SBJ/20100712/This Week's News

NHL’s legal costs soar; Bettman’s pay tops $7M

The NHL’s legal costs climbed 48.6 percent during the 2008-09 season, according to its most recent tax filing.

The filing shows the NHL’s legal fees climbed to $3.94 million that season. The NHL declined to comment on the filing, and it remains unclear what contributed to the cost increase.

The tax filings cover the fiscal year July 1, 2008, to June 30, 2009, a period that saw the NHL conclude a lawsuit with Madison Square Garden over the New York Rangers’ digital rights and begin a bankruptcy trial over the Phoenix Coyotes.

The commissioner’s pay package
has nearly doubled from his pre-
lockout compensation.

The league concluded its lawsuit with MSG in October 2008 and legal fees associated with that trial were supposed to be paid by MSG, according to league rules. It began the bankruptcy trial in Phoenix in May 2009.

The league reported the compensation of seven more executives than it historically had disclosed, causing the total reported compensation of senior executives to increase by 64 percent during the period, to $9.9 million. Commissioner Gary Bettman saw his total compensation increase 1.7 percent to $7.23 million in 2008-09. His base compensation totaled $5,529,491 million, other compensation $956,515, deferred compensation $700,000 and benefits $44,777.

The package continues the escalation of Bettman’s compensation, which has nearly doubled from his pre-lockout compensation of $3.77 million. During that same period, the league saw its revenue increase from $2.2 billion to more than $2.6 billion.

The salary still remains a fraction of what other professional sports commissioners are paid. Major League Baseball Commissioner Bud Selig ($18.35 million) and NFL Commissioner Roger Goodell ($10.9 million) both earn more. NBA Commissioner David Stern is believed to earn more than $10 million, but his salary is not reported publicly because the league doesn’t claim tax-exemption status as an association.

NHL Executive Salaries
Executive Position Compensation*
Gary Bettman Commissioner $7,230,783
Bill Daly Deputy commissioner $1,910,402
Colin Campbell Director of hockey operations $1,389,142
Craig Harnett Chief financial officer $938,367
John Collins Chief operating officer $878,226
Ed Horne** SEVP, club business and strategic development $794,238
David Zimmerman General counsel $577,394
Joseph DeSousa EVP, finance $520,299
Stephen Walkom** Director of officiating $488,736
Michael Murphy SVP, hockey operations $440,317
* Total compensation includes base compensation, bonuses, other reportable compensation, deferred compensation and non-taxable benefits.
** No longer works for the league.
Source: Form 990, Department of the Treasury, Internal Revenue Service

NHL Deputy Commissioner Bill Daly earned the second-highest compensation in the league with a total package of $1.9 million, a 6.7 percent increase from the previous year. Colin Campbell, NHL senior vice president and director of hockey operations, earned $1.39 million; Chief Financial Officer Craig Harnett earned $938,367; Chief Operating Officer John Collins earned $878,226; and Ed Horne, former senior executive vice president, club and business strategic development, earned $794,238.

Compensation for Campbell, Collins, Horne and four other executives were reported for the first time.

During the 2008-09 fiscal year, the league generated $74.4 million in total revenue. It collected $59.5 million in dues from its 30 member clubs, approximately $1.9 million per club. It also pulled in $4.9 million from licensing, $7.1 million in playoff assessments and $729,814 in club fines. The filing doesn’t reflect the revenue of NHL Enterprises, NHL Network and other business operations, which are not tax exempt.

The league totaled $75.7 million in expenses during the period. The largest expenditures included executive compensation ($9.9 million), employee salaries ($20.4 million), travel ($7.3 million), officiating costs ($5.1 million), legal fees ($3.9 million), team-related expenses ($3.9 million) and other employee benefits ($3.8 million).

Total expenses for the league have increased $17.7 million since fiscal year 2005-06, and executive compensation has risen by $3.8 million.

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