NHLPA takes a cautious look to economics

February 4, 2009
NHLPA takes a cautious look to economics
By Shi Davidi, THE CANADIAN PRESS

TORONTO - Paul Kelly thinks the National Hockey League should look to Canada first if the current economic downturn forces one of the existing 30 franchises to find a new home.

Speaking a day after NHL commissioner Gary Bettman spoke of his league's bright outlook during a speech at the National Club, the head of the players' association took a much more cautious stance in his outlook for the future.

Kelly freely admitted Wednesday that some franchises in "blue-collar areas and the sun-belt areas" are "running into some tough times" and said the union is monitoring the situation in Phoenix, where the league has advanced the Coyotes funds and is helping the troubled ownership find "new investors, possibly new owners."

And while he expects the next NHL season to open with the same 30 teams this one ends with, he says moving teams north is the way to go if that changes.

"I actually believe that Toronto and the greater Southern Ontario area certainly can support a second team and that sooner (rather) than later we ought to have a second team here," Kelly said before attending the Conn Smythe Celebrities Dinner and Auction.

"If we reach the point where one of the existing franchises runs into real difficulties and they can't continue to exist in that location, than I think we need to look here first, to Canada.

"There are other opportunities. ... Most of those names are out there, Kansas City, Las Vegas, Seattle, Houston, Winnipeg. We hope all 30 survive, but if they don't, I would be at the front of the line pushing for a Canadian franchise."

During the all-star break Kelly said he wouldn't be surprised if more than one team moved in the next five years. He sounded pessimistic about Phoenix's chances of making it.

"We hope they survive but it's a tough market when you're in the desert and most of your populous hasn't grown up on the sport, playing the sport," he said. "It's a really difficult area to make a go of it."

On Tuesday, Bettman said the Coyotes "will be fine."

Bettman also said the NHL's growth is expected to slow from 12 per cent in 2007-08 to five or six per cent this season, a number Kelly agreed with but clarified.

Kelly said that by factoring in the Canadian dollar's decline, actual growth will be just one per cent, a decline of six per cent on the raw dollar number plus five more on the worsened exchange.

He pegged expected overall league revenues somewhere between US$2.6-$2.61 billion, and pointed to concern over the remaining non-guaranteed revenue sources like playoff ticket sales and concessions as the reason for the union's increase in escrow payments from the players.

That is money deducted from players' salaries to ensure the league's total payroll doesn't exceed 56.7 per cent of the NHL's hockey-related revenue. If it does, money is taken from the escrow accounts to make up the difference.

Players are having 22.5 per cent of their paycheques lopped off to escrow.

"We looked at real numbers and we determined how much of the projected revenue is still at risk," said Kelly. "... We came in at 22.5 per cent, which we think is the right number for the players' association. I suspect that if you ask the league, they would probably have come in around 16 or 17 per cent. ...

"The players are building in some protection because if our escrow amount is short of what is necessary, it's very difficult for us to go back to players after the season is over to collect additional funds."

Meanwhile, Kelly also had little to say about Eric Lindros' resignation from the role of ombudsman on Tuesday. There have been persistent reports of friction between the two.

"Eric has decided to go off and do other things, we respect that, we wish him well," said Kelly. "We're in the business of looking forward rather than looking back. As far as we're concerned it's nothing that really requires any detailed comment."