Something Zach Parise, the newest member of the Minnesota Wild, said Tuesday struck a chord with me, because it got me thinking about whether locked-out NHL players have spent enough time pondering the fundamental difference between revenues and profits.
As anyone who has ever dabbled in a business, large or small, can tell you, they are two completely separate columns on the ledger sheet. The reality that people sometimes fail to grasp is that billion-dollar businesses can and do lose money.
So there was Parise wondering to the Minneapolis Tribune’s Mike Russo, why Bettman would “brag” endlessly about the $3.3-billion (all currency U.S.) in revenues that the NHL generated last year, and then turn around and ask the players to take a smaller share of the overall pie in the current round of collective bargaining negotiations.
Well, here’s the thing.
Revenues may have risen steadily under the last CBA, but it doesn’t change the fact that half the teams in the league are operating in the red, and some would likely fold if free-market principles were ever applied to the overall NHL model.
The Phoenix Coyotes are a well-publicized black hole, but there are other teams operating in the lower 49 that would be sunk without the $3- to $8-million in annual revenue-sharing subsidies that they received under the old agreement.
It would have been far better off if Bettman had been more open about the warts in the business in the 12-to-24 months leading up to the lockout, rather than constantly glossing over the problem areas.
As recently as this past June during the Stanley Cup final, when the labour tom-toms were starting to thump, Bettman was specifically asked how profits were looking in conjunction with all those revenue increases, and he wouldn’t answer. That should have been a red flag.
That should have been a warning sign to anyone who might have been thought, hey, if things really are that flush – and if the system doesn’t need tweaking or any serious revamping – then it should be a simple matter of figuring out the percentages in a new deal.
It was a wrong assumption, and a lot of it had to do with Bettman’s stubbornness over Phoenix – and his lengthy crusade to keep the team in Arizona.
The Coyotes’ losses eventually became a matter of the public record, but why anyone would think that Phoenix was the only problem spot in a league grappling with ownership issues in half-a-dozen markets is hard to fathom.
But Bettman likes to keep the message upbeat and positive, and so when that first NHL negotiating volley landed with a thud in early July – loaded with take-backs – it caught the players off guard.
It likely didn’t catch the NHLPA’s leaders by surprise, but they were smart enough to let the PR damage work its way through the rank-and-file, without comment or clarification.
So now you get player after player criticizing Bettman because all they know is that revenues are dazzling – the commish said so himself, right? – which to them means only one thing, that the business is healthy and thriving. In some places, yes. In others, no. The types of contracts awarded to the likes of Parise this summer – $98-million to play in small-market Minnesota – would naturally reinforce that supposition.
Accordingly, Bettman has no one to blame but himself for misreading the situation and miscalculating how badly all that Pollyanna sunshine would be interpreted.
It would have been far better off if he’d been a little more forthright about where things stand in the overall scheme of a 30-team league, which includes some breathtakingly successful franchises, and others held together by glue, baling wire and a bank note coming due any day now.
After Tuesday’s short-and-not-so-sweet negotiating sessions, NHL deputy commissioner Bill Daly was asked about the value of mediation, given that neither side seemed prepared to budge, and that likely, within the next 24 hours, regular-season games will start to be sacrificed.
“A mediator can only be helpful if both sides are willing to embrace it and compromise,” Daly said. “We certainly haven’t ruled out that possibility – and both sides have talked to mediators individually throughout the process. We have a federal mediator in Washington who I’m sure would be prepared to help if we took that step.
“But usually, you only need a mediator if you’re not understanding each other. I don’t think that we have a lack of communication in this negotiation. They understand our position. We certainly understand their position.”
Maybe. Maybe not.
Because suddenly trust seems as if it is an issue again, just as it was during the last lockout. All the broadsides directed towards Bettman – by Parise, by Jonathan Toews, by Jarome Iginla – suggest that suspicion of the owners and the true nature of their pain is running deep on the players’ side; and they’re not about to sacrifice money that they were promised in contracts in order to make it go away.
All of which makes it that much easier for the NHLPA to dig in and see if they can get the owners to blink first this time.
Good luck on that one. In fact, good luck to them both. In the absence of any clear willingness to negotiate, they are going to need it.