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The CBA’s Shine Is Slowly Wearing Off
by SENShobo on 10/06/08 at 06:03 PM ET
Comments (7)
From Ken Campbell of The Hockey News,
Guys like George Gillett gave up a season of profits so that guys like Ted Leonsis could have a better chance to make some of their own. But, three years after the lockout, the collective bargaining agreement does not seem to be working so great for either of them.
The lockout was supposed to be about keeping player costs in line, but Gillett looks at the money he is paying out and notices that with what his team pays into player salaries and revenue sharing, he is putting out more money than he did prior to the lockout. He owns the Montreal Canadiens.
The lockout was supposed to level the financial playing field and give everyone a chance to make a profit. Leonsis looks at his bottom line and sees he is still losing money and will do so again this season. In order for him to start making any money, the stars will have to align as they never have before. He owns the Washington Capitals.
Last week I wrote my thoughts on the CBA, and this only further explores the hardships of the current system. A time will come when a new deal is reached, but whether it will benefit the owners of rich successful teams, of smaller market teams, or the players themselves, that remains to be seen.
Like a politician only now admitting that there is a financial crisis going on, let us hope that along with extolling the virtues of the new CBA, Bettman and Kelly start openly admitting some of the issues with it, so they can be discussed and addressed before any monumental crises emerge.
Filed in: NHL General | SENShobo | Permalink
Comments
It would be interesting to look into, see how it might work. Some, like Lemieux obviously, might well enjoy the opportunity. But you’d have to ask questions like whether all players would want a share of a team, how much of a share they’d get if they played 2 games and sat in the press box for 80 or in the AHL for 80, and a host of other concerns, like whether a team could remain easily manageable with all those voices and differing opinions (one wonders what fun it has been dealing with Toronto’s ownership group and their interests).
I think gaining a following, whether it be in the States, in Europe, or anywhere, is a major key. I read recently, might have been a post on KK actually, that more than any other sport, the NHL is very team-loyal, whereas there is less trouble switching allegiances in other sports. That might be that while you get 82 games watching the Sens, even for all the glory of following the Pats, you only get a fraction of games to watch in comparison, or how March Madness has single elimination, leaving fans whose team drops out in the first bracket more amenable to switching their viewing preferences, not to mention the advantage in the sports betting world of following multiple teams. It actually seems backwards that in such a team-loyal league, blackout rules and tv deals focused more on bringing a variety of games spread over many channels work against the fans who want to follow a team’s full 82 game schedule.
I found it interesting as well how many people followed this past Superbowl, not just because of the Pats’ record, but because of who they were rooting for. There were many stories here in Canada about right tackle Nick Kaczur, a Brantford native, and yet you don’t always see that same sort of hometown-pride story in the NHL. Certainly, Dan Cleary was a great example of it, but sadly a rare one, and a missed opportunity for the League to play up.
Posted by SENShobo from Waterloo, ON on 10/06/08 at 06:53 PM ET
Well, I actually offer it as a false solution; I don’t think owners would like giving up shares of ownership, and that action would speak louder than any owner financial-related quote for me at least.
And I don’t really have any specifics of how such a system would work, but if these are indeed the two issues:
a) Owners claim to lose money owning a franchise
b) Players don’t believe those statements
...then the logical middle ground to me is to have players exchange some salary for some share of ownership. Whichever side doesn’t like this arrangement, then they are probably the ones lying to us.
It’s like Solomon cutting a baby in half; it’s a solution that doesn’t really solve anything, it’s simply designed to cut through the half-truths of the involved parties.
Posted by Earl Sleek from Anaheim, CA on 10/06/08 at 07:24 PM ET
After his last CBA article I really have to take Ken Campbell with a grain of salt. One of the few people I trust in terms of NHL economics is Doug MacLean who was able to make hockey work in Columbus.
Posted by bcrt on 10/06/08 at 09:35 PM ET
If Gillett says that his costs are up, despite the fact that he’s charging his fans more than he ever has, and his players are only entitled to a certain percentage thereof…I guess beggars can’t be choosers.
I very genuinely don’t care if the owners stage another lockout. I hope that the players and owners can come to a sensible agreement and draft a sensible CBA that addresses the economic issues facing everybody involved, but I’m not betting on it. Paul Kelly is a sensible man, and Gary Bettman, as much as I dislike the man, is a sensible commissioner, and the last thing either party could use is another “work stoppage”...but if it happens, I won’t be surprised. I hate saying that, I really hate saying that, but the posturing began about five minutes after the current clusterbleep was signed.
Posted by George Malik from South Lyon, MI on 10/06/08 at 09:42 PM ET
What incentive is there for the players to want a new CBA? This is the CBA the owners wanted. It’s been better for the players than it has been for the owners. Tough.
The only way the players consider revising the CBA is if the changes don’t impact the amount of money they are making at present.
And to be clear, I am not blaming the players—they got what was best for them all the while the owners thought they were getting what they wanted. Too bad for the owners.
If there’s a problem with the system its that small market owners are allowed to carry as much, if not more clout than major market owners with significant fan bases and cash flow. If you want to stick the blame some place, stick it at the commissioner’s office for working to preserve clubs that contribute little to the league, all the while making it worse for the clubs that carry the league.
Posted by Nathan on 10/07/08 at 08:15 AM ET
Overall, the average player salaries have gone up, but I keep hearing that there’s a greater rich/poor divide, with more players that don’t appear in an All-Star game winding up without any of the prosperity. They might have something to say.
I wonder how best to treat the teams that are pulling in revenue sharing, rather than paying it out. If you chopped the League in half, inevitably your schedule would lose home games, and I doubt even the rich owners would want that to happen.
I have a friend who works in retail, who has worked in an ‘A’ store in an upscale mall, one of the largest stores with the most traffic, sales, and value to the brand, as well as a ‘D’ store, with far less space, selection, and rarely much in the way of profit. But without those non-‘A’ stores, the brand likely doesn’t do as well. They still move their product, allowing discounts and benefits to all the other stores for bulk ordering, they give better penetration to the brand, and together all stores help each other out. Sure, as a ‘D’ store franchise owner, you aren’t making much profit unless you get very creative, but you still pay your employees the same as the ‘A’ store, still face most of the same costs, and deal with the same issues.
The question is: why couldn’t something like this work for the NHL? Or isn’t that already where we are in a sense, only far less fine-tuned than retail industry.
Posted by SENShobo from Waterloo, ON on 10/07/08 at 09:32 AM ET
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Well said, Sens Hobo. The tragedy will be if both sides wait too long to admit there are issues that should be talked about and there is more missed hockey.
Still, I don’t like taking any owner’s word for anything when it comes to money any more, especially when we’re faced with this kind of gloom-and-doom story.
I mean, these two owners don’t even appear to be measuring the same thing! Gillett says his costs are up; Leonsis says spending to the cap has prevented him from profitability, and I don’t think either of them will admit to anything about their franchise values.
If owning an NHL team is really as unprofitable as owners tell us, then why not go for my suggestion? In every player’s contract, lower the dollar-salary and instead award the player a share of team ownership. I’m sure owners would jump at the chance to do this—unless they’ve been feeding us mistruths about the hardships of ownership this entire time. (GASP!)
Posted by Earl Sleek from Anaheim, CA on 10/06/08 at 06:38 PM ET