NHL Lockout 2012: Will A Revenue Sharing Plan Finally Stabilize the NHL?
Yesterday's meeting between the NHL and NHLPA included talks on revenue sharing. In order for the league and its member clubs to be financially stable, a new revenue sharing plan is necessary.
In these negotiations, one number that both sides like to mention is $3.3 billion. This, of course, represents the amount of revenue that the NHL earned during the 2011-12 season.
Here is another statistic that bears mentioning: according to Forbes, 18 out of 30 NHL teams lost money during the 2010-11 season.
The math doesn't add up, and the discrepancy in income between the teams highlights the problem. Over the course of the 2010-11 season, the Rangers, Toronto Maple Leafs, and Montreal Canadiens earned a combined total of $171 million. The remaining 27 NHL teams lost a combined total of $44 million over the same time period.
As a result, many teams believe that they couldn't operate under the current CBA without losing substantial amounts of money.
This problem explains one of the reasons why players were faulting the owners for the lockout. Many players wondered aloud why the owners wouldn't play under a system that "they created" after the cancellation of the 2004-05 season.
Even though they created the system, the NHL's escalating revenues put some small market teams in the same position as they were in before the league's last work stoppage.
So, how do the two sides fix the problem? The answer is revenue sharing.
It isn't a surprise that teams like the Rangers, Maple Leafs, and Canadiens wouldn't be the biggest proponents of a new revenue sharing program.
However, if a new revenue sharing plan isn't in place, the labor strife that is taking place this year will take place again when the new CBA expires.
In 2005, the league believed that a rollback and the implementation of a salary cap that corresponded with league revenues would make the NHL stronger as a whole. Overall, the league is stronger as a whole than it was in 2005, but there are admittedly "weak links" in the system. Revenue sharing will resolve these issues.
The big market teams may not like it, but revenue sharing will allow the league to maintain or create growth among all of its member clubs and ultimately create labor peace between the owners and the players.
Do you agree with what we said? Did we completely miss the boat? Be heard in the comment section below!
