September 13, 2012; New York, NY, USA; NHL commissioner Gary Bettman speaks during a press conference at the Crowne Plaza Times Square. Mandatory Credit: Brad Penner-US PRESSWIRE
The most common refrain I’ve heard leading up to this lockout is “it’s billionaires fighting against millionaires,” and how both sides are being greedy. It’s easy to think that the players are greedy. Wouldn’t it be nice to be like Joe Thornton collect $7M to PLAY A GAME for a living and be the captain of an NHL team with a legitimate shot at a championship”? Let that number sink in: Joe Thornton gets about $4M per season AFTER Uncle Sam has taken his cut…for playing a game. In normal every day terms, it’s ludicrous.
Problem is that, in NHL terms, Thornton’s worth every penny that an owner’s willing to pay him. He is, like many of our NHL favorites, likable and front and center (literally) for our team. We watch Thornton play 82 games a year, see him in post game interviews and doing funny commercials with Slappy
. We wear his jersey to games and our kids pretend to be him when they’re on the ice. Players like Jumbo are the single most marketable thing about this business and the primary reason we love the NHL. Ask yourself this: If a competing league started up tomorrow, with franchises in the 30 NHL cities, and all 1005 members of the NHLPA went to that new league, would you stay loyal to a league that had to fill roster spots with sub par talent or would you watch the new league? And if you think I’m not telling the truth about this, ask your friends how many of them watched the most recent Olympics vs. how many watch the Hockey World Championship. Better hockey attracts more fans.
February 13, 2012; Washington, DC, USA; San Jose Sharks center Joe Thornton (19) skates against the Washington Capitals at Verizon Center. Mandatory Credit: Geoff Burke-US PRESSWIRE
Onto the owners. Now, it’s easy to blame them too, of course. They’re the faceless financiers of our franchises, and the ones in charge of employing the hockey operations folks that cause 29 fan bases to go home unsatisfied every season. They do have legitimate concerns here, though. Their primary problem? They’re losing money. A lot of money. We should feel some sympathy for them. These are our teams, but they’re the ones actually running 30 businesses, most at an annual realized loss. Our beloved Sharks are worth a reported $211M (according to Forbes) and claim to have lost $15M last season despite selling out all home games and making the playoffs. A few other figures for you: the initial expansion fees paid by the Sharks were $50M, meaning the value of the franchise has gone up $161M in the last 21 seasons ($7.67M per season). I don’t know the reporting history of revenue here but you can easily see how the owners have likely lost money even after capital gains since the team started. It’s clearly a labor of love for these ownership groups.
But back to the reason you can feel ok about yourself blaming the owners. The main reason they’re claiming to lose money is because player salaries are too high. They can’t afford the salaries they’re paying players. What dictates those salaries? Ultimately NHL salaries, like any other profession, are dictated by a market completely controlled by…the market. Economics dictate that salaries are controlled by supply and demand. How else do you think Wade Redden got $6.5M a year?
The cap last season was $64.2M, meaning the floor was $48.2M. The Sharks paid $61.5M in salaries, so they had just about $13M in space they could’ve lowered salaries to save money and only lost $2M last season. Tack on a deeper post season run and the team breaks even. I’m not saying breaking even is smart business, but if you tack on the capital gains they would realize if they were to sell their franchise, they would be making a profit. Now, I haven’t seen any balance sheets and accounting books, so I’ll admit the finances here are a bit fuzzy, but it seems to me that, in plain words the owners can’t control themselves and spend more than they can afford
. If any of us spent more than we could afford for 20 years we’d be declaring bankruptcy. Owners and franchises who can’t afford to spend what they’re spending should board up the windows on their arenas (I’m looking at you, CBJ) and stop crying foul. If you can’t stay competitive in your market with the salaries dictated by the market, then get out of your market. Note: The owners of our San Jose Sharks? They’re OK running at a loss to stay competitive
. We should tip our caps to them.
As for some of the other owners, feel free to blame them for this lockout, starting now.
Top Things I’m Excited To Do During The Lockout
- Watch the proposed Canada/Russia series
- Try to find KHL highlights online
- See Joe Thornton actually suit up with Rick Nash
- Wait for the lockout to end
- Watch the NFL