The NHL Lockout is on and it’s not going anywhere. I’m not negotiator and I’m not an economist, but I think, since my only intent is to get hockey back on the ice, that I can bring up some novel ideas that will bring this nightmare to an end.
First, let’s make one thing clear. This isn’t an issue between the players and the owners, it’s an issue between wealthy owners and the owners of less profitable teams. The Toronto Maple Leafs are making 82 million dollars a year in overall revenue. The Rangers and Canadiens bank more than 40 million dollars a year. The problem is, only 12 teams are profitable, and the handful of teams that are making a profit are making enough to overwhelm the other 18 teams operating losses, and overall league revenue is going up, and so too is the cap, and the struggling teams struggle even more.
This isn’t the players’ fault, but the owners, operating as one, deem them to be the only solution to the strife of the disadvantaged owners. Of course, after hearing this explanation, the obvious solution is to do some profit sharing, wherein the Maple Leafs and Canadiens alone could cover the entire operating deficits of the 18 teams and still have a couple million leftover for themselves. Of course, none of the wealthier teams are going to let this happen, so we need to find a work around that makes the idea of profit sharing less of a problem. The number one way to do that is to reduce the overall operating loss among the struggling teams. Here are a few steps to making that happen,
Move teams: It came out earlier this week that the Edmonton Oilers were looking into Seattle, and it’s viability as a relocation target. Of course, the Oilers are one of the 5 most profitable teams in the league, making 17 million dollars in overall revenue. The squabble is to do with the city council’s refusal to approve more city funding for an arena, but I have to believe the Oilers would be fools to leave Edmonton. Let’s relocate the 4 teams whose operating loss is at least 10% of their overall income, which points to a more likely inability to ever turn a profit. The 4 teams we are moving then become Phoenix and the Islanders rather unsurprisingly, and more surprisingly Anaheim and Columbus. The Islanders move to Brooklyn, Phoenix goes to Quebec City, Anaheim to Seattle and Columbus to Milwaukee (tentatively), all cities with ready arenas and an existing hockey fan base. (Hamilton, Hartford and Kansas City are other possibilities). We have addressed 43% of the overall operating loss.
Tie Salary Cap to median, rather than mean income: Mean income, the straight average income will mean a higher salary cap because of the stronger revenue teams. Median income, which would be the number between the 15th and 16th ranked revenue is not going to be skewed towards the outrageously profitable teams. This year, that would be 96.5 million dollars. Keeping the 57% number that is used currently, the Cap would now be 55 million for next year, rather than 70. Player salaries ARE the greatest expenditure, and for the overall health of every team, they need to come down.
Realign the league: Cut down on travel, while we’re at it. Re-align the league for more natural geographic rivalries, going with the plan that has been in play since the Jets came back into existence. 4 different leagues, 8 teams in 2, 7 in the other 2.
League 1 – Panthers, Lightning, Hurricanes, Capitals, Predators, Stars, Blues
League 2 – Flyers, Penguins, Devils, Rangers, Brooklyn Islanders, Bruins, Quebec Zombie Coyotes, Canadiens
League 3 – Red Wings, Blackhawks, Milwaukee Blue Jackets, Maple Leafs, Wild, Senators, Jets, Sabres
League 4 – Oilers, Flames, Canucks, Seattle Ducks, Sharks, Kings, Avalanche
Obviously, it’s not perfect, but fewer cross country trips and moving the Coyotes out of the middle of nowhere will help.
Increase gate revenue: One way to do this is to get more butts in seats. If you note, three of our teams, Anaheim, Phoenix and the Islanders, aren’t located in city centers, but rather suburbs, in more difficult to reach locations. Only accept arena deals if the teams are going to play downtown, or on public transportation routes. Having teams nearer to one another will also fill some of those empty seats, even if it is with rival fans. Another way to do this is with better concessions, which can be marked up, but only if they are worth it. Ratchet up the ticket prices just a little bit. There are ways.
Of course, the only way you will get revenue at the gate is if the game is actually being played. The problem isn’t with the players, or even the players versus the owners, but rather with the owners versus debt. There is a way to get past it and still keep the league strong. Actions need to be taken now.