End of bargaining agreement will change hockey - East Valley Tribune: Sports

End of bargaining agreement will change hockey

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Posted: Wednesday, October 8, 2003 12:03 am | Updated: 2:25 pm, Thu Oct 6, 2011.

It's time again to play that well worn sports game: "We say, they say."

In one corner we have commissioner Gary Bettman and the National Hockey League's owners crying woe-is-us over a collective bargaining agreement that forces them to pay 76 percent of league revenue to player salaries.

In the other corner we have hard-line NHL Players' Association executive director Bob Goodenow and the players of a second-tier sport who still earn more money, on average, than their counterparts in the nation's most popular league: the NFL.

Caught in the middle of this tiresome charade is the beleaguered NHL fan.

Who to believe? Who to despise?

It's all so confusing, and with nobody from the league currently speaking in anything more than generalities, thanks to a recent league-wide gag order, the truth is as indecipherable as Enron's finances.

“There is not a whole lot more to say," said Bettman, following last week's meeting between the Players' Association and the league — the 14th such meeting, but the first that players and owners attended. “While it was a positive and constructive step to get together more formally than we have in the past, there are many more such steps ahead of us," Bettman added. “I prefer they occur behind the scenes, where they belong, so the competition on the ice can get the attention it deserves."

Here's what we know. The collective bargaining agreement between the owners and players is set to expire on Sept. 15, 2004. Both sides have been amassing war chests (the league's a reported $300 million) to prepare for a long and bitter battle.

If the two sides can not reach a compromise by that date the owners are expected to lock out the players.

The NHL locked out players for 103 days in 1994.

Another work stoppage could last more than a year and threaten the existence of some teams even though Bettman insists contraction is not an option.

Here's what the two sides are saying:

According to figures distributed to owners this summer, NHL teams lost about $300 million last season, an increase of 35 percent from the $218 million the year before. Owners blame the losses on rising player salaries. While the NHL says league revenue rose from $600 million a decade ago to $1.9 billion last season under Bettman's initiatives, player salaries increased at an even greater rate from an average of $468,000 in 1992-93 to $1,790,209 last season.

Average team payroll has increased from $12.2 million in 1992-93 to $45.8 million last season, an hike of 275 percent. The number of millionaires in the league jumped from 43 before the current CBA to 412 last season. As a result, owners say they are paying 76 percent of revenue to players' salaries compared to 57 percent a decade ago.

"The current system doesn't work any more. It has to be changed," said Bill Daly, the NHL’s chief legal officer.

Depending on which owner you ask, as many as three-fourths of the league's teams lost money last year. Coyotes owner Steve Ellman said his team has lost about $35 million each of the past two seasons.

Among the ideas that owners are floating to combat the losses are a hard salary cap of about $35 million and no guaranteed contracts, like the NFL.

"If they're talking no guaranteed contracts then we'll play hockey when hell freezes over," said Pat Brisson, an agent with IMG who represents players such as Sergei Fedorov.

Bettman has refused to say whether owners prefer the cap to the idea of a luxury tax which taxes teams that exceed a designated payroll. But Daly has said he doesn't think the luxury tax system used by Major League Baseball would work for the NHL because of the league's dire financial situation.

Bettman has said the league is open to ideas other than a cap that include wage scales (fixed salaries based on years of experience or performance) and revenue sharing between clubs.

But NHLPA senior director of business affairs and licensing, Ted Saskin, said that wasn't the case at last week's meeting.

“The owners didn't seem interested in any proposal that did not include a cap," he said.

The NHL is the only one of the four major North American professional leagues that does not have a salary cap or luxury tax. The league does not enjoy the huge revenue streams from national television contracts of its counterparts in the NBA, NFL and Major League Baseball. NHL teams will earn about $5.7 million from their deal with ABC and ESPN that is set to expire after this season.

Still, there is little trust on the part of players that the numbers coming out of the owners' camp are accurate.

“Some of them might be truthful but some of them might not," said former Coyotes player representative Todd Simpson, who is now with Anaheim. “You don't want to call anyone a liar but you have to wonder when there's all these accounting scandals so complex that even professional accountants can't figure them out.”

Los Angeles Kings president Tim Leiweke recently opened his books to the Los Angeles Times, but even that effort was dismissed by the players.

“We've been very clear that the alleged losses of $300 million and the percentages being paid to player salaries all flow from the NHL's decision on what revenue they choose to include in their reporting,” Saskin said.

Saskin said there are a number of ways for teams to hide profits, including luxury suite revenue, outside licensing agreements and local television deals, in which ownership also owns the media outlet, as is the case with Cablevision and the New York Rangers.

“Their figures wouldn't withstand any real public scrutiny," Saskin said.

Bettman said such talk is absurd.

"The union needs to get itself up to speed because we believe it to a certainty and we are relying on it in everything we do," he said. Kings player representative Ian Laperriere acknowledges that the financial standing of the league is tenuous. But he also wonders why it is the players who must make the major concessions.

“Owners think that with a salary cap they won't be able to screw each other and drive up the salaries, but why is that our responsibility to keep them from screwing each other?" he said.

After a spate of free spending by the league's handful of wealthy teams last season, many clubs did curtail spending this offseason.

Phoenix has cut its payroll for the third time in the last six months by exposing Simpson to the waiver draft.

But other teams like Anaheim have increased payroll and several teams signed players to long-term deals this summer.

Brisson acknowledges that allowing some teams to spend more than others might create a competitive imbalance. But he thinks revenue sharing is the solution to that problem.

Laperriere just hopes both sides come to their senses soon.

“People will say we're greedy players or the owners are lying, but the sad thing is we're all walking away from the main focus, which is the game of hockey," he said. “If we have a lockout, the game is what's going to suffer the most. Look at baseball. It's the strongest game in America and it took every little thing to bring the fans back after a strike.

“Our game is not that strong. If we have a lockout, what will happen to hockey?”

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