interesting idea for NHL

This is an interesting idea for a restructured NHL, submitted to the Globe and Mail.

It presents the idea of the NHL as a proper business organization, something that provides some true merit and would solve a lot of the problems existing in the league right now.

Of course, there is no way this would happen, but it is certainly an interesting prospect.Is it time to blow the NHL up?


Globe and Mail Update

In a perfect National Hockey League world, there would be no injuries or contract disputes, no bankruptcies or impending labor disputes hovering on the horizon. In a perfect NHL world, there would be no mascots running amok, no $100-plus tickets, no missed calls by the referees and no hockey played well into June.

Of course, even in a perfect NHL world, there would only be one Stanley Cup champion crowned every season. Even if both the Ottawa Senators and the Buffalo Sabres emerge intact from bankruptcy and do not simply disappear from under the weight of their accumulated debts, one NHL team will still have to finish in 30th place every season. Coaches will still get fired; fans will continue to get frustrated and boo underachieving teams and eventually stop attending games because – let’s face it – it’s easier to love a winner than a loser.

The reality is, there is no perfect NHL world, as the Globe And Mail’s four-part series into the state of the game decisively concluded Wednesday.

But the NHL world could get a lot closer to perfect if the league radically altered the way it does business. Instead of negotiating cost certainty or a luxury tax in the next collective bargaining agreement, why not blow the whole thing up and start afresh, an idea suggested by a reader (Robert Walsh), which has some merit and appeal on an intellectual level.

Consider, for example, the following possible scenario:

The NHL, as it now exists, folds. A new company emerges from the ashes, NHL2. It opens for business in 30 cities. It establishes employees (players and management) at each of its different branches, but everyone works for the same company, headquartered in either Toronto or New York.

Current NHL owners receive 51 per cent of the shares of NHL2, which are allocated on the basis of third-party valuations of their respective franchises. A players “trust” is created, which receives 40 per cent of the shares of the new company. Instead of the current system of compensation – in which players sign contracts with their individual teams – each NHL player would get salary and shares (or options) initially and annually based on a formula, which includes years of service, team performance, and primarily personal achievements.

The other nine per cent of NHL2 would go to non-player employees such as coaches, managers, team marketing people and league employees. They would be compensated based on their success, as is the case elsewhere in the working world.

Most importantly, in NHL2, there would be a per-team limit on shares and salary. Players could be traded, and there would still be a draft and free agency. The only difference is, teams would have to work within their annual budgets, minimizing the chance that the New York Rangers could supplement their roster every season with a $2.8-million Mike Dunham or a $3.3-million Boris Mironov.

From year to year, the proportions would be maintained through new share issuances to each pool. Players would compete with each other for theirrelative proportion of the shares, providing them with a financial incentive to succeed in every season, instead of just the years in which their contracts come up, the so-called platform years.

How would NHL2 succeed where NHL1 has failed? Primarily, it would address the fact that the overall NHL financial pie is finite (and compared to other major professional sports leagues, comparatively limited).

Whenever commissioner Gary Bettman discusses the impending labor showdown with the players’ association, he eventually gets around to discussing the need to establish a real partnership among all the principals in the industry. By creating one large, umbrella company, that goal would be achieved.

Secondly, it would eliminate from the discussion, the term “small-market” team. All clubs would start with the same financial resources each season; the team that wins the Stanley Cup would be the one which drafted well, traded intelligently and allocates its resources in the most intelligent fashion.

Think of it as a back-to-the-1980s initiative, when teams such as Edmonton and Calgary perennially iced championship contenders, without the fear of having to sell their best talent to richer, or greedier, fellow owners. Off the ice, the marketing employees in the smaller locations would be asked to meet different goals than the ones in New York or Los Angeles, creating an even playing field, even for support personnel.

Finally, because all the employees of NHL2 owned a stake in the company, they would share a common financial goal and thus work together towards growing the industry.

In good times, everyone would benefit. In hard times, they introduce efficiencies in order to make the enterprise succeed – and perhaps even face layoffs or cutbacks; the same challenges, in other words, that everyone in the working world deals with on an ongoing basis.

In recent months, the rhetoric flowing between Bettman and Bob Goodenow, his NHLPA counterpart, suggests there is a wide gap between their respective goals. The one, Bettman, is trying to stabilize an industry which succumbed to Nortel-like delusions of grandeur in the past decade and grew too big too fast. The other, Goodenow, is trying to lock in the extraordinary financial gains his players made during the NHL’s decade-long spending spree.

Know this though: No matter what you may think of them personally, Bettman and Goodenow are both smart cookies. Put them together on the same team and the odds increase significantly that they could make the industry work better than it does today. Imagine a day when NHL news focusses less on salary disputes and bankruptcies and more on who scored the goals and which team won the game.

In other words, imagine (if only for a brief delusionary moment) a perfect NHL world … before returning to our regularly scheduled programming, already in progress.