IT ALL COMES DOWN TO DOLLARS & SENSE

As the NHL prepares today for the start of the Stanley Cup finals, it can look back on some noteworthy highs this season.

A record 17,981,741 fans attended games in 27 cities, continuing the league’s exploration of new areas. A record 23.9% of roster spots were filled by players born outside North America, reflecting a growing talent pool that enhances the NHL’s international flavor and appeal.

Games generally flowed better than in previous years because of rule modifications designed to reduce obstruction and increase scoring, and the introduction of a two-referee system. In the first two rounds of the playoffs, 34 of 70 games were determined by one goal and 75% by two or fewer. Ratings declined in the final year of the league’s contract with Fox but playoff ratings on ESPN and ESPN2 are up, although they are still microscopic compared with baseball, basketball and football. Ratings in Canada also increased. ABC will carry fewer weekly games next season, but will pay $600 million over five years for over-the-air and cable rights.

Yet, if the league is in good shape from goal line to goal line, club executives say they’re alarmed by what they see on the bottom line.

“The NHL is in real trouble because of salaries,” said Harry Sinden, president and general manager of the Boston Bruins. “The . . . NBA had a very long and tough lockout in order to get the money paid to players to 55% of revenues. We pay over 70% of our revenues to players, and that’s the trouble.”

The financial states of individual clubs are difficult to gauge. Many are privately owned and don’t release financial statements; some are owned by the persons or companies that own their arenas, so revenues can be shifted from one ledger column to another. In court testimony related to the Pittsburgh Penguins’ bankruptcy proceedings, NHL Senior Vice President William Daly said 20 of 26 teams lost money in 1997-98, two broke even and four made money.

The Dallas Stars may make money this season because they have hosted nine playoff games and will play at least two more, today and Thursday. The Buffalo Sabres’ run to the finals will cut--but not erase--a projected deficit of $15 million. And the fate of the Penguins, who filed for Chapter 11 bankruptcy in October, remains murky. NHL executives hope a reorganization plan filed by Mario Lemieux will be approved by creditors and U.S. Bankruptcy Court Judge Bernard Markovitz on June 24. In the worst-case scenario, the Penguins would be sold and moved or dissolved by the league and its assets sold to pay creditors.

Estimated losses this season range from $30 million for the Carolina Hurricanes to $2 million for the Montreal Canadiens, who are experiencing their first red ink. Other losses are pegged at $20 million each for the Kings, Washington Capitals and Tampa Bay Lightning, $17 million for the St. Louis Blues and about $7 million for the Mighty Ducks, their first loss in six seasons.

“I don’t like when any of our clubs loses money, and if any of our clubs is losing money, they can reduce their expenses,” NHL Commissioner Gary Bettman said. “Our revenues have never been higher and our attendance has never been higher. Our TV revenues have never been higher. Our vital signs have never been better. That doesn’t mean there are no issues we have to deal with, but our vital signs have never been stronger.”

Salaries have grown faster than revenues each of the last two seasons and average about $1.3 million, but Bettman said the Penguins’ woes aren’t a sign fiscal Doomsday is near.

“Pittsburgh has always been a terrific hockey market for us, but the club was purchased in 1991 on a leveraged basis and it has accumulated too much debt,” he said. “We are hopeful the Lemieux plan will be confirmed so we can move forward and the Penguins can move forward.”

The Penguins loom largest among the problems that seem to pop up each time Bettman puts out a fire.

The New York Islanders, who want a new arena but can’t pay for it, have begun dumping high-salaried players. Owners Steven Gluckstern and Howard Milstein want to sell the club, but no legitimate buyer has emerged.

Rod Bryden, chairman of the Ottawa Senators, said his club may be sold and moved to the U.S. after next season because it bears a heavy tax burden and is hurt by the unfavorable exchange rate on Canadian money.

“I think [there are] some real positives in the league, in that the footprint has grown throughout the U.S. and into California and the South,” said Greg Jamison, president and chief executive officer of the San Jose Sharks. “But there are also a lot of things we need to take into consideration, such as the Canadian teams. I’d like to see them stay put, and we all want to find a way so that can happen.

“Unfortunately, the expense side has grown so dramatically, it has become difficult from an expense viewpoint to make owning a hockey club a positive investment. I’m not sure revenues have matched salaries, and there are other expenses to consider too, such as travel. We talk about what other businesses we can get into, but first we have to control costs and at least stay in the ballpark as far as revenues and expenses are concerned.

“You hate to have ticket-price increases. You want to have 8-year-old kids and families coming to games, and if you raise prices past a certain point, that won’t happen. There’s a real dynamic tension there. We have to figure a way to control costs, maintain revenue streams and find new revenue streams.”

By next season, 19 teams will play in arenas that are not even 10 years old and feature money-producing suites. Two more are planning new arenas. Yet, even these pleasure palaces may not be lucrative enough to keep owners happy.

“The financial state of the league is a real concern to me,” said Dave Taylor, the King general manager. “Economics are a real issue and we’ve had budget meetings to talk about that. Even moving into [the Staples Center], the picture is not good for us. The biggest expense leaping ahead is player salaries. Although we do have ourselves to blame, we have to rein in costs.”

Said Pierre Gauthier, the Duck general manager, “We pay the players too much money for the revenues we have. That’s the short conclusion you can bring to anything you analyze. . . . In any business you want a return on your money. You’re not happy when you’re president of a company that’s losing money.”

General managers are happier when they look at the game itself. They say obstruction has decreased, games are more entertaining and the talent level is high. Scoring didn’t rise--teams averaged 5.27 goals a game, close to the 5.28 average of 1997-98--but they attribute that to superb goaltending, and no amount of tweaking the rules will change that.

“The important thing for a league when you look at competitiveness is the ability of as many teams as possible to win any night,” Gauthier said. “There’s not a game played in this league that you know what the outcome is going to be.”

Kinks must still be smoothed in the two-referee system, but it has won approval from old-guard conservatives such as Sinden.

“I had a strong concern we’d have too many penalties called, but that hasn’t been the case,” he said. “They’re calling the stuff behind the play, and that’s great.”

Sinden said he would like to see more scoring, but he’s satisfied with the quality of play as the NHL moves toward a 30-team league in 2000-01.

“When we had our last expansion and the expansion before that, in ‘79, I had my doubts,” he said. “I thought the skill level would go down because the supply of talent wasn’t available to stock all those teams.

“But more people are playing the game and we’re getting players from new places, including Scandinavia and the U.S. and some of the smaller European countries, like Slovakia. We didn’t have to look as far when it was a six-team league, but when you’re forced to do it, you find there are resources out there.”

Bettman said discussion will be reopened on the crease rule, which mandates that a goal must be disallowed if an attacking player is in the crease unless he is pursuing a puck that’s in the crease.

“The problem with zero tolerance is whether we should also consider no harm, no foul,” Bettman said. “From a rules standpoint, everybody thinks we had a good regular season. In terms of the tweaking we did last summer, I think we did very well.”

Overall, he said, “We continue to be heading in the right direction. It’s not going to take one year or two or five. But of all those franchise issues we had a few years ago, we’re down to three or four. Think about all the franchises that have gotten new owners in the last few years. But most important, the game is fundamentally sound.”

NHL COMPARISON

SALARY vs. REVENUE

Percentages of total revenues devoted to player salaries:

NHL: 70%

NFL: 63%

MLB: 59%

NBA: 55%

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SALARIES

Comparing the major leagues:

NHL: $1,300,000

NFL: $1,012,000

MLB: $1,720,050

NBA: $2,818,000

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NHL AVG. SALARY

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: $892,000

1996-97: $984,500

1997-98: $1,167,713

1998-99: $1,300,00

Source: NHL Players Assn.

Note: Salaries are in “mixed” dollars. Salaries of players paid in Canadian dollars are averaged in with those paid in U.S. dollars.

STANLEY CUP FINALS

BUFFALO SABRES vs. DALLAS STARS

GAME 1: Tonight at Dallas, 5, Channel 11

GAME 2: Thursday at Dallas, 5 p.m, Channel 11

GAME 3: Saturday at Buffalo, 5 p.m., ESPN

GAME 4: June 15 at Buffalo, 5 p.m., ESPN

GAME 5*: June 17 at Dallas, 5 p.m., Channel 11

GAME 6*: June 19 at Buffalo, 5 p.m., ESPN

GAME 7*: June 22 at Dallas, 5 p.m., Channel 11

* if necessary

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ALSO

PRETTY ISN’T EVERYTHING: Don’t expect the Stars and Sabres to win style points in the finals. Boring or not, they concentrate on defense. Page 4

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NHL TV Ratings

ESPN

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Season Ratings Households Playoff Ratings 1992-93 .8 491,000 households 1.3 1993-94 .7 439,000 households 1.4 1994-95 .9 589,000 households 1.4 1995-96 .8 545,000 households 1.8 1996-97 .8 570,000 households 1.7 1997-98 .7 516,000 households 1.2 x-1998-99 .59 447,000 households 1.05

Season Households 1992-93 794,000 households 1993-94 883,000 households 1994-95 852,000 households 1995-96 1,230,000 households 1996-97 1,230,000 households 1997-98 918,000 households x-1998-99 797,000 households

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x- through Game 6 of Western Conference finals

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ESPN2

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Season Ratings Households Playoff Ratings Households 1993-94 .6 84,000 households 6 84,000 households 1994-95 .6 127,000 households 7 248,000 households 1995-96 .5 146,000 households 7 221,000 households 1996-97 .4 187,000 households 7 346,000 households 1997-98 .4 203,000 households 5 278,000 households 1998-99 .32 201,000 households 55 352,000 households

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FOX

Playoffs excluding Stanley Cup finals

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Season Ratings Households Playoff Ratings 1994-95 2.0 1,984,000 households 1.9 1995-96 2.1 2,083,200 households 2.4 1996-97 1.9 1,884,800 households 2.1 1997-98 1.4 1,388,800 households 1.8 1998-99 1.4 1,388,800 households 1.5

Season Households 1994-95 1,884,800 households 1995-96 2,380,800 households 1996-97 2,083,200 households 1997-98 1,785,600 households 1998-99 1,488,000 households

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Stanley Cup finals

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Season Ratings Households Telecasts 1995 3.4 3,372,800 households two telecasts 1996 3.6 3,571,200 households two telecasts 1997 4.0 3,968,000 households one telecast 1998 3.3 3,273,600 households one telecast

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Fox is scheduled to televise Games 1, 2, 5 and 7 of finals. For Fox, each rating point equals 992,000 households.

Sources--ESPN, Fox .