THE NATION’S BUSINESS

New Age dreams in hard times

Canadians are God’s true children. We act like strangers in our own land without feeling at home anywhere else.

Peter C. Newman October 10 1994
THE NATION’S BUSINESS

New Age dreams in hard times

Canadians are God’s true children. We act like strangers in our own land without feeling at home anywhere else.

Peter C. Newman October 10 1994

WAITING GAME

SPORTS

A power struggle could doom a hockey season

His wife, Cari, was at work and the house was quiet. Ron MacLean was in the study of his home in Oakville, Ont., one morning last week, and he was thinking about all the changes that had occurred in the 26-team NHL over the past summer. He made notes about trades, free-agent signings, new coaches, new owners and promising rookies. The genial 34-year-old host of Hockey Night in Canada, one of the most popular shows on Canadian television, was preparing for his first broadcast of the 19941995 NHL season. “I’m working on ways to tell all the stories,” MacLean said. “Half the magic for a fan is the players in new uniforms, new buildings, new cities. I love opening night for that alone.” But MacLean was also doing something else: scanning books on labor disputes in professional sports—preparing for the distinct possibility that the owners would lock out the players before the opening faceoffs.

They haven’t exactly—not yet. Instead, they postponed the opening of the 1994-1995 NHL season, which was set for Oct. 1, until Oct. 15,

while they make a last-ditch effort to negotiate a new collective bargaining agreement with the players. That left two weeks to accomplish what the two sides had tried and failed to do for the past year. The owners— echoing the same issue that killed the baseball season—insist that they need to control skyrocketing salaries to ensure the survival of smallmarket teams, which, in hockey’s case, includes the Winnipeg Jets, the Ottawa Senators and the Quebec Nordiques. The players have categorically rejected any form of salary cap, and they have refused to take part in any team-sponsored practices during what they regard as just a lockout-in-disguise. At a critical time for the growth of hockey—when it has no World Series to compete with and new TV contracts to provide unprecedented exposure—the entire 1994-1995 season could hang on the latest talks. “We are looking for peace,” said Boston Bruins owner Jeremy Jacobs. “But we are fully prepared for the alternative.”

The owners’ move was a bid to buy time and to capture public opinion. Since intense negotiations began in mid-August, the players have outshot them in the public relations game. They reported to training camps in early September, even though league commissioner Gary Bettman removed 19 benefits included in their old agreement, which expired in September, 1993. They played the exhibition schedule under threat of a lockout on Oct. 1. And in an eleventh-hour move last week, they offered to complete the entire 84-game season, as well as the Stanley Cup playoffs, without a contract and without a strike. The owners’ position is that they are neither accepting nor rejecting that offer by postponing the season.

Many observers believe that the differences between the two sides are so wide that a two-week delay may merely put off the inevitable. The most contentious item is the owners’ insistence upon some form of salary cap (although they avoid the phrase like a bruising body check). Their proposals would either create a different cap for each club, based on a set percentage of revenues, or a single figure for all teams based on the league’s average payroll. In either case, Bettman proposed last week that the league tax teams that pay salaries in excess of the average. On a graduated scale, the fines would increase from five per cent of the first $250,000 over the average to a maximum of 125 per cent. The tax

money, in turn, would be pooled and used to assist the small-market teams. The players countered with an offer to tax not just salaries but revenues—and estimated that their scheme would create a pool of

$25 million to $35 million annually for small-market franchises.

The fruitless talks had many players fuming, and their anger was aimed straight at the commissioner. Although he later apologized, Chicago Blackhawk defenceman Chris Chelios even suggested that Bettman and his family should be concerned for their personal safety. “Some crazed fan or even a player, who knows, might take it into their own hands and figure they’d get him out of the way and things might get settled,” Chelios said. Even the normally diplomatic Wayne Gretzky was exasperated. “They’re talking to us about a partnership,” he told Maclean’s in Los Angeles after flying back from an NHL players’ association (NHLPA) meeting in Toronto. “But I haven’t heard the New York Rangers offer to help the Hartford Whalers or the Toronto Maple Leafs offering to help the Winnipeg Jets.”

The stalemate tested the patience of fans, and created enormous anxiety among the companies and individuals who rely on pro hockey for their incomes. TV networks such as the CBC would lose millions in

advertising revenue if the season were postponed indefinitely. Retailers of licensed NHL merchandise, everything from team sweaters to bedspreads bearing club logos, anticipate that their sales would drop dramatically. Darkened arenas would put ushers, Zamboni drivers and ticket takers out of work (and keep the scalpers off the street, though few people would mourn their absence). Sportsbar owners in NHL cities had visions of empty barstools and unsold beer. ‘We can’t even afford to think about the possibility of the whole season being scrapped,” said Allan Ehrenworth, manager of M. L. Gardoonies, located across the street from Toronto’s Maple Leaf Gardens. “It would be devastating.”

But if the season were cancelled, the biggest loser would be hockey itself. The dispute has occurred just as the league’s new TV deals were about to take the game into U.S. prime time. The NHL collected nearly $300 million by selling five years of network and cable TV rights, respectively, to Los Angeles-based Fox Broadcasting Co. and ESPN, the all-sports network based in Bristol, Conn. The baseball strike also created an opportunity for the NHL to attract new fans. “Hockey could present itself as the sport that cares about the fan,” said MacLean. “It’s a great chance to expand the game’s casual fan base in the Sunbelt. But the owners have obviously concluded that it is more important to get their costs in line. It’s a huge risk.”

There is no question that hockey has begun to score big with more U.S. sports fans. In the past four years, the NHL awarded franchises to the Sunbelt cities of Miami, Tampa Bay, Anaheim and San Jose, while the Minnesota North Stars pulled out of Minneapolis-St. Paul and

resurfaced in Dallas as the Stars. And the Stanley Cup final last June—seven white-knuckle games between the New York Rangers and the Vancouver Canucks that ended with the Rangers capturing their first title in 54 years—was a promoter’s dream. “It was like pulling straight sevens on a slot machine,” said former Ranger goaltender John Davidson, a Calgary native and color commentator on Madison Square Garden Network hockey broadcasts. “You can’t get a Ranger ticket this year. They’re sold out for the season.”

But success has been both a blessing and a curse. League revenues reached $700 million last season, up from $550 million in 1992-1993, partly because of the successful launch of two new teams, the Anaheim Mighty Ducks and the Florida Panthers. With those clubs leading the way, sales of licensed merchandise, which brought in $200 million four years ago, are expected to surpass $1.35 billion this year. Despite the revenue windfall, Bettman describes the NHL as “a league with a profound financial problem.” He contends that the owners have seen their substantial profits of a few years ago transformed into a large collective loss. A

main reason: player salaries have more than doubled in five years, to an average of $560,000 from $232,000. While there were three millionaire hockey players five years ago, there are now 75. The players point out that no one forced the owners to give them those contracts—and argue that there is no way the league is losing money.

The two sides are represented by tough professional negotiators, and both happen to be Americans—a source of considerable irritation to some Canadian fans. Bob Goodenow, 41, a Detroit-born, Harvardeducated labor lawyer, became executive director of the NHLPA in January, 1991, after the players ousted Alan Eagleson, who founded the association in the late 1960s and ruled it with an iron hand for more than 20 years. Their disenchantment grew out of Eagleson’s unusually close personal relations with several NHL owners, as well as with former league president John Ziegler. Some hockey writers and players referred derisively to Eagleson and Ziegler as “Iggy and Ziggy.” And since Eagleson’s departure, a U.S. federal grand jury in Boston has indicted him on 32 charges—including racketeering, fraud, embezzlement and obstruction of justice—arising from his management of the players’ association and international hockey tournaments.

The new guard and the old squared off in early 1992, when Goodenow and Ziegler sat down to negotiate a new agreement By all accounts,

Ziegler was overmatched by Goodenow. The result was a 10-day player strike in April,

1992, that delayed the playoffs and led to a hastily concluded agreement that addressed few of the owners’ concerns. “One thing is certain,” says MacLean.

“Whatever was in the last deal, it sent an absolute wave of panic through the establishment. The NHL was ill prepared and the negotia-

tions were absolute chaos. You had 24 different owners trying to analyze each new player proposal. Afterward, Ziegler was gone in a heartbeat and his replacement, Gil Stein, didn’t survive six months.”

After the contract debacle, the owners set up a search committee to find a new chief executive. According to Stan Fischler, a New York City hockey writer and broadcaster, their first choice was Russ Granik, deputy commissioner of the National Basketball Association, but he turned them down. Instead, they hired Bettman, a New York lawyer who was the NBA’s senior vice-president and general counsel, and in February,

1993, made him NHL commissioner. For a majority of the league’s owners, Bettman, now 42, was an attractive choice, in part because he had negotiated a salary cap for the NBA in the early 1980s.

In less than two years as NHL commissioner, Bettman has improved the operation of the league and substantially increased rev-

Hockey by the numbers

The average salary for an NHL player in 1993 was $560,000, up from $232,000 five years earlier. The highest-paid player last year: Wayne Gretzky of the Los Angeles Kings, $11 million.

In 1974, the Washington Capitals paid an $8-million expansion fee to join the NHL. In 1993, the Anaheim Mighty Ducks and the Florida Panthers paid more than $65 million apiece.

I The average price of a ticket to an NHL game is $29; to a majorleague baseball game, $14.

Retail sales of NHL merchandise in North America climbed to $1.35 billion in 1994, up from $200 million in 1990; over the same period, international sales jumped to $40 million—up from nothing.

enues. He hired vice-presidents of marketing and media relations, negotiated the new TV deals, realigned the league’s four divisions, overhauled the playoff structure and strengthened the merchandising division. He also hired former player and general manager Brian Burke to curb violence on the ice—improving the public’s perception of hockey. “People used to see hockey players as uneducated goons skating around clobbering each other and having fistfights,” says Davidson. “The league is now ruled by a strong hand. People are beginning to understand that hockey is a tough sport, but they also see the beauty and the grace.”

Now that Bettman is immersed in his most critical test—the negotiation of a new agreement—it is apparent that he has won the owners’ trust. “One of the demands Bettman made when he took the job was that he would be the sole negotiator and these guys would have to shut up,” said Fischler. “He got what he wanted. I know this because I do a TV

show and wanted to inter view an owner. The guy told me they mean business about speaking with one voice." In a show of solidar ity, the owners shared the stage with Bettman on Sept 30 when he announced the delay in starting the sea son-and a few of them even talked. But Davidson said Bettman's control is unprecedented: "The own ers are committed to his leadership in this fight. Nobody else is saying a word. This is unbelievable."

Goodenow has a much larger and more unruly constituency to control. But his advisers and the player representatives insist that he has the solid support of his members. Doug Wilson, who spent 16 years in the NHL before joining the players’ association as coordinator of business development, said that Goodenow has won their support by communicating openly with them on the issues. And Wilson insists that the players will never accept an agreement that contains the dreaded salary cap. “Each team can have a salary cap,” he said. “It’s called a budget. All the owner has to do is hire a qualified general manager, give him a budget and tell him to live within it. These guys can’t control themselves so they want the players to save them.” With just a few minutes to go in overtime, the owners and players may not have much longer to save the season.

D’ARCY JENISH

JAMES DEACON