Michael Arace commentary: Revenue sharing vital for NHL deal
The NHL, in the form of commissioner Gary Bettman and his negotiating team, and the NHL Players’ Association brain trust, led by union chief Donald Fehr, have finally hunkered down to forge a collective-bargaining agreement. Yesterday marked a third consecutive day of negotiations.
The league-imposed lockout is in its 55th day, and 329 regular-season games and the Winter Classic have been canceled. So, this latest tactic — talking to one another, soberly and for a period of longer than 30 minutes — is entirely out of character, and offers hope.
They might well broker a deal. Will it address the long-term health of the league, top to bottom, and thus stave off future work stoppages? Such a thing is possible provided a form of meaningful revenue sharing is put into place. That is no lock.
The sides are meeting at secret locations in New York and they are keeping quiet about the proceedings. Of course, there always are leaks, and they are feeding a guarded optimism. There remains a chance to have a season of semi-legitimate length (72 games, say) if a deal is soon struck. The issues have been clearly defined and a settlement is somewhere in the middle. One does not need binoculars to see it.
The players received 57 percent of defined, hockey-related revenues under the previous agreement. The owners have offered a 50-50 split, which is reasonable. The players want their current contracts honored in full, and it is a sticking point. Out of whose cut will it come? There is the rub. A compromise can be made by implementing a gradual decline in the players’ share rather than slashing them by 7 percent right off the top.
There are other issues, as well, but nothing that could derail negotiations. Nothing, that is, outside of revenue sharing. Are the rich owners willing to prop up their less-fortunate cohorts? That is the question.
Fehr has long held that more meaningful revenue sharing is the key to having a healthier league, top to bottom. It was his mantra when he led the baseball union. A healthier league leads to greater revenues. Greater revenues benefit all involved.
Under the last agreement, some $150 million of the NHL’s $3.3-billion pie was placed in a revenue-sharing plan. That 4.5 percent is a pittance compared to other major leagues, which share at least 30 percent (baseball) and up to 70 percent (NFL) of certain defined revenues. Granted, the other leagues have greater revenue streams that are easier to divide, but the point still holds: NHL thinking on this subject is arcane to the point of stupid.
The league has been willing to increase its revenue-sharing pool to $200 million, but the players want a heftier commitment. According to James Mirtle of the Toronto Globe & Mail, Fehr is asking the league to funnel its newfound windfall — the 7 percent it wants to cut from the players — and apply that $230 million to the revenue-sharing pool.
The pool would most benefit the six teams that are hemorrhaging the most money, namely, the Phoenix Coyotes, Blue Jackets, New York Islanders, Florida Panthers, Nashville Predators and Carolina Hurricanes. (Quick aside: Although the Coyotes and Jackets are the league leaders in losses, the Jackets’ situation will be improved with their new lease and increased revenue streams).
If Bettman can somehow twist enough owners’ arms and make concessions on revenue sharing, he will be doing something for the good of the game. Imagine that.
He will be laying ground for a healthier league and creating a tighter bond with his primary partners, the players. I do not see him pulling it off.
History has shown that the revenue-rich NHL teams are only nominally interested in subsidizing the revenue-poor teams. They would prefer the players to do it, which is why they locked out in the first place.
At this point, the players are missing paychecks and the rich owners are itching to reopen their gates. There is a deal to be made, and the guess here is that it will not include a more robust plan for revenue sharing. They will kick that one down the road until the next lockout.
Michael Arace is a sports reporter for The Dispatch.