When National Hockey League Commissioner Gary Bettman looks at his 30-team domain that stretches from Los Angeles to New York and from suburban Miami to Montreal, he sees franchises losing money because, “despite an absolutely phenomenal growth in revenue, salaries have increased at an even faster rate.”
According to Bettman, establishing “a rational relationship between revenues and expenses” is the paramount problem that must be resolved when the league and the NHL players association construct a new collective bargaining agreement to replace the one that expires Sept. 15, 2004.
In last week’s two-hour Tribune interview, Blackhawks President Bill Wirtz refused to discuss issues involving the league as a whole because of a mandate from Bettman ordering franchise holders and their executives to confine their comments to matters relating to their own teams.
Wirtz referred these questions to Bettman, and the commissioner addressed them in a telephone interview.
Q–Have you and the players association’s executive director, Bob Goodenow, made any progress on the road to a new collective bargaining agreement?
A–We continue to chat informally as we have throughout the course of our relationship. I don’t think we’re in a position to report anything substantive at this point. I’m an optimist. I believe at a time when the union is more comfortable we’ll get to taking care of business.
Q–Buffalo and Ottawa are bankrupt, Bill Wirtz says he’s losing approximately $15 million and several other owners have said that their franchises are awash in red ink. How many teams do you think are losing money?
A–I know exactly how many teams are losing money, but that’s not something we discuss. Even if just one team were losing money it would be one too many. Because we’re not as healthy as we need to be, we need to make some changes.
Q–The cost of operating an NHL team includes travel across North America, scouting in Europe and maintaining a minor-league franchise. The NHL has six teams in Canada, where they pay salaries in U.S. dollars and sell tickets in Canadian dollars that are worth roughly 65 cents U.S. What are the solutions to all of these problems?
A–You point to a variety of issues, but they really mask and divert attention from the core issue, and the core issue is: Despite an absolutely phenomenal growth in revenue, salaries have increased at an even faster rate.
There needs to be a relationship between revenues and expenses, but being more specific is not something I’m comfortable in doing. Ultimately we’re going to have to reason behind closed doors with the union and come to a place that makes sense and is fair to both sides and, most important, fans.
Whether or not it involves an imbalance in the short term reasonable people can debate because you can have lower payroll teams being competitive in the short term. But the issue then becomes: How do they retain their maturing players over time? The bigger issue is: Does the imbalance create inflationary pressures that harm the franchises? That’s ultimately the question you have to justify in addition to whether or not there are competitive issues. Ultimately, it will depend on what the new collective bargaining agreement says.
Q–The 1994 collective bargaining agreement establishes a $1.24 million salary cap, no more than half of which can be salary, for entry-level players. Haven’t some teams and players been able to circumvent the intent of the rule by offering performance bonuses?
A–We didn’t anticipate the rookie cap would work the way it wound up working. We believe the way it played out was not what the parties intended at the time. It’s part of the overall mix–we’re going to be looking at everything.
Q–The bankrupt franchise in Ottawa dramatizes the financial problems Canadian franchises have experienced for many years. Wirtz believes the survival of each of the six Canadian franchises is of paramount importance. How important do you think it is to keep franchises in each of these cities?
A–Vital. Vital. Vital. Canada and the NHL are inextricably interwoven. Canada identifies hockey as one of the great unifying sports in the country and frankly Canada is the heart and soul of our game. More than half of our players are from Canada. As big a deal as people think football and baseball are to the United States, hockey is an even bigger deal in Canada. The gold medal Olympic game (pitting Canada against the U.S.) in Salt Lake City was the highest-viewed program in the history of Canadian television.
Q–Wirtz and Blackhawks senior vice president Bob Pulford are strong proponents of returning to regular-season and playoff formats that place much greater emphasis on divisional competition to reinforce rivalries and stimulate fans’ interest in opposing teams. How do you see the situation?
A–When you look at our playoff races for the last five years, there is no question that we have the most meaningful regular season in professional sports. By having conference-based (rather than division-based) playoffs you have to balance a schedule that they’re playing both for a divisional championship and to make the playoffs.
You have to balance between conference play, division play and interdivision play. Every point matters. Last year in the last month of the season, you didn’t know who was going to finish second to 10th in the Western Conference. The team that was 10th at one point could have vied for second; the team that was second could have dropped out of the playoffs (by finishing ninth). We had two teams with 90 points or more not make the playoffs.
When you look at how meaningful our playoff races are, I’m telling you that we’ve got a great regular season.
Next year we are going to a little bit more divisional play as we finish phasing in our current alignment. Teams are going to go from five games against all of their divisional opponents to six, so that’s a 20 percent increase in that regard.
Starting next year basically every team in the West will play every team in the East just once and it’ll rotate each year whether or not it’s home or away. You will only get to see everybody from the other conference once whether it’s in person or on television.
Q–Do you advocate continuation of the participation of NHL players in the Olympics?
A–When you look back at Salt Lake City it was a plus, but it wasn’t easy. Stopping the season, travel, logistical issues and myriad other issues we had to deal with makes it very complex.
It creates a decision that gets made for which there is no perfect right or no perfect wrong answer. It’s a mixed bag that we think on balance was a real positive last year, but that doesn’t mean that it’s correct under all circumstances, and we have to weigh that on an Olympic to Olympic basis.
In Salt Lake City the circumstances were ideal, even though you don’t get a unanimous consensus that it was a good thing. The break was the shortest that it had to be, the wear and tear and travel was the least that it could be and the media coverage was in North American time zones. So, everything worked as well as it could work.
Going to Italy in 2006 presents more problems. It requires a longer break. There’s more travel. You’re out of the North American time zone.
But we’re not yet focused on the wisdom of going to Italy or not–we need to get through 2004 before we can worry about 2006.
