SBJ/June 11 - 17, 2007/This Weeks News

Bettman, Daly get $2M raises

NHL owners rewarded Commissioner Gary Bettman and Deputy Commissioner Bill Daly coming out of the lockout, giving each of them a roughly $2 million raise for the fiscal year ending June 30, 2006, according to the league’s tax return.

Bettman’s salary rose 57 percent from June 2005 to June 2006, topping out at $5.9 million for the first fiscal year following the lockout, which ended in July 2005. The salary includes a $400,000 contribution to his retirement plan.

Coming out of the lockout, Bettman delivered NHL owners the salary-cap and revenue-sharing systems they wanted. Since then, he has overseen two consecutive years of revenue growth, as well as the record-setting, $220 million sale of the Nashville Predators to Canadian businessman Jim Balsillie.

Carolina Hurricanes owner Peter Karmanos, a member of the NHL’s executive committee, which
submitted Bettman’s salary to the board of governors for approval, said the raise was a reward for the commissioner’s work during hockey’s 2004-05 lockout.

“The owners were so happy with the way he handled the labor situation, because it was a bit like herding cats,” Karmanos said.

His salary remains a fraction of what other executives earned, according to each league’s most recent tax filing (see chart). It’s also 50 percent less than what NFL Commissioner Paul Tagliabue made at his peak ($11.6 million, as reported in 2003), and 60 percent less than what MLB Commissioner Bud Selig made last year.

“It looks awful when senior executives are paid when the public is suffering from the diminution of the sport, but … it’s in line with the other major sports, given the (NHL’s) franchises, the TV audiences and the attendance,” said Stephen Unger, a sports compensation consultant with KSMU in Los Angeles.

Daly, who was lead negotiator during the lockout, was rewarded, as well. His promotion from chief legal officer to deputy commissioner came with a 215 percent raise for the fiscal year ending June 30, 2006. His total compensation reached $2.78 million last year. That number reflects a $113,126 contribution to his retirement plan.

“That’s a hell of a raise,” Unger said.

The return also shows that Bettman took out a $5 million loan from the league in September 2005. The loan is due in full in 2012 at the conclusion of his contract.

The league declined to explain why the loan was issued. It is Bettman’s second loan from the league. His first — for $1 million in July 2001 — is due in full in June 2008.

Loans are not uncommon for commissioners. Tagliabue took out a $5 million loan from the NFL in 1998, according to tax documents filed by the league in March 2004.

Bettman’s loan verifies his assertion that the league made a new commitment to him coming out of the lockout by extending his contract from 2008, when the $1 million loan was due, to 2012, when the $5 million loan is due.

The terms of his contract with the league were questioned by the Dallas press after this year’s NHL All-Star Game, when Texas Motor Speedway President Eddie Gossage said he had been contacted by a search firm looking to fill a high-level executive position at the NHL. At the time, several media outlets speculated that Gossage might eventually replace Bettman. Bettman asserted he was under contract for several more years, and the September 2012 maturity date of the loan verifies that.

In the year after the lockout, total league office salaries rose 10 percent from their pre-lockout level to $21.3 million. Total nonexecutive salaries accounted for $15.2 million of that, rising only 6 percent from pre-lockout level.

The league cut staff drastically during the work stoppage. The total number of employees fell from 545 in March 2003 to 56 in March 2004 and 54 in March 2005. Since then, the league has increased its total staff to more than 300 employees, according to spokeswoman Bernadette Mansur.

The tax return also highlights a significant increase in reported league revenue, which rose 9 percent from pre-lockout levels to $58 million from June 2005 to June 2006.

The bulk of the league’s income came from team dues, which topped $48 million, or roughly $1.6 million a team. The additional $10 million of total revenue came largely from a mix of copyright royalties, licensing and playoff income.

The reported $58 million in revenue reflects the cost of running the league, not the league’s entire income, which topped $2.1 billion over the same period.

Who’s making what at the leagues?
Bud Selig
$14.5 million
Paul Tagliabue*
$10.3 million
David Stern
Not available**
Gary Bettman
$5.9 million
Bob DuPuy
$4.78 million
Tim Finchem
PGA Tour
$3.6 million
Bill Daly
$2.78 million
Don Garber
$2 million^
Note: Only 22 of the NHL’s 730 players made more than Bettman this year.
* Retired in 2006.
** Stern is thought to earn roughly what Tagliabue made in his last year with the NFL.
^ Don Garber’s salary is listed as reported in SportsBusiness Journal (June 5-11, 2006), which included a $1.3 million base with potential incentives pushing it to $2 million.
Sources: The leagues’ most recent income tax filings. NBA information is not available because the league does not claim tax exemptions for business-league status.

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