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?

By ERIC DUHATSCHEK

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.


16 Responses to interesting idea for NHL

  1. garry1221 says:

    ok… correct me if im wrong, but essentially what it boils down to is an idea sort of like the stock market… not a bad idea in general, though a little hard to completely grasp right now… maybe given a less tired mind it might make more sense than it does now, but still interesting plan

  2. cwhockey says:

    Even though it doesn’t give much detail to the relevant points of the plan, that’s a pretty damn interesting take on how to solve some of the league’s problems.

    Oh, to hell with criticizing the details. I just like that train of thought. Others may find fault with parts of the plan, but I like the idea and the creativity behind it. Even though it’s pretty obvious that it would never happen.

  3. Rushing says:

    Yeah, you’re right…..hard to grasp.

    BREAKING NEWS!!!!!!!!

    BLACK FRIDAY HAS JUST HIT……….THE STOCK MARKET HAS JUST DROPPED 5000 PTS!!!

    That is just taking too big of a risk IMHO

  4. -momo- says:

    Well, in a major stock market crash the teams would suffer anyway, just like they would in a recession.

    Like any other business, it would have to make major decisions and cutbacks in order to survive. Which then leads to the question, why should a sports organization be operated financially from a different point of view than any other business. It is entertainment after all. A stock market crash would devestate the film industry, why should this be different?

    Look at the fan base and income of professional wrestling, now that they have settled their rivalries. I know they aren’t city based, but every wrestler has their fan following, and if one doesn’t sell very well, he doesn’t have to go into backrupcy protection, he’s still taken care of by the organization.

    I’m playing devil’s advocate more than anything else, but a situation where everyone takes care of everyone else is very benificial, in my mind.

  5. Aetherial says:

    If the “shares” were given to the team on the basis of a third party valuation then how can you say each team has the same amount of resources at the beginning of the year? Or am I just not getting it?

    Also, this kind of system either A) means the fans of the big cities are helping out the fans of the small cities basically B) it perpetuates, in writing the current inequity between teams.

    As I don’t fully understand the approach I can only make vague observations.

    This is a like a little communist organization in a free-market society? I dunno, would that work?

  6. garry1221 says:

    ok… now reading it w/ a sell tired mind it seems like what he’s saying would come down to the salary would be a signing bonus, and the options maybe extra incentives like so much more for getting so many goals and so on and so forth, but it seems like every team would have a set hard cap and everyone who plays for u would have to be budgeted into that cap… so while still an interesting idea doesn’t seem to be quite as nice unless something like revenue sharing goes into a general fund type thing and is spread through all the teams which would boost their cap a little and give some room to breathe

  7. cosmos says:

    This might sound perfect, but then you have to assume the players are all lemmings. As soon as a system like this is in place, there would be team bonuses offered to players to play for that team, signing bonuses, etc, etc. and then we will back to the same problem. And the term “lay-offs” does not exist in sports because you still need to field certain amount of players.

    In a perfect world the players would have regular jobs and play hockey just for “the love of the game” and all games would be free to watch. In a perfect world.

  8. Hockey_Fan says:

    Lets get real guys. Owners are greedy. Players are greedy. Nobody plays for the love of the game anymore, maybe a few players. Every player tries to bargain to make the most money not because they care about where they play or the love of the game. Salaries are getting rediculous. I love hockey, playing it and watching it, but deep down inside I really hope the NHL folds. I am a Flyers fan and you know what I have noticed since moving from the Spectrum to the FU center? The true fans do not go to the games because they cannot afford it. It is mostly rich people that know nothing about hockey and just go because they can afford it. Notice why it is much quieter in the FU centre then the Spectrum. 100 hundred dollars a game is rediculous. The NHL needs to fold. Salary caps and luxury taxes are not going to fix the problem of inflated salaries. Beleive it or not people, hockey has changed since the eighties. It is much crappier and no where near as exciting. God look at the All-star game every year, it sucks. The NHL needs to restart and make sure true fans can go to the games and that hockey players get payed what they actually deserve, not what they think they deserve. That’s just my two cents.

  9. aafiv says:

    Why would anyone, player or owner want to be involved in a league where their compensastion in shares is tied to a third-party valuation that could rise and fall… like the Canadian dollar? I think given the choice, all would rather there be real dollar amounts set that can be counted on rather then a share system.

    Don’t get me wrong, this sounds very, very equitable but there is no real incentive for people to move to such a system when they can sign a contract now and be guaranteed a salary instead.

  10. Rushing says:

    That’s just it. You’re basically putting your life in everybody else’s hands. If they say, “Hey sorry, but we’re low on money and can’t assist ya right now.” You’re up the creek. Somebody else is going to tell ya, “Sorry dude, our ticket sales are down and we’re low too, we’re gonna have to pass too.”

  11. aaron says:

    Two problems with this system: #1, it would eliminate all league balance that everyone seems to value so much (basically, return hockey to the dynasy dominated days of old).

    #2, if the players salaries are based on production, they’re going to focus on doing the things that get them the moolah. A great third line center who shuts the other team’s top line down but doesn’t score very many goals is going to get seriously shafted, and you’ll see some of these ppl trying to change their game to make more money. Then again, this could be a good thing, as it would probably open the game up.

    The other thing someone else already said is that this is a communistic system, and when has that ever worked? Way too idealistic for reality.

  12. gprodent says:

    This is a well written article people, and actually a plan like this could work, in a perfect world. For years now I’ve been beating my drum at saying professional sports is heading towards a complete implosion due to free agency. A system like this wouldn’t neccessarily eliminate a free agency styled system, but it would limit the growth of players salaries due to limited funds to be spent by a team. Also one thing I always believed that should be in existence and is not mentioned in momo’s article, performance based contracts. Play like crap, get paid like crap. Play great, and get paid great.

    The one flaw (just to be nitpicky) to all of this is in the end, is that pro sports teams are just plain -GREEDY-…even if a system like this was installed and it flew, the friggin NHL2 would charge prices equitable to what NHL 1 charged anyhows since it was a accepted standard. As Hockey_Fan wrote about the First Union Center, all the people are richer people who go and pay these monies to see the games, because they can. Ever check out what season tickets cost for a pair of decent to good seats? Yeah, like I got $15,000 to piss away on hockey every year, no thanks I’ll pay $150-$200 bucks to get NHL Center Ice….for the year!

    One day…maybe..in the far-off future…Pro sports might be returned to the true fans who love the game…

  13. Hockey_Fan says:

    Great comment, I totally agree with you especially the last things you said.

  14. puckedinthehead says:

    Ummmmm…. Naw…I think I’ll wait till NHL2 comes out on video.

  15. Naslund_Rules says:

    I know it is just an idea but:

    Fans would never go for it. As in anything, it is the contraversy that makes it interesting to follow and they would probably lose alot of fans over it. Secondly (as the writer mentioned), there is always going to be bad teams that lose thier fan base. Considering these factors, a perfect NHL is completly impossible.

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