| T O P I C R E V I E W |
| The 4th Line Banger |
Posted - 12/30/2008 : 20:50:53
By The 4th Line Banger
In the recent Board of Governors’ meetings, the economy was the hot stove topic. Many teams, specifically in the US smaller southern markets, are really starting to feel the heat. Due to the one thing the NHL does reasonably well (that being handling their finances) at least 70% of the revenue for the 2008-2009 season has already been received. It appears that the salary cap will not move much for the 09-10 season, but should show a reasonable drop in the 10-11 season. This is the largest concern for those smaller market teams in that next year, their revenue will be reduced at the same time they will be expected to maintain their salaries to the same level as the current season. Some of those teams are really sweating right now.
Without going into a ton of specifics, there are less than ˝ of the teams today that are profitable. Of those teams, most of the profit is generated by Toronto, Montreal, New York Rangers, Edmonton, and Vancouver. Those 5 teams pumped in $152 million in profits, with the other 9 profitable teams adding about another $40 million last season. The problem is that the 16 teams in the NHL that lost money last season cost a combined $96 million. The bottom 5 teams alone had around a $55 million loss.
Now, we all should know that simply dropping the losing money teams out of the league would not be a good thing. There will always be teams that have bad years and might go through money losing periods (such as in New Jersey) after spending a lot of capital on arenas. However, there is a growing concern that a few teams (no one knows exactly how many) will be out of business in the next 12-18 months.
If I were comish for a day, I would not wait. That was the mistake that many “normal” companies made. I say, act now. Here’s my plan:
1) 4 teams will be impacted in the 2009-2010 season. 2 will be completely folded (Phoenix and Florida) and 2 (Atlanta and Carolina) will be relocated to other markets. One in Canada and one in the States (Kansas City who are well known to have a rabid sports fans or Las Vegas which has tons of corporate cash). Those two teams will be re-evaluated prior to the 2010-2011 season and for the next 5 season. If they become money losers, they will be folded as well.
2) The NHL will be reduced to at least 28 teams. I would create 2 divisions of 7 teams in each conference. Each team will play the other teams in their division 6 times (36 games – 3 Home 3- away), the other division in the conference twice (14 games one home and one away), and the other conference twice (28 games, one home and one away) for a season of 78 games.
3) The playoff format would have every team play and would go back to a best of 5 playoff series in the first round. This would mean that the division winners would get a bye in the first round of the playoffs. As the season would be shorter by 4 games, this would not add to the length of the current season and would give teams at least one playoff game a year.
If this was to happen starting next season, the NHL would make at the very minimum $50 million more in profits based on 2007 numbers. Above this, each team would be better overall. If 2 teams were folded, and a dispersal draft occurred, it would spread 40-50 players through the league. This does not include any prospects that are in that teams system. Overall, the talent in the league would be more tightly concentrated and the product on the ice would be of a higher quality.
An aggressive plan such as this would almost ensure a painless transition through a tough economic time. This might not have all the answers, but why would the NHL wait to see what happens in markets that were not viable in the best of economic times?? To show the NHL fans that the league is serious about sustainability and the product on the ice, do this starting next season. Plan it and make it sound. Don’t wait until the bottom falls out of a team like Phoenix or Florida and then scramble.
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