BY MATT LUNDY FOR SPORTSNET.CA
Last fall, Bill Guerin had a simple and surprising message for NBA players already losing games to a lockout: it’s not worth fighting the owners, so get a deal done.
It was a stunning piece of insight given that Guerin had fought on behalf of players during the 2004-05 NHL lockout. But that cancelled season cost Guerin one of his best paydays, a season that would have paid him the league’s eighth highest salary. “It wasn’t worth me giving up $9 million a year, or 82 games plus the playoffs, then having a crappy year and being bought out,” he told the Fort Worth Star-Telegram. “Guys in the NBA making $15 million or however much better think long and hard about this.”
National Hockey League players will likewise have to think long and hard about what they’re willing to sacrifice as the current CBA nears expiration. While the average NHL salary isn’t nearly on par with those of the NBA, NHL salaries have risen substantially in the past seven years.
Consider that NHL players lost an estimated US$ 1 billion as a result of the last lockout, while their split of last year’s revenues totaled $1.87 billion. For the upcoming season, assuming the league maintained its annual rate of 7.1 per cent growth, the players’ 57 per cent share under the current CBA would net them roughly $2 billion. Simply put, NHL players are making more than ever—hence why commissioner Gary Bettman finds them too pricey.
For the NHL’s top earners, the current climate is even more profitable than the free-spending years before the last lockout. Salary figures for the canceled 2004-05 season aren’t easy to come by, but a web archive search of the NHLPA’s web site on Sept. 16, 2004—the day the lockout started—provides compensation figures on union members. That season, the league’s 30 highest paid players lost roughly $232 million, or an average of $7.73 million per player.
Provided their salaries aren’t disrupted, this year’s 30 highest paid players are set to earn roughly $258 million, or an average of $8.62 million per player, according to recent figures from CapGeek.com. The top earners from this bracket—Shea Weber, Zach Parise and Ryan Suter, for example—have been the beneficiaries of long-term, front-loaded contracts that league owners will try to curb in the new CBA. In turn, the 30 highest salaries have increased in value by about 42 per cent since the first post-lockout season.
On the whole, league-wide salaries have shown striking growth over the past two decades. In the decade leading up to the last lockout, the average NHL salary increased by more than three times, totaling $1.83 million for the 2003-04 season, according to a 2005 article in the journal Monthly Labor Review. Since the lockout, the average NHL salary has continued growing at a healthy rate. If you look at the average salary for this year’s highest spending teams—say, the Boston Bruins or Minnesota Wild—it’s currently in the range of $3 million per player.
So it comes as no surprise that Bettman moved player salaries to the forefront of yesterday’s talks. He said “the average salary has gone from $1.45 million to $2.45 million” under the current deal. “We believe we’re paying out more than we should be,” he said. “It’s as simple as that.”
It’s enough to make you reconsider the expiring CBA. Back when it was signed in 2005, the owners were considered the runaway winners. After all, they had achieved two key objectives: introducing a salary cap and forcing players to accept a 24 per cent rollback on existing salaries.
“At the conclusion of the 2005 CBA, a salary cap structure was met with fierce resistance from several NHL players,” wrote Joshua Liebman in a 2009 article from Sports Lawyers Journal that analyzed the cap implications of the current CBA.
“Any vehicle that essentially limited their salaries was viewed as an impediment towards their financial well-being. However, as league revenues and the salary cap continued to increase, players have become the unlikely recipients of more valuable contracts.”
That wasn’t the case for Guerin and the league’s elder statesmen, though countless others have reaped the rewards of the expiring CBA, one whose perks they’ll try to preserve as much as possible in the next labour agreement. But like Guerin, those players will face the prospect of missing paycheques at a time when they’ve never earned more.
Deciding how much to sacrifice will be as tough a decision as ever.
Matt Lundy (Follow @MattLundy33 is an editor with CanadianBusiness.com and will provide insight on the economics of sports for sportsnet.ca.