SBD/January 8, 2013/Leagues and Governing Bodies

NHL Open For Business: Owners Get 50/50 Revenue Split, But Not All Clubs Happy

Southern expansion franchises have been a hallmark of Bettman's tenure
NHL owners ended up with a new CBA "that eventually will shift more money to their side of the ledger, potentially boosting profit margins, with franchise equity values theoretically moving up in lockstep," according to an analysis by Kevin Paul Dupont of the BOSTON GLOBE. The players "will be made to do with less," as they "agreed to settle" for 50% of all hockey-related revenues (HRR). A team exec yesterday said, "It’s probably actually Year 4 that we finally get to a true 50/50. Some clubs won’t like that. It’s not like all clubs like this deal, by any means. But the win here for both sides is that this should be, could be, might be a CBA that could extend for up to 20 years or more." What the owners "wanted most" all along was a 50/50 split. Their other major gain "came on player contract lengths, which the new deal limits to 7-8 years, with year-to-year variance limitations imposed on salary payouts that should prevent GMs from writing contracts specifically aimed at skirting the salary cap." Previously, there was "no limit on contract length." The Maple Leafs "led the way in pushing for reform on those so-called long-term 'backdiving' contracts." A league source yesterday confirmed that the Sharks, a "mid-tier team in terms of revenue, also adamantly opposed such deals." Of all that was bargained "across the five-plus months, those two changes are the most significant." An NHL agent said, "It’s pretty clear how [NHL Commissioner Gary Bettman's] operated here. If you look at the document, you can tell he’s ignored the input of hockey people, especially his own GMs, who are the guys who have to work with it every day. Nothing changed in no-trades, in arb, in age threshold for free agency ... guaranteed contracts." A league source said, "Not everyone is happy. There will be guys in there not happy about the revenue sharing, others who think the cap is too high to start, that it takes too long to get to 50/50" (BOSTON GLOBE, 1/8).

THE FINE PRINT: ESPN.com's Pierre LeBrun broke down more "key components of the tentative agreement" (ESPN.com, 1/7). USA TODAY's Kevin Allen noted the NHLPA "sent agents a list of some of the changes" to the CBA, detailing how the minimum salary "will rise from $525,000 to $750,000 over the course of the 10-year deal." Other issues that "caught agents' attention: Teams can now trade a player and retain some of the salary cap hit, a significant change, particularly for teams that previously had players who seemed next-to-impossible to trade because of high salaries" (USATODAY.com, 1/7).

WINNERS & LOSERS: SI.com's Adrian Dater wrote small-market teams are "winners" of the deal. They got the "salary cap ceiling ($70.2 million prorated for 2013; $64 million for 2013-14) and floor ($44 million) lowered for next season, and they'll get more money in revenue sharing ($200 million) from the big-market teams" (SI.com, 1/7). In New Jersey, Andrew Gross echoes that small-market teams are "a possible winner," as the salary cap "will be lower and there's increased revenue sharing, though still not enough." Gross writes among "the losers" in the lockout are the players and Bettman (Bergen RECORD, 1/8). In Detroit, Gregg Krupa writes the deal may do "little to solve the financial problems of the league, the very issue that supposedly caused Bettman and the owners to take an onerous, hard line in negotiations." Bettman and the owners were "out to repair a broken business model," but with the "huge disruption in the sport, they may have fallen short" (DETROIT NEWS, 1/8). In Buffalo, John Vogl has owners winning with HRR, contract term limits and yearly salary variance. He has the players winning on the salary cap and pension. Sabres LW Thomas Vanek: "It wasn't worth it" (BUFFALO NEWS, 1/8). NBC’s Pierre McGuire said, "This deal could have been done in early December. ... But there was so much negative energy between both parties and I think this is why we ended where we are right now.” McGuire added, "Nobody won” (“NBC Sports Talk,” NBC Sports Network, 1/7).

FINANCIAL DISPARITY: The GLOBE & MAIL's Mirtle & Gordon note the split between "big-money franchises and those struggling in less hockey-friendly markets remains." Already there are "concerns this could be an agreement -- like the last -- that is unable to help those poor teams, many of them the southern expansion franchises that have been a hallmark" of Bettman’s tenure. However, this remains a league "where the gap between the two appears poised to grow as money pours into the seven Canadian cities and a select few successful American markets, just as it did under the previous" CBA. Canadiens President & CEO Geoff Molson said, “I think it’s a situation where there are no winners." Asked whether he is "satisfied with the outcome," Molson "smiled" and said, "I’m satisfied because we’re playing hockey." Molson said, “But I think what [Bettman] has done is to make sure that each team is satisfied to the highest potential of being satisfied. But there are no perfect answers for every team" (GLOBE & MAIL, 1/8).
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