The Bettman Cartel: Soon to Tumble?
Posted 5:47 PM ET | Comments 15
Bettman is oft’ made out to be the bane of the NHL’s existence by some, and by others excused for simply trying to fulfill the owner’s mandate of selling the game in the U.S. market, ending labor unrest, completing expansion plans, and modernizing the views within the ownership groups.
Let’s look at the body of work of Mr. Bettman.
Since the diminutive attorney took over the job as NHL Commish in 1993, league’s revenue has increased from $400 mil. To $3.3 bil. Two teams were already slated for expansion (Ducks and Panthers), but Bettman was the overseer of expansion that added the Predators, Blue Jackets, Thrashers and Wild.
Bettman was also the architect of the re-location of the Jets, North Stars, Whalers and les Nordiques, and instituted the Canadian Assistance Plan which was also known as the Exchange Rate Equalization Plan.
How do Mr. Bettman’s actions measure up?
First off let’s tackle his efforts to end labour unrest. This can be described as nothing short of epic failure. We are now in our third lockout since Bettman took the league-reigns, and hockey is the only pro sport in North America to lose an entire season to a labour dispute.
The security of a salary cap was supposed to add the cost certainty the owners would require to keep spiraling salaries under control and help the weaker teams to compete and add parity to the league. But for various reasons including blatant cap circumvention tactics by the owners, this has not added the financial stability it was intended to, and the parity in the league is more due to three-point games than the salary cap. Cap circumvention could have been avoided with a little foresight and adding contract restrictions when the last CBA was signed; and should have been.
The temporary resurgence of the NHL’s weak sisters after the last CBA was due to the salary rollback of 24% and had nothing to do with the salary cap. In concert these factors amounts to Strike One.
On to expansion and relocation:
This situation is so bizarre it defies comprehension.
•Relocation of the Jets to Phoenix, who have never made money. Now, currently dropping tens of millions of dollars a year in the midst of an unprecedented league-takeover to ensure the team stays in a losing environment, when the alternative of moving to Hamilton was clearly the prudent option.
•Relocation of the failing expansion Thrashers to Winnipeg.
•Relocation of the Minnesota North Stars to Dallas, who were recently sold in Chapter 11 to Canadian business man Tom Gaglardi.
•Expansion back into the Minnesota market.
•Expansion into Columbus who are currently only second to Phoenix in losses: estimated around $15 million a year.
•Expansion into the hockey hotbed of Nashville Tennessee, where despite heavy local subsidies and an infusion of over $60 mil in ownership dollars over the last three years the team is still losing money.
•Contemplating either relocation or expansion back into the Quebec City market.
•The only two expansion/relocation teams who do not require revenue sharing are the Jets and 'lanche.
Strike Two.
But Mr. Bettman did institute the Canadian Assistance Plan, which saved some Canadian teams right?
Not so fast. Bettman waited so long to bring in equalization some Canadian franchises were barely viable or competitive because they had to offload their best players…mostly to big market American teams.
Foul Ball.
Lastly: Growing the game in the States.
Despite growing league- revenue by 50%, the greatest growth came from Canadian teams and original six franchises, with only two franchises outside of these two groups being profitable as of last year: The Colorado Avalanche and Philadelphia Flyers. http://www.forbes.com/nhl-valuations/#p_1_s_d6_
Strike two-and-a-half.
Why the baseball references? Because Bettman’s negotiations with former baseball union boss Donald Fehr-if they cost the league another season or more-should be the final strike that puts Bettman out at home plate. But hey, this is the NHL, and Bettman will probably get yet another raise.
Factoid: In 2003-2004 the top players in the league made $11 million per season, the top paid player in the league now is Alex Ovechkin with a cap hit of just over $9.5 million a year. In the same time-frame Gary Bettman’s annual income has grown from $3.77 mil to $7.23 mil.
Let’s look at the body of work of Mr. Bettman.
Since the diminutive attorney took over the job as NHL Commish in 1993, league’s revenue has increased from $400 mil. To $3.3 bil. Two teams were already slated for expansion (Ducks and Panthers), but Bettman was the overseer of expansion that added the Predators, Blue Jackets, Thrashers and Wild.
Bettman was also the architect of the re-location of the Jets, North Stars, Whalers and les Nordiques, and instituted the Canadian Assistance Plan which was also known as the Exchange Rate Equalization Plan.
How do Mr. Bettman’s actions measure up?
First off let’s tackle his efforts to end labour unrest. This can be described as nothing short of epic failure. We are now in our third lockout since Bettman took the league-reigns, and hockey is the only pro sport in North America to lose an entire season to a labour dispute.
The security of a salary cap was supposed to add the cost certainty the owners would require to keep spiraling salaries under control and help the weaker teams to compete and add parity to the league. But for various reasons including blatant cap circumvention tactics by the owners, this has not added the financial stability it was intended to, and the parity in the league is more due to three-point games than the salary cap. Cap circumvention could have been avoided with a little foresight and adding contract restrictions when the last CBA was signed; and should have been.
The temporary resurgence of the NHL’s weak sisters after the last CBA was due to the salary rollback of 24% and had nothing to do with the salary cap. In concert these factors amounts to Strike One.
On to expansion and relocation:
This situation is so bizarre it defies comprehension.
•Relocation of the Jets to Phoenix, who have never made money. Now, currently dropping tens of millions of dollars a year in the midst of an unprecedented league-takeover to ensure the team stays in a losing environment, when the alternative of moving to Hamilton was clearly the prudent option.
•Relocation of the failing expansion Thrashers to Winnipeg.
•Relocation of the Minnesota North Stars to Dallas, who were recently sold in Chapter 11 to Canadian business man Tom Gaglardi.
•Expansion back into the Minnesota market.
•Expansion into Columbus who are currently only second to Phoenix in losses: estimated around $15 million a year.
•Expansion into the hockey hotbed of Nashville Tennessee, where despite heavy local subsidies and an infusion of over $60 mil in ownership dollars over the last three years the team is still losing money.
•Contemplating either relocation or expansion back into the Quebec City market.
•The only two expansion/relocation teams who do not require revenue sharing are the Jets and 'lanche.
Strike Two.
But Mr. Bettman did institute the Canadian Assistance Plan, which saved some Canadian teams right?
Not so fast. Bettman waited so long to bring in equalization some Canadian franchises were barely viable or competitive because they had to offload their best players…mostly to big market American teams.
Foul Ball.
Lastly: Growing the game in the States.
Despite growing league- revenue by 50%, the greatest growth came from Canadian teams and original six franchises, with only two franchises outside of these two groups being profitable as of last year: The Colorado Avalanche and Philadelphia Flyers. http://www.forbes.com/nhl-valuations/#p_1_s_d6_
Strike two-and-a-half.
Why the baseball references? Because Bettman’s negotiations with former baseball union boss Donald Fehr-if they cost the league another season or more-should be the final strike that puts Bettman out at home plate. But hey, this is the NHL, and Bettman will probably get yet another raise.
Factoid: In 2003-2004 the top players in the league made $11 million per season, the top paid player in the league now is Alex Ovechkin with a cap hit of just over $9.5 million a year. In the same time-frame Gary Bettman’s annual income has grown from $3.77 mil to $7.23 mil.
Leave a Comment
You must be logged in to leave a comment.Blog Archive
07 The Flames Direction: Maligned by Many, Understood by Few.
08 Jay Feaster: The Inaugural Year. Part I.
10 Jay Feaster: The Inaugural Year. Part II.
10 Jay Feaster: The Inaugural Year. Part III
11 The Calgary Flames and Moneyball.
15 Jay Feaster: The Sophomore Year. Part I.
16 Jay Feaster: The Sophomore Year. Part II.
21 %$#@ Lockout!
26 Flames Playoffs Chances: Reason for Optimism?
08 Jay Feaster: The Inaugural Year. Part I.
10 Jay Feaster: The Inaugural Year. Part II.
10 Jay Feaster: The Inaugural Year. Part III
11 The Calgary Flames and Moneyball.
15 Jay Feaster: The Sophomore Year. Part I.
16 Jay Feaster: The Sophomore Year. Part II.
21 %$#@ Lockout!
26 Flames Playoffs Chances: Reason for Optimism?
They should fine every owner that created or signed these front loaded contracts for hundreds of thousands of dollars and remind them of how stupid they are.
Outside of the original six and Canadian franchises only the Avalanche are profitable? Where did you find that info? I`m going to guess that mostly true but ultimately false. One example: the Philadelphia Flyers.
Agree with egreenvx, Pittsburgh must also make a ton of money.
@egreenxc. The information is taken from Forbes online. But you are right; the Flyers were in the black as well, but they were the only other team. I missed them in my research I will correct the blog and thank you for pointing it out.
@MontrealTheTime...Fobes listed the Penguins as having -.02 million operating income. The only ommission was the Flyers and it was an honest mistake.
Thanks for the response. I wasn't citing any facts with my comment, it was just a preconveived notion. Crazy that Pittsburgh, with all its success loses money. Really good article though.
Hi Montreal, I added the link, since it seems to be somewhat controversial. I was pretty surprised too.
Appreciated, surprised not only by Colorado and Pittsburgh but also San Jose and Nashville being so low despite on-ice success and a dedicated fanbase. Stick any of the teams in the bottom third in a Canadian city with at least 300 000 people and it will immediately become a lot more profitable.
Also Carolina, Dallas...Cup winners all tanking. I thinik hocckey was trendy for a few years not only for fans but also owners.
hey hockey fans this sucks fire gary bettman he wanted a locket he got his wish...if the season started in november or january it will suck so fans dont wait to long there will be no hockey to 2020.
The salary cap is very responsible from creating parity in the league. The amazing increase in revenue is largely due to the strength of the Canadian dollar. But it's also important to realize that the new rules(no more hooking, holding BS) has made the game a lot more exciting and I think that has had a huge impact on bringing fans to the game.
hey we (top 6) flyers and Avalanche are paying for as i like to call them Bettman's bastards. Our ticket prices are through the roof so this idiot can have a team loosing money in the NHL.... The solution is simple: If after five years a team is not making money, its time for them to move or get out of the league. I blame some of these lower teams for the salaries as well. Look at how much the panthers offered players just to get to the salary floor.
Says the fan of the team that offered Weber a heavily front loaded $110M contract. Yeah, it's the lower team's fault. [/rolls eyes]