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[SacredCow]

This is from the magazine Let's Play Hockey, which gave permission for this use:

NHL Season? It’s Done
By Wally Shaver
Let’s Play Hockey Columnist

For all of you who have been wondering about the fate of the NHL for this season, you should likely learn within the next two weeks. It isn’t going to be pretty. Let’s Play Hockey has learned that unless there is a miraculous turnaround in the posture of the NHL Players Association (NHLPA) in the next two weeks, the NHL will officially cancel the season.

I’m not a prophet, but I’ve spent 18 years working in pro hockey, including eight years with the North Stars. My close friends will recall comments I made eight years ago that there would be a day of reckoning in the NHL because player costs were escalating to the point where the league would eventually be in a calamitous financial situation. Welcome to the day of reckoning.

The recently expired Collective Bargaining Agreement worked for both sides during the first three or four years; after that, it became a disaster for the NHL and the owners.

In this space five weeks ago (Oct. 28 LPH – “Hey NHL! What Have You Done Now?”), we filled you in on how greed and stupidity on behalf of players, agents and owners alike has led to the current lockout in the NHL. The NHLPA and the NHL last met Sept. 9, have not met since then to try to resolve their differences, and there is no common ground for discussion or compromise in their current positions.

Now, here are the hard-core facts of what our sources have told us will happen next.

First, NHL negotiators have made six different contract proposals to the players association, and all have been turned down because they represent, in the union’s opinion, different forms of “cost certainty,” something the NHLPA has flat out refused to accept. Big mistake.

To avoid the rest of the season being cancelled, the NHLPA and its leader Bob Goodenow will have to get an agreement done in the next two weeks. Because Goodenow has declined everything to this point, including another round of discussions, progress is unlikely and the badly needed agreement will not happen. The NHL will not play a season of less than 40 games, meaning, this season is over.

The NHLPA is then likely to file a complaint with the National Labor Relations Board (NLRB) implying that the NHL has not negotiated in good faith. The NLRB won’t buy that, because the NHLPA has made only two contract offers, nothing since August, and the last offer (worse for the NHL than the previous one) wasn’t close to what the NHL feels is necessary, or league finances dictate. The NHLPA has made no effort in furthering discussions, though there may a last minute proposal from the NHLPA to improve their “legal paper trail.” The NLRB will eventually side with the owners, feeling the league has been negotiating in good faith and consequently will rule out the case going to arbitration. Keep in mind the NLRB is a five-person quasi-judicial board appointed by the U.S. President.

The NHL currently needs cost certainty if it is to survive in its current form with 30 teams. And cost certainty my friends, is what this whole mess is all about. Here’s why.

At least a dozen NHL teams have loans from various financial institutions based on franchise values that no longer exist. An amazing percent of NHL revenues go to player salaries versus the 55-63 percent range in other major league pro sports. The NHL is bleeding buckets of money at levels that many of the current owners can’t sustain. Lenders have made loans in the past based on financial parameters and franchise values that no longer support them. Without cost certainty in a new labor agreement, a dozen or more franchise loans will go away and so will the teams. That is one of the key reasons the NHL is so resolute in its negotiating position.

The NHL is currently a financial disaster. NHL Commissioner Gary Bettman knows this, but finds it difficult to admit this publicly because of the consequences with sponsors, the NHL’s fan base, broadcast rights holders, etc. Bettman should have done so in the Forbes magazine article a few weeks ago, which stated that NHL financial losses were not as great as what the league was reporting. The league chose not to respond. Admitting something like that would certainly scare the heck out of the financial community but it no doubt would have been the lesser of two evils.

Bettman’s primary concern is to maintain the existing 30 franchise models and franchise values. Cost certainty alone will do that. The NHLPA proposal of a luxury tax (taxing teams that spend over a set amount on salaries) is not sufficiently predictable. It doesn’t guarantee cost certainty and may work in the short term on a limited basis but it won’t save the NHL.

As we pointed out in our Oct. 28 LPH article, the average net worth of an NHL owner is a half billion dollars, although a significant number are far below this threshold and not able to personally sustain the losses their franchises are incurring. These people made their money by making astute business decisions. They are not prone to supporting money-losing businesses, particularly business with no future profit potential – the NHL franchises must carry their own weight. And right now, very few are, leaving the league as a whole, on the brink of financial ruin.

NHL players are now receiving monthly checks of $10,000 beginning in November from a fund established from NHL licensing deals. The players have laptop computers to stay in contact privately with the NHLPA without their agents and others nosing in on the details.

But one player agent in particular holds the magic key to the door. He is Don Meehan, who’s Mississauga, Ontario, firm Newport Sports Management, represents approximately 125 NHL players. Player’s agents have been relatively quiet to this point in the lockout dispute – kind of refreshing isn’t it? But you can bet they’re getting antsy. They get paid on commission and with players getting no paychecks, agents get zero money – kind of refreshing isn’t it?

In the best case, come next spring or early summer, Meehan and a number of other key agents will step in to the fray and tell Bob Goodenow either settle this thing or step aside. It’s too late for the current year, and Goodenow simply has too much clout with the agents for them to step out of line (yet).

Absent an agreement, the NHL will announce next summer that they will open training camps with replacement players and those current NHL’ers who want to play. But keep in mind, the NHLPA has already implied to a number of player agents that they will decertify current agents whose players report to camp and the players will receive no pension. This is likely to create real tension between the players and their union chief, not to mention a multitude of lawsuits. If you didn’t think this could get worse, just wait.

In the end, if this mess continues into next year, both Bob Goodenow and Gary Bettman are likely to lose their jobs. A key part of a viable future NHL is a league-player relationship that is based on respect for the product and good player relations. The demise of this situation is likely to be fatal to the current leaders.

No, this isn’t a pretty picture. Fans, ushers, broadcasters, peanut sellers, support businesses, hockey companies and the like are all suffering. It’s all collateral damage that happens in order for the big picture to get fixed.

Apathy from the fans, rules changes, draft picks, development leagues – all mean nothing at this point until the NHL is fixed. That in a nutshell is what this is all about – the league is no longer viable in its current form; it has no choice but to stay out until it is fixed, or accept a future solution that only encompasses 10-12 teams. That means half of the current NHL players can kiss their past paychecks goodbye because they’ll either be playing in the minor leagues at vastly reduced wages or hitting the soup line. Good luck.

[Dark Knight]

Good luck indeed

[wilka91]

Cool, no NHL season means a full RSL season with more NHL players, and maybe even Tara ... I mean Sergei Fedorov in Russia!

[Francaise]

I'm not sure from your posts Wilka, if it is Tara or Sergei you dislike. Is Tara Reid a bimbo? I saw on another post, you said she was in American Pie. I didn't see that movie, but I know which one you are talking about. :>)

[DropThePuck]

Player’s agents have been relatively quiet to this point in the lockout dispute – kind of refreshing isn’t it? But you can bet they’re getting antsy. They get paid on commission and with players getting no paychecks, agents get zero money – kind of refreshing isn’t it?

Oh yeah, you betcha! It's more than just "kind of"

[Veca]

Player’s agents have been relatively quiet to this point in the lockout dispute – kind of refreshing isn’t it? But you can bet they’re getting antsy. They get paid on commission and with players getting no paychecks, agents get zero money – kind of refreshing isn’t it?

Oh yeah, you betcha! It's more than just "kind of"

<{POST_SNAPBACK}>

Agents are not getting paid...who said there was no silver lining to this whole fiasco???

[DropThePuck]

BTW, SC, Thanks for getting permission to post it. A very interesting read indeed.