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Talk of a lockout is hanging over the NHL because the collective bargaining agreement ends in one year

September 16, 2003|Helene Elliott | Times Staff Writer

A year from today, a new era of labor peace and stability could be dawning over the NHL.

Or, rinks across North America could be turning out the lights, signaling the start of a labor dispute that could threaten the future of half a dozen clubs.

The collective bargaining agreement between the league and the NHL Players' Assn. reached after a 103-day lockout that cut the 1994-95 season to 48 games, expires one year from Monday. That leaves 365 days -- 2004 is a leap year -- to transform rhetoric into solutions.

Is there enough time to forge an agreement that will sustain a league that's already at the bottom of the U.S. major-sports heap and whose national TV deal with ABC/ESPN ends after this season?

"I think a work stoppage in hockey would be catastrophic to the sport," said Allan Walsh, an agent with the Beverly Hills Sports Council, whose clients include young stars Marian Gaborik of Minnesota and Martin Havlat of Ottawa. "I think it would be akin to both sides putting a bullet in a gun and blowing their brains out. And I don't think that both sides really want that."

Walsh says he senses he's in the minority in thinking hockey will copy the example Major League Baseball set last summer and avert an interruption.

"I believe it's going to come down to the wire," he said, "and I'm talking about the last possible minute, but that both sides, at the 11.59th hour, are going to cut what they perceive to be the best deal possible for themselves."

The gulf between those perceptions, however, seems vast.

Owners say salaries have risen faster than revenue, leading them to spend 68% of revenue on payrolls and lose millions of dollars.

If there's no agreement and the NHL locks players out?

"In Anaheim, we'd lose considerably less than we're losing now," Mighty Duck General Manager Bryan Murray said.

And he's not alone.

"The system has not worked the way we intended it to work and it has to be changed," said Bill Daly, the NHL's chief legal officer. "I don't want to speculate [about effects of a stoppage]. I would be concerned about the long-term viability of this league in this form if we don't fix the CBA. That's why we have no margin of error."

Under business initiatives instigated by Commissioner Gary Bettman, the NHL's revenue rose to about $1.9 billion last season, from $600 million a decade ago. But the average player salary, which was $558,000 in 1993-94 under the old agreement, hit $1,790,209 last season, according to the NHL.

Each club annually gets about $5.7 million in national TV revenue. Each NFL club got about $75 million in TV money last season, and its average salary was $1.25 million. The NHL's situation is complicated by inequities between the U.S. and Canadian dollars, a reason it provides subsidies to Canadian teams that meet certain quotas for season-ticket sales and advertising.

The NHL is alone among the four major North American professional leagues in not having a salary cap or luxury tax. During the 1994-95 talks, the union proposed revenue sharing through a graduated levy on player payrolls of the top 16 revenue teams and a levy on gate receipts, but owners refused. They compromised on a cap on salaries for the first three years of players' careers, but that was circumvented by bonus clauses.

"This was a decent agreement, there was no question, as far as tools being there for us to do certain things," Murray said. "But teams found ways to go overboard, and agents found ways and the union found ways to get past the entry-level cap. It has been as big an issue as anything. When you've got the possibility of a guy earning $3 or $4 million in bonuses a year, that affects your budget. The salaries -- you think you have under control, then all of a sudden your budget is being blown out."

One idea being floated widely is a $35-million hard cap, about half of the Rangers' and Red Wings' payrolls last season. Bettman won't specify whether owners seek a cap or luxury tax, and the NHL has fined club executives who have discussed the matter.

"You need to have cost certainty because nothing else seems to work," he told Canadian sports and business leaders last week, adding, "I promise a new system can and will be attained."

Say players: Try self-restraint and good management techniques instead of asking the NHL to curb your worst impulses.

"The key issue is maintaining a fair marketplace for salaries," said Bob Goodenow, executive director of the NHLPA. "Clubs can already have cost certainty under the current agreement. They can set a budget and stick to it. We've seen it with the Ottawa Senators, Vancouver Canucks and Minnesota Wild and in other places. Cost certainty can be established and maintained on a team-by-team basis.

"It really boils down to teams being able to run their business the way they want and be competitive. People will make counterpoints that they can't compete against the Rangers, but it's not so much how much you spend as how you spend it."

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