Kukla's Korner Hockey
by Paul on 07/22/05 at 08:09 AM ET
The league, whose CBA victory speech prominently features the pledge that a new era of hockey marketing is just around the corner, seems to have neither a marketing department nor marketing plan in place. Or, if it does, it's sure kept either or both a double top secret. I'm tempted to suggest that this is simply typical NHL neglect. But that's probably unfair, because honestly, with only 10 months to create a high-powered relaunch campaign engineered by a powerhouse New York advertising firm, there obviously wasn't enough time to hit the ground running. I know, I know, I know. This is a time for celebration, not cynicism. I mean, just look, even Bob Goodenow could sit beside Gary Bettman on the NHLPA dais here yesterday during the press conference at which the union announced it had ratified the hard-cap-percentage-of-the-gross imposed on it by the league. Bettman, who will have much more to say at a New York press conference this afternoon after the Board formally ratifies the document, talked about the dawning of a new age of true partnership between the league and the players. He talked about how the league and the players will now share the risk of the business. Which, of course, is not true at all. The risk has now been shifted entirely to the players, who, in order to even maintain payroll levels that have been set artificially high for this coming season, have to trust the league to increase revenues through creative and aggressive marketing. They have to trust that owners who - for the most part, have no incentive whatsoever to increase revenues - will now work feverishly to do so. Indeed, not only don't owners and the league have incentive to increase revenues, they have incentive to depress revenue. That's because the players' share increases to 55-percent when revenues hit $2.2B; to 56-percent when revenues hit $2.4B; and to 57 percent should revenues ever hit $2.7 billion. This year's payroll range of $21.5 to 39 million is based on a revenue projection of approximately $1.8 billion that is almost certainly optimistic, given both the effects of the cancelled 2004-05 and the widespread cut in ticket prices around the league. If this year's revenue is in fact $1.6 billion, the range next year will be set at $18.8 to 34.8. But if revenues were to grow to $2.4 billion, the range would become $34.8 to 50.8 million. And understand, if revenues grow, it will because they're driven by big-market teams with a selfish interest in increasing the cap. The lower revenue teams - half the league, if not two-thirds of it - have no interest at all in adopting a floor of nearly $35 million.
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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.
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