Re: The REAL reason the NHL is shut down!!!

An open letter to all hockey fans.

Well, we're in our third month since the NHL locked out it’s players.
The two sides have not even spoken to each other since early
September. Both sides seem willing to sacrifice and entire season, at
a minimum, potentially, even two seasons. Both sides are entrenched in
their positions.

The owners want a hard salary cap. The players refuse to accept one,
and have even offered a luxury tax proposal. Mediation has been
mentioned by members of the media, among others, even a few potential
candidates names for mediator have been floated around. Both sides
have rejected mediation. Which, of course for the owners, that is
logical. They have their secret agenda, their closed door old boys
network of their own making, and of course, creative accounting. It is
in the owners interest to reject mediation. The players, however,
should be demanding it! This would be a rare chance for the players to
open the door on the owners’ inner sanctum.

The players are being foolish in their rejection of mediation. I know
how the labour dispute will be resolved. It will end with the luxury
tax being adopted. The only question is when the dispute
will be resolved, and how many lives will be lost as a result.

A little history of the NHL and it’s players is in order. Back in the
1950’s a couple of players started to organize a players union, which
the owners, all six of them back then, quashed. The players had been,
for the lack of a better phrase, virtually enslaved by the owners.
They were working for a pittance of what they could have been earning.
Most of them were small town Canadian kids in the big city for the
first time. Eventually, the union, or, "Players’ Association" was
formed in the 1960’s. The labour leader of the players union was a
lawyer named Alan Eagleson, who, it has since been revealed, in
essence, did the owners’ bidding. The wages did get better, but
the players were still under the control of the owners. Then, in
1991, Eagleson was out, and Bob Goodenow was in. This was something
new to the owners. Goodenow stood up for the players, and stood up to
the owners. There was a brief strike by the players which was quickly
resolved, but it must have been an insult to the owners. This
Goodenow guy, and the union had to go. The players were holding out,
and demanding more and more money. In 1994, at the
beginning of the season, the owners locked out the players. Games
came to a halt, and half of the season was lost. The owners blinked
first. They were not prepared for a prolonged interruption in their
business, so they had to settle. The season was reduced to a 48 game
schedule, and life went on.

But to the owners, the union was still there, and they still could not
control it, not like in the good old Alan Eagleson days. So, the cost
of players was going up. And revenues were not keeping pace.

So, the NHL came up with a novel way to bring in money. But, it was
something they could only sustain for a short period of time.
Expansion.They brought in money by selling expansion franchises. The
NHL hired a commissioner in 1993, who was brought on board
specifically to break the players’ association. The NHL was also going
after the big-time US national TV deal. The ‘if you build it, they
will come’ mentality. The NHL expanded, foolishly, into markets that
had never been hockey cities, such as Nashville, or Columbus, and even
into areas that had previously failed as NHL markets, such as Atlanta.
Meanwhile, two Canadian clubs, in Quebec City, and Winnipeg, both went
south of the 49th, due in part to the rise in player salaries, but
also due to the exchange rate between American and Canadian
funds. The NHL extended the 1995 agreement with the players
association, to buy the owners time to prepare for this lock-out. And
this lock-out was designed for one purpose, to break the players’
union. The expansion money has since dried up, and the
non-traditional hockey markets, now that the curiosity factor has
faded, are now withering on the vine. The league built up a war chest
of $300 million. $10 million contributed by each of the now 30
franchises.

The league is full of players that would otherwise barely have the
skill level to compete in an NHL practice, but they are in the league
because there are so many spots to fill. The product on the ice is
suffering as a result, and even old time fans are losing interest.
There are too many teams for the fan to care about, and the big time
TV contract never materialized. The hockey product is going downhill,
and it is, for the most part, all the fault of the owners. The owners,
for the past few years, kept saying that half of the clubs were
losing money, but the owners, of course, failed to identify which
clubs. The owners conducted an ‘independent’ report
on the state of the leagues finances. The owners claimed to have lost
$300 million in the last year. The report, by Arthur Leavit, the
former head of the Securities and Exchange Commission said, low and
behold, that the NHL lost $280 million dollars last year. Of course it
did, the numbers for the report were supplied by the owners! When
asked about the objectivity, and independence of the report, NHL
Commissioner Gary Bettman replied, "he was an independent person,
picked by us." The report also fails to identify the money losing
franchises. All numbers are in a league wide pool.

One of the cruxes of the argument between the owners and the players,
is that the players have never trusted the figures revealed by the
owners. And with good reason. Many of the hockey owners also own the
arenas, broadcasting rights, and other hockey-related sources of
income. So it would be easy, with a little creative accounting, to
have your balance sheet say whatever you wanted, in the manner of the
income the hockey team produced. Or did not produce. The New York
Rangers have been listed as one of the possible money losing teams.
That explains perfectly, how the owners were fudging their books. The
New York Rangers are part of the Cablevision empire, which also owns,
among other things, Madison Square Gardens, the home of the Rangers,
the New York Nicks basketball team, the MSG network, and much more.
Since the Rangers are only a small division of such a large empire,
all of the income earned by Madison Square Garden, even though they
are earned while the Rangers play, could stay within the coffers of
the Gardens. All of the revenue generated by TV would go to the TV
division, and so on. So, in theory, the Rangers could produce a total
of $800 in revenue per person, per game, only $100 total of all that
money would go into Rangers’ accounts. The other $700 would go into
the accounts of other cablevision properties. Though, in the
end, the same organization ultimately, receives all monies.

NHL Commision Gary Bettman has repeatedly said, "this is not about
compromise. This is about cost certainty." It's also about control.
The NHL's control of the players' association.




I wrote this back in October, long before the "Forbes" article came
out.
When Gary Bettman appeared on the CBC a couple of months ago
and was being "grilled" by Peter Mansbridge, Bettman kept insisting
the NHL "can have 30 viable franchises." And he keeps using that as
his justification for what he is doing, The truth of the matter is,
hockey,
at least at this time, CANNOT sustain 30 franchises. The talent pool
is too shallow. The NHL expanded for all the wrong reasons, and
is now sitting in a pile of crap that is their own making!!! One way
or another, the league is going to have to contract. Or, that choice
will be made for them if this lockout drags on long enough.

The league is killing itself rather than own up to the fact that they
have
made stupid descions in the past. GM's continue to run
money losing operations because they are signing mediocre
players to rediculous multi-million dollar salaries! The Alexander
Daigle fiasco was a perfect example of someone who had not
even laced up a pair of skates in an NHL practice, yet he
was signed to an obscene rookie contract. And now, the
NHL is saying that they have to be saved from themselves?
If any other normal business ran the way the NHL did,
they would not be in business long.

The most important message any business needs to project to
it's clients, is that you cannot do without its services. The
public is turning it's back on the NHL. Like a woman's love,
when it's gone, you can never get it back. I think it's time
to get rid of Bettman!!!