NHL Lockout Begins; Blame The Hypocritical Owners
The last lockout established a salary cap, instituted an immediate 24-percent rollback, and gave the players 57 percent of hockey-related revenues. Now, the owners wish to reduce the amount of hockey-related revenue the players receive, as well as the salary cap, citing poverty.
The initial proposal by the owners wanted to cut the players’ percentage of the revenues to 43 percent. The amount was raised to 46 and then 47 percent in the most recent proposals. However that’s just one part of the cuts; the owners also wished to redefine hockey-related revenues to further reduce the players’ share. The owners also proposed to reduce the salary cap to $60 million, a cap in which 16 of the 30 teams would currently violate, and impose either a salary rollback or an amnesty buy-out period.
The NHL’s salary cap is a hard cap; the only way a team can go over the cap is in the case of long-term injured reserve (LTIR). The salary floor is a fixed $16 million below the cap, regardless of how high the cap is. The salary cap is directly tied to the league’s revenues; as the league makes more money, the cap goes up proportionally.
For the 2005-06 season, the salary cap was set at $39 million, with a floor of $23 million. The proposed cap for the 2012-13 season was $70.2 million and a floor of $54.2 million. The fact that the current cap floor is $15.2 million higher than the cap ceiling was in 2005 is cause for consternation among the smaller market teams, many of whom can barely spend to the floor without losing money.
But for all the crying poor, the fact remains: the league’s revenues grew from $2.1 billion directly following the lockout to $3.3 billion just seven years later. It seemed like every month the NHL releases a press release crowing about its record-breaking revenues, all the way up until the old CBA expired and owners started claiming that almost all of them were losing money hand over fist.
Minnesota Wild owner Craig Leipold stated on April 11, 2012, “We’re not making money, and that’s one reason we need to fix our system. We need to fix how much we are spending.” On July 4, 2012, he signed the two top free agents, Zach Parise and Ryan Suter, to identical 13-year, $98 million contracts. Three months after Leipold cried poor, he spent nearly $200 million on two players - two very good players, to be sure, but not exactly the actions of an owner who has no more money to spend.
It is true that the revenues are being shared unequally throughout the league. A team like the NHL-owned Phoenix Coyotes can barely spend to the floor, while teams like the Toronto Maple Leafs or New York Rangers can easily spend twice the cap. But that inequity would argue for an increased amount of revenue sharing (as many mid-market teams receive no revenue sharing funds despite consistently losing money) rather than solely a league-wide cut of the cap.
The reductions of revenue for the players, proposed salary cap cut, and contract term limits are all ways to keep the owners from shooting themselves in the foot. While the players did negotiate their contracts, the owners ultimately signed off on those deals; why, then, should the players pay for the mistakes made by the owners?
Also, consider this: on the eve of the lockout, with no last-minute resolution in sight, 15 contracts were signed by teams around the league before the moratorium on signings began. The contracts totaled $177 million dollars and 53 years of term. This includes a four-year, $21.2 million handed out to a 35-year-old Shane Doan by the Phoenix Coyotes, a franchise that declared bankruptcy and has been owned by the NHL since 2009 with no end in sight. Somehow, a team that cannot find an owner can spend over twenty million dollars, all the while crying poor.
There is a need to restructure the CBA and the way the league distributes the revenue. That much is certain. But the owners’ proposals, especially after getting a salary cap, a salary rollback and an 18-percent player cut in hockey-related revenue less than a decade before, is simply greedy and hypocritical after their years of getting away with all that they can.
With the NHL’s proposal, Gary Bettman will be making more than Sidney Crosby. And that just isn’t right.