A YEAR AFTER A BITTER LABOR DISPUTE RESULTED IN LOCKOUT, NHL STILL IS A . . . FROZEN ASSET : Although Attendance Is Off, Optimism Soars at All-Star Break

The season had been saved, and a bitter, protracted struggle was over. Yet no one exulted on the January afternoon that the NHL lifted the 103-day lockout it had imposed upon its players. At the news conference announcing the settlement, Commissioner Gary Bettman had to be reminded to smile.

No one will have to remind Bettman to look happy at today’s All-Star game.

A year ago today, the NHL’s darkest hours had just ended and its abbreviated season was beginning. It’s too soon to assess the impact of the new collective bargaining agreement, but the NHL, although still dealing with several trouble spots, has rebounded strongly from last season’s woes.

“We’re optimistic the growth that we’ve had the last few years will continue,” Bettman said. “Last year and the year before, salaries were up as high as 20%, and this year we think will be well below that. Revenues are going to continue to grow. We are seeing some growth in all areas.

“We didn’t expect to snap our fingers and have it happen overnight. We’re doing things to expose the league and gain recognition and it’s going to take time. We will see the revenue impact over the next few years.”

After getting only one corporate sponsor two years ago, the NHL this season lured nearly a dozen major sponsors who have made significant financial commitments. Sales of NHL merchandise, which reached $1 billion for the fiscal year ending in June 1994, stayed level in fiscal 1995 despite the lockout and the short, 48-game season. Sales are expected to increase this year.

Those figures are crucial because the NHL’s television revenues are smaller than those of the other major sports leagues, leaving teams to depend more heavily on gate and merchandise income. U.S. and Canadian TV deals--including a five-year Fox contract--bring each team about $4 million a season. Each team’s share of merchandising revenues in 1994 was about $1 million.

“Those revenues are critical for the future of the league,” said Howard Baldwin, co-owner and chairman of the Pittsburgh Penguins. “We do well on tickets and luxury boxes, and one of the things Gary is working on is getting league revenues up to the numbers they have in baseball and basketball. It’s going to take time. But it’s got to happen in the next few years.”

To increase international marketing opportunities, the NHL and the NHL Players Assn. agreed that players will participate in the 1998 Olympics under a Dream Team format. As part of that deal, the labor agreement was extended through the 1999-2000 season. The guarantee of peace is a selling point to potential expansion owners, but Bettman said he won’t take applications until he is satisfied that every existing franchise is stable.

In the last year, four franchises were sold--or are in the final stages of being sold--for hefty prices. The Kings were sold for $113.75 million--mostly assumable debt from previous owners--and the Dallas Stars went for $84 million. Neither owns the arena it plays in or has a favorable lease. The Quebec Nordiques were sold for $75 million and moved to Denver, and the Winnipeg Jets, who were sold for $68 million, will play in Phoenix next season. Both moves are to bigger TV markets.

Although Baldwin attributed the Nordiques’ and Jets’ moves to financial losses caused by the lockout, Bettman disagreed.

“The problems in Quebec and Winnipeg transcended what we did with the [collective bargaining agreement],” Bettman said. “Those were market problems and building problems and ownership problems. Those problems may be 20 years old.”

The Jets’ impending move is affecting the NHL’s attendance average. Bitter fans are staying home, leaving the Winnipeg Arena half empty. As of last week, teams had filled 88% of their seats, down from 90% at the same point in 1993-94, the last full NHL season.

The Tampa Bay Lightning, which eliminated a popular $99 season-ticket plan, was down 10% and the Florida Panthers, who are for sale, were down 7% to 87% capacity. The Kings, who missed the playoffs the last two seasons, were at 86% capacity, down 11% from two years ago.

Bettman, however, isn’t alarmed by the decline.

“Our attendance historically gets stronger as the year goes on,” he said. “I predict that compared with two years ago it’s going to be up by the end of the season.”

As an offshoot of the labor agreement, the NHL devised a plan to help Canadian clubs compensate for the weakness of the Canadian dollar. They can get up to $5 million a season from the NHL if they meet specified levels of season-ticket and advertising sales.

Edmonton Oiler owner Peter Pocklington has threatened to move his team if his revenues don’t increase.

“We’re happy to do our share, but the local communities have to do their share,” Bettman said. “All the franchises that had problems, we’re addressing in concrete, long-term ways, not with Band-Aids.”

The league’s board of governors, obviously pleased with Bettman’s handling of the lockout and the direction in which the league is headed, have extended his contract through June 2003.

Despite an $850,000 salary limit for entry-level players, players aren’t suffering under the new agreement. After warning of economic Armageddon if salaries kept climbing faster than revenues, owners are paying more players more money than ever.

Keith Tkachuk, 23, became the NHL’s third-highest paid player this season--at $6.2 million--when the Jets matched a five-year, $17.2-million offer from the Chicago Blackhawks. The New York Rangers gave Luc Robitaille a six-year, $19.2-million deal. Philadelphia Flyer winger Mikael Renberg went from $285,000 to $6.4 million over four years. Teammate John LeClair got $9 million over five years. The St. Louis Blues spent $19 million on five free agents last summer.

“It takes three years to see a cycle, see players come in and sign a second contract, see how the sport grows and the way signings are moving along,” said Bob Goodenow, executive director of the NHLPA. “The game is healthy. It’s growing. There are some trouble spots. As the game grows, the value of franchises increases, and that’s a reflection of the economics the game produces.

“At the end of the day, players’ situation will be reflective of the general economic state of the game, and that’s fair to both sides. Salaries are a reflection of revenues. Owners will claim they have to increase prices to pay players, but they aren’t paying more than they can afford. There are no checks bouncing.”

The average league salary, which according to NHLPA figures rose from $211,401 in 1989-90 to $733,000 (using a mixed formula in Canadian and U.S. dollars) last season, is expected to be $850,000 this season. Six years ago, only two players earned $1 million a season but 147 players will make at least that much this season.

“I think Gary Bettman has done a great job educating all the NHL owners that they can’t continue spending the way they have been,” said Tony Tavares, president of the Mighty Ducks. “No one can spend $1.40 or $1.30 for every dollar they take in. . . .

“I think [the rate of salary growth] will slow. I don’t know that it will slow to the point I thought it would initially. We amaze ourselves with how silly we get and some of the signings we’ve continued to make. There’s no substitute for good business acumen. If you want to do things a la [New York Yankee owner George] Steinbrenner in baseball, nobody will be able to stop salary escalation. . . . If it had been allowed to run away, we would have been in deep trouble.”

Said Mike Gartner of the Toronto Maple Leafs, the president of the NHLPA, “The state of the NHL is very good right now. The game has grown and the wounds from the lockout have healed in most respects.”

Despite owners’ assertions that they were losing money, only the Buffalo Sabres cut their payroll this season. With moves that included trading Alexander Mogilny to Vancouver and not re-signing Dale Hawerchuk, they trimmed about $1.5 million and are at $18.4 million. They lost $12 million last season and will lose as much this season, but their owners recently provided 70% of the financing for a new arena that will open in October.

“I cannot compete with the New York Rangers and go out and purchase unrestricted free agents or tack more money onto contracts,” said Doug Moss, the Sabres’ president and chief executive officer. “We have to be better traders and better drafters and tougher negotiators.

“In New York, you can charge $100 a ticket. In Buffalo, there aren’t a lot of people who would pay that. That restricts your revenue and changes the way you have to do business. We didn’t slash the payroll, we retooled. People tell me they like our team and the potential our kids have. We had a lot of stars but we didn’t always have winning teams.”

Tavares thinks Moss is idealistic.

“The bottom line is, you’re going to get dragged into salary escalation,” Tavares said. “Doug has tooled back and done a great job keeping salaries in control. He has a nice group of kids. But when that group becomes popular and productive and all the kids who were draft picks start their second contracts, they’re going to want more money. Then you retool again. I question how many times you can do that and keep your fans.”

Bettman’s biggest concern is the Panthers. They are successful on the ice but haven’t been able to get local help in building a new arena. Owner Wayne Huizenga claims to be losing $1 million a month.

“Hopefully, they’ll stay [in South Florida], but one way or another we should know soon,” Bettman said. “It’s easy to look for simple solutions. We need 26 stable franchises and I think we’re well on our way to getting 26 strong franchises.”

Tavares is less sure.

“The discrepancy between the haves and have-nots is really growing to an epidemic proportion,” he said. “I really believe until a catastrophe exists, until teams go bankrupt, it won’t be addressed properly. I don’t think we’re near a crisis yet, but this next year will be telling.”

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On the Rise

Average salaries of NHL players. Figures do not include bonuses.

1989-90: $211,401

1990-91: $271,000

1991-92: $368,000

1992-93: $467,000

1993-94: $550,000

1994-95: $733,000

*1995-96: $850,000

* Estimated

Source: NHL Players Assn.

Note: Salaries are in “mixed” dollars. Salaries of players paid in Canadian funds are averaged in without those amounts being converted to U.S. dollars.