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So the National Hockey League, in its continuing bid to annoy the hell out of its fans and try to justify to them that there is a need for another lockout despite mountains of evidence to the contrary, launched another hilarious salvo into the debate on Tuesday.
RDS reporter Renaud Lavoie reported in two separate tweets (here and here) that a league source told him the NHL is losing money by the barrel, shedding some $240 million over the last two seasons. For reasons that should be pretty plainly obvious to all non-ownership shills, the Players’ Association basically feels the NHL is full of it.
[Related: A plea for sanity amid CBA outrage]
Losing an average of $120 million in both of the last two years seems, well, shocking. To say the least. Sure, there are some teams in bad markets who are assuredly losing money. But for the league, with its revenues at about $3.3 billion last season — and a salary cap tied directly to that number — to act as though there are moths flying out of every team’s wallet whenever the GM opens it is silly.
There was a really good breakdown of that from On the Forecheck yesterday in the immediate aftermath of the Lavoie tweets. Player costs have risen about 30 percent at most since the last lockout, accounting for as much as $1.9 billion. And because we know revenues are $3.3 billion, the costs beyond what players are paid probably climb to $1.52 billion, given that the league is claiming to have lost about $120 million last year. That’s simple math.
So what on earth, then, are teams spending $1.52 billion dollars on that are not covered by hockey-related revenues? The Levitt Report, which was based on data from the 2002-03 season, defined “other costs” as: those related to additional player costs outside salary, bonuses, and benefits; operating costs including everything from what they pay other people associated with the team (front office staff, coaches, trainers, travel, etc.); minor league players, coaches, scouts, etc.; arena and building costs; and additional staff like legal, finance, marketing, and so forth. Man, those seem like they’d add up in a hurry. Wow. Must be expensive, right?
Well, not really. The Levitt Report found that all those things combined, league-wide, cost about $770 million in 2002-03. And so now we’re supposed to sit here and believe that “other costs” have skyrocketed to just about double the money required nine years ago? Well, that’s funny in and of itself.
We’ve been told all along that the reason for this impending lockout, which will now almost assuredly happen, is because player costs are simply too high to justify. Forget the several $100 million contracts being given out this summer by small-market teams — granted, Nashville’s was actually written by Philadelphia, but the Preds took it on — this is a problem shared league-wide.
But what a little math here tells us is that whoa hey they’re paying more to keep the lights on and operate organizations than they’re paying the players. At least, if these numbers are real. And why wouldn’t they be?
So how do they go ahead and blame the players for that, exactly? How do they say with a straight face that the Ilya Kovalchuk contract is to blame for this pending lockout when they’re paying twice as much as they did less than a decade ago to operate a team? Doesn’t make much sense to me, but then I’m not an NHL team owner who’s going to be cashing checks from NBC Sports regardless of whether my team plays 82 games next season, or none at all.
(Which, by the way, seems like it doubly screws the players down the road. They’ll lose out on the hundreds of millions in what is essentially lockout insurance this winter and, thanks to the deal then allowing NBC to get a free year of NHL coverage at the end of the contract, that’s more money lost.)
What’s curious to me is that the NHL is now turning out its pockets for the world to see on Tuesday, just 11 days before the current CBA is set to expire. If there was any legitimate veracity to these numbers, wouldn’t you have expected to see them, I don’t know, around the time everyone’s jaws hit the floor in mid-July as a result of that preposterous first new CBA offer?
It might have softened the blow then. Draconian rollbacks in both the amount of hockey-related revenues to which the players will be entitled, as well as what constitutes those revenues? “Well hey jeez we’re losing our shirts here.” This would have been a reasonable point of attack, right? Not that too many would have bought that kind of talk, but hey, at least a few out there probably would have.
People have talked a lot about the NHLPA having won the war for the hearts and minds of hockey fans this time around, after having been hammered during the last lockout for being greedy and all manner of other bad things. This feels like the NHL trying to get back some ground on that front. Not that it worked. The reaction to the league saying it’s losing money only now, when things seem most dire, was of course a hearty round of laughter, the equivalent of a nerd saying he has a summer camp girlfriend who lives in Michigan. No one buys it, because it would have come up before this — from official channels rather than details squirted out through one media member — if it were true.
The ploy comes off as being exactly what it is: A last-ditch effort to cry poor and save face ahead of this inevitable lockout, the second in seven years and third in 18.
Ryan Lambert is a columnist for Puck Daddy. Follow him on Twitter or whatever.