The NHL's Salaries Reach the Billions - National Hockey League - Brief Article

THE 2000-01 SEASON NHL HAS seen a continuation of last decade's salary escalation, making it more and more expensive for teams--particularly Canadian ones--to do business. For the first time in league history, combined player salaries have topped $1 billion. Of course is partly a result of expansion and inflation, but more than simple inflation is at work when 16 players earn 87 million or more per year and 32 earn at least $5 million, which is now the case. By comparison, only seven NHL players earned 85 million or more just three years ago, and 16 reached or surpassed that plateau two seasons ago.

For Canadian teams, player salaries--which are paid in American dollars--are becoming more and more of a burden. The Canadian dollar, which has steadily been declining against the strong American dollar over the course of the past few years, hit a 19-month low late last year and was then valued at approximately two-thirds of the American dollar.

Every one-cent decline in the exchange rate costs the average Canadian team hundreds of thousands of dollars per year. The exchange decline increases team's expenses (which are primarily paid in U.S. dollars), but lowers the

value of their revenues (which are collected in Canadian currency).

The San Jose Sharks' home arena may soon have a new name. Late last year, mayor Ron Gonzales announced a Proposal that would rename San Jose Arena the Compaq Center at San Jose. The 15-year, $47-million agreement with the Houston-based computer manufacturer would guarantee keeping the Sharks in town through at least 2018, which is a 10-year extension of their current commitment to the city.

The team and city will split the $3.13-million annual payment from Compaq, and the combination of naming rights revenue and the extension of the current agreement with the franchise will provide an additional $72 million to the city over the life of the new deal. While the Sharks manage the San Jose Arena, the city has the final say in any naming rights contract for the publicly funded facility.

While the main part of the Alexei Yashin and Senators court saga--which kept Yashin in Ottawa--officially ended long ago, one more piece of legal business was recently wrapped up. An Ontario judge ruled that Yashin must pay almost $28,000 (Canadian) in legal fees incurred by the NHL from when he attempted to appeal the original ruling, which was in favor of the Senators and league,. While the ruling was another blow to Yashin's decision to holdout from last season, the league was seeking nearly twice as much from the center. However, Yashin received a piece of good news when the league and the Senators reportedly agreed to drop a lawsuit seeking nearly $1 million in damages from the holdout, as the Senators have considered him to have been a good teammate since his return.

In 1998, a U.S. District Court in Philadelphia dismissed a lawsuit that claimed the NHL and its teams were responsible for the criminal actions of former players association executive director Alan Eagleson. Eagleson pleaded guilty in 1998 to three counts of fraud and theft involving players association and other funds, and was sentenced to six months in prison and paid a $1 million fine. In 1995, five NHL players--Dave Forbes, Rick Middleton, Brad Park, Ulf Nilsson, and Doug Small--filed a class action suit on behalf of nearly 1,000 other players who played while Eagleson ran the NHLPA.

The players alleged that the NHL and its teams were liable for Eagleson's crimes because they knew of his actions and allowed him to continue. However, an appellate court recently heard the case and agreed with the original ruling, saying that the league is not responsible for Eagleson's crimes and that the players' suit was filed after the statue of limitations had expired. A separate claim alleging that Eagleson, who resigned from the Hockey Hall of Fame after his sentencing, skimmed other players association funds over the course of many years, is still pending in a Philadelphia court.

While minor league hockey has exploded in the past few years, its growth spurt appears to be over. Through the early part of this season, attendance at United Hockey League, International Hockey League, East Coast Hockey League, and Central Hockey League games collectively were down 14 to 1996, and a number of ECHL teams were reportedly on thin ice financially.

However, NHL attendance remained fairly strong, with a slight increase over last season, as approximately half of the teams were ahead of last year's attendance. The Vancouver Canucks were the biggest gainers with an increase of 16%, but despite the leaguewide increase, some big-market teams, such as the Atlanta Thrashers, Chicago Blackhawks, and Boston Bruins, have lost more than 10% of their gate.

COPYRIGHT 2001 Century Publishing
COPYRIGHT 2001 Gale Group