Puck Blog

Bettman addresses state of the game and state of the economy


While much of the focus of 2009 NHL All-Star Weekend was on the city of Montreal and the celebration of the 100th anniversary of the Montreal Canadiens franchise, a great deal of attention was also paid to the state of the economy and its potential impact on league revenue and thus the salary cap. On Friday of All-Star Weekend, Paul Kelly, the head of the NHLPA, officially announced that the Union would opt not to reopen the CBA, but instead operate under the existing one through the 2010-11 season. This decision was made largely due to the spiralling economy and the belief that things will get much worse before they get better. Under the new (post-lockout) CBA, players have seen the average salary steadily increase as well as a multitude of young players sign long-term, lucrative contracts; “if it ain’t broke, don’t fix it.”

Nonetheless, players began the 2008-09 season, having 13.5% of their paychecks put into escrow in the first half of the season, with speculation that this escrow percentage will increase. Gary Bettman directly addressed this issue from Montreal in an intriguing article, written by Toronto Star sports columnist Damien Cox.

NHL CRUNCH

Economy not that bad, says Bettman

Disagrees with union on need to take bigger salary bite

Jan 25, 2009 04:30 AM

Damien Cox
HOCKEY COLUMNIST

MONTREAL–Gary Bettman sees no reason why NHL players should have one-quarter of their paycheques withheld in the second half of the season.

Then again, it’s not entirely his call.

Bettman was responding to an apparent request by the NHL Players’ Association to increase the escrow amount withheld from every player to 25 per cent from 13.5 per cent for the second half of the season.

“I don’t think that amount is necessary,” Bettman said yesterday.

On Friday, players’ union boss Paul Kelly said that deteriorating North American economic conditions will likely force players to give back more than $217 million (U.S.) in salary this season, the amount over the 56 per cent limit in total league revenues the players are expected to earn.

Part of the reason the union wants to now increase the amount each player pays to the escrow account is to make sure the players’ association isn’t left holding the bags for millions of dollars in monies owing to the league at the conclusion of the season. Salaries increased more than 13 per cent this season. Bettman and Kelly both agree revenues will grow slightly this season, but not enough to compensate for the increased wages.

“If the players’ association is concerned there’s a risk of a shortage, that’s something we can discuss,” said Bettman. “I do understand their desire to err on the side of having more money there.”

Partly, the NHL commissioner might be worried that increasing the escrow sends out a bad signal that the union believes the NHL’s projections of slight growth are overly optimistic, and thus indicates a lack of confidence.

On other fronts, Bettman seemed to indicate little interest in a number of union proposals, including that the players’ association be given a say in future franchise relocations and expansion.

Bettman denied that the troubled Phoenix Coyotes are on “life support,” although he acknowledged there are significant problems.

Phoenix needs an infusion of capital … and I believe that’s going to happen,” he said. “We have a pretty good track record of fixing teams that get into trouble.”