Jets could be greatly affected by deal

The last time the NHL and NHLPA slugged it out, the results made it possible for Winnipeg to return to the NHL. What happens this time could improve or damage the Jets' ability to compete in the NHL.

The Jets are a middle-of-the-pack team in terms of revenue and the business model they have created using the current collective bargaining agreement and its salary cap calls for them to be a bottom-third club in labour spending.

While budget teams have won championships in professional sport, it is the exception rather than the norm.

Three of the four teams left in the Stanley Cup playoffs spent over $60 million and approached the cap while, the league-owned Phoenix Coyotes spent $55 million.

The Jets, who will wind up somewhere between 15th and 11th in hockey-related revenue among all 30 NHL teams, spent just over $51 million this season, 25th in the league.

They view that as responsible under the league's current economic model and it is exactly what they promised prior to getting the team, immediately after getting the team and throughout their first season. The Jets have been consistent -- "this is what we can spend and this is what we will spend."

They had a better than expected year in terms of revenue and they'll pour that extra money back into the organization by improving the building, enhancing fan experience, paying down debt and upping their scouting budgets.

The organization raised ticket prices by three per cent across the board for next season. The salary cap, under the revenue rules of the current CBA, is expected to rise from $63 million to $69 million, an increase of close to 10 per cent. Ticket revenue for the Jets last year was in the neighborhood of $50 million and the projected increase in labour costs will easily outstrip the added three per cent in seat money.

For Jets fans it becomes quite easy to see their team spending somewhere between the floor and mid-cap for a long time going forward, while a Stanley Cup parade gets foggier in the mind's eye.

The current CBA expires on Sept. 15 and substantive negotiations have yet to begin.

Most of the talk about the coming negotiations centres around the NHL wanting to trim back the players' share of hockey-related revenue. Right now 57 per cent of all hockey-related revenue is available towards the cap and the NHL is believed to be looking for more of a 50-50 split.

In a gate-driven league with as many broken franchises as the NHL has, meaningful revenue sharing isn't possible under the league's current model. The Torontos and Philadelphias aren't going to share the bulk of their ticket money with teams like Phoenix and Florida.

National TV money in the NHL has increased, but each club's slice of the pie is nowhere near large enough to fund a team's labour costs. Until that day, ticket money will remain the lifeblood of the NHL and the haves will never agree to sharing those funds with the have nots.

In order to keep the playing field even the league sees controlling labour costs as the biggest lever, and if one believes the whispers, the NHL wants to pull back on that lever.

The owners have invested in a business and the players are the attraction. They both deserve their share.

But for Jets fans a system that gives their team the best opportunity to compete for a championship is the desired solution. Don't get caught up in what's best for the owners and players.

Worry about what's best for you.

gary.lawless@freepress.mb.ca Twitter: @garylawless

Gary Lawless, Winnipeg Free Press

Republished from the Winnipeg Free Press print edition May 19, 2012 C1