A recent article in the Edmonton Journal reports that the NHL is set to bring in $3.2 billion in revenue this year. This number represents a growth of 50% over the seven years since the NHL endured a lock-out that claimed the 2004-05 season.
Gary Bettman released these figures at the MIT Sloan Sports Analytics Conference, discussing how well the lock-out worked for NHL owners. He stated that as soon as the league resumed business, it has been breaking revenue records ever since.
With all this financial talk coming from Bettman the question must be asked - will the NHL and NHLPA reach a new deal to avoid a work stoppage now that it's clear the league is thriving?
The Edmonton Journal calls on an interesting source to answer such a question - MLB player agent Scott Boras. Boras, a man familiar dealing with both the players and the league in baseball, lent his opinion to the upcoming negotiations the NHL and NHLPA will hold. Boras believes that the huge growth in revenue will logically cut down on any potential stoppage.
With the NHL breaking records in terms of revenue, both the owners and the players have more to lose than they did prior to 2004-05. According to Bettman, money is all but raining down in the NHL which would be a significant loss if the NHL was to close the doors on another season.
When Bettman was bluntly asked how he thought the collective bargaining agreement negotiations would go, Bettman replied that he hoped a new deal would be "quiet, quick and painless". Let's hope so.
However, will the increased revenue cause a divide between the owners and players? It's possible, but like we saw in the NFL, it's easy to imagine that the bigger revenues will cause both sides to reach a new deal more quickly than if the league had a smaller revenue. Simply out, there's more money to lose than there was in 2004-05.
The NHL and NHLPA negotiations should be interesting. Ultimately, I feel a deal will be reached but it will be fascinating to see how certain topics such as realignment and a new playoff format are discussed. The NHL proposed their own version of realignment only to have it fall through after the NHLPA refused to support it. This brought up new information that the NHL evidently never consulted the NHLPA when formulating their new proposal - a worrisome report. It's discouraging that the NHL would try to pass such an immense change without consulting the NHLPA, which could cause some ill feelings when the two sides meet to discuss a new collective bargaining agreement.
The bottom line is that the NHL is making money - more than ever before. Some clubs are struggling but the overall NHL product is profitable which should reduce the chance we see a repeat of 2004-05. However, as positive as this news is, the fact remains we likely will see some heated discussions when the NHL and NHLPA finally sit down to negotiate after the NHL attempted to drastically change the game as we know it without the NHLPA's consent.
Where's the popcorn? This should be a lot of fun to watch.
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It's my understanding that under the current CBA there is a fixed percentage of total league revenues to be paid to players (57%). Also you need to consider the seven Canadian teams and the increase of the value of the Canadian dollar. I don't see where the current system is broken at all. Players cap has raised each year. A portion of there pay is held in escrow until after the season to ensure the 57%. The cap in 2005-2006 39 million. The cap in 2011-2012 64 million. If it's not broke don't fix it. There might be some (cakes and circus) for us to watch but they would be idiots to mess with much concerning pay.
@MSP I don't think money will be the issue. Instead, I think the increased $ will hopefully soften the negotiations towards more controversial aspects of the new agreement such as the new alignment & playoffs. The sides seem to be pretty distant on that topic yet the threat of losing such a large amount of cash is likely to cause both sides to compromise more than they might with a small revenue.
@David Rogers @MSP This is all well and good unless, with the growth of the overall league, the owners see a need to try to cut into the 7% over 50 currently going to the players. Somehow, I expect that's at least on their radar, though not necessarily as a major concern.
I expect money to factor into it in this way, if nothing else: The continually rising floor for the cap is going to become a problem for the smaller markets, particularly if league revenues continue to increase as a whole at this rate, but not equally across the markets. Whether it's enough of a problem now to cause an issue in crafting the upcoming CBA, or it gets punted a few years down the line to the next one, is certainly more than I can say.
Also, a couple of words to cap this off, for folks who aren't worried about the possibility of labor strife and a strike/lockout resulting from this, even though the league as a whole is in a good place right now: Donald Fehr.