The Jackets are one of several clubs taking a 25 percent cut in the money they receive from the league because they didn’t meet incentives spelled out in the 2005 collective-bargaining agreement. In short, the Jackets’ revenue-growth rate in the past year failed to match the league average during the same period. – Columbus Dispatch
Carolina and Nashville have also said that they will see their revenue sharing cheques cut because they did not meet the criteria for full participation. Phoenix, Florida and Atlanta are probably in this boat, too.
The small market American teams are not looking at a very good year, financially speaking. We can expect to see the vast revenue disparities to continue to widen and costs for all teams to continue to rise.
1) The economy is deteriorating as we speak. Teams with a low season ticket base will find it more difficult to attract walk up customers as discretionary income falls next season. (The silver lining? TV viewership may go up when more people find big league sports unaffordable.)
2) Revenue sharing has been cut for this year and as long as the big markets in Canada and the traditional American markets grow revenues faster than the revenues among the weak sisters, the welfare will get cut again next year.
3) Player costs are up substantially.
4) Travel costs – a hockey team’s biggest expense after payroll – are rocketing higher. The new schedule means significantly more travel and the price of oil will make that travel much more expensive. If the price of oil continues to rise, all sports will be negatively affected.
Few of these low revenue teams were profitable this year and losses will be even higher next year. None of these franchises were particularly robust in good economic times. A quadruple whammy is now slamming them. Are they all strong enough to survive?
Postscript: The good news for the fan is that there is no way the NHLPA will opt to re-open the CBA given the poor economy. The bad news is that the league as a whole will suffer with a declining economy and high oil prices. The owners are whiners at the best of times and when they have legitimate gripes, the whining ratchets up several notches. It will be interesting to see whether the fans are sympathetic this time around.