No Good Reason for Lockout

When the proverbial bell rung to start the NHL’s 2007 free agent signing period, it quickly became clear that large-market teams had an enormous advantage. With the salary cap rising to $50.3 million, it was no longer close to possible for teams in smaller cities (like the Buffalo Sabres and Edmonton Oilers) to compete dollar-for-dollar with the likes of the New York Rangers and Philadelphia Flyers.

During the 2004-05 lockout, the commissioner and owners spouted nearly nonstop about helping small-market teams to survive and about keeping ticket prices affordable for the NHL’s loyal fans. But over the past two years, it’s become abundantly clear that if the NHL’s owners do in fact consider this CBA to be a success, it’s not for either of those reasons.

For the Rangers, the $50.3 cap is not only easily attainable, but it’s actually a threshold they surpassed numerous times throughout the late 1990s and early 2000s. And so, where a team like the Sabres would need to hemorrhage money in order to spend to the cap, the Rangers are actually saving money based upon their pre-lockout expenditures. The Sabres lost both of their co-captains, Drury and Daniel Briere (who signed a seven-year, $52 million deal with the Flyers), and a huge step backwards in their on-ice performance in 2007-08 is all but a certainty.

Meanwhile, by reducing the age at which players qualify for unrestricted free agency, it’s become possible for a team like the Rangers to offer huge long-term deals for free agents that actually make sense. Signing 27-year-old center Scott Gomez to a seven-year deal worth $51.5 million actually made a lot more sense than signing 34-year-old forward Michael Nylander to a four-year deal worth $19.5 million.

When Gomez’ deal ends, he’ll be the same age as Nylander is today, and his superior skating ability make him a much better long-term fit for the Blueshirts. And while it’s certainly true that Nylander had developed magnificent chemistry with 35-year-old superstar Jaromir Jagr, the Rangers made the wise choice to build their forward corps around the 27-year-old Gomez and the 30-year-old Drury rather than Nylander and Jagr.

Meanwhile, the Devils, who lost Gomez to the Rangers, were at least able to sign Dainius Zubrus away from the Sabres. The 29-year-old Zubrus, who signed a shockingly lucrative six-year deal with the Devils worth $20.4 million, is expected to take Gomez’s spot on the first line alongside captain Patrik Elias. And, of course, he represents yet another downgrade of the Sabres’ roster.

We’re also seeing the impact of this rising cap in Nashville, where the cost of maintaining a competitive team has far outstripped the Predators’ current earning potential. Tomas Vokoun was dealt to the Florida Panthers in a blatant cost-cutting measure, while UFA’s-to-be Scott Hartnell and Kimmo Timonen were dealt to the Flyers in mid-June, where they signed lucrative long-term contracts. Paul Kariya left for the St. Louis Blues, who are desperately trying to win back their disillusioned fan base, and Peter Forsberg is not expected to return. In their place, the Predators only managed to add Radek Bonk and Greg de Vries.

If the Predators’ average paid attendance doesn’t rise above 14,000 in 2007-08, it’s a good bet that it will be their final season in Nashville. And with the team losing money in every season of its existence, it’s hard to imagine them cutting ticket prices to help achieve that goal. Now, it’s not in the NHL’s best interests to have a lame-duck franchise operating for a full season in Nashville, and so the NHL and current owner Craig Leipold can be expected to at least pay lip service to a rumored bid by a group of local businessmen.

But the most likely scenario is that William “Boots” Del Biaggio III’s bid (of somewhere south of $200 million) will be accepted and the team will be moved to the brand-new Sprint Center in Kansas City. The longer the NHL waits to settle this situation publicly, the more tickets will be sold in Nashville. Keeping the Predators’ fans hopeful that the team can be saved will ensure that the team doesn’t play to an empty building during the coming season, and delaying the announcement of a sale to Del Biaggio until as late as possible is without question in the current owners’ best interests.

No team was hit harder this off-season, however, than was the New York Islanders. They lost their leading scorer, Jason Blake, to the Toronto Maple Leafs. They lost their top-scoring defenseman, Tom Poti, to the Washington Capitals. Forwards Richard Zednik (Panthers) and Viktor Kozlov (Capitals) also departed. Ryan Smyth, for whom the Isles surrendered a first round pick and two top forward prospect at this year’s trade deadline, signed with the Colorado Avalanche even though the Isles offered more money. Meanwhile, the replacements GM Garth Snow has been able to drum up thus far–forwards Jon Sim and Ruslan Fedotenko–are not exactly going to strike fear in the hearts of the Isles’ Atlantic Division rivals.

Of course, it’s not just small-market teams like the Predators, Islanders, and Sabres who will suffer under the salary cap. The Montreal Canadiens are one of the most successful franchises in the NHL today, consistently selling out an arena that holds over 21,000 fans. But with Canadian taxes taking a huge bit out of players’ paychecks, and with the Montreal media and fan base amongst the most ravenous in the league, players like Briere will spurn the Canadiens for the lower taxes and lesser pressure afforded by places like Philadelphia.

The notion that the City of Brotherly Love is far less pressure-filled than Montreal may come as a surprise to the likes of Eric Lindros, but indeed, there is no comparison. And so, when 33-year-old rearguard Roman Hamrlik inked a four-year, $22 million deal with the Habs, the exorbitant price ($5.5 million per year) was no big shock.

And lest anyone feel too much sympathy for the Canadiens, one need only look west to Edmonton to see a far more dire situation. The Oilers are hampered by the same income tax issues as the Habs are where the players are concerned, but they also must work with a much more restrictive budget given their smaller revenues. And perhaps even more challenging, they must operate in a market that has far less to offer than the coastal metropolises where UFAs typically gravitate.

When Michael Nylander spurned an Oilers offer his agent had reportedly accepted to instead sign with the Washington Capitals, it wasn’t exactly surprising. After all, his wife probably asked the logical question “You’re accepting LESS so we can live WHERE?” and Nylander quickly realized that the District of Columbia was a far more palatable option than the Albertan frontier. And as a result, the Oilers are now faced with the reality that the only way for them to upgrade their forward corps would be to aggressively pursue a restricted free agent such as Blues forward Lee Stempniak, sacrificing a package of draft picks in the process.

So what, exactly, has this CBA wrought upon the NHL? By lowering the age at which players qualify for unrestricted free agency, it’s become possible for teams to dramatically improve themselves via the open market. And when players like Gomez and Drury hit that open market, only a small group of NHL teams can effectively compete for their services.

And then there’s the cap itself, a travesty of mind-numbing proportions. Calculated based upon a percentage of total league revenues, the team payroll maximums and minimums effectively bear zero relevance to an individual club’s economic state. Nearly all of the NHL’s revenues are collected locally, and so the total is inflated by the economic successes of teams like the Rangers and Maple Leafs, both of whom own the network on which their games are televised.

This all, of course, leads to the second stated purpose of the lockout, keeping ticket prices affordable for fans. As the team payroll minimum continues to rise, the NHL is effectively forcing small-market teams to spend more on players than they otherwise would. And as a result, clubs in cities like Nashville and Buffalo not only cannot afford to retain their best players, but they must raise ticket prices–their primary source of revenue–in order to be able to stay in the game.

Meanwhile, the league’s confusing revenue sharing plan actually works as a counterweight, and not a helpful one at that. Teams must meet ticket sales goals in order to qualify for revenue sharing, and as demonstrated in Nashville, one goal (reducing losses and paying players) comes in direct conflict with the other (reducing ticket prices in order that more tickets may be sold).

A team like the Islanders, small-market by any reasonable definition, are instead treated as a large-market club due to their proximity to New York City. Of course, the Isles’ proximity to Manhattan is no more relevant to their economic stability than the Sabres’ proximity to Toronto is to theirs. The Islanders play in what is quite possibly the NHL’s most decrepit facility, with Pittsburgh’s Igloo the Nassau Coliseum’s only legitimate competition for that dubious honor.

With player salaries continuing to rise, there’s little reason to believe that the NHLPA will exercise its right to terminate this CBA prior to the 2009-10 season. And so, these rules are likely the ones that will stand until 2010-11. Back in 1995, the NHL owners celebrated their trouncing of former union chief Bob Goodenow at the bargaining table. Over time, that CBA turned out to be far more beneficial to the players than the owners. As each day passes under the current agreement, it’s becoming readily apparent that history is going to repeat itself. Only this time, the large market teams hold an even greater edge.

Under the prior agreement, players were generally past their prime when they qualified for unrestricted free agency. But now, with players becoming free agents at age 27 (and in some cases, even younger), it’s become quite easy for teams to fill critical holes via the open market.

For a team like the Rangers, their organizational cupboard well-stocked on the blue line and in goal, the signing of a pair of valuable centers (Drury and Gomez) can instantly raise their status to bona fide Cup contenders. And for the Sabres, just one year removed from being considered a “model” team under the cap, it’s already rebuilding time, with no Cup to show for their trouble.

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