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So the National Hockey League, in its continuing bid to annoy the hell out of its fans and try to justify to them that there is a need for another lockout despite mountains of evidence to the contrary, launched another hilarious salvo into the debate on Tuesday.
RDS reporter Renaud Lavoie reported in two separate tweets (here and here) that a league source told him the NHL is losing money by the barrel, shedding some $240 million over the last two seasons. For reasons that should be pretty plainly obvious to all non-ownership shills, the Players' Association basically feels the NHL is full of it.
[Related: A plea for sanity amid CBA outrage]
Losing an average of $120 million in both of the last two years seems, well, shocking. To say the least. Sure, there are some teams in bad markets who are assuredly losing money. But for the league, with its revenues at about $3.3 billion last season — and a salary cap tied directly to that number — to act as though there are moths flying out of every team's wallet whenever the GM opens it is silly.
There was a really good breakdown of that from On the Forecheck yesterday in the immediate aftermath of the Lavoie tweets. Player costs have risen about 30 percent at most since the last lockout, accounting for as much as $1.9 billion. And because we know revenues are $3.3 billion, the costs beyond what players are paid probably climb to $1.52 billion, given that the league is claiming to have lost about $120 million last year. That's simple math.
So what on earth, then, are teams spending $1.52 billion dollars on that are not covered by hockey-related revenues? The Levitt Report, which was based on data from the 2002-03 season, defined "other costs" as: those related to additional player costs outside salary, bonuses, and benefits; operating costs including everything from what they pay other people associated with the team (front office staff, coaches, trainers, travel, etc.); minor league players, coaches, scouts, etc.; arena and building costs; and additional staff like legal, finance, marketing, and so forth. Man, those seem like they'd add up in a hurry. Wow. Must be expensive, right?
Well, not really. The Levitt Report found that all those things combined, league-wide, cost about $770 million in 2002-03. And so now we're supposed to sit here and believe that "other costs" have skyrocketed to just about double the money required nine years ago? Well, that's funny in and of itself.
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