What's significant is Brooks numbers are different in terms of what
revenue teams are making, he claims these were the league reported
revenue's in a recent offer, which contradicts the Forbes revenue
numbers, especially on our friends in Manhattan by over thirty
SHARING THE CRUMBS
by Larry Brooks...
March 1, 2005 -- THE NHL has published specific details of each
proposal it has made to the NHL Players Association within the last
three months but the league has steadfastly refused to disclose any
of the financial elements of its revenue-sharing plan for the next
The Post has obtained the heretofore confidential Feb. 9 NHL revenue
sharing model, presented to the PA in Toronto as part of the
league's "compromise trigger" proposal. And now that we've been able
to review it ourselves, we completely understand all the secrecy.
Analysis of the plan reveals stunning avarice on the part of the
NHL's wealthiest franchises and explains why Commissioner Gary
Bettman was able to essentially bribe the big markets into going
along for the lockout ride but now faces an insurrection from those
clubs as the Board of Governors prepares to meet today in Manhattan.
It also explains why the small markets remain so militantly opposed
to unlocking the rinks until the league gains a punitive hard cap.
Based on reported revenues for 2003-04 and a cap plan under which the
players would receive 54 percent of a $2.082 billion gross, with each
club assigned a hypothetical payroll of $34 million, the league would
mandate a total revenue-sharing pool of $88.9M, with only $42.9M
flowing from the top 10 revenue producers to the bottom 15 with the
remaining $46M created by taxing playoff gate receipts, regardless of
the financial status of the postseason participants.
Remarkably, this model would increase the percentage of overall
league-wide revenue-sharing from 11 percent to just 12 percent this
to a great extent created by the NHL's projected $64.8M decline in
television revenue. By comparison, the NFL shares 63 percent of its
revenue; the NBA, 35 percent; and even Major League Baseball divvies
up 26 percent.
The NHL's seven top revenue-generating franchises Toronto, Dallas,
Detroit, Colorado, Philadelphia, the Rangers and Montreal produce
$661 million. Under the league's revenue-sharing plan, these teams
would contribute only $38.2 million to the pool a paltry 5.78
percent of their combined gross earnings.
As a combined result of the meager revenue-sharing and an
artificially low hard cap, these seven teams would reap windfall
profits right out of the box under this proposed CBA. Assuming level
revenue, the Maple Leafs project a profit of $38.8M; the Red Wings, a
profit of $30M; the Avalanche, $26.1M; the Stars, $25.7M; the Flyers,
$22.5M; the Canadiens, $20.4M; and, the Rangers a profit of $17.8M.
At the same time, the relatively small total that would flow to the
15 poorest teams with the Islanders, Anaheim and Chicago excluded
under the plan from receiving aid because they're located in TV
markets with more than 2.5 million households would be at best a
Band-Aid fix for the NHL's neediest franchises.
Indeed, even upon implementation of the plan, the league projects
that 11 teams would lose money in the first year. The Mighty Ducks
are projected to lose $12.8M. The Islanders would lose $11.3M; the
Blackhawks, $10.6M; Phoenix, $10.3M. Incredible. What happened to the
pledge of "guaranteed profits for all"?
What's more, the NHL intends to eliminate revenue-sharing entirely
entirely as league-wide revenues increase. The league assumes that
the imposition of a cap will create greater parity and thus,
automatically increase the gate receipts taken in by small-market
franchises. This, of course ignores empirical evidence from places
like Nashville, where, despite a franchise-best 91 points and first-
ever playoff berth, the Predators' attendance declined last year for
the fifth straight season.
It's clear that Bettman has made different promises to different, and
indeed, competing constituencies within the Board. The large-market
franchises want to stuff their pockets. The small-market clubs want
to suppress payrolls. And so the players are forced to pay . . . and
pay . . . and pay.
The players, that is . . . plus the thousands in the industry who
have already lost their jobs . . . plus the game, itself.
It's been a shell game all along. The league's revenue sharing model
simply proves it.