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How about some transparency? League continuing to “tweak” finances

November 19, 2020, 7:44 PM ET [11 Comments]
Jeremy Laura
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The kids are alright, and it’s a good thing they’re overseas. The more talks the NHL and NHLPA have, the further off a 20/21 season seems to be. With that in mind, we’re going to do another deep dive and try to get a clearer picture of what is going on.

The tweet embed above seems to indicate where we’re at. In my last blog, the figures were laid out on a new proposal. An additional 13% (total 23%) in deferred salary on top of the 20% escrow. The owners are asking for an adjustment to escrow, in that after 3 years it’s supposed to drop to 6% they are calling for 9.5%. Part of me things the 20 is also being re-examined. The players feel “betrayed” due to the fact that in June the current levels were agreed upon.

Unfortunately, the NHL was bleeding money in the post season. Massive ratings hits (even with prime time viewing as opposed to just daytime), a complete lack of fans buying tickets, and an increase in expenses just proved to be too much. Yes, it’s easy to look back and say “we should have skipped the playoffs”, and I truly feel that way, but it won’t help us now.

If you didn’t see it in the last post, an entire ECHL division has cancelled for the upcoming season. Even teams that work with Toronto and NYR who have exceptionally deep pockets and are probably best suited to handle a season of loss. 8 of 12 colleges in the ECAC have cancelled their seasons, the IVY league has cancelled as well. This is rapidly becoming an eye opening. Players who opted to wait it out instead of head overseas will be more than a little disturbed if they can’t find a job soon.

The players are feeling a pinch, and feel like it just keeps getting worse. I understand that. I think there is a massive disconnect on how bad the losses have really been. The NHL treats financials like players treat injuries. A vague description of “upper body injury” applies to a sprained finger and a punctured lung. As it goes with most businesses, when things are bad you want to soften the blow as much as possible. Right now the league wants players to take a 43% discount and we’re still no closer to knowing what a season will actually look at. That’s not a sprained finger, it’s a missing limb.

We’ve gone back and forth, and here is where I find myself. The ECHL may just shut it all down. If that league can’t make it happen, I don’t expect the AHL to be able too. The salary differential and infrastructure is far more expensive than down in the “E”. To that end, the NHL needs to seriously contemplate whether or not returning at this point is actually feasible. Part of the frustration is that much of damage was known before the playoffs. The push to do all they accomplished may have set everything back even further.

My suggestion to the ownership is this, present what the cap would be based on last year’s losses. If there really is a 30% loss, the cap and floor would drop 30%. Show everyone how many teams could survive that without having to do massive buyouts or waivers. I don’t recommend making any permanent decisions right now, but be completely honest about how bad it is. Find out which teams may not make it through this season. How many season tickets have cancelled or remain non commit all? The NBC deal is coming up, and now the league has to negotiate from a point of weakness. Players see owners, but not necessarily where all the revenue comes from.

A proposed 60 game season has been presented, but I think that is borderline delusional. Keep in mind that a season of “at least 48 games” was used as a buffer (the league loves buffers). Rule of thumb at this point is take the “worst case scenario” the league gives you and use that as the ceiling. Then you’ll be in the actual ballpark of reality.

As I see Christmas commercials about how it’s going to be a “lean” Christmas (see kid playing in an empty box) everyone is bracing themselves. I’m not convinced that at least 2 or 3 teams aren’t seriously looking at closing shop. That’s 66 - 75 jobs per team gone. Seattle is stuck with entering the league at a difficult time. All of us want the sport to come back, but we also want some stability. If taking the 20/21 season to figure things out and not increase the debt, that may well be the best course of action.
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