The Boston Bruins were scheduled to host the Phoenix Coyotes Monday night at TD Garden, but for the 15th time this season the arena was dark, costing the team another $3 million in tickets and related spending.
The National Hockey League lockout also is inflicting collateral damage on nearby bars and restaurants — between $850,000 and $1 million per game, according to the Greater Boston Convention & Visitors Bureau. Eighty days into the off-ice fight, representatives of the NHL and its players union remain far apart on big-ticket issues, despite Commissioner Gary Bettman’s estimate that players and owners are losing as much as $10 million and $20 million a day, respectively.
A group of owners and players are scheduled to meet Tuesday in New York to continue negotiations. Meantime, the league continues to bleed money. This is the third lockout in 19 years for the NHL, which has the dubious distinction of being the only major North American professional sports league to have scrapped an entire season — 2004-2005 — because of a work stoppage.
NHL revenues have grown by 50 percent over the past five years, to $3.4 billion, but 13 of its 30 franchises suffered losses last season, according to Forbes magazine estimates. The Bruins, one of the “Original Six” teams, have historically turned a profit and made about $14.2 million during the 2011-2012 season.
Analysts say the NHL’s economic woes stem largely from its failure to practice smart growth. Nine of the clubs in the red are among the 13 that moved or were added between 1991 and 2000, when the league grew from 21 to 30 teams. But the new teams were established in cities such as Anaheim, Phoenix, Dallas, and Nashville, where hockey isn’t a natural fit, and has failed to take root.
“The NHL made a mistake in overexpanding to bad markets, and now it’s trying to make the players pay for that mistake,” said Raymond D. Sauer, president of the North American Association of Sports Economists and chair of the economics department at Clemson University. “It’s that simple.”
The owners contend the underlying problem is not the location of teams but the bloated salaries of players. The salary cap in a collective bargaining agreement that expired on Sept. 15 gave players 57 percent of the league’s hockey-related revenue. The owners’ opening proposal in the current negotiations called for slashing that to 43 percent. The cap refers to the share of league revenue that can be spent on player salaries.
A 50-50 split appears to be the most likely compromise and would bring the NHL closely in line with the National Football League and National Basketball Association, both of which began new labor deals last year after lockouts of their own.
But each side rejected a proposal the other called an even split, because owners and players can’t agree on what types of revenue should be included.
The players union, which fought the introduction of a salary cap during the 2004-2005 lockout, is willing to accept a smaller slice of league revenue, but wants to reduce its share gradually, setting aside $393 million to honor existing contracts. The deal that ended the last lockout reduced the value of all signed deals with players by 24 percent.
“Over the summer, we negotiated business as usual, and I felt like managers and owners were negotiating in good faith,” said agent Wade Arnott, whose top client, Zach Parise, signed a 13-year, $98 million contract with the Minnesota Wild two months before the lockout began. “But my sense is that certainly concessions are being made by the players.”
While club owners are trying to bolster their bottom lines by shrinking players’ paychecks, the NHL Players Association is pushing for the league’s richest teams, including the Bruins, to share more of their revenue so struggling teams remain solvent. The players union has hired Donald Fehr as its executive director and Fehr’s brother, Steve
, as special counsel — a tandem known for bringing increased revenue sharing to Major League Baseball as representatives of the MLB Players Association.
NHL owners currently share an estimated $150 million per year with one another, or about 11 percent of their revenue. Baseball owners share more than 30 percent, and in the NFL, the nation’s most popular pro sports league and a $9 billion annual business, owners share roughly 80 percent.
Donald Fehr has said the NHL Players Association wants owners to increase revenue sharing to as much as $250 million annually and drop some restrictions on which teams are eligible for subsidization. The New York Islanders, for instance, are losing money but cannot receive assistance because they play in a large television market.
Bettman, the commissioner, has countered with a proposed revenue-sharing increase to $190 million a year.
Bruins owner Jeremy Jacobs will probably be an important figure in any agreement. Jacobs, who like all owners is subject to a gag order imposed by Bettman, chairs the NHL’s board of governors and is reputedly a hard-line opponent of additional revenue sharing. He is the league’s second-longest tenured owner, and his team is the NHL’s fifth-most valuable franchise. He bought the Bruins in 1975 for $10 million, and today the club is worth $348 million, according to Forbes.
“The NFL has big, centralized TV deals, so the owners don’t mind sharing as much, but in the NHL it’s more about your team’s ability to procure revenue in your specific market,” said Justin Hunt, a sports attorney and revenue sharing specialist based in Columbus, Ohio.
The Bruins are better positioned than most NHL franchises to generate local TV money because Jacobs owns a 20 percent share of New England Sports Network, which broadcasts most of the team’s games. That means the team will survive and probably do well, no matter what damage the current stoppage wreaks on the league’s fan base.
When a club has a lucrative local television arrangement like Boston’s, Hunt said, “Good luck prying that money away.”Callum Borchers can be reached at email@example.com. Follow him on Twitter @callumborchers.