Thursday, May 31, 2012

Stanley Cup Fever – with a dose of NHL Armageddon 2012


The Stanley Cup Finals began in New Jersey last night, with the Los Angeles Kings wining a thrilling 2-1 game in overtime. Before the Finals began NHL Commissioner Gary Bettman held his annual State of the NHL. It’s been a very good year for the NHL, off the ice – the business of the NHL has never been better than it is today.

“During the regular season, we played to nearly 96% of capacity and attracted about 21.5 million people, and we're at nearly 102% of capacity for the playoffs.

“In the face of what remains a challenged economy, we estimate that we did $3.3 billion worth of business, which is another record for revenues for us. I can't thank adequately our fans, business partners and broadcasters for all of their support.” Bettman noted.

The National Hockey League is never going to generate the $9 billion the National Football League did in 2011, or the more than $7 billion Major League Baseball reportedly collected in 2011. The NHL remains far behind the National Basketball Association in total revenue generated but $3.3 billion they did collect this year stand as a record the NHL should be proud of.

There is a dark cloud on the NHL’s horizon – the current collective bargaining agreement is set to expire on September 15. 

Seven years ago the Tampa Bay Lightning defeated the Calgary Flames in a thrilling seven game Stanley Cup Final. The Lightning captured the hearts of northern Florida. On September 15, 2004 NHL owners locked out the players. The National Hockey League cancelled the 2004-05 season becoming the first North American professional sports league to lose an entire season to a labor stoppage.

“We also look forward to finally beginning meetings with the Players' Association. The goal obviously is to reach a Collective Bargaining Agreement that can take the game and the business to even higher levels than have been reached over the past seven seasons.” Bettman said.

Bettman was asked several questions about the possibility of a labor dispute delaying the start of the 2012-13 NHL season. The commissioner refused to deal with speculation, time and time again reiterating that the two sides haven’t even begun negotiating a new CBA.

That indeed may be the point the Bettman is missing. Bettman ‘hopes’ the two sides will be able to begin meeting in two weeks (after the finals end). That would suggest the NHL and the National Hockey League Players Association may not meet before mid-June giving the two sides four months to negotiate a CBA that took the NHL and the NHLPA two years to negotiate seven years ago.

The two sides were at polar opposites seven years ago. The NHL hired economists to suggest NHL franchises were collectively losing hundreds of millions of dollars. On the eve of game seven of the Lightning-Flames 2004 Stanley Cup Final anyone close to the game advised hockey fans to enjoy game seven, the last hockey game they would see for some time. The same level of animosity doesn’t appear to exist between the NHL and the NHLPA in 2012.

“I don't want to be presumptuous and characterize where we may or may not be right now because we haven't begun the formal exercise.

“But if you go back in history, one of the reasons we wound up where we did, people who were covering us at the time, remember, we had told the executive director then of the Union, at least four years in advance, the systemic problems that had become obvious to us at the time, and we were mightily for a long period of time. At that point the Union was aware of it and chose to do nothing about it.

“We're in a completely different situation. There's a new executive director who has gotten himself up to speed, new people, new relationships. Time will tell how this all sorts out.

“I'm hopeful that it sorts out easily because labor peace is preferable to the alternative.”

The new executive director Bettman referred too – Don Fehr.  Bob Goodenow was the NHLPA’s executive director seven years ago. Seven years later, Fehr is the third person who has managed the NHLPA since Goodenow was fired in July of 2005. Fehr’s reputation is second to none. Fehr replaced Marvin Miller as the Major League Baseball Players Association executive director. Miller is the founding father for collective bargaining and players rights being protected. Fehr battled MLB for more than 20 years, never blinked and never lost to ownership. 

Fehr who has worked with the NHLPA for two years spoke with the Globe and Mail and offered this: “All I can say is, with all the talk about other sports, the one that is far and away the most stable is baseball,” said Fehr.

“I find myself always wondering if I actually understand it right, so I want to make sure. That’s why I have a good staff. I’m talking to players all the time. That’s why I’m not the slightest bit bashful about asking questions and seeking assistance from anybody who may be able to assist the players in this regard.

“But if the question is, am I worried about our ability to negotiate the agreement, I’m not.” Fehr told the Globe and Mail.

The NHL has owned the Phoenix Coyotes for three years. The NHL hopes to be in the midst of concluding the sale of the franchise for a reported $170 million to former San Jose Sharks president Greg Jamison, a sale that has yet to be completed.

“I spoke to Greg Jamison early today. He continues to do the two things he needs to do to secure the future of the Coyotes where they are, in Arizona: One, working to conclude a set of documents with the City of Glendale on the building management situation. And he continues to put his equity together.

“The City of Glendale I believe next week is supposed to vote on the management agreement. Once that's in place, I think Greg will be able to conclude hopefully the finalization of his equity raise.” Bettman reported.

It was during last year’s Stanley Cup Finals Bettman announced the Atlanta Thrashers would be moving to Winnipeg. The Winnipeg Jets sold out their first five NHL seasons when they put season tickets on sale in early July. There has been a great deal of speculation if Jamison fails to complete his purchase of the Coyotes the team would be sold to interests in Quebec City.

Bettman made it clear the NHL has no Plan B when it comes to where the Coyotes will play their 2012-13 season if it isn’t in Phoenix. It appears the Coyotes who have finished last in NHL attendance for the last three years will be playing in Phoenix regardless of who owns the team next year.

One issue Bettman briefly noted was whether or not the NHL would allow their players to participate in the 2014 Sochi Olympic Games.

“The benefits from the Olympics have to be evaluated as we balance it against the impact that it has. I think in that regard we have to take into account where the next two Winter Olympics are going to be.

“Having said all that, I see this as joint problem solving that we need to do with the Players' Association. I don't think it's anything other than a joint issue, joint decision, that we need to do in the best interest of the game and the players.”

The NHL was happy to participate in the 2002 Salt Lake City Games and the 2010 Vancouver Olympics. The 2014 Games are in Sochi and the 2018 Winter Games are heading to Pyeongchang, South Korea. NHL players and in particular the Russians who play in the NHL want to play in the 2014 Games but with the next two Winter Olympics in Asia it’s likely the NHL is having sober second thoughts allowing their players to represent their countries in the Olympic Games.

For Sports Business News this is Howard Bloom

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