Commentary: Salaries Are Slamming the NHL. Who's to Blame?

Listen to NHL Commissioner Gary Bettman's dire warnings, and you might think the seconds are ticking down on hockey's collective-bargaining agreement. Well, they are, kind of. On Dec. 15, expiration will be a mere 21 months away.

In the National Hockey League, that's time to crown two more Stanley Cup champs and for the average defenseman to rack up three concussions and a busted nose. But is it time enough for Bettman to rescue the overheated economics of the NHL?

League revenues have risen from $600 million to $2 billion in the past 10 years. Yet player paychecks soak up 73% of revenues, up from 62% in 1997.

A lot of Third World countries have a better handle on inflation than pro hockey. A decade ago, an NHL player's average take-home pay was $368,000. Five years ago, it topped $1 million. Today, it's $1.6 million. And that's in the face of a labor pool that expanded considerably since the Cold War ended and Russian players began to be drafted.

It's not just skating icons such as Peter Bondra and Mario Lemieux who are striking gold. When Bobby Holik, who hasn't scored more than 65 points in any one of his 12 years in the NHL, became a free agent last off-season, it was as if Wayne Gretzky was pulling on a jersey again. Teams concocted lavish offers, and the New York Rangers eventually wooed Holik with a deal worthy of the Great One: 5 years, $45 million.

Now, Bettman is taking on a challenge as oversize as Holik's investment portfolio. He's trying again to sell the NHL Players Assn. on a salary cap--and he's suggesting that a deal be cut as soon as possible. That would mean opening the collective-bargaining agreement that expires in 2004. NBA and NFL players have yielded to comprehensive caps that protect owners from their own impulsive spending. But hockey players have never given in.

At times, their resistance has been fierce. In 1994, the owners staged a 103-day lockout and still couldn't get a cap. But without a cap, Bettman argues, "the league, in its current form, may not be recognizable. Some [of the 30 teams] will run out of gas." Waiting two years to fix the contract, he adds, will only drive some franchises deeper into debt. Among those on the thinnest of ice are the Ottawa Senators and Florida Panthers.

Bettman says he has sent a proposal to union chief Bob Goodenow. (He says he hasn't received it.) And Bettman professes optimism that his sense of urgency "is getting through" to Goodenow and the players.

Maybe so. But the players don't show any sign of softening. "We dealt with this issue during the lockout. We don't believe a cap is in the best interest of the sport," says Goodenow. "There should be a marketplace. The clubs and players should have the ability to decide values."

"Free markets don't have minimum salaries. Free markets don't have salary arbitration," sniffs the commish.

Rhetorical points will get Bettman only so far. Eventually, he has to convince players and sympathizers that hockey's financial crisis is real. "Of course I'm skeptical," says John Palmer, a professor of sports economics at the University of Western Ontario. "If most hockey franchises weren't profitable, you'd have to assume there are a lot of idiots out there paying $100 million for a franchise to lose money."

Maybe there are. "Management incompetence amazes me. These are businesspeople supposedly planning years ahead. But their long-term plan is like my daughter's--a day long," says agent Rich Winter, whose clients include Bondra.

Bettman will, no doubt, keep jawboning about the salary time bomb, but that will probably be as effective as crying for help in Madison Square Garden right after the Rangers score. Odds are that the issue will go down to the wire. When that happens, watch out for the high sticks.

By Mark Hyman

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