On the Forecheck
A better way to save the Islanders
by Forechecker on 02/02/09 at 02:20 PM ET
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Just in case anybody took my earlier tirade against the “New York Islanders deserve revenue sharing” idea as mere invective against a struggling NHL team, I thought I’d try to reframe this whole question in perhaps a more constructive light:
“What, if anything, should the NHL do to assist teams with upgrading their arenas?”
The business challenges facing the Islanders, it is almost universally agreed, have mostly to do with the aging Nassau Coliseum, and the need for a new state-of-the-art facility with luxury boxes and other revenue-generating amenities. Since the NHL is largely a gate-driven league, it makes sense that leveraging their collective resources to improve those facilities could help the league as a whole.
An example to follow perhaps comes from the NFL’s G3 program, as described in a 2006 article at AllBusiness.com:
The NFL’s G3 loan program was created in 1999 to help teams build state-of-the-art, revenue-generating stadiums. The funds come from a share of each NFL team’s media revenue and from visiting teams’ share of club-seat revenue generated by new stadiums.
Because the visitors’ share otherwise would go into the pool of funds shared with players, the union has to approve each loan. The loans are attractive because there’s no out-of-pocket expense for the borrowing team. To satisfy the loan, the NFL merely credits revenue sharing payments the team already makes to the league toward the loan’s balance.
It has helped in the financing and development of several NFL stadiums (20 according to Time) in recent years, and might be worth considering for the NHL as well. It should be noted that such a program would be quite different from the current revenue-sharing system. Revenue-sharing is a mechanism that helps sustain the narrow band between the salary floor and the cap, and is tied to ongoing profit & loss statements. A “G3 for the NHL” would provide a capital pool for investments in team infrastructure, so it would only be tapped by any given team when they undertake a major renovation or build a new arena.
Filed in: NHL Commentary | On the Forecheck | Permalink
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