I just had an epiphany.
We as hockey fans constantly ask ourselves: why does the NHL keep teams in weak markets? It makes no sense to us. Why waste our beloved talent on the passionless, when there are plenty of enthusiastic, highly profitable hockey markets further north?
The answer: the ownership situation.
Pre-lockout, many owners were considering getting out of the market (i.e. selling their teams). Understandable. Why would any businessman want to be involved in a business in which 75% of your revenues are paid out as salary (other than the fact that hockey is amazing). If this mass selling were to occur, Bettman and the NHL would be screwed, so he tried to implement a salary cap. NHLPA says "No way, Jose". Lockout.
So great, now we have a salary cap. Players are now paid a fixed amount based on a percentage of league revenue. Player salary increases with league growth; sounds fair. One problem: six of your biggest markets are in a different country, and you're still dealing with US currency. The Canadian dollar increases in value, driving league revenue higher and faster than ever. Danger: the cap rises with revenue. Owners of American teams are grumbling about salaries again. We can't afford another lockout. What to do?
Here's what I'll do. We have small market teams that we're trying to grow. Stop trying to grow them; keep them small. This way, we can offset some of the growth generated by the Canadian dollar until the effect has worn off (i.e. the Canadian dollar drops back down), thus keeping the cap under control. Furthermore, let's not take a contract with ESPN. Let's take the cheaper move and take the contract with Versus. Saves everyone a few bucks, and lowers our exposure in small markets (lowering the risk of high growth). This will do for now. Once we weather the storm in Canada, we can reassess our growth strategy. One last thing. What about small market team owners? How do we keep them happy? Revenue sharing: take some of those Canadian profits and redistribute them to the unprofitable teams. It's for the "good of the game". The owners will understand.
Crisis averted.
Don't agree? Ask yourself this: why do you think they went "Oh crap! Balsillie is trying is trying to buy Phoenix and move them to Hamilton! We need to acquire them"?
