Lockout could do Jets good
Owners, fans stand to gain if forced to take short-term pain
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Hey there, time traveller!
This article was published 13/09/2012 (3791 days ago), so information in it may no longer be current.
NEW YORK — Their timing may be terrible in the short term but history says it will almost certainly go their way in the end.
Mark Chipman and David Thomson haven’t owned the Winnipeg Jets for much more than a year and already they’re going to face a major hit to the wallet if the NHL has to postpone games.
But the lockout of 2004-05 gave Winnipeg a chance to succeed as an NHL market with its institution of a salary cap. If ownership gets its way and trims both the revenue percentage dedicated to salaries and player mobility, Chipman and Thomson will have arrived in the NHL at a fortuitous moment.
The show of support among players in New York on Wednesday, with close to 300 in attendance backing union head Don Fehr, made for a good photo op and certainly the union is in better shape than it has been in some time.
Moreover, the players have a real leg to stand on in this battle. Ownership has mismanaged a number of league franchises and they can’t control their own spending. Those are issues commissioner Gary Bettman should solve with his board of directors and not in CBA negotiations.
But that’s not reality. The owners are asking for as much as they are for the best reason of all — they believe they can get it and they likely will.
That may prove to be unpopular with players but it’s true until proven otherwise. Maybe Fehr really is that good at his job. We will see.
But if Bettman gets his way, the Jets and the people who own and run the franchise will find themselves on even better footing than they are today.
The Jets made money last season under the current CBA model and any improvements to the next agreement from an ownership perspective will provide Chipman and Thomson a little more breathing room and give the franchise more of an opportunity to succeed on and off the ice.
The Jets’ model works in the NHL’s current economic climate but it’s tight and the organization has been transparent in saying it will never be a cap team. If that cap comes down, however, management will be able to compete for the best players available without having to spend beyond its means.
But there will likely be some pain for the franchise before any of these gains can be achieved.
Just in their second year of ownership, Chipman and Thomson have major debt commitments on both their arena and their franchise purchase that must be met whether there is NHL action and the revenue it brings or not. They have also committed to keep their staff on at full pay for the near future as well.
“They told the staff there would be no layoffs or salary reductions for the time being,” said a source within the organization.
The hit to Chipman and Thomson if there is a lockout could be significant. The loss in revenue for True North in the case of a lockout would include gate receipts for 41 regular-season games (the Jets take in just over $1 million per game in ticket revenue) broadcast revenue, sponsorship money and the concessions take. The organization won’t have to meet player costs but the loss of revenue far exceeds any savings and ownership will be on the hook for any losses. No one is suggesting there be any tag days for the duo, who have a combined wealth that skyrockets into the billions, but the Jets are a stand-alone business that must account for itself.
The Jets aren’t unlike the handful of other money-making franchises in the NHL that a lockout will hurt, but once it starts they will become far less likely to cut a deal that doesn’t meet their satisfaction. There’s a reason Bettman said on Wednesday the latest concessions made by the owners in an offer to the players will come off the table on Saturday if a new CBA is not signed.
Once a lockout begins, ownership will draw a harder line and they’ll stick to it. In 2005, the league’s last offer to the players prior to the lockout was $42 million and in the end the players had to accept $39 million. NBA players took a worse deal in their last agreement after a lockout galvanized ownership.
Ownership always has time on its side in these dealings once a stoppage begins.
Players have a finite time to recoup their investment. The latest statistics say the average NHL career is 5.5 years. Losing a season is almost the equivalent of kissing 20 per cent of your career away.
Ownership views their stake as a long-term commitment and once they lose money, they’ll want the new CBA to be meaningful in terms of the overall health of their franchises.
They’ll want their pound of flesh.
For the owners of the Jets and their fans, a lockout will hurt in terms of today. But if history repeats itself, the owners will get what it wants and that will likely be good for the Jets franchise and its fans.
firstname.lastname@example.org Twitter: @garylawless
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