What are some of the problems that could lead to an NHL lockout?

The NHL is the only major professional league without any semblance of a salary cap, and while this is wonderful for its players, it has wrought financial havoc upon many of its teams. Since agreeing to the current CBA to end the lockout of 94-95, the average salary in the league has jumped from $733,000 to $1.79 million. NHL Commissioner Gary Bettman says that league revenues have climbed from $400 million to nearly $2 billion in his 10 years on the job, but 76% of this goes back to the players in the form of salaries. This perecentage is higher than Major League Baseball (63%), the NFL (64%), and the NBA (58%).

     There is no parity in the NHL compared to other leagues. Since 1995, four teams have won the Stanley Cup: New Jersey (1995, 2000, 2003), Colorado (1996, 2001), Dallas (1999), and Detroit (1997-98, 2002). Not coincidentally, these four teams are some of the biggest spenders in all of hockey. The biggest, the New York Rangers with a payroll of nearly $100 million, has not made the playoffs since 1997. Some pundits may say that this is indicative of some parity within the league, but the stumbling of the Rangers has more to do with a lack of on-ice chemistry rather than money or talent. Low payroll teams like the Ottawa Senators or Edmonton Oilers may reach the playoffs more often than the Rangers, but New York still has the financial resources to raid both of those teams during free agency.

     Everyone loves a winner, and the demands of the casual fan are often burdensome on a franchise. An owner wants as many fans through his turnstiles as possible, so the pressure is always on to form the best team that money can buy. With talent comes wins (more often than not), and with winning come the playoffs (where ticket prices are nearly doubled than during the regular season) and the chance for a championship. This results in a mutual system of financial disarray.

     Owners, feeling the pressure from the fans, open their large wallets and spend frivolously to land the biggest free agents possible. Many times the teams overspend on players just to keep them away from rival clubs, despite the obvious knowledge that they are overspending. Fans in turn continue to purchase the overpriced tickets that are a byproduct of these inflated salaries.

     The problem has not been so much the willingness to spend, but the lack of common sense used when throwing money around. Average salaries for top players hovered around $1-$3 million dollars just ten years ago, but now the top players in the game are receiving up to $11 million per season, and even that is not enough for some. Fourth line players now average $1 million per season. Now it is not uncommon for fringe players to receive big money deals. Martin Lapointe, a third line grinder for the Detroit Red Wings, came into the 2000-01 season having never scored 20 goals or 60 points in an entire season. After scoring 27 goals and 57 points that season, he immediately signed a contract with the Boston Bruins for $5 million per season. In the three seasons after signing, he scored 31 goals and 67 points total. The third leading scorer in the NHL for that season, New Jersey’s Patrik Elias, received an 11% raise the next year to a whopping $750,000. Role players are indeed important to a successful team, but not at such exorbitant prices. Star players deserve the top pay in the league, but the rapid ascent of the pay scale over the last nine years has escalated to a problematic level. You can see the salaries of some of the top players in the NHL before the last lockout began, and how their current salaries have escalated here.

     Simply put, salaries have risen to the point where owners do not (and some who cannot) want to pay them, while players have become so accustomed to financial freedom that a salary cap is unacceptable to them. Player costs have risen faster than the revenue streams intended to pay them.

Next: The NHLPA vs. the NHL owners: Who wants what and why?