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Think-tank: spread it around, NHL

Better revenue sharing key to keeping fans happy

By: Tim Campbell

Posted: 08/21/2012 1:00 AM | Comments: 0

Dropping itself into a fan's chair on Monday, the Conference Board of Canada voiced an opinion on the brewing labour troubles in the NHL.

One of the main conclusions by report author Glen Hodgson, the board's senior vice president and chief economist, forecasting and analysis, is more revenue sharing would be a good thing for the league's fans as a whole, no matter what its salary cap.

"In our view, more revenue sharing would serve the interests of the fans, as it would create better long-term competitive and operating conditions for the league and its teams," Hodgson wrote after citing recent Forbes figures on the profitability, or lack of, of NHL teams.

Added Hodgson: "Fans care about the end result -- a competitive league in which their team could make the playoffs and compete for the Stanley Cup -- and don't care that much about the specific action to achieve this."

While the board seemed to be siding with players on the call for more revenue sharing between teams, it also expressed an opinion the players' proposal for a three- or four-year term to a new collective bargaining agreement wasn't long enough to convince fans the players are interested in stability.

The Forbes statistics presented in the report say just 12 NHL teams were profitable in 2011, and that the top eight teams made about $230 million.

No updates or estimates of figures have yet been reported for 2011-12, but other than the situation of the Winnipeg Jets transfer from Atlanta, the financial situation of the league isn't thought to be much different.

In the league's first season back in Winnipeg since 1996, the Jets were believed to have generated revenues near $100 million, not far from the league average and likely within the top half of teams in that category.

Jets governor and True North Sports and Entertainment chairman Mark Chipman said in the spring projections showed his team likely would not qualify for league revenue sharing for the season, based on its standing in the top 15 of individual team revenue.

That result would be an improvement of tens of millions of dollars (revenue and net income) for both the franchise and the NHL over 2010-11, when the club was in Atlanta.

But revenue generation league-wide is one of the biggest issues in this labour negotiation between NHL owners and the NHL Players Association.

Several teams have had trouble spending to the league-mandated minimum -- known as the floor -- in the salary-cap system. That floor number has been temporarily pegged at more than $54 million based on formulas in the CBA set to expire on Sept. 15.

The Conference Board's analysis on Monday also conceded fans' interests might not be at the forefront of the hard negotiating to come.

"This is a battle between millionaire players and multi-millionaire or even billionaire owners," Hodgson wrote. "They may pay lip-service to the fans and to doing the right thing for the game but at the end of the day, the issue is who gets what share of the pie.

"But if the teams and the players both thought about the fans for just a moment, they might reach a deal that makes sense for all."

tim.campbell@freepress.mb.ca

Republished from the Winnipeg Free Press print edition August 21, 2012 C2

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