Welcome To Law And Order, Hockey Edition
Today restarted an impasse in negotiations between the NHL and NHLPA that quite frankly never should have been stalled. The 50/50 revenue split no longer appears to be a sticking point between the two sides, however the NHL quickly dismissed the Players Association counteroffer, presumably due to the timetable given by the players to reach 50%. Given this 2011 Stanley Cup State of the League address by Gary Bettman, none of this should be shocking. Pay attention to the video from 1:10 to about 3:00.
Just to be clear, while not definitively stated, the valuation given at the end of the 2011 season was approximately $3 Billion. This also mentions the television deal and molson sponsorship which would not have been included in those figures. The NHL is just barely scraping by. Even using basic math, applying a $60 million per team cap, the player portion of that would have been around $1.8 Billion. So what the NHL is now claiming is that is cost in excess of $1.2 Billion dollars to operate their business, which up until then had been growing at an unprecedented rate and just latched on to both the largest corporate sponsorship deal and television deal in the history of the business. By this logic, 2012 must have been an awful year, right?
Another record year. I would have gone back through all six years, but the message is no different. Record viewership, record revenue, record everything. So the message being sent to the people that are paying for this albatross, is that while we have taken record amounts of your money, we no longer feel the need to pay our employees. We will lock out the ones under contracts, lay off the ones that are not collectively bargained, and completely shut down business because things are just going horribly, regardless of what I declared in the publicly available state of the union. This must have something to do with the awful situations going on in Glendale AZ, Columbus OH, and Newark, NJ.
This would all be perfectly correct, except unless the Coyotes lost in excess of $25 million, they actually lost nothing. Rather, the taxpayers in Glendale lost $25 million. Thats because, while the NHL is out selling the daily line that they have assumed an incredible amount of risk in running these operations, they actually have largely assumed none. The NHL is kind of like a check valve, when they make money it is theirs. When they lose it, local and state governments make up the difference in some form of subsidization. It’s a great system really, if you can get in on it.
This may seem a bit late, as the negotiations have been going on (or not going on depending on who you ask), but it is really important that people be reminded that the players did not create this. While many state that is was disingenuous, the players association did state that they would play so long as negotiations were ongoing. The League told them to go home. For those that feel it was disingenuous, go comb through the history in the United States regarding organized labor, you will find that most Unions work straight through contract negotiations. The only organizations that have resorted to such extreme measures in the last decade would be those which involve professional sports.
Others will look to contracts like that of Alexander Ovechkin, Sidney Crosby, or more recently Zach Parise and Ryan Suter, and question why the players would balk at some percentage, after all they are still millionaires. If you talk to the people that are making the league minimum, I doubt that taking a ten percent paycut would be a happy proposition. The trouble in sports is that the players that make the most give a blanket representation of all. Because Sidney Crosby makes at or close to $10 million, so must Patrick Kaleta. The truth is that the league is made up of a lot of Patrick Kaleta’s and very few Sidney Crosby’s. Each team has two, possibly three players in the upper pay brackets, five or six in the middle, and the rest at or near the bottom. Don’t believe me, just look it up.
So while all of the NHL sits in idle while the NFL season rolls on (like anybody needs an excuse to watch that), and the MLB playoffs increase viewership nightly, their winter competition/counterpart just allows fans to sit and wait. So let me introduce everybody to what NHL 2013 should look like on the playstation.