Mixed signals are coming from around the NHL about its economic health in the early days of a new season.
On the one hand, there are disquieting attendance numbers in some cities, such as 6,306 in Dallas, 12,096 in New Jersey and 11,278 on Long Island on Monday night and 9,187 in Columbus on Saturday. Those are the official attendance numbers from the teams, so the actual number of fans in the seats was certainly lower.
However, it must be noted there were lots of sellouts in the first few days, too. But most of all, a key indicator of the league’s economy that came out this week has a positive outlook.
The bean-counters employed by both the league and the NHL Players’ Association agreed that the percentage of players’ salaries that will be withheld in escrow for the first quarter of the season is 8.5. This is half of the 17 per cent held back a year ago in the first quarter and the lowest percentage since the first season after the 2004-05 lockout when the system was introduced.
Under the escrow system, which the players hate and will fight to eliminate in the labour battle looming at the end of this season, a certain amount of their salary is placed in an escrow account. The money is a safety net for the league’s owners, who are to pay 57 per cent of their hockey-related revenue to the players.
When the revenue is toted up each summer, if it turns out the owners paid more than their share in salaries, they are reimbursed from the escrow account with anything left over going back to the players. In the last few years, thanks to the recession, the players have been coughing up a larger share of their salaries.
No, they aren’t happy about it, especially since a club such as the Phoenix Coyotes, which is owned by the league, can single-handedly drive up the cost of escrow by routinely losing more than $30-million (all currency U.S.) per year.
However, better times may be here for the players. The percentage deducted from their salaries is calculated four times during the season and it is based on projections for NHL revenue. By slashing the first quarter’s deduction to 8.5 per cent (the actual deduction, if there is one, usually proves to be about half of the projections), they are betting on a good year for the league.
Playing into their calculations was the move of the Atlanta Thrashers, long one of the NHL’s biggest losers, to Winnipeg, where they will blossom into a profitable club. Also helping out is the continued strength of the Canadian dollar, since the addition of the Winnipeg Jets means there are now seven teams paying their way in Canuck bucks.
But this would not be the NHL unless there was a crisis du jour for commissioner Gary Bettman. Today’s is the Edmonton Oilers, although it is a relatively small one.
Oilers owner Daryl Katz and Edmonton Mayor Stephen Mandel are in New York meeting with Bettman thanks to a squabble over their deal for a new arena. Katz wants it ironed out by Oct. 31, when his options on property for the new rink expire, and Bettman is trying to bring them together, no doubt with a quiet half-Nelson on each gentleman.
In the meantime, St. Louis Blues chairman Dave Checketts made it known he has a verbal agreement to sell a majority piece of the club to Chicago businessman Matthew Hulsizer. Checketts may be allowed a role in the club but that is not certain, nor is the sale. There have been lots of verbal agreements that went south over the years and Blues minority owner Tom Stillman has not declared himself out of the running.