Monday, October 1, 2012

An open letter from a cynic

Cynic: a man who knows the price of everything and the value of nothing – Oscar Wilde

Every now and again my cynicism gets the best of me.  Typically this happens during an election year or when there is an NHL lockout.  This year, I get to deal with both at the same time.  For me, that’s like having dinner with my mother-in-law and Nancy Pelosi at the same time.  It’s not so much that elections are happening or the lockout is happening again.  It’s the opinions that swirl around and the passionate pleas from fans for the league and players to resolve their differences and get back to playing hockey. So here we are, about a couple weeks into the NHL’s 3rd lockout in just under 20 years and I can’t take it anymore.  What really grinds my gears are the “open letter to…” blog posts that are written to players, owners, and the league in hopes of resolving short-comings of a player or resolutions to lockouts.  So I leave you with my own ‘open letter post’ written to the rest of the blogosphere in hopes that you take some time to consider the larger picture concerning the hat trick of labor lockouts:

Dear Sir or Ma’am,

It’s time to take a step back pretend the NHL is a for profit business.  If we are able to pretend that, this letter will be much easier to read.  If you view the NHL as a non-profit bringer of rainbows and sunshine to joyous hockey fans everywhere, you will not like this letter. 

We enter another lockout with same tired sheet of music - that lovely tune of  “The league doesn’t make money” composed by NHL expansion and thrice conducted by Gary Bettman. Same as it ever was, teams in cities where hockey is not woven into the fabric of the community struggle to make money.  Being in complete denial since 1994, the NHL has made these items the heart of every work stoppage in the NHL:

1.      Rolling back player salaries
2.      Extending free agency beyond the average length of an average NHL career
3.      Providing owners with a greater share of generated revenues

Another lockout in the NHL serves no purpose, unless it is the lockout to end all lockouts. These three items tell us something.  After expansion and the promise of growth in the “Bettman Era-NHL” the NHL can’t seem to turn a steady profit. The financial predicament of the NHL cannot be solved simply by rolling back player salaries.  I would argue the players at the bottom make too much, but 13 year contracts that teams offer are ridiculous. But any ways, the NHL as a league is an unprofitable enterprise.  This lockout is not about fans, or arena deals, or billionaires fighting with millionaires.  This lockout, like the others before it, is about turning a profit on a poorly marketed niche product in a three-balled obsessed United States.  The NHL is considered one of the ‘Four Major Sports’ because it represents being the pinnacle level at which the sport is played.  It is by no means one of the four most popular sports in the United States – it may barely make the top ten.

What, the NHL marketing is great you say?  The Crosby/Ovechkin era has largely played out on the Outdoor Life Network.  OLN has changed names more the last 7 years than the Lightning have changed ownership groups – and THAT’S saying something.  Not to mention the viewership difference between the Versus Network and ESPN 2 at the time of the switch was equivalent in numbers to the population of Canada.  But hey, we get a couple of also-ran communication majors and the worst personalities (I love Roenick) in hockey giving us a post-game show following the Hurricanes/Flames games on NBC Sports Network.  Yippee.  The NHL niche product is somehow better served on a niche network…

It is sad that Fans suffer through another lockout. But let’s be honest, you’re not really suffering.  You’ll be back to watching “your” team in no time.  Professional athletics plays to the emotional maladies of the fan base, just like reality shows.  Sure you are angry now, but wait, you’ll be back – we’ll all come back.  Are you really angry that there’s a lockout?  Are the players and owners peeing on the fans?  Perhaps it’s the other way around.  What?  You’ve never thought of that?  What if this is the most revenue the NHL will ever generate from fans?  Let’s look at this example: The Columbus Blue Jackets have made the playoffs more than the Toronto Maple Leafs since 2008, so why the $100 million dollar difference in profitability in 2011 between the two teams?  I know Blue Jackets fans, times are tough. You think winning will change things?  It’s funny because you have to change things to win.  Let’s not forget - It took the CBJ 12 years to have a franchise worst season and it took the Tampa Bay Lightning 12 years to win a Stanley Cup. Put that in your crock pot and let that simmer.

Let’s skip to the core of the issue here, the owners don’t make money.  Unless you are some card-carrying communisto, why begrudge the owners a profit?  The owners are allowed to make a profit.  That being said, the owners are also responsible for having equitable SG&A that will improve the bottom line – that stands for Sales Growth & Administration.  Good Arena deals, avoiding 15 year contacts to ouchy goalies, and connecting with a broader fan base with grass roots marketing is what an ownership group is charged with. As an example, I’m not sure how the Blue Jackets were awarded an NHL franchise when they had to take 10 million dollars off the top every season before they even have their first practice. I love the Blue Jackets, but they have been the poster child for “How not to do it” since McConnell sued Hunt.   I don’t know the answer to this, but I would love to see how many other NHL teams have to cover ALL the losses on the arenas they play in.

You don’t think the lockout will last long? I wonder what the players think?  Consider this:  The players don’t get paid for attending training camp or preseason games – players don’t receive their first game check until October.  This year, the players get an 8% escrow payment from last year’s salary in October, so really players wouldn’t feel the financial pinch until mid-November.  So why are highly-paid, marquee guys going to the KHL and European leagues in September when there is really no financial reason for them to do so?  Because a lot of those jobs will be gone when the league decides the season is canceled in December.

So fans and bloggers realize this:  the league is in financial trouble.  The players and owners know it.  This lockout is not about hard-line ideologies.  It’s about finding a solution to bring long term and sustainable profitability to the league without hurting anyone.  But like Santa’s secret workshop, one doesn’t exist.  The league has to take a long look at itself to see if it has done or is doing all it can do to market the world’s greatest sport the best it can.  Using a little perspective, the Cleveland Browns generated 247 million dollars in revenue in 2011 and they stink.  The most popular and profitable team in the NHL, the Toronto Maple Leafs, generated 160 million dollars of revenue.
Is there blame on players and owners?  The players have had this day circled on the calendar since the end of the last lockout and largely did nothing until a couple of weeks ago.  The owners have had 7 years to make money under the current system and have failed as a collective.  I don’t think I need to mention an entire season was lost in 2004-2005 to get the NHL to where it is today.  In my opinion, the league has too many teams in too many cities.  Obviously, the player’s union will never agree to the loss of jobs by contraction, and if the league has the money to buy back 4 franchises, why don’t they have a more liberal, I mean progressive, revenue sharing plan?  The NHL is at its Zenith and the teams that will always make money are the only teams that will continue to make money.  Unless something radical like contraction or universal base-salaries with league paid incentive programs, fans can count on a lockout every 7-10 years. 

Oh, and dear god, growing a mullet to protest the NHL lockout will make you a weirdo, not endear the sport to casual fans.


Morgan Ward

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