SBD/Issue 213/Leagues & Governing Bodies

Complex NHL Revenue-Sharing System Leaves Many Confused

Daly Says New CBA Allows All
Clubs To Have Competitive Payrolls
Flames co-Owner & NHL BOG Chair Harley Hotchkiss, Devils President, CEO & GM Lou Lamoriello, Bruins Owner Jeremy Jacobs and NHL outside counsel Bob Batterman all “struggled to explain” the “complex” revenue-sharing and escrow components of the NHL’s new CBA agreement, according to Andy Bernstein of SPORTSBUSINESS JOURNAL. Each was “unsure of how all the potential escrow money would be redistributed to clubs.” The system is based on two “batches of revenue sharing, an escrow and a payroll ‘midpoint,’” which is defined by the league each year. NHL Deputy Commissioner Bill Daly said, “You only need revenue sharing to allow all clubs to afford representative and competitive payrolls, and that’s what this revenue sharing does.” Bernstein notes revenue sharing is also “designed to make sure all clubs maximize local revenue. Clubs in markets with 2.5 million or more television households are ineligible.” After three years, teams will “have to grow revenues faster than the league average and have attendance of 75[%] of capacity to receive their full revenue-sharing allotment.” The following season will require 80%. Daly: “You don’t want a revenue-sharing program that doesn’t incentivize performance” (SPORTSBUSINESS JOURNAL, 8/1).

Goodenow To Receive Full NHLPA
Salary For Next Three Years
GOODENOW FALLOUT: In Ottawa, Bruce Garrioch cited sources as saying that former NHLPA Exec Dir Bob Goodenow will receive his full salary from the union for the next three years, which is believed to be $2.5M per season. One source said that Goodenow was “caught by surprise when he was called into a meeting by” NHLPA President and Canucks C Trevor Linden and new Exec Dir Ted Saskin last week. The source indicated that Goodenow “thought he was going to be asked to take a 24% rollback on his contract” (OTTAWA SUN, 7/30). On Long Island, Alan Hahn reported the NHLPA exec committee’s “decision to promote [Saskin] ... was frustrating to the rank and file. The players expected to get a chance to vote on a successor” (NEWSDAY, 7/31). In Toronto, Steve Simmons reported a conference call among NHLPA members “ended up in near disarray and name calling when the buyout ... and the elevation of Saskin was explained to members who were not consulted on either decision” (TORONTO SUN, 7/31). A NATIONAL POST editorial read, “Goodenow served his membership extremely well — leading them though a period in which their salaries escalated beyond anyone’s wildest expectations. ... But as the NHL moves into an entirely new era, it’s for the better that the league has left him behind” (NATIONAL POST, 7/30).

CBA PITFALLS: In Toronto, Al Strachan writes, “In the new NHL, success will come to those who are ruthless. ... This new CBA is not unlike modern western economies, in that the middle class will bear the greatest burden and may be all but eradicated in the process.” Teams will “have to target a few top-line players and fill the remainder of the roster with hard workers who can skate” (TORONTO SUN, 8/1). In Ft. Worth, Mac Engel wrote, “Once a league with no financial boundaries, the NHL now has well-defined limits, down to reporting revenue generated by team mascots.” Engel added that because all NHL contracts are guaranteed, GMs “must be careful when awarding long-term deals.” Stars GM Doug Armstrong said, “You can flush your mistakes in the NFL [which does not have guaranteed contracts]. This is more player-friendly. Once you marry a player here, you’re married” (FT. WORTH STAR-TELEGRAM, 7/31).

NOTES: Jacobs, on how the lockout played out: “[Owners] had given a great deal to [the players] over time — they were always able to get what they asked for. We made the situation what it was — and it was our own inability to think what we were doing in the process.” Jacobs also said that Stars Owner Tom Hicks “no longer has his club and arena up for sale” after seeing the new CBA (Kevin Paul Dupont, BOSTON GLOBE, 7/31)....The NHL announced the Canucks will host the ’06 NHL Entry Draft at General Motors Place (NHL).

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