NHL Facing Cracks in Ice

As Americans focused on a sporting event with a much higher profile last weekend, the Buffalo Sabres and Ottawa Senators took to the ice -- some would say it was very thin ice, at that -- for a matchup of historic proportions.

Hours before the Super Bowl, the NHL staged what some dubbed the Bankruptcy Bowl and others the Creditors Cup: a game between franchises mired in bankruptcy court proceedings, believed to be a first for any of the four major pro sports leagues.

It would have been fitting if the final score was 0-0, but the Senators won, 4-3, in overtime. Now, as the NHL skates into a pivotal time in its existence, final scores aren’t the only bottom lines that are being closely watched.

Barely a year away from what some players already are calling Armageddon on Ice, the NHL goes into its annual All-Star break this weekend, as the Grateful Dead once sang, with troubles behind, troubles ahead.

It’s not only the two ongoing bankruptcies, which give the NHL four such filings in eight years, or four more than the NFL, NBA and major league baseball combined, although baseball is running the Montreal Expos.

There’s also a pending labor dispute that, in about 18 months, could shutter the sport for an entire season. There are attendance problems throughout the league, involving Original Six teams and newly minted franchises alike. There’s a visible lack of recognizable young players to market the game; the league’s biggest star, Mario Lemieux, has been around so long he now owns his team.

Lemieux’s owner-player status gives him a unique perspective, and he realizes how difficult it will be to sort out the labor mess in a league that has an average higher salary than the NFL but only a fraction of its revenues.

Lemieux has a major stake in the negotiations too. He may be a player, but he has all but said the small-market Penguins, only four years out of bankruptcy themselves, can’t sustain a competitive team without some sort of salary restraint.

Currently, the NHL stands alone among the NFL, NBA and baseball in not having some sort of salary restraint mechanism, either a hard or soft salary cap or a luxury tax.

“It’s the hardest thing I’ve ever done,” Lemieux said of his nearly one-year campaign to extract the Penguins from a messy bankruptcy case. “It’s a lot different when you’re a player. You just play the games, go to practice, get paid, go home to your family.”

Now, he goes home wondering why a team that once had stars throughout its lineup can’t afford to keep them. Ron Francis left years ago, Jaromir Jagr took off in 2001, Robert Lang departed last year and All-Star Alexei Kovalev likely will be next to go.

“It’s getting harder for a market like ours to keep its stars,” Lemieux said.

Those fiscal problems aren’t restricted to Pittsburgh but are commonplace in a league that relies heavily on gate receipts, rather than TV revenues, to pay its salaries. The system worked fine when the economy was good and corporations gobbled up luxury boxes and season tickets, but an economic downturn and stretched-to-the-max ticket prices are taking a big toll. Many corporations have stopped buying tickets while average wage-earners, who have sustained the league for years, find themselves unable to afford but a few games a year.

New Jersey, which won the Stanley Cup in 2000 and returned to the finals in 2001, hasn’t had a sellout all season. Nashville and Phoenix, growing cities once seen as the league’s future, are averaging fewer than 13,000 per game. The Boston Bruins, one of the six original members, is 24th among the 30 teams in attendance; another Original Sixer, Chicago, is 23rd. Half the league’s teams have drawn less than 80 percent of building capacity in at least one season since 1998.

Something that isn’t going down is the payroll. Remarkably, the average NHL player’s salary of $1.64 million -- seven times what it was only 12 years ago -- is higher than the NFL average of $1.123 million, though, of course, NFL teams have twice as many players.

The revenues aren’t close. Each NFL team collected roughly $77 million in TV revenue last fall; NHL teams get only about $6 per million per year, not counting local TV rights, which vary greatly according to market size. The disparity is so great, the NFL’s $2-billion ancillary TV rights contract with the DirecTV satellite service is more than twice as large as the NHL’s deals with ABC, ESPN and its Canadian rights holders, the CBC and TSN.

The six Canadian teams get hit with a double whammy. Their revenues are in the weaker Canadian dollars, but salaries are paid mostly in American dollars. The Senators’ payroll, for example, is $30 million U.S., but is $48 million Canadian.

There’s an even greater disparity between the NFL and NHL in an even more important barometer: fan interest.

According to a Harris Poll of more than 1,000 adult Americans last fall, pro football is the nation’s favorite sport, outpolling baseball by a nearly 2-1 margin. Hockey was the favorite of only one-ninth as many fans as the NFL, ranking below baseball, the NBA, auto racing, college football and basketball. Even niche sports such as women’s tennis and soccer were on about the same level as hockey.

Hockey may be Canada’s pastime, but, outside of a few core U.S. markets, it doesn’t seem to be a way to pass the time for many Americans.

Commissioner Gary Bettman points to cost certainty -- i.e., some sort of salary cap -- to restore economic stability and create the kind of anybody-can-win-this season parity that sustains the NFL and keeps fans interested.

“We must have a system that enables all our clubs to be economically stable and competitive,” Bettman said.

But what price must the league pay to get that once its labor deal runs out in September 2004?

NHL Players Assn. chief Bob Goodenow has begun meeting with players and has warned them to set aside enough cash to sustain them through 18 months -- an entire season and two off-seasons -- of labor strife.

Bettman isn’t predicting any more Chapter 11 filings but suggests some teams will keep watching their once-frozen assets melt away like a snowman in April until there’s a cap in place. The Kings revealed recently they’ve lost $100 million since new ownership took over eight years ago, and the Florida Panthers’ owners are taking out a $30-million loan from the same lenders that came to the Penguins’ rescue during their bankruptcy.

Bettman reportedly will push for a $35-million hard cap, or slightly more than half of the Rangers’ current $69-million payroll. The players are expected to oppose any kind of cap, hard or soft.

That’s not to say some players don’t recognize the trouble around them; Detroit star Brett Hull said last week that 75% of the league’s players are overpaid. In a recent column for the Hockey News, he suggested the league needs some sort of NBA-like soft cap.

Not all of his fellow players agree.

“We have to make a living. We have to support our families. We have to worry about our lives too,” said Kovalev, an All-Star starter. “I don’t know what’s going to happen in 2004, but I hope the winning will be on our side the next time.”

If that happens, the long-term existence of some franchises might be as fragile as a Stanley Cup made of plastic Legos. Maybe that’s why it could have been a bad omen when just such a cup, set to be displayed at the All-Star game, was stolen recently in Las Vegas. It later was returned to police by an Arizona man who had bought it for $50.

Next year, the fans may find out if an entire season will be stolen from them.

“Everybody will be fighting for their lives,” Kovalev said.