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BEYOND THE RHETORIC: WHY WAS OWNERSHIP SO ANGRY?
Published October 6, 1994
The NHL owners' "anger appeared to stem from the fact that they, for the first time, apparently offered up a tax on gate receipt revenue as a means of generating support funds for small market teams." The inclusion of a revenue tax "marked a significant departure from previous offers" (Damien Cox, TORONTO STAR, 10/6). Mark Everson calls the owners' offer to tax gate receipts a "major shift" and predicts it could "be the basis for an agreement, once blood pressures drop." Bettman, on Goodenow's inclusion of a gate receipts tax in the union proposal: "He thought I couldn't get it past the Board of Governors. Well, I can" (N.Y. POST, 10/6). Goodenow reported that during the talks, McMullen told the NHLPA, "The hell with small markets, that's not what this is about" ("SportsCenter," ESPN, 10/5). SPECIFICS: Larry Brooks lays out the NHL's latest revenue- sharing plan in this morning's N.Y. POST: 1) Using the '93-94 average payroll of $14.1M as a "trigger," there would be a flat 1% payroll tax per million up to the trigger; 2) There would be a marginal 5% tax rate for each $325,000 above the trigger; 3) A flat 3% tax on gate receipts for the top 16 revenue teams. The NHL "is willing to negotiate the trigger position. It has also proposed a minimum team payroll, with funds generated from the taxation monies dedicated to salary" (N.Y. POST, 10/6). ESPN's Al Morganti reported that the NHL brought its 125% ceiling on a payroll tax down to 122% ("SportsCenter," 10/5). In Toronto, Bob McKenzie reports the league also proposed a rate proposal that "progressively taxed every team on every payroll dollar -- even those under the league average -- up to a minimum of 105 percent" (TORONTO STAR, 10/6). Goodenow said the union will be preparing a counter-proposal "over the next day or so" ("SportsCenter," ESPN, 10/5). UNITY CHECK FOR BOTH SIDES: In New York, Mark Everson reports a "significant schism has formed" among the owners. The Rangers, Red Wings, Flames, Canadiens and Maple Leafs "are believed to be pressing for a settlement," with the Devils, Bruins and Flyers "dug in" (N.Y. POST, 10/6). In Winnipeg this morning, Brian Smiley reports at least two Jets -- "one, a very high-profile player -- are experiencing severe financial difficulties" (WINNIPEG SUN, 10/6). DEFINING "REVENUE": Goodenow also criticized NHL VP Brian Burke for giving a "one-sided picture" of the league's offer to guarantee the players 63% of all revenue. The NHL definition of revenue "leaves out marketing, the new Fox network TV deal, expansion fees, pay-per-view potential in Canada and other revenue sources" (Tony Gallagher, Vancouver PROVINCE, 10/6). Bettman said the figure on NHL losses in '92-93, which the league claims to be $32M, does not include expansion fees from the Lightning and Senators shared by the other 22 clubs (Jim Smith, N.Y. NEWSDAY, 10/6). Bettman: "A business doesn't, on an on- going basis, reports its operating revenue to include extraordinary sales of assets. We're not in the business of selling expansion franchises every year" (Len Hochberg, WASHINGTON POST, 10/6).