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A View From The South

from Josh Cooper of the Tennessean,

To help explain where the two sides are from an economic standpoint, and how the lockout may hurt Nashville, The Tennessean talked with Vanderbilt sports economics professor John Vrooman.

You’ve often discussed the NHL’s “Southern Strategy” and the issues that have come with it. Is the league’s lockout cycle correlated to this?

John Vrooman: “Yes, on both the revenue and cost sides, the Sun Belt expansion has put the squeeze on the NHL bottom line.

“On the revenue side, the Sun Belt clubs have been placed in mid-markets with nontraditional hockey fans. This reduces average club revenue and increases its volatility. Risky cash flow is worth less than certain cash flow in financial terms.

“On the cost side, the addition of nine teams in nine years increased the demand for relatively scarce skilled hockey talent, and as a result player salaries exploded from 1995 to 2004.

“The purpose of revenue sharing is to remedy the first problem, and the imposition of the hard salary cap is designed to remedy the cost side of the problem. In the sports business, cash flow certainty is critical on both the revenue and cost sides of the equation.

“The 2005 CBA rectified the cost problem (with the exception of signing players to long-term salary cap-circumventing deals) but the revenue side ... not so much. Revenue sharing is still a major shortcoming in the current NHL.”

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Filed in: NHL Talk, NHLPA, | KK Hockey | Permalink
 

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Note “Player salaries have exploded”  How does not playing help the players.  I’m sympathetic to them but unless they start their own league they don’t have the winning hand.

Their careers are finite, thats’s a fact.  They can’t wait and watch their careers pass by.  The owners don’t have that problem. 

But the owners want to win and ultimately pay the players to do so.

Posted by 13 user names on 11/21/12 at 10:37 AM ET

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About Kukla's Korner Hockey

Paul Kukla founded Kukla’s Korner in 2005 and the site has since become the must-read site on the ‘net for all the latest happenings around the NHL.

From breaking news to in-depth stories around the league, KK Hockey is updated with fresh stories all day long and will bring you the latest news as quickly as possible.

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