center in Big D. It should be the Jackets' ninth contest of the young National Hockey League season.

Instead the Jackets have yet to suit up, and Marchant, a nine-goal scorer last season, is at home in Ohio coaching his 6-year-old daughter's hockey team. In a year when Zamboni sightings may be as rare as the footprints of the Abominable Snowman, it could be Marchant's only ice time. "No one likes losing money, but this year everyone involved in hockey may be losing something," he says.

Around the NHL signs are ominous. The league office has slashed 100 jobs, belt-tightening being repeated by many franchises. Players are fleeing to skate for teams from France to the Czech Republic. As incredible as it seems for a league that sells 90% of available tickets and last season generated revenues of $2.1 billion, the NHL may sit this season out.

For five years, NHL Commissioner Gary Bettman has been warning that despite healthy growth, the league was choking under the strain of player salaries. Last season they gobbled up nearly 75% of NHL revenues, vs. 64% for the NFL and 59% for the NBA. Losses for the 30 franchises over the past two years top $500 million, according to Bettman.

HARD CAP, PLEASE

"Since 1999, I have been asking and begging the union to acknowledge our problems and deal with them," says Bettman. On Sept. 15, when the labor deal expired, he made good on a promise, shutting down the league before training camps opened.

Bettman says the lockout will last as long as it takes to win "cost certainty." And NHL owners, who claim they will lose less canceling the season than playing under the old contract, seem to be on board. "We all recognize that we have to correct this problem," says Boston Bruins owner Jeremy Jacobs.

The owners want a hard cap, similar to salary restraints in pro football and basketball, that would hold player pay to 53% of NHL revenues. Such limits would cut the average salary this year by $500,000, to $1.3 million. Worse, say the players, the days of profligate owners waving checkbooks at hot players -- which is how they got themselves in this mess -- would be over. "We're not going to play under a salary cap. We're dead-set against it," says Brad Lukowich, a veteran defenseman for Tampa Bay and Dallas.

Tough talk from the players isn't surprising given the bruising history of NHL collective bargaining. But it has been a decade since labor discord cost the league a game. In 1994, when the owners last tried to ram through a salary cap, they got body-checked. With Bettman leading the charge, a 103-day lockout canceled nearly half the season. The deal that got the season restarted didn't include a cap. The terms -- entry-level salary cap and modified free agency -- that Bettman counted on to tamp down salary growth quickly were evaded by owners and agents.

Bettman concedes that the league erred in 1995 by settling for less than a system linking salaries to league revenues. It won't happen again, says NHL Chief Legal Officer William Daly, adding: "If it makes sense to wait until next year [to resume play], we'll wait."

One reason talks with the National Hockey League Players' Assn. are stalled is that there haven't been any lately. The sides last met on Sept. 9. When owners and player reps do get together, mostly they belittle each other's financial assumptions. Case in point: former Securities & Exchange Commission Chairman Arthur Levitt Jr.'s 2004 audit of league books, which offered the gloomy assessment that 19 of 30 NHL franchises lost money. Misleading, claims the players union. Its analysis concludes that 75% of the losses were rung up by six clubs. "We have serious issues with their numbers," says union chief Bob Goodenow.

Who blinks first will depend on willpower and finances. And the two sides seem to have of plenty of both stored up. Marchant says his comrades have been preparing for years. "My wife and I sat down one night, wrote down what we spend our money on, and made some adjustments," says Mar chant, who before last season signed a five-year, $19 million contract. Some 243 NHL players will barely feel the pinch of a canceled season -- they're earning salaries near their NHL pay playing overseas.

Thanks to deep-pocketed owners -- such as Cablevision Systems (CVC) (New York Rangers), Comcast Spectacor (Philadelphia Flyers), and Philip F. Anschutz (Los Angeles Kings) -- and a $300 million lockout fund, the league has substantial reserves of its own. But Brad Lukowich isn't impressed. "They could have $300 million or a billion, it doesn't matter. We won't budge on a salary cap," says the player. That kind of talk makes it seem like the Stanley Cup finals may be an even tougher ticket than usual this season.

By Mark Hyman


Too Cool for Crisis Management
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus