The NHL’s Disorderly House

The NHL Seeks a Return to its Fishing Channel Recent History 

So here we go again—the fourth NHL labor stoppage in the past twenty years. A causal observer might think that the Lords of the Boards have a death wish. These guys do more than go out of their way to relegate the game to an afterthought in the collective North American sports fan mind–their idea of making a right turn is to head south out of Toronto and keep going.

We hear much about the NHL being in good financial shape–$3.3 billion in surplus revenue is the figure commonly bandied about.  According to Forbes that’s a pretty accurate figure, but it’s also a deceptive one; some teams make money, but in 2011-2012, eighteen did not. I’m always amused by political debates in North America if, for no other reason, some of the most strident free-market guys are the ones that think socialism—e.g. “revenue sharing”—is a good model for professional sports. One of the things that’s terribly wrong with the NHL is that well-run franchises subsidize the hobbies of rich men that want someone else to pay for their broken toys. In order, the rich teams (in terms of value) are: Toronto, the New York Rangers, Montreal, Detroit, Boston, Chicago, Vancouver, Philadelphia, Pittsburgh, and Los Angeles. But that doesn’t even tell the whole story; even the Pens actually lost a few bucks last year. Revenue is far more than putting fannies in the loge seats or the theoretical resale value of a club. If we parse the numbers further, we find that six Canadian teams—all of them sans Winnipeg, which must pay debt associated with leaving Atlanta—generated one-third of all hockey revenue (TV, radio, merchandise, and residuals). The Edmonton Oilers haven’t won a Stanley Cup since 1990, but they sure do generate revenue! More to the point, Edmonton helps pay the tab for sand storms like the Phoenix Coyotes.

The first thing hockey has to do to get its act together is admit that the Southern strategy was a flop with a capital F. Phoenix set the NHL back by a whopping -$24.4 million last year and only Gary Bettman thinks the game is ever going to squeeze money from saguaros. Stop this farce. And while we’re at it, admit that there are Coyotes-in-the-making out there: Nashville, Tampa, Sunrise, and Raleigh. I mean no disrespect to rabid fans in those cities, but the harsh economic fact is that each of these is a second-tier city insofar as the Golden Goose–media revenue–is concerned. There’s a reason these cities are never mentioned when other major league sports speak of moving teams or expanding. Sunrise, its (sort of) proximity to Miami notwithstanding, is an overgrown town of under 85,000; Raleigh has just 416,000 people, and so on. More to the point, name a major media outlet in Nashville, Raleigh, or Sunrise. And haven’t the Rays proved that Tampa isn’t a pro sports city? Without major media penetration, there’s no more reason for these places to have a hockey team than Hartford, Connecticut. (Hey, there were a lot of rabid Whalers’ fans!)

There are several other critical franchises, Columbus topping the list. Ohio State football in Columbus? Sure! Hockey? (See media above). Only the Coyotes lost more money than the Blue Jackets, who have become the Kansas City Royals of hockey—a breeder of talent that skates away to cities that can afford it. The Islanders and Devils are also hemorrhaging money and another reality is that metro New York probably ought to have two hockey teams, not three. Also losing lots of cash are the Ducks, the Sharks, and the Capitals. See a pattern here?

I doubt this will happen, but the first step would be to trim the size of the league. Personally I’d like to see a 24-team league, but that won’t fly with owners or the union. So let’s try 28 by folding the Coyotes and Blue Jackets and holding a player dispersal draft. The next step is to move failing franchises. My new NHL would have four divisions of seven teams each. Division winners get a playoff bye and the next eight teams by point totals play for the right to move on. It would look like this:

Northeast: Boston, Brooklyn (the former New Jersey Devils), Montreal, New York (Rangers), Pittsburgh, Philadelphia, and Quebec City (the former Islanders).

Central: Chicago, Detroit, Chicago, Toronto (Maple Leafs), Toronto Lightning (from Tampa), Ottawa, St. Louis, and Buffalo. (Toronto is the Holy Land of Hockey. It could probably support four teams.) St. Louis and Buffalo are endangered franchises and should be put on notice that Hamilton and Milwaukee are relocation-ready.

Moutain/Plains: Calgary, Dallas, Denver, Edmonton, Houston (from Carolina), Minnesota, Winnipeg. I don’t know if hockey would go down any better in Houston than in Phoenix, but the AHL teams do well and Houston is a massive media market.

Pacific: Vancouver, Los Angeles, and a whole lot of reshuffling. San Jose isn’t doing well financially, but in contrast to the Deep South, the NHL really does need a team in the Bay area. (San Jose also needs the Sharks to work or baseball may rethink the city as a landing spot for the Oakland A’s.) So keep San Jose and relocate Nashville to Seattle, the Ducks to Portland, and the Panthers to Salt Lake City. The seventh team is, frankly (and appropriately), a gamble—the Capitals to Las Vegas. Leaving D.C. wouldn’t be popular with U.S. politicians, but Washington just isn’t a very good winter sports town. The Caps have been a fine team, but steadily lose money. (Even the NBA’s Wizards lost over $5 million last year; the Caps racked up $7.5 million of red ink.) Las Vegas has no other major league franchise, but it does have minor league hockey and a metro population of nearly 2 million. I’d make this my desert strategy, not Phoenix.

One can (and many will) dispute my realignment ideas. I can anticipate the howls of derision from those in or near cities that stand to lose franchises. I feel your pain, but there isn’t anybody watching hockey during lockouts and future problems are inevitable unless most of the NHL generates revenue, not just a handful of franchises. It took the NHL years to recover from the last lockout; one or two more and it’s back to competing with fishing shows for TV revenue. You can blame whomever or whatever you wish for the labor strife—greedy owners, spoiled players, outmoded rinks, an idiotic commissioner, bruised egos—but it all comes down to money. The NHL needs to get its entire financial house in order. Hockey isn’t a non-profit organization, thus, having a handful of teams that subsidize hopeless dreams and hapless management simply isn’t a viable long-term business plan.