NHL Lockout: How to split the revenue

October 11th, 2012

It may seem to many sports fans across the country that the owners and players can never agree on anything. Just in the past few years, the National Basketball Association, National Football League and, now, the National Hockey League have dealt with lockouts as well as revenue-sharing disagreements.

The NFL and NBA had their widely publicized revenue disputes and eventually found an agreement that was fair enough for both the players and the owners.

That being said, the NHL is currently missing the beginning of its regularly-scheduled season, and it doesn’t seem to be causing quite the stir that was observed when basketball and football had their own disputes.

The NHL’s growing popularity over the last few years may be significantly diminished if a deal is not struck soon between the league’s owners and its players. The NHL cannot afford a long lockout.

Sept. 16 saw the beginning of the lockout when the last collective bargaining agreement expired. Last week saw the announcement of the cancellation of the first two weeks of games, and there seems to be no end in sight.

According to The New York Times, the league initially offered a revenue split of 57-43 percent, in favor of the owners. Most recently, a deal for six years with the players receiving 49 percent of revenue in the first year and 47 percent in its last year was proposed.

Many sportswriters have reached the general consensus that the NHL Players Association will not accept anything below a revenue split of 50-50. Seems fair, right?

With players moving to play in leagues across Europe while the league is locked out and fans growing increasingly frustrated or not even caring (which may be worse), perhaps it’s time to listen.

Donald Fehr, of the NHLPA, represents the players in their quest for a “fair” break in revenue. Eventually, a revenue split near 50-50 will be realized. The other economic details of the deal are what is holding up this new agreement.

The last lockout surrounded the salary cap, which is not the issue in the current lockout. The NHL needs to realize that the strength of a good sports league rests in the level of competitiveness across the sport.

The hockey clubs that are struggling financially should receive more help to maintain a competitive nature with the league’s juggernaut franchises, both fiscally and in terms of win percentage.

The league should not ask players to take a hit in their salaries, as it would not be in the best interest of the league going forward.

Any economist knows that paying employees a competitive and higher salary leads to improved performance on the job. Most people would agree that professional athletes make too much money as it is, but the bottom line is that owners need to pay what they are due based on performance.

A league that generates billions cannot stiff the players that are sacrificing their long-term health for the enjoyment of the fans and bank accounts of the owners. It is no secret that the NHL is not the most popular league in the country, and a lengthy lockout is bad for business. It certainly doesn’t take a genius to understand that you cannot make money when you aren’t in business.