September 15, 2004

Entering an Ice(less) Age

Today's Musical Selection: "Cold as Ice" by Foreigner

Well, it's official: the NHL announced that it's locking out its players starting tonight at midnight. It's no surprise: the negotiating sessions between owners and players have been so acrimonious as to make the Israelis and Palestinians look like something out of Mister Rogers' Neighborhood. But for real, true hockey fans like me, it's still a discouraging sign. We don't know how long the stoppage will be. All indications are that it will be long. There's talk of losing a whole season, or possibly even two. And the hell of it is, it just might be good for the league. Assuming it doesn't kill the league first.

Which side is right and which is wrong? At this point, it doesn't much matter. Reports are that the players have been making many more concessions than the owners, which is to their credit if true. It's reported that the concept of a salary cap is coming between them (the owners insist on it, the players swear they'll never accept it). If this is true, both sides are dramatic overestimating their own power. The owners don't seem to understand that their league's hold on the sporting public is far too tenuous to even toy around with the idea of losing a whole season. And the players don't seem to understand that their union isn't exactly the MLBPA. Both sides are far too willing to be stupidly stubborn and risk Armageddon. They're both behaving like Dirty Harry with his finger on the nuclear button.

And yet... this is a league in dire need of a new financial model. Stagnant revenues aren't coming close to matching the spiraling growth in salaries. Trying to act like a big-time league on the level of the Big Three (MLB, NBA, NFL) has crippled the NHL. It's not the players' fault -- they were perfectly entitled to sign the absurd contracts the owners were dumb enough to offer -- but any real solution will have to involve a pay cut. The players appear to understand this; it's reported that an across-the-board salary cut was part of their last proposal. The owners are right to pick this fight now; the current salary structure is simply insupportable. Yes, it was largely their fault, but just because you start down the wrong road doesn't mean you have to stay on it until you go off a cliff.

Take the infamous 7-year, $77 million contract handed to Jaromir Jagr a couple years back. Jagr's been openly tanking since he got his money, but that's not the issue. The issue is that given the current financial state of the NHL, no player can be making $11 million a year, not even the best. There simply isn't the sort of revenue out there to make that feasible. And once you have one player making an insane amount of money, other players start using that as a benchmark. And that's a swift road to ruination. The league can survive one guy with an outrageous contract, even if it cripples the team that's paying it. But once other salaries start ratcheting upward to meet it, they're doomed.

But isn't that entirely the owners' fault, you might ask? (In this case, the fault of Ted Leonsis, the ebullient owner of the Washington Capitals.) It is. But that's where a salary cap comes in. Despite what player's unions love to say, it's not a tool to save owners from their own stupidity. It's a tool to save smart owners in small markets from their idiot big-market brethren.

When Leonsis made Jagr the richest player in hockey, none of the other owners got a say. It's probable that at least 25 of the other 29 owners wouldn't have made the same deal. But Leonsis felt that he needed a star, and Jagr was the biggest star available, and Leonsis wanted to make damn sure he got him.

Now, because one or two of your free-spending fellow owners handed out dumb contracts, the price of your own stars is going to go up through no fault of your own. Suddenly, Pierre LaCrease is going to say, "Hell, if Jagr's worth $11 million, I'm worth $7 million." Now, you have two options: You can pay Pierre his $7 million and throw your salary structure out of whack, or you can say no and watch him skate off to some franchise like the Rangers, who seem to exist primarily as a retirement home for players with insane contracts.

Now, every other major sport has found some way to deal with this. The NFL headed the salary explosion off long ago with the imposition of a hard cap. The NBA had a showdown with its union in 1998, and thanks in no small part to that union's incompetence, managed to secure a structure that makes owners very happy. MLB, after a long series of fruitless work stoppages, finally arrived at a livable plan with a luxury tax in 2002, and Billy Beane and the Moneyball A's developed a blueprint for smart teams to win on a budget.

And the NHL? There's no salary cap or luxury tax to slow down rich owners who are itching to win now. The league has a decent revenue-sharing plan, but the total revenue pie isn't large enough. (Unlike MLB, where the problem isn't the size of the pie, but the disparity in the size of each team's slice.) And there's no Moneyball-esque model for low-revenue teams to follow. So a cataclysmic labor showdown probably had to happen sometime. Player's unions are almost never farsighted enough to try to head off problems before they happen.

And while the players are going to have to get used to an end to the crazy salary explosion, the owners will have to adjust to the fact that Gary Bettman's league vision is a failure. Big Slick thought he could make the NHL a league comparable to the Big Three, a league of the same (American) national prominence and revenue scale. For a while it came close, but it ultimately failed. And the sooner the owners realize that, the better.

So in the long run, a long and bloody strike may actually be the best thing for the game. Rumor has it that teams like Atlanta, Carolina, Phoenix and Nashville might not survive a long strike. To be brutally honest, the league is probably better off without them.

So as a diehard hockey fan, I'll make the NHL a deal. Take as long as you need. If it takes a year, fine. If it takes two years, fine. I'll be waiting when you come back. Provided, that is, that you meet the following conditions:

1. Fix the salary mess. Call it a cap, don't call it a cap, I don't care. Just find a structure that both sides can live with that gets the salary structure back under control. Find some way to control runaway rich owners and keep them from poisoning the well for everyone else.

2. Remember your roots. Whatever deal you cut, make sure it protects teams and fan bases that have had long and loyal relationships. No moving the Flames to San Antonio, or the Sabres to Orlando. If the new revenue system doesn't allow small-market teams, especially in Canada, to survive and compete, you've failed.

3. Come back leaner. 30 teams is too many. Let attrition shrink the ranks. Cut back to 26 at minimum. 24 is better. 22 is fine. Even 20 is okay. If you're fixing the salary structure, trim the bloated team ranks too. If said attrition spells the end of the stupid six-division structure and restores the old beloved rivalries from the Wales-and-Campbell conference days, so much the better.

4. Don't waste time with public posturing and drawing lines in the sand. No one cares. Get in the conference room, lock the door, and work together to save the sport, okay? I'm willing to wait as long as it takes, but don't make it take longer than it has to.

I call upon my fellow hockey fans to sign on to this pledge. I know we all hate losing games, and the thought of a hockey-less winter hurts us all. But rather than pressuring them to work out a half-measure just to get back on the ice, I think we'd be better served to have both sides sit down and make the sweeping changes the game needs. Think of the potential loss of the season as an investment in the game's long-term future.

I also wanted to take a moment here to look at the curious case of Art Howe. Howe is the manager of the Mets, for the time being. I always liked him, but I never thought he was cut out for the big-market pressure of New York. Looks like I was right, as the Mets have stunk like toxic waste floating in the East River during Howe's one-year-plus in charge. A week or so ago, the New York papers began buzzing about Howe's impending departure at season's end. Howe was displeased with the rumors, and demanded that if he was to be fired, that the Mets do it now. He met with ownership, and they reached the following compromise: Howe was fired, but he'd stay on until season's end. What the hell is this?

I understand why Howe didn't just quit; he'd rather get fired and keep the money he's due in the remaining two years of his contract. And I understand why the Mets fired him. But why keep him around? Why leave Howe out there as a lame duck, with no authority to speak of, to preside over the end of the mess? I can only imagine two reasons for this: either the team's other coaches refused to take over for Howe, or the team's so cheap that they didn't want to pay Howe not to manage the last two weeks of the season. Neither speaks well of the Mets. Ugh.

And that does it for me today. See you tomorrow!

Posted by Fred at September 15, 2004 05:00 PM

Well, it isn't like we haven't seen this one coming. I agree on just about every point on the NHL, especially concerning the cutting of teams. Florida does not need 2 teams, neither do we need Carolina, Atlanta, Nashville or Phoenix. We also need to figure out a way to keep small Canadian teams viable.

Posted by: frinklin at September 15, 2004 09:27 PM

Thanks for the back-up, Frinklin. I'm opposed to Southern hockey teams in general, but I'm willing to accept teams that build well and draw decently (Dallas and Tampa Bay). And if the NHL can't protect the Calgarys, Edmontons and Vancouvers, the league is selling out its base. I'm still pissed about Quebec and Winnipeg (not to mention my beloved, deceased Whalers).

Posted by: Mediocre Fred at September 15, 2004 11:10 PM

Being a traditionalist, I'm all for cutting back Southern teams (Anaheim, Florida, Atlanta and Carolina, to start). But here's the problem...What if those teams are - while not drawing great or even decent numbers - actually solvent for the time being. Do you, as Bettman, just go up to the Thrashers and say, "Yeah, well, we know you're not going out of business and we got your city to build you a brand new arena, but see, me and the guys were talkin' and we decided that you suck. Bye."

At the very least, that sets bad precent for the future. No owner's going to like subsisting in a league where at any given moment, their team can be yanked out from under them.

Posted by: Papa Shaft at September 16, 2004 04:10 PM

Oh, no no no. I'm not talking about forcibly taking away teams that are otherwise doing fine. That's poor business strategy, and probably illegal besides. Note the use of the word "attrition." I'm simply saying that if a long strike causes some of the weaker Southern franchises to fail, then the league should let them fail. You can't force the Thrashers to disband, but you can refuse to help them if they're teetering on the brink of bankruptcy. This is why I say that a long strike might be good for the game; it'll help clear out the deadwood.

Posted by: Mediocre Fred at September 16, 2004 04:58 PM

On that point, I definitely agree...I just think that it's more difficult than it seems to junk southern teams that hockey fans seem to hate across the board. For example, a lot of people want to see Nashville dead, gone and any knowledge of their existence disavowed. But by all accounts, they've planned for this lockout and have enough cash to weather the storm. So Bettman's not likely to give them the kiss of death (much to the chagrin of most hockey fans).

Anyway, none of that has anything to do with what you've said here, just a point that needs to be made. So my question here, though, is if you're not going to axe southern teams across the board regardless of financial situation, who's going to get the axe to get us down to 26, 24, or even 20 teams?

Posted by: Papa Shaft at September 17, 2004 12:05 AM

Good question, Papa. (Although many of the accounts I've heard about Nashville suggest that they're in iffy shape.) While many of the teams reported to be in the shakiest state are Southern teams, more traditional hockey markets like Pittsburgh and even Chicago may well be threatened by a long strike.

On the one hand, the hockey fan in me would hate to see the Pens and Blackhawks die... a lot of tradition there. It's one thing for a marginal Northern team like Columbus to fold (who'd miss it?), but the old-line teams are something else again. However, the old-school teams in peril are so poorly run that it might almost be better for them to be folded and replaced by new teams with presumably better ownership. Something to think about.

Here's a clearer definition of what I meant by "attrition", for the record: let's say 6 or 8 teams go bust during the strike. The ones in good hockey markets like Chicago and Pittsburgh, you try to stabilize or replace (maybe by moving some surviving Southern teams). The ones in Raleigh and Atlanta, you shrug and move on.

I think hockey needs to give a good hard look at contraction, and I think that Southern teams should be seriously considered for that contraction. But I'm not talking about that here. I'm talking about teams going bankrupt. If you're going to bother with a long strike, why not let the natural workings of the market clear some of the deadwood for you?

Posted by: Mediocre Fred at September 20, 2004 09:08 PM
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