News

They will make their annual pilgrimage from both the snowbound and the sun-kissed NHL cities, to descend on a swish seaside resort on Florida's Gold Coast, which seems an ironic locale for a meeting about the impending economic storm.

At the NHL's annual early-winter confab in tiny Palm Beach — as with other destinations favoured by the American wealthy, the airport has more parking spots than usual available for corporate jets — the league's board of governors will be preoccupied with matters financial, and more specifically, the salary cap, the slumping Canadian dollar and how best to insulate the league from the worsening recession on both sides of the 49th parallel.

"What else is there to talk about," a Canadian NHL executive groused recently. "It may not affect us right this minute, but it's going to soon and we need to figure out how we're going to deal with it."

The governors meeting will feature presentations from Canadian and U.S. experts on the gloomy economic prognosis for the next 12 to 18 months.

The two-day meeting, which begins today, will also hear that the NHL is likely to hold the line on the salary cap next year, which for the first time since the 2004 lockout season, is not likely to increase in 2009-10.

To put that into perspective, the salary floor for 2008-09 is higher than the maximum cap amount in 2005-06, the first full season after the lockout.

It's expected the cap, which factors in league revenue, will settle somewhere between $54-million (all currency U.S.) and the current $56.7-million next season and may well shrink substantially in 2010-11, the final year of the current collective labour agreement.

That's not good news for teams such as the Montreal Canadiens, who are close to the maximum payroll amount and face the unenviable prospect of having to make decisions on 10 unrestricted and four restricted free agents next summer — in the face of a shrinking cap.

The popular refrain from league commissioner Gary Bettman and from most owners is that revenue for the current season is "locked in" — sponsorships, season tickets, game tickets and television contracts have largely been collected.

"I'm mindful of the fact that if there is a continuing economic upheaval, I don't think anybody will be immune from it," Bettman said in an interview with The Canadian Press this season. "But its exact impact is unpredictable and not something we're feeling yet."

While most owners expect the real problems to hit in 2009-10, that situation could change, and quickly.

As The Globe and Mail recently reported, the Phoenix Coyotes could lose as much as $35-million this season; they are one of as many as a half-dozen clubs teetering on the brink of financial calamity.

Several hockey sources insist other cash-strapped clubs, such as the Nashville Predators and Tampa Bay Lightning, have come close to missing their payroll obligations (although both the Predators and Lightning insist they are on solid financial footing.)

And the extent to which the league is able to weather the gathering economic storm may test Bettman's standing with owners, who have thus far been supportive and indulgent, even in the case of recent bankruptcies in places such as Pittsburgh, Ottawa and Buffalo.

Clubs such as the Edmonton Oilers and Ottawa Senators are also likely to raise the question of how to cope with a precipitous drop in the Canadian dollar.

The loonie dipped below 77 cents U.S. last week, and with the six Canadian clubs paying into the league's revenue-sharing plan, a further slide will eat into profits considerably between now and the end of the season.

The governors are likely to raise the question of revenue sharing — although there's little in the short-term that can be done about changing the system — and are also expected to address the issue of expansion to Europe and possibly Southern Ontario.

Despite the focus on the economy, league sources suggest there will also be a discussion of on-ice matters, such as the crackdown on blows to the head and the suspension meted out against Dallas Stars miscreant Sean Avery.

The NHL Players' Association filed a grievance over the six-game suspension levied against Avery for his disparaging and sexist comments last week, and there is widespread speculation that the Stars are considering cancelling his contract.

Not that the NHLPA's perspective will be heard — in a break with the practice of past years, the union's executive director, Paul Kelly, hasn't been invited to the governors meeting.

The governors may also broach another subject near and dear to the NHLPA's heart: the escrow provisions that allow clubs to withhold 13 per cent of player salaries to counter market cycles.

Last season, the owners disbursed the full amount of the escrow to the players, but this year it seems increasingly likely they will hang on to most or all of that money.

And Bettman could also face questions about the recent criminal charges laid against former Predators minority shareholder William (Boots) Del Biaggio, who was indicted last week for securities fraud and the due-diligence procedures that were followed when he bought into the club.