A report from Forbes suggests the only way the National Hockey League can thrive financially is if it drops from 30 down to 20 teams.
The publication argues: “Trimming back player salaries from 57% of revenue to 50% won’t solve the fundamental problem. Neither will throwing a bit more of the New York Rangers’ or Montreal Canadiens’ money to the St. Louis Blues and Florida Panthers. That’s because the fundamental problem is this: the NHL has 30 teams when it should have 20 teams. Time to start chopping.”
The NHL and its Players’ Association are in the midst of their second lockout in the last decade. Collective bargaining talks are ongoing, once again with mediators on hand, but time is running out on the season. The League has already cancelled all regular-season games through Dec. 30.
Some have suggested that the NHLPA should decertify as a way to speed up CBA negotiations, however Hockey Central analyst John Shannon said that might not be the right move for the players and it could potentially lead to the NHL losing franchises.
“I don’t think they want to (decertify). I don’t think it’s in their best interest,” Shannon told Jeff Blair on Sportsnet 590 The Fan Thursday.
“There is a process between where they are now and decertification. That’s called disclaiming, and I think that’s probably the first thing they’re going to look at. The bottom line is, I don’t think it’s to anybody’s advantage to decertify at all if you want to get a deal done.
“The threat of decertification at this point is probably just as bad as decertification.”
Shannon added that there are teams that might welcome decertification, but if the NHLPA does in fact decertify and the entire season is lost, by the time the NHL comes back, the league might be unrecognizable.
“We may be talking about a 22-team league; we may be talking about players making $30 million and players making $250,000, and the $250,000 guys on a non-guaranteed contract. The details of decertification could benefit what the NHL might morph into, so it’s not that simple. The decertification process, as I understand it, really only works if the courts get involved and say the NHL has to open its doors.”
Stanford University economist Roger Noll, who has an extensive history dealing with sports economics says a lack of a significant national television package in the United States is also contributing the league’s financial woes.
“You’ve got almost no centralized revenue to work with,” Noll told Forbes. “There is probably no way to make the bottom of the league viable. Even if salaries were zero, some still couldn’t cover their other costs.”
Noll believes the only option — besides significantly restructuring the way the league redistributes its earnings from the financially viable teams to the struggling teams — is “substantial contraction.”
“People in the south and west just aren’t hockey fans,” Noll said.
The NHL lockout is currently on its 89th day. A total of 406 games have been missed so far with nearly $600 million in player salaries lost.