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NHL Needs Increased Revenue-Sharing, Salary Control to Survive PDF Print E-mail
Articles and Opinions
Written by Maury Brown   
Friday, 14 December 2012 00:00

NHLTry to imagine this: The New Jersey Devils nearly won the Stanley Cup Finals, and in that aftermath, banks could have seized the club and sell it. Think about that: In New Jersey… the Stanley Cup Champion…. seized and sold.

This is the NHL’s biggest issue off the rink. While the league itself sees in-roads with sponsorships, broadcast deals, and advertisers, the fact is, you’re only as strong as your weakest link. In that, all but a handful of clubs are struggling in the NHL.

The Devils are just one of many floundering in red ink. They missed an $80 million debt-service payment and have had to have the league loan them $10 million. In the meantime, the Glendale City Council recently has agreed to pay the Phoenix Coyotes an additional $25 million to keep them afloat.

All told, just 11 clubs were shown making an operating profit, according to the most recent valuations of the NHL. The “haves” fall into clear categories that make the challenges all the more daunting for the league: the Canadian clubs, and those with long, storied histories in large markets such as the Bruins, Red Wins, and Blackhawks.

In the meantime, the average value of a club in the NHL grew 5 percent to $240 million. But, concerns about the league salary cap which is 57 percent of league revenue, is creating problems across the league in places like Columbus, Tampa Bay, and Phoenix.

All of this sits against the backdrop of lockout.

What should be a concern is the model upon which the NHL is standing. Serious consideration into contraction needs to be discussed, which doesn’t bode well in labor talks (after all, you’re discussing eliminating jobs), and beyond that, the NHL needs to consider how revenue-sharing is functioning. Some clubs, namely the Maple Leafs, are pulling in big profits.

So, much like the NBA, the NHL will be where two aspects are colliding that could spell doom: the salary cap and revenue-sharing.

Hockey has arguably has the most hardcore fans, but a league does not live by them alone. Gary Bettman and Donald Fehr have to remember the recent labor history with the sport. They need to be reminded that they are just now climbing out from the darkness that was the loss of the 2004-05 season. Some clubs will surely say that they will actually lose less money, or possibly save money, if games are lost and corrections are made. None of these are easy answers. But, it comes back to that sense of disbelief that the Devils could have been seized by the banks. That black eye that would have the league sitting in the penalty box could be the beginning of the end (again) for the NHL.


Maury BrownMaury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey, and is a contributor to Forbes via his Bizball blog.. He is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network (select his name in the dropdown provided).

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Money Out-Weighing Performance For NY Islanders PDF Print E-mail
Articles and Opinions
Written by Michael E. Jafari   
Sunday, 02 October 2011 19:29

DiPiertoThe season hasn’t even begun yet on Long Island, and there is already goalie drama.

When the puck drops on October 8th, the New York Islanders will find themselves with three NHL-caliber goaltenders on their roster in Rick DiPietro, Evgeni Nabokov and Al Montoya.  Although Montoya seems more suited for a back-up role, the team still has two starting goaltenders which could easily divide a locker room if it isn’t handled properly.

Word out of the New York Islander’s camp is that DiPietro is close to returning from a knee injury that shelved him last season.  It would make sense for the Islanders to rest DiPietro as long as possible, since injuries have plagued him for the past four seasons, and for the fact that he still has 11 years remaining from his ridiculous 15-year $67.5 million contract he signed in 2006.  DiPietro’s extension was the first signing under GM Garth Snow, so the financial burden means the team will do everything they can to give DiPietro starting job.

If DiPietro gets the starting nod, how will Nabokov handle accepting the number two role?  Nabokov came to the island last year, after the team claimed him off waivers back in January.  Prior to the waiver claim, Nabokov signed a one-year deal with the Detroit Red Wings in hopes of proving himself after a messy situation in AKA St. Petersburg of the KHL.  Nabokov never got to prove his worth last year, after he refused to report to the Islanders after he was picked up.  His reasons were that he wanted to play with the Red Wings and didn’t feel he could help the Islanders, who by that time were almost eliminated from playoff contention.

Nabokov’s refusal was disappointing to the team, but it was nothing personal against them or the city.  Nabokov was a star goaltender in the league during his 10-year tenure with the San Jose Sharks, but the team’s constant early playoff exits were starting to irritate the organization and its fans.  When Nabokov’s contract ran out, the Sharks chose not to bring the Russian netminder back in hopes of changing the team’s playoff mentality.  Nabokov’s rejection from the Sharks was very heartbreaking to him, and it fueled his motivation to prove that he was a clutch goaltender in the playoffs.

When the 2010-2011 NHL season came to an end, Nabokov’s hold-out came to a halt, too, as he finally showed up to Islanders camp with the same intention he had back in January.  So far, Nabokov has been the team’s best goaltender in preseason, showing the organization why they were wise to pick him up in the first place.  However, the franchise’s commitment to DiPietro lingers the goalie’s future, and if their “franchise cornerstone” is healthy enough to play, then moving Nabokov sooner than later would be the best case scenario for this franchise.

Islander fans have witnessed many front office blunders, like Alexei Yashin’s ridiculous 10-year $87.5 million contract, and a goalie controversy would just put the icing on the flavorless cake.   If DiPietro struggles early and often, and Nabokov’s motivation just somewhat rejuvenates his career (and the team is winning with him), how can they justify putting DiPietro back in or explain what to do with the remaining 11 years of his contract?  They certainly won’t be able to trade him!

The Islanders could have several trading partners to look to like the Florida Panthers, who are going into the season with journeyman Jose Theodore between the pipes.  Another reason for the Panthers’ interest is a knee injury to their backup Scott Clemmensen, who’ll be sidelined for at least the first month of the season.

Another trading partner could be the Phoenix Coyotes, who saw their Russian star Ilya Bryzgalov pack his bags for Philadelphia and have yet to fill the void.  (We all know Mike Smith is going to have too big of shoes to fill).

The hockey world knows DiPietro’s contract was a mistake and if a rejuvenated Nabokov can provide a spark, then management could have another issue on their hands.  The question is, will they have it in them to cut their loss with DiPietro? Or will they be forced to continue the cycle and pass on Nabokov for hopes of DiPietro meeting the expectations he has yet to reach.  I guess it will be up to Nabokov to force the management to decide.


Michael Jafari is a producer and contributor for WGR Sports Radio 550 in Buffalo, NY.  He also served as the Web Content Coordinator Graduate Assistant for the Buffalo Sabres, Buffalo Bandits and the IIHF World Junior Championship.  You can follow him on twitter: @mikejafari.

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How Potential Lockouts in the NFL and NBA Could Affect the NHL, UFL PDF Print E-mail
Articles and Opinions
Written by Sloane Martin   
Thursday, 10 March 2011 13:27
Florida Panthers
The Florida Panthers are
leveraging possible lockouts in
the NFL and NBA in ad
campaigns

While most of the sports-watching public is awaiting the potential doomsday of both an NFL and NBA lockout in the fall, other sports leagues are looking to take advantage.

The Florida Panthers of the NHL, for example, have started using this advertising campaign on their website, which promotes the Panthers as a viable and desirable option for sports fans in normally crowded Florida market come November.

The slogan reads alongside two juxtaposed pictures of Panthers players and a football and basketball in a beach chair in an ocean setting:

In October 2011: We’re Guaranteed to Play. They’re not!

The Panthers’ campaign works under the understanding that many fans may not be willing to commit to buying tickets to Dolphins or Heat games because of the potential lockouts. In the ad, the organization also promotes its biggest matchups of the season with traditional hockey teams that Florida-transplants from the North may find enticing: Montreal, Chicago, Philadelphia, Toronto, Pittsburgh and Washington.

Since the NBA has some time before the June 30th expiration of its current collective bargaining agreement, the focus has been on the NFL’s negotiating crisis and how fans will respond to not having football every Sunday. The United Football League (UFL) is seeking to bank on the potential NFL lockout.

Even though ESPN authorities have said that they have “no current plans” to adopt UFL broadcasts if the NFL season is cut short or cancelled, the league is pushing itself as an option for professional football this fall.

“Every network is looking at content they have to fill in, and people are seeing us as a potential viable option,” UFL commissioner, Michael Huyghue told TSN.

Huyghue said the league lost $30 million in its inaugural season in 2009 and $50 million last season. But league officials are optimistic about where the league could escalate given the potential for a television contract granted there’s an NFL lockout.

“To be candid, we'd be crazy to quit now if there's going to be a lockout,” UFL Founder and Locos Owner Bill Hambrecht told KLAS-TV. “We'd be the only game in town. Almost under any circumstances, we have to see through what's going to happen with the lockout.”

Huyghue insists that the UFL’s plans are not contingent on an NFL lockout. “It's not a business strategy for us,” he said. “It's potentially an opportunity.”

The Florida Panthers and the UFL are two examples among many sports leagues and individual teams that could benefit from the elimination of competing with the NFL for viewership, attendance and attention.

While the Panthers are promoting an NFL lockout in their advertising, Huyghue and the UFL have approached the issue more cautiously.

“There's been so much anticipation for what a lockout might mean,” Huyghue told ESPN. “We're still around. Just breathing has a lot to do with the chance to succeed.”

Whether the UFL or NHL would actually benefit from an NFL lockout is yet to be seen.


Sloane MartinSloane Martin is the creator of the women's sports blog Same Size Balls. She is a sports broadcaster and freelance writer. She can be followed on Twitter.

 
Cap Circumvention Watch: Bruins Rookie Signs Endorsement Deal With Arena Sponsor PDF Print E-mail
Articles and Opinions
Written by Matthew Coller   
Friday, 12 November 2010 23:12

Boston Bruins rookie Tyler Seguin signed an endorsement deal with Dunkin' Donuts this week. The company plans to use Seguin as the “centerpiece of the company's 'Caught Cold' promotion.” There is no word whether the 19-year-old forward actually drinks coffee, and we're not looking into it, but there is something fishy about Segin's deal.

Several months ago, Denver Post writer Terry Frei wrote that GM's could use endorsement deals as a way to circumvent the league's salary cap. Here's what he wrote:

I was told to look out for how long it took NHL executives to figure out new ways how to not necessarily circumvent or violate the cap, but to at least find imaginative ways to 'massage' it. I’ve always thought the biggest potential for a loophole was if teams found ways to line up extra income for players. Example: Colorado signs an unrestricted free agent for a 'reasonable' deal, and all of a sudden he signs a huge endorsement deal with the soft drink company whose name is on the Denver arena, on the alleged basis that having him playing in the Pepsi Center enhances the value of the naming rights. Or he signs a Wal Mart* endorsement deal. “

As you can see, Dunkin' Donuts is clearly a sponsor at TD Garden, where the Bruins play. Frei said in the article that we've yet to see this type of deal. Maybe we haven't been looking closely enough into players' endorsements and if they are being used to circumvent to salary cap.

According to CapGeek, the Bruins currently have $0 of cap space.

*Frei is referencing the Avs/Nuggets/Rapids/Pepsi Center/Dick's Sporting Goods Park (and Rams) are controlled by the Kroenke family, and Mrs. Ann Kroenke is one of the Waltons.



Matthew Coller is a staff member of the Business of Sports Network, and is a freelance writer. He can be followed on Twitter

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Women's Hockey 'Will Be There' in 2014 Olympics PDF Print E-mail
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Written by Matthew Coller   
Monday, 25 October 2010 20:03

Nobody gets shortchanged more than female athletes.  Often they are either sexualized or ignored all together; sometimes so underappreciated that sometimes the IOC doesn't let them play, just ask women who ski jump.  So, incredibly talented female athletes are forced to look for small victories.  One of those was announced Monday as the IOC said it would allow women's hockey to remain an Olympic sport in the 2014 games, according to AOL Fanhouse. 

During the 2010 Vancouver Games, IOC president Jacques Rogge questioned whether women's hockey had any appeal outside North America.  But, despite finding that South America, Australia and Africa don't play much hockey,  Executive Director Gilbert Felli told reporters on a conference call on Monday that "the program commission had a review, but there were no questions (concerning) the sports that were in Vancouver," Felli said.

The United States and Canada, who met in the 2010 gold metal game, have dominated the sport since it was first brought into the Winter Games in 1998.  Both countries are making efforts to improve women's hockey throughout the world. 

"We are pleased to have confirmed women's hockey inclusion at the Sochi Olympics and look forward to a competition level that will continue to get better across all countries," USA Hockey spokesman Dave Fischer told reporters. "We're fully committed to helping women's hockey around the world."


Matthew Coller is a staff member of the Business of Sports Network, and is a freelance writer. He can be followed on Twitter

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NHL Has Much to Consider with Rypien-Fan Incident PDF Print E-mail
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Written by Matthew Coller   
Thursday, 21 October 2010 05:57

When you see the clip, you can't help but channel Al Michaels' “He did what?!?!” In the name of competition, you can slam someone into a plexiglass, bareknuckle box for awhile or even whack a guy in the leg with a stick and probably not face punishment. What you can't do is what Vancouver enforcer Rick Rypien did: physically assault a fan.

The Associated Press reported Wednesday that Rypien was suspended indefinitely pending investigation for grabbing a Minnesota fan Tuesday night in a 6-1 loss to the Wild. As you can see in the video, Rypien goes after the 28-year-old fan after being assessed a double minor for roughing and a 10-minute misconduct. The NHL will hold a hearing, likely on Friday, to determine how long to keep Rypien out of play.

How long is the question the hockey community has been bouncing around for the last 24 hours or so since the incident. The problem for the NHL is precedent; it is difficult to compare this issue to the Indiana Pacers' Ron Artest jumping into the stands while guard Stephen Jackson threw punches on the court. Artest's actions caused an all-out mob scene, while Rypien's actions were isolated to one fan.

To say it wasn't as bad as the “Malice in the Palace” isn't to say it wasn't bad. Unlike the Pacers' problems, the Wild fan wasn't wild, he was simply clapping.

TheHockeyWriters.com laid out factors that head disciplinarian Colin Campbell will have to consider when suspending Rypien: 1) The fan didn't go after Rypien 2) The fan egged Rypien on after he'd just been in a physical altercation and 3) the league cannot tolerate fan-player altercations.

A few can be added to the list including the fact that Rypien doesn't have any type of record. If this was Sean Avery, he'd be on his couch for the rest of the season. Another factor is that the Canucks' general manager Mike Gillis said Rypien is a good teammate and good in the community. Rypien's management won't be able to eliminate a suspension, but it could help ensure he returns before 2011.

Clearly Rypien broke the rules, but Campbell can't react based on the outcry. The league has to make sure Rypien and other players know the fans are off limits, while keeping in mind no one was hurt and Rypien's reaction was one of human-nature and was not in any way planned or thought out.


Matthew Coller is a staff member of the Business of Sports Network, and is a freelance writer. He can be followed on Twitter

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Hofstra University Radio to Become New York Islanders Flagship Station PDF Print E-mail
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Written by Matthew Coller   
Saturday, 09 October 2010 04:59

The New York Islanders finally found a radio station with the signal strength to provide game casts to listeners, but the choice is raising eyebrows.  Radio Hofstra University (WRHU) will now carry Islanders games.  The fact that the team is going with a college radio station is unique on its own, but the most of the head-scratching is over the amount of participation during broadcasts by Hofstra university students.

Chris Botta, who covers the Islanders for Islanders Point Blank, said the team will keep broadcaster Chris King, but allow Hofstra students to cover intermissions, sideline reporting and even possibly serve as color commentators.  Students would also run all the technical and audio aspects.

The Islanders competition, the Rangers and New Jersey Devils, are on two of New York City’s biggest stations ESPN Radio and CBS-owned WFAN.  BusinessInsider.com columnist Adam Fusfeld said of the move, “This is a pretty embarrassing situation for the Islanders…it’s just one more reason the Islanders need to take the first train out of Long Island.”

While Fusfeld’s words are harsh, he isn’t the only one sounding off, Eric Mirlis, who used to work public relations for the Islanders wrote a seething blog post ripping the team’s decision to use college students, in the post he said:

“Look at every analyst on every broadcast you watch. The overwhelming majority are former players or coaches, who have a knowledge of the game that is more intricate and in depth than anyone really cares to realize. I’ll always be of the opinion that a former player or coach should be in that spot, especially one that has ties to the team that fans can grab onto and relate to on a personal level. You will also find the occasional media member as the analyst. This is how Chris King originally got into the Islander broadcasting biz, how Sherry Ross became the Devils radio analyst and how Suzyn Waldman earned her way onto Yankee broadcasts. None of them played the game professionally, but all had an insight into the game that came with years of being around the game and all deserved the opportunity they got to show their stuff on the air.”

A quality radio or TV broadcast can be a major asset to a sports franchise (think about how much the YES Network benefits the New York Yankees), so it’s difficult to say the quality of a college station’s game cast will be anywhere near the level of ESPN or WFAN.  Not difficult, impossible. Not to mention the move takes away potential  jobs for out-of-work media professionals who have the ability to produce a broadcast.  The Islanders’ move essentially drives down salaries for those working in radio by saying, “why should we pay a pro when a college student can do it for free (or super cheap).”

This is the problem newspapers have run into over the past 10 years or so and the state of print journalism is sad to say the least.  It is understood by all that the move about cutting costs, but if AHL teams who draw 4,000 a night can afford to pay professionals, many are going to ask why an NHL team can not.


Matthew Coller is a staff member of the Business of Sports Network, and is a freelance writer. He can be followed on Twitter

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Labor Issues, Fehr-Bettman Relationship, Take Center Stage as 2010-11 Season Looms PDF Print E-mail
Articles and Opinions
Written by Jeff Levine   
Monday, 04 October 2010 16:10

NHL

Although a potential labor conflict is still over two years away, the upcoming NHL season feels like to many a make or break year.  At some point during the 2010-11 season, the hockey world will get its first look at Donald Fehr 2.0, as the seminal sports labor leader shifts from his short-lived retirement from the MLBPA into a new role with the NHLPA.  Fehr’s leadership is expected to morph the NHLPA from a punching bag into a formidable bargaining force.

Fehr, 62, should be a bridge leader for hockey’s fledgling union.  As an unpaid union advisor, Fehr has already assisted the NHLPA with its new executive director search as well as revamped the union’s constitution.  However, his most significant impacts surely lie ahead.

Many within the hockey world are holding their collective breath in anticipation of how Fehr, once installed, with interact with NHL Commissioner Gary Bettman.  While some believe Fehr will adopt a more militant approach that former union chief Bob Goodenow successfully exploited during the late 1990s, it is more likely that Fehr will take a moderate viewpoint when interacting with whom many refer to as the most powerful person in hockey.

While Fehr will not always adopt an adversarial nature when dealing with the league, there are more than a few contentious issues to be bargained over.  The league’s most important issue is probably tinkering with the salary cap.  League executives will most likely negotiate with the union to reduce the percentage of hockey-related revenue, currently at fifty seven percent, which is allocated toward paying player salary.  Fehr will not give up any percentages without league concessions.

Players will also want to address financial topics as well.  A major sore spot is most likely the escrow concept.  Players, who under the current CBA, deposit eighteen percent of their earnings into a league-mandated escrow account, will want to renegotiate the current escrow system.  Of course there are other issues.  The players want to address NHL involvement with the Sochi Olympics, long-terms contracts, and whether the league and its players can change their relationship from one of being adversarial to one of partnership. There are other issues but, because hockey’s financial landscape is at times precarious, these financial issues will probably be the most fiercely negotiated.

Although the current CBA does not expire for another two years, the NHL and its stakeholders cannot afford another lockout.  Both sides must strike a cooperative tone and negotiate an accord that fine-tunes the new NHL financial model.  The new CBA should also include additional mechanisms to help correct the financial woes that many southern US franchises are still experiencing within this troubled economy.  Now that the NHL has, over the last five years laid a new foundation, both Fehr and Bettman must work together to ensure that this foundation and the momentum of the new NHL is not lost to another lockout.  As the season starts on Thursday, it is only a matter of time until these labor events begin to unfold.


Jeff LevineJeff Levine is a staff member of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He is a sports attorney, and the Executive Director of One Sports and Entertainment, International.

 
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Sat., 3/26 - ESPN 910, Rochester (10:45am ET) - Maury Brown on Donald Fehr and the NHLPA, possible club relocation, more






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