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Revenue Sharing: Can the NHL Support it?

Revenue SharingThe NHL has come a long way since its early years with only six teams.  It has become one of the largest and most talented leagues in all of sports.  With this growth, came the introduction of numerous expansion teams popping up all over Canada and the United States.  Some of these teams have proven to be extremely successful, while others have failed or continue to fail economically.  In order to keep these struggling teams on the ice, the league has introduced revenue sharing.  The new CBA ( Collective Bargaining Agreement ) incorporates increased revenue sharing, which is specifically designed to help teams who are struggling economically.

As of the 2011-12 season, nearly half of the league’s franchises were failing to make money.  With approximately half of the league struggling, it is no wonder why the NHL and NHLPA have such difficulty agreeing on money distribution.  I agree that the league must help out teams through rough times, but many of these teams have never been profitable, nor will they ever be.  The Atlanta Thrashers were a great example of a lost cause that Gary Bettman was reluctant to fix.

The organization failed year after year to make ends meet in the city of Atlanta.  The organization was just barely staying above ground since it first entered the league in 2001.  From 2006 onward, the Thrashers were steadily losing money.  Why then did Bettman insist that the NHL try to keep the franchise in Atlanta rather than selling it?  The hockey market in Atlanta was clearly not big enough to support an NHL franchise.  Despite this, the Thrashers took the ice and continued to lose money until 2010.  In 2011, the franchise was finally sold to ‘True North Sports and Entertainment”. The team moved to Winnipeg where they made over ten million dollars (after expenses) in their first year back in the city.  This leads me to ask, why are there still so many teams losing money?

The answer to this question is location!  Nearly all of the franchises located in the Southern United States consistently lose money.  It is safe to say that the farther South you go, the worse the hockey market gets.  It amazes me that so many great teams can fail to bring in revenue.  I imagine the day where Canada has a team like Tampa Bay or San Jose.  There is no doubt in my mind that a team like that can easily sell out every single night, assuming it was properly located.  One might wonder, who would buy a team that loses money?

url-1The answer was Jim Balsille.  I say “was,” because Balsille made numerous attempts to buy an NHL organization but was denied.   He offered to buy not only the Pittsburgh Penguins, but the Phoenix Coyotes as well.  In 2009, Balsille was essentially going to buy the Coyotes out of bankruptcy and likely move the team to Hamilton for the 2010-11 season.  Balsille made two offers for the team but was rejected both times by Judge Baum, who then disallowed Balsille from any future bids on the Coyotes.  I, for one, do not blame the Judge.  Rather, I blame the NHL, Bettman and the owners for not taking action on such a serious issue.  The Coyotes lose upwards of fifteen million dollars every season!  Despite this, there has been little to no talk of a plan to solve the problem.

I hate pointing fingers, but shouldn’t the league commissioner, Bettman, do something?  I seriously doubt his ability to run the league effectively.  Even with available buyers and locations, we see struggling teams cemented in place.  It is only a matter of time before the owners lose their patience.  I also dread the day when all of this information goes public.

We as fans will finally realize how much money is being wasted on maintaining teams like Phoenix when the league could have easily tried to make a deal with an alternative owner.  What many people do not understand is that the owners of these failing teams are not losing money.  The owner still takes their cut of the revenue.  The only money being lost is that of the successful organizations, who have to continually fund struggling franchises.

Revenue sharing is a great idea if done correctly, but this has simply got out of hand.  Half of the franchises are losing money, and Bettman insists that we increase revenue sharing to save these teams!  This is a business.  Why should failing teams be allowed to leach money off of successful teams?  Do the Toronto Maple Leafs need to support fifteen teams in the Southern United States before we notice a problem?

Revenue sharing needs to be limited.  NHL franchises cannot fail year after year without being held accountable.  Why do we even have a commissioner if he does not do his job?  The NHL constitution states that the commissioner must supervise business and league affairs, as well as preserve public confidence in the league.  I for one, am not convinced that Bettman is successfully fulfilling his duties.  If the league continues down the path it is on, over half the league will be losing money.  If they do not act fast, revenue sharing is going to destroy the league.  Once Bettman is exposed, there will be very few, if any buyers interested in purchasing a team.  The time to act is now, before they have to completely liquidate teams to preserve league revenue.

Comment below on your opinion of revenue sharing and if it can or cannot work in the NHL. Make sure to keep the conversation going on our Facebook page and on Twitter @SportsNetworker

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