Kukla's Korner

2008’s Biggest Story

I’m back from a week of non-stop holiday stress interspersed with a few hours of catching up with friends and family. Here’s a lesson I learned this year—if you’re already pressed for time due to various commitments, making two time-intensive holiday gifts is a bad idea. Only one per year from now on.

In any case, I always find year-end stuff to be a little awkward because hockey season is split into two calendar years. How does one judge what’s the biggest story of the year? Do you go with the Stanley Cup champs and ignore the start of the 08-09 season? Do you select a single incident like Sean Avery’s potty mouth? How about an ongoing fiasco like the ridiculous shenanigans happening in Tampa Bay?

No to each of those, I say. I think the biggest hockey story of 2008 is also the biggest global story of the year (no, not Sean Avery).

To some, it may sound boring, but the economic crisis of this year has implications on every single level of hockey and we’re just starting to envision how it will affect things for the next year, and perhaps even next several. So if you’re one of those people that ignores business and political news to focus just on sports and entertainment, I’d suggest at least reading enough to get a general barometer as to how things are going because it will affect you as a fan.

From an on-ice perspective, it’s pretty much a given that the salary cap will go down next season. How will teams react? You have to remember that this isn’t just about general managers working in a way to spend to the cap; it’s about owners knuckling down on their budgets and forcing potential slash-and-burn when it comes to dead-weight salary. So there will be two caps going down—the official NHL salary cap and the internal per-team budget.

This will have two major tipping points: the trade deadline and free agency. At the trade deadline, there may be more caution when making any transactions involving hefty salary since GMs simply don’t know what they’ll be working with for the upcoming season. I imagine that cap-clearing moves, especially for any extended contracts, will be offered for less value than usual. For free agency, all logic points to a cool-down period when it comes to insane contracts for star players (see: Campbell, Brian) and for not-nearly-as-worthy roster fillers (see: Finger, Jeff). If a team is maxed out, it’s going to have to get creative over the off-season in terms of shedding salary, either through buyouts or “Take my player, please!” types of trades.

For players looking to hit that gigantic payday, I’m betting that they’ve missed the golden goose by one season. Sorry Marian Gaborik, things just ain’t what they used to be.

Off the ice, we’re seeing all sorts of instability. When owners have their primary business hit the toilet, their vanity projects don’t seem nearly as important. We’re already hearing reports of that. It’s surprising that attendance hasn’t been too bad so far overall; even markets like Phoenix are seeing a slight growth in attendance. This, perhaps, is the indirect benefit of the charity overtime/shootout point in the standings. By keeping everyone in the middle of the road, way more teams have a sense of “We’re still in it” and fans have a reason to go. There’s usually a drop off for some teams come February and March as they slide out of the playoff race, but I gotta believe that that drop will be even greater this year. And next year? Who knows what season ticket renewals will be like?

Since a large percentage of league revenues are tied to ticket sales, it’ll be interesting to see how teams in individual markets react. Here in the Bay Area, we’re lucky that the recession hasn’t hit us that hard. We’ve also got the best team in the league, so the Sharks ownership has hit a little bit of synchronicity when it comes to weathering the storm. Of course, one only has to look at Detroit, where the auto industry has taken a beating for the past several years and much of the population has begun looking for work elsewhere.

As much as fans love their teams, that whole paying bills thing is always more important. And for hockey fans, the Center Ice package is pretty much the cost of going to one game when you take food and parking into account, so there are other means of getting their hockey fix.

Ticket prices are an interesting formula. At some point, if you lower them just enough, you’ll be able to generate more revenue by inviting more people in rather than keeping ticket prices high and selling less. Some people talk about the bad stigma of a major league sports franchise lowering ticket prices as a sign of a weakness, but I think we’re all smart enough to recognize that the economy is affecting everyone. If a team lowers ticket prices, it’s a gesture of goodwill and (to some degree) smart big-picture business by ownership, not an admission that the league has failed.

In short, the economic crisis of 2008 has its malicious little fingers in just about every area of the NHL, and we’ll know its true impact over the next six months or so. Why then, you might ask, is this my biggest story of this year, not next year? Well, you know how trailers for disaster movies show footage of the actual disaster, not so much the aftermath? Same concept here. The actual economic meltdown is the event—and the story—of the year. How teams, players, the league, and fans handle it in 2009? That’ll be an entirely different journey. With any luck, it’ll be a non-issue at this time next year.

Filed in: Salary Cap, | Mike Chen's Hockey Blog | Permalink
  Tags: 2008, attendance, business, economy

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