KK Members Blog

KK Members Blog

A Lost Season for “Cost Certainty”

07/22/2010 at 11:43pm EDT

In light of the recent debacle, known as the Ilya Kovalchuk contract saga, and listening to and reading wide ranging opinions on various radio stations and print media, I can’t help but thinking back to the lockout and lost season of 2004-2005.

The main issue of the CBA negotiations was the idea of creating “cost certainty” for the owners. Gary Bettman wanted to ensure that player salaries were linked to league revenues. After a lost season, Bettman and the owners were able to get the salary cap or “cost certainty” that they desired. Player’s salaries are now guaranteed to be 54% of league revenues and teams must meet a salary cap floor.

The salary cap for the 2005-2006 season was set at $39 million with a salary cap floor just over $21 million. In comparison, the current salary cap for the 2010-2011 season is set at $59.4 million with a cap floor of $43.4 million. The salary cap has increased by over 40% in its first five seasons of existence and the cap floor has more than doubled! That is a pretty impressive growth rate considering that returns in the stock market and most people’s pensions have shrunk. What is even more perplexing is that the salary cap floor is now more than 10% higher than the original salary cap.

With the astronomical rise in the salary cap over the past five years, one must think that the league is doing exceptionally well. Unfortunately, one can argue that the league is in worse shape financially than it was back before the lockout. The league still does not have a legitimate national television contract, there are numerous teams that are struggling to survive, and the league actually OWNS a team.

So what is the problem here? With players salaries tied to league revenues and a salary cap, how aren’t the NHL and its individual teams prospering? I am not going to sit here and go through all of the issues with the CBA, as there are many, but I can’t help but think about what is going to happen in September 2011 when the current CBA expires (players can extend agreement to September 2012). Are we, the fans, going to have to sit through another lockout? Are we going to have to endure another lost season? Just thinking about makes me cringe. What spin can Gary Bettman and the NHL owners put on it to make the fans accept another stoppage? In my opinion, there is nothing that they can do or say. They were given the system that they wanted and the owners and general managers of individual teams have found ways to circumvent that system. The Ilya Kovalchuk contract is just the latest example, but there have been numerous contracts handed out that fit the bill including, but not limited to, the Hossa, Savard, Luongo, and Franzen deals.

The funny part about all of this is that the players presented a $49 million cap at one point during the CBA negotiations that was flat out rejected by the league as they were desperate for their “cost certainty”. Well they got it and they better be satisfied with it.

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