Revenue sharing key to NHL CBA talks
At the end of this round of the NHL’s labour negotiations one phrase should become as familiar to hockey fans as the term salary cap did during the 2004-05 lockout – revenue sharing.
This is where the league owners and the NHL Players’ Association have their sharpest difference over a solution to the league’s lingering economic problems.
Seven years after the owners successfully won a hard salary cap based on revenue with a little revenue sharing, there are fewer of the NHL’s 30 teams in serious economic trouble – six in the estimate of one former governor – but the owners are still looking to find the solution in the pockets of the players.
In their first offer to the players earlier this month, the owners demanded the players reduce their share of hockey-related revenue (HRR) from 57 per cent to 46, but also demanded a change in how HRR is defined that would further reduce that share to 43 per cent.
Both a current NHL governor and a former NHL governor admitted the league`s richest teams are not keen even about the limited sharing the exists now. The former governor said the owners would only accept sharp increase like the NBA owners did if Fehr and the union can convince them every team will become profitable.
“You really have to get whole league profitable for that kind of revenue sharing to work,” said the former governor, who added the league is saddled by several teams in markets that will never work financially. “Otherwise, it`s just moving chairs around the Titanic.”
But a prominent sports agent, who asked to remain anonymous because he is not authorized to speak for the players as a group, said revenue sharing is the only answer to the NHL's problems. He said the NHL’s cap system is doomed to fail because the revenue from the richest teams inflates the salary cap beyond the reach of the poorest teams.
“If the NHL owners were smart, they’d say to Fehr, ‘Help us design a system that works for us and you guys can live with,’ and he would come up with a system,” the agent said. “All the owners do now is grab more money from the players. That works for a year, revenue goes up and the small markets start choking.
“Then they limp to the next collective agreement and Bettman promises more cap money for small markets. This is all just like a Ponzi scheme. Unless you meaningfully share revenue, the small markets will die.”