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Monitoring Spending

from Sports Business Journal (paid sub.),
NHL Deputy Commissioner Bill Daly said he thinks the rise in spending on players this year is a one-time occurrence, and that he doesn’t think double-digit percentage increases will happen in subsequent years.... As of last week, only four of the 30 NHL clubs had spent less money than they did the year before, and four teams had year-over-year payroll increases of more than 40 percent. “I can’t say I am necessarily surprised where payrolls are,” Daly said. “It’s the nature of the cap system that teams tend to migrate towards the cap.” Coming out of the longest work stoppage in the history of professional sports, the NHL last season set its revenue projections conservatively — $350 million too conservatively, as it turned out. The league had predicted revenue of about $1.8 billion, but the final number was about $2.1 billion. As a result, the upper limit on payrolls was too low, Daly said. This year, it is $5 million, or 12.8 percent, higher. “The reason [spending] grew by a double-digit percentage is we had a payroll range last summer that didn’t reflect what our leaguewide economics were,” Daly said. “I don’t anticipate that we will continue to see double-digit increases in the payroll range on a going-forward basis.” Daly said that although he is not concerned about the market on a leaguewide basis, the league is monitoring the way certain teams are spending on certain players. “It’s clearly something we have to monitor … to make sure the right dollars are going in the right pockets,” he said.

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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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