Earlier this week it was announced that the NHL was canceling the first two weeks of the regular season. The league has been in a battle with the NHLPA over a new CBA since July and while their recent string of meetings has been an encouraging sign, both parties are still far apart.
The biggest issue has been revenue sharing. While the players would like like to keep 57% of hockey related revenue, the owners would like them to take 47% instead. Given that the league makes money off of the tremendous skill of these players, 47% of the revenue just isn't going to cut it and it makes the owners look greedy.
The question is, why do the owners want to take a bigger piece of the pie? Is it simply just because they want more money? Not exactly.
According to a Forbes article last month, only the Canadiens, Maple Leafs, and Rangers made a profit from the 2010-2011 season while 18 teams lost money. The reason is the top ten money-making teams contribute to the bottom fifteen in revenue. When you consider the increase in player salaries, the profit margins shrank by 21%.
Simply put, the league cannot support the current salary cap. As the cap ceiling rises, the cap floor follows forcing some of the small market teams to spend more money than should. Throw in the fact that a team with fewer than 80% attendance for the season, or in the market of 2.5 million TV's or more cannot be eligible to receive revenue from the big boys, and you have a recipe for bankruptcy.
Still, the notion to bring down player revenues below 50% is excessive. The league would be better off with a 50-50 split as the NBA currently has in place.
What would help the league even more is if it contracted teams and moved them to better hockey markets. That's a difficult thing to suggest, especially coming from Pittsburgh where the Penguins were on the verge of leaving just a few years ago. The difference is, the Penguins at least sell out when their team is playing well whereas teams like the Devils, Stars, and Coyotes draw empty seats no matter what.
Consider this, the New Jersey Devils have made the playoffs in 14 of the last 15 seasons including four Stanley Cup appearances and two rings. Yet, the team has failed to break out of the bottom third in attendance in the last ten years. With the Flyers, Rangers, and Islanders taking massive bites out of their market share, the Devils cannot get the necessary amount of fans to draw a crowd.
The Phoenix Coyotes, Dallas Stars, and Florida Panthers are all in warm weather climates where the only ice they see is in the freezer. Hockey is the only major sport you can't play outside in warm temperatures. The sport in those markets is swallowed by football, basketball, and baseball. Those teams would be better suited in colder climate where they wouldn't lose millions of dollars each year. Instead, the owners are fighting to take away salary from the players to finance teams that can't afford to be in the league.
This is a very complicated situation. There is more to this lockout than the owners trying to make a couple of extra dollars at the expense of the fans. At the same time, the owners need to understand that the players generate the revenue and as the lockout drags on, the fans will become increasingly unsettled while the players continue to head overseas.