The NHL's adoption of a hard salary cap linked to 54% of league-wide revenues, tight entry-level salary limits and other cost controls in the soon-to-be-finished collective bargaining agreement will give the league a solid economic base and enhance its competitiveness by putting teams on a closer footing, a prominent sports marketing expert said Thursday.
Paul Swangard, managing director of the Warsaw Sports Marketing Center at the University of Oregon and an avid hockey fan since childhood, said the foundation of the labor agreement as outlined in The Times on Wednesday "is the economic model we've all believed was needed, those of us who follow this as a business. It sets the league up to be successful in the only way it could be successful."
However, he said that the NHL might be miscalculating if it bases its $37-million salary cap, $24-million payroll minimum and other provisions on projected revenues of $1.8 billion. The league had revenues of $2.1 billion in 2002-03 but has since lost its TV deal with ABC/ESPN and is likely to lose sponsors because of the lockout imposed by Commissioner Gary Bettman last Sept. 15.
"The idea of $1.8 billion seems ambitious," Swangard said. "Is it impossible? No. It's not a number that you laugh at. But you sort of worry that it's going to be ambitious. The silver lining is teams will have the ability to tie personnel expenditures to whatever that number will be....
"The NHL was perceived as one of the mansions of professional sport but in truth, it was lying on a fault line. Hockey needs to grow to be the sport it always wanted to be, and this is the framework that will allow it to do that."
A prominent agent said that while it will take time for agents, general managers and players to adapt to the new economic system, he expects the deal will be workable.
"If what we're hearing is right, this will be OK," the agent said. "We're not rolling over and dying. We'll be able to survive."
Sources familiar with the negotiations told The Times that the NHL and the players' association had agreed in principle on a labor pact that would for the first time institute sweeping cost controls, which the league had sought after contending player costs had consumed as much as 76% of its revenues.
