Wednesday, October 31, 2012

NHL Armageddon 2012: tough times for everyone

The National Hockey League reportedly is set to cancel one of the league’s marquee events -- The Winter Classic currently scheduled for January 1, 2013. The NHL has booked Michigan’s 115,000+ football stadium, hoping the Toronto Maple Leafs will be meeting the Detroit Red Wings. If the league cancels the game on or before November 2 (Friday), the school will return the $100,000 deposit the NHL has made to the school.

Before the NHL can consider holding The Winter Classic, the league first has to reach a new labor accord. The NHL and the NHL Players Association are no closer today than they have been since talks broke down on October 18 in agreeing to a new collective bargaining agreement. There are many hockey insiders who suggest if the Winter Classic is canceled; the cancelation of one of the league’s showcase events would be seen as a harbinger of bad news.

If the NHL labor dispute is settled and the league begins its 2012-13 on or before January 1, the Winter Classic would serve as the perfect opportunity to reintroduce the NHL. The NBA used a five-game Christmas Day schedule last year to help bring the NBA back after their lockout delayed the start of the 2011-12 NBA season.

NBA Deputy Commissioner Bill Daly told The New York Times: “We aren’t commenting on the timing of the Winter Classic announcement. It will (or won’t) be made if and when necessary.”
But he added, “I can certainly confirm that if the game is canceled, there is no ‘resurrection’ scenario for this year.”

Daly’s thinking and the NHL’s doesn’t make a great deal of sense. The Winter Classic does take a great deal of planning and if the event moves forward the NHL likely needs at least four to six weeks to put all of the necessarily pieces in place to hold the event. But canceling the event two months before it is scheduled to take place might seem a little premature on the NHL’s part.

“There are so many arrangements associated with an event of this magnitude — about 109,000 tickets have already been sold,” Brian Cooper, the president of the Toronto sports management company S&E Sponsorship Group said in a New York Times report. “For companies attending the game or doing business there, you’ve got to book hotels, transportation. There are bands playing that have to book dates. All that has to be in place six to eight weeks in advance at the latest.”

It is in the NHL’s best interests to move forward with The Winter Classic if their labor dispute is settled on or before December 1. Brian Cooper’s sentiments aside, plans for the 2013 Winter Classic include a series of events at Comerica Park (the home of the American League champion Detroit Tigers) and other events in the Detroit area. The event is very important to Detroit who like to call their city “Hockey Town”.

Those events include games between Red Wings and Maple Leafs alumni, as well as A.H.L., N.C.A.A. and junior games. The first of those games at the Detroit baseball stadium is scheduled for Dec. 27, with a doubleheader involving Michigan, Michigan State, Western Michigan and Michigan Tech.

In terms of the NHL and the NHLPA moving forward and working towards a new CBA, the two sides haven’t met since their hour long meeting held at the NHLPA’s Toronto offices on October 18.
Don Fehr the NHLPA’s executive director was in Minneapolis Monday where he was meeting with 30 NHL’ers updating his membership on were the lockout currently is. NHL players have now missed two paychecks – they’ll lose their third paycheck next Monday, November 5.

Speaking with The Minneapolis Star Tribune’s Michael Russo, Fehr suggested some of his membership are experiencing some genuine fear the entire 2012-13 season could be lost to the lockout. Russo asked Fehr NHL’ers are worried about the money they’re losing and if some hockey players are ‘frightened’?

“Yeah. … But that doesn't mean you make a bad agreement because of it.”
Fehr is right in saying you don’t sign a bad labor agreement because you are losing money but sooner rather than later more and more NHL’ers are going to realize they stand to lose a great deal of money they’ll never see again.

The average NHL salary is $2.4 million. The average NHL career is between 4 and 5 NHL seasons. The minimum NHL salary is $500,000. The National Hockey League has canceled 25% of the current NHL season.

Simply mathematics explain why fear and loathing is about to become the new NHLPA mantra. Fear realizing that for the second time in eight years the National Hockey League may lose an entire season to a labor dispute, loathing directed at NHL owners determined as they did eight years ago to break the NHLPA and force players to accept a CBA the owners want the players too.

Most of the more than 800 current active NHL players either missed the 2004-05 season or understand the impact a lost NHL season had on NHL players through what they were told by current and former NHL teammates. The millions of dollars most NHL players stand to lose is money they will never be paid – never.

On October 16 NHL commissioner Gary Bettman put forward a proposal offering ownership and management share all Hockey Related Revenue (HRR) on a 50/50 basis. The initial offer the owners made to the NHLPA in early July called for the split to be 43% for the players and 57% for the owners. The players have been steadfast in their demand that all current contracts be honored at their full dollar value and a gradual decrease in their share over the lifetime of the agreement from the current 57% to 50%.

The owners have suggested they are ready to honor current NHL contracts. The NHL hasn’t been clear as to how that can take place and only offer the players 50% of the HRR. The NHL can keep a larger percentage of the annual escrow payments the players make into a fund that is held in trust. Based on HRR the escrow payments are paid to the players or the owners at the end of the season. As is so often the case players who either don’t have long-term contracts, are unsigned or are currently playing junior hockey that will be impacted once the NHL and the NHLPA agree to a new CBA.

The owners as expected withdrew their 50/50 HRR revenue split Thursday night after the NHLPA refused to accept the owners October 16 offer. Gary Bettman is preparing a new offer for the NHLPA one that is expected to include the owners offering the players 47%, while the ownership keeps 53%. The regressive move by the owners follows a similar tact David Stern sent to Billy Hunter and the NBA Players Association when labor talks in their dispute broke down last November.

The two sides in the NBA dispute settled on a 50/50 split over the 2011 American Thanksgiving holiday weekend. Watch for a similar timeframe and resolution in the current NHL labor battle, a settlement in time to save part of the 2012-13 NHL season.

For Sports Business News this is Howard Bloom

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