The expiration of the of the 10-year CBA on September 15th, 2004, was much anticipated for the owners of NHL teams. In the current negotiations, the two primary objectives of the owners are to initiate a salary cap and to initiate revenue sharing.
Simply put, looking at the NHL as a whole commodity, the owners are losing revenue. The solution -- a salary cap.
A salary cap will put a ceiling on the rise in players salaries (which make up 76% of total NHL revenue). Players are refusing the proposal for a salary cap, however, the owners will not budge until a cap is instituted.
The owners are focusing on leveling the economic playing field.
Under the old CBA, it was implied that owners were to stay within its team's budget. However, stronger marketplaces have bigger budgets and consequently can sign more marketable players. This created a downward spiral of owners spending well beyond its planned budget.
Will a cap completeley resolve the problem? Not entirely.
In effect, owners are strongly concerned with the disparity in revenue in the NHL. Cities such as Detroit and New Jersey have healthier marketplaces than Ft. Lauderdale and Anaheim. A stonger marketplace correlates to greater revenue. Without a salary cap, it is near impossible for weaker teams to afford the increasingly high salaries of superstar players. The solution -- revenue sharing.
NHL owners are emphasizing in the negotiations to share revenue equally across the board. This would make the playing field more equal.
Copyright © 2004 Dan Jimmerson. All rights reserved