October 14, 2008
Before we get to how the Globe & Mail gang-raped Gary Bettman's NHL economy this morning, a word from Commission for Life about subsequent Winter Classics after the Detroit Red Wings and Chicago Blackhawks play in Wrigley Field:
"We're not going to overdo it. We're not going to require ourselves to do one every year."
Perhaps this is just a preemptive strike in case the ratings sag or if it's 70 degrees in Chicago on Jan. 1. And yes, I know that many fans would actually agree with Bettman that the Winter Classic is in danger of overexposure. But by playing in consecutive years, the standard is set: The NHL now has an annual event that attracts mainstream coverage.
There are too many combinations of competitors and stadia yet to be explored for the NHL to walk away from annual games on Jan. 1. It's an instant sports tradition, and only the NHL would be stupid enough not to ride this thing until every viable matchup and venue has been exhausted.
(Unless, of course, this is Bettman's way of saying that the NHL won't require itself to have an All-American game on New Year's Day each season, so the Montreal Canadiens and Toronto Maple Leafs can face-off in their own open air stadium.)
Bettman was in D.C. last night giving a press conference about the NHL, and wouldn't you know it: The fundamentals of our economy are strong! From the Washington Times:
Bettman said that unlike some sports leagues, the NHL has not yet been affected by the recent downturn in the economy. (The NBA yesterday said it was expecting a decline in season ticket sales and was laying off 9 percent of its domestic workforce.)
"That is not the mode we find ourselves in right now," Bettman said. "Our season tickets are up 4 percent over where they were a year ago, and as of ten days ago our single game tickets were up almost 13 percent. Those are remarkable, if not startling numbers, when you look at what's going on."
They sure are ... unless he's taking into account the massive discounts and freebies for teams in struggling markets. Of course, ask a Canadian journalist, and you'll wonder how many tickets need to be sold to off-set what has become their greatest critique of the maligned commissioner's tenure: Sending revenue welfare to struggling U.S. markets.
The Globe & Mail unloaded on Bettman today in a sports section cover story titled "The giant sucking sound." It's a devastating indictment of the lockout's economic failures, and a scathing attack on the NHL for using millions of dollars from Canadian franchises to prop up struggling teams:
According to information compiled by The Globe and Mail from various sources, the six Canadian NHL franchises contributed more than $40-million (all figures U.S.) to their fellow owners last season, and about $50-million when playoff revenues are taken into account. And at the other end of the spectrum, several teams are becoming increasingly frustrated at the skyrocketing salary cap, which now forces teams to carry a minimum payroll of $40.7-million.
What the story does is illuminate a stunning dichotomy in NHL ownership: Those who keep revenues low to avoid having to share it, and those who complain about the cap floor forcing them to spend more than they'd like to:
Some teams build their business models around their revenue-sharing windfall and strive to keep their own revenues below the threshold where they will have to contribute. The Buffalo Sabres and Nashville Predators, like other teams who spend near the midpoint of the salary-cap range, are often singled out as examples.
But other owners contend the larger issue is the ever-rising NHL salary-cap floor. "The cap was supposed to solve everyone's problems, but all it's done is prevent six or seven teams from spending $80-million," said an ownership source who exchanged candour for anonymity. "Some folks are pretty upset: We sat out a whole year to get the cap, and some people are saying, 'Well, why?' "
For no good reason, of course. Consider that we don't even know the implications for being over the cap or under the floor. It's like watching a reality game show were the rules are arbitrarily established only when necessary.
In the end, the real issue here is exactly what the real issue is in any Canadian MSM lament about the NHL: Warm weather cities in the U.S. getting "propped up" by the massive revenues of Canadian teams. Globe and Mail columnist Stephen Brunt brings up the "basket cases" of the Florida Panthers and the Nashville Predators, and basically calls them welfare mamas:
Limited revenue sharing was added to the mix to try and balance the haves and have-nots, though the NHL has been loath to provide details as to how it actually works. Certainly the redistribution of wealth was sold as a temporary fix to help needy teams get back on their feet (like the old Canadian Assistance Program), when in fact it now looks very much like a permanent welfare roll.
The weak franchises have to hit targets to qualify, and there's a time limit - but what's going to happen when you start disconnecting them from life support?
Well, the answer is that they'll just be moved to another hospital. Bettman said last night that no teams are actively looking to relocate or be sold in this frozen credit market, but even if that's correct (and we don't believe it is), how long will it hold?
Ticket sales can be juiced with special offers and creative accounting. But the fundamental flaws of the Bettman Economy can't be obscured. We've gotten competitive balance but, if we're to believe the folks up in Canada, we've also gotten a welfare state.
It's hard to square Bettman saying the NHL is "still in growth mode" when six teams are contributing $40 million a season to keep their rivals financially viable. Then again, his words haven't had credibility in about 15 years anyway. Why start now?