Wednesday, February 11, 2004

How timely, a report on the financial status of the NHL franchises.

The much anticipated review of finances of NHL franchises will be released Thursday. Stephen King took a year to put it together, oh wait, that's not right. It was a gentleman named Arthur Levitt, who authored the report. It will just resemble a Stephen King novel, and a rather gruesome one at that. Lots of blood, much screaming, walking zombies, horrific scenes, this should have it all.

Levitt, who previously spent time as the chairman of the American Stock Exchange (hmm, no interesting accounting in the US stock business) will paint a picture of losses, topping the 300 million dollar mark. It's generally believed, that 25 of the leagues 30 teams are losing money. The owners received a "sneak preview" of the document at the all-star game this past weekend. That could account for Gary Bettmans bitter news conference during the all star break. Not to mention the hostile Q and A with Ron McLean on Hockey Night in Canada. Bettman says that this document will prove the leagues point, that some form of cost certainty is required for the health of the game. A way to ensure that costs don't over run the profits.

NHLPA leader Bob Goodenow tends to disagree with Mr. Bettman on the issue, not wanting a hard salary cap, but instead preferring a luxury style tax similar to baseball, where the rich teams are punished for spending too much.

To say that they are going in different directions. would be an understatement.

The upcoming negotiations are going to be an important milestone for Mr. Bettman, he championed the NHL into a massive expansion over the years. Lining the pockets of his bosses, with ever increasing expansion fees. It was a gamble designed to make the NHL a more "national" sell in the US, but it seems to have not succeeded as designed. The vast majority of the new franchises are struggling to find a core group of fans, empty seats most nights can outnumber the occupied ones in many of the southern franchises. There are no other places to expand, so the shell game of revolving financing has come to an end. The existing teams will have to make it on their own, and largely on a gate driven league.

A television deal in the US is about to be renegotiated, the long sought after status as a major TV sport seemingly drifting further and further away. The NHL may find itself back on a cable only footing by this time next year, not much progress for the commisioner, in that hope for big time exposure. More importantly is the fact that the television money that does exist, doesn't really add up to much. There's no NFL type revenue pool here, it's the difference between a Monday night poker party at your buddy's house and playing in the World Series of Poker in Vegas. You figure out which one is the NHL.

The upcoming negotiations will be Bettman's legacy achievement. If he can bring a sense of fiscal sanity to the league and return the owners to at least a chance of profitability, then perhaps the mis-steps of the last then years will be forgotten. He'll be known as the Commissioner who stood up to the players union, giving the owners an upper hand in the league.

Money in the pocket goes a long way to making one see things in a better light. If he can put some back in the owner's pockets, with or without a work stoppage, he'll be perceived as the winner in the upcoming battle.

The players union is not accepting of the leagues position, they are prepared to wait him out. Thinking that eventually the majority of owners will return with an acceptable offer, with or without Mr. Bettman.

The loser in all of this? Well that would be the fan. A bit player in this drama, we just turn the pages of that Stephen King like report, getting deeper and deeper into the novel. But unlike a King novel, we may find that this one just doesn't end, it goes on and on. Either we finish the book, or put it back on the shelf, maybe to return to it one day, maybe not,

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