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Craig Leipold, Majority Owner of Minnesota Wild (left) leaves the NHLPA's offices with NHL Commissioner Gary Bettman (centre) and Washington Capitals owner Ted Leonsis (right) following collective bargaining talks in Toronto on Thursday October 18, 2012. (Chris Young/THE CANADIAN PRESS)
Craig Leipold, Majority Owner of Minnesota Wild (left) leaves the NHLPA's offices with NHL Commissioner Gary Bettman (centre) and Washington Capitals owner Ted Leonsis (right) following collective bargaining talks in Toronto on Thursday October 18, 2012. (Chris Young/THE CANADIAN PRESS)

The NHL's rising share: When is enough enough? Add to ...

"Millionaires against billionaires."

You've likely heard the expression countless times during the NHL lockout, and it's part of the perception problem that happens for a league when it engages in prolonged, season-altering spats over a $2- or $3-billion-dollar-a-year pie.

From the fan base, it incites anger, frustration and, more than all, apathy.

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Let's go back though, for a closer look at why we're here. As we all know, coming out of the 2004-05 lockout, the general consensus was that the league had won.

The union was crushed, its leadership ousted, players had caved on the (then very low) salary cap and salaries were about to take a huge nosedive.

They did. As it turned out, however, many of those changes were temporary.

But the reason for that wasn't necessarily the players "winning." The main reason was league revenues, to the surprise of most, exploded, with the Canadian dollar providing roughly 12.5 per cent of that growth and the rest coming from rising ticket prices, sponsorships, TV deals and demand for NHL hockey.

And the way the last collective bargaining agreement was written, when revenues went up, everyone won.

Consider this: While the average player salary jumped from $1.8-million to about $2.4-million (about 33 per cent) between 2003 and 2012, the owners' share went up from $500-million (as per the league's own Levitt Report) to $1.42-billion in those nine years (185 per cent).

That was the correction the league was looking for, even if it came with players getting a whole lot more than expected.


The above graph contains some estimates where specific data isn't available, but for the most part, that's a very accurate representation of how the owner and player shares have grown over time (and project to in the future).

For future seasons, I've used the owners' latest proposal as a basis and projected revenue loss this season (12 per cent) and minimal growth over the next four years after the lockout (2.5 per cent in 2013-14 followed by 5 per cent a season).

You can also see what the players have proposed will happen with their share (in orange), which is absurdly similar to what ownership has on the table.

Now, the two shares will meet for the first time in Year 3 or 4 of these proposals, putting them at 50-50 presumably until the next CBA comes into effect.

And, once again, if revenues rise rapidly, both sides will make out very well here.

This isn't meant to be an indictment of either side's position here, but merely a presentation of what this fight is over and to ask the question of whether or not this new correction will fix things for good.

What's indisputable is that the owners have enjoyed a far, far greater share of revenues than in the Dead Puck Era, and player salary growth has been relatively moderated (compared to 2004 and earlier) in light of how quickly the business has grown.

I think the vast majority of hockey fans and pundits would agree that that correction during the last lockout was likely needed, as player salaries very much were taking over the game.

Now? That argument is much less definite. The proposal the players have on the table would most likely flatten their share for four years until the owners' caught up to it, from which point they would be identical going forward.

So, yes, the perception may be that the players side won handily the last time when it appeared the owners got their way. That's fair enough, especially considering some of the mammoth contracts out there.

But the concerns you hear now coming out of the NHLPA are over what that red line looks like.

It's tilting up and up.

Is this where it stops? Or will another correction be needed again in six or seven years?

For the sake of the fans and the league, let's hope they get it right this time. At some point, enough is enough.

Follow on Twitter: @mirtle

 

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