Exodus
Oh, I am loving every single minute of this. I was right, AGAIN, and I’m not going to shut up about it for, oh, like, the rest of my life.
Gotta start at the beginning. I am, or more accurately, used to be, a rabid hockey fan. Born in Toronto, played since I was 8; moved to Chicago and nearly won the IL State Championship my junior year of high school; massive Blackhawks fan, published a fan web site for about three years; I mean, I ate/drank/breathed/pooped the sport.
Until the lockout. Until they decided to turn the most time-honored sport on the North American continent into pond hockey with beer sales. But we won’t get into the whole shootout debacle, history will prove me right on that front too. I walked away from the sport last year, and I am proud to say I have not watched a single NHL game since the new collective buffoonery agreement was signed.
No, today we are talking pure and simple economics, specifically the contentious sticking point between players and owners during the lockout: the salary cap. Players didn’t want it, owners wouldn’t sign a deal without it. Ultimately they did implement a cap with a floating scale tied to owners profits, one of the dumbest clauses ever written into a legal contract, and both sides have just witnessed the first step in the eventual demise of what today we call the NHL.
The following is an excerpt from an article I wrote for my fan site, Talking Hawks, in July of 2005:
“First, the salary cap. As if putting a limit on a player’s earnings wasn’t bad enough, the players have foolishly agreed to tie their collective earnings to the owners’ revenue. This will cause a never-ending downward spiral, causing player salaries be cut in half by the start of next season, and making it more lucrative for top-name talent to play in Europe. Permanently. The NHL has just guaranteed itself the position of no-longer-the-premier-hockey-league in the world.”
Well, training camp is about to start in early September for NHL teams. There are just a few weeks left for teams to sign their free agents. But what are they finding? Some of them have already signed with…
…wait for it…
Russian teams.
According to an article posted August 24th on the TSN.ca web site, there is a wave of players shunning the low-ball offers from the NHL teams that own their North American rights to go play for more money in Russia. The Tampa Bay Lightning has lost winger Eugeni Artukhin to Locomotiv Yaroslavl, who will be teammates with defenseman Denis Grebeshkov and winger Sean Bergenheim of the New York Islanders. The Vancouver Canucks have lost promising backup goaltender Mika Noronen to AK Bars Kazan in Russia, and star winger Nikolai Zherdev is holding out from the Columbus Blue Jackets with an offer on the table from an undisclosed Russian club.
The exodus has begun. The end is near.
This should not surprise anybody with two IQ points to rub together. It’s simple supply and demand. The NHL owners arrogantly believed that they were the only game in town, not realizing that “town” now includes teams on three continents. By limiting the amount of money that their own teams can spend on player salaries, they opened up opportunities for European and Russian teams to come calling.
And it isn’t as if these players need to go out and attend tryouts for these overseas clubs, they all have agents to do the leg-work for them. Agents get paid more money if a player signs a bigger contract, so how long do you think it took the agents to start soliciting offers from across the Atlantic? About as long as it took the ink to dry on the new collective bargaining agreement. This wasn’t just a possibility, it was an undeniable certainty.
So right now we have four gone and one strongly considering it, what happens next? A bunch of things. First, more European teams will see that quality players can be had for less money than they had thought, and many of them will enter the running to bid on these young men. This will increase demand for NHL players whose contracts are expiring. This will force bidding wars for NHL players, not just between NHL teams, but with overseas teams as well.
Next, NHL teams will respond with higher offers to keep their talented players. But to do that, they will need to lower salaries on their higher-paid players in order to stay below the salary cap. So the gap between “stars” and the rest of the team will narrow, but the average salary will start a slow decline. Why? The players jumping ship to Europe and Russia will have to be replaced, necessarily with less-talented (and cheaper) players. So the highest salaries will be lower, the lowest salaries will be lower, and the average salaries will be lower. Bad news for players all around.
Next, the talent pool in the NHL will be diluted. We have to create an artificial universe here to illustrate the situation, so bear with me. Let’s say the NHL has two teams of 20 players each, a total of 4 “stars” on each and the other 16 players are just your average NHL fare. Well, now the two European teams (with less-than-NHL caliber players) comes to realize that they can afford to pay for four average players each from the NHL. So they do that, luring away 8 players from the 40 that are currently playing. That puts 8 European team players out of a job, so they go sign for peanuts with the NHL teams. So the result of this is, the NHL has lost 8 average players and replaced them with crappy players, and the European teams have replaced 8 crappy players with 8 NHL players. Distribution of talent is spread across more teams, and with a fixed number of NHL caliber players on planet earth, no matter whether it is four teams or four hundred, the talent pool will be thinned on North American shores.
And finally, right now the exodus consists of players that are replaceable. But if these Russian teams can afford average players today, what’s to say that they won’t be able to afford top-tier players tomorrow? Top-name talent salaries will soon be on the decline (see above), making such players more affordable to overseas teams. With the addition of NHL talent, these Russian teams are going to be winning more games, putting a better product on the ice, selling more tickets, and generating more revenue. That means more money to spend on more talented players, which means more wins, which means more ticket sales, which means more money, and so on. This is nothing but good news for European teams who want to take the plunge and invest in some NHL hockey talent.
And what does it mean for the NHL? As I said, it is the beginning of the end. As the exodus continues and the talent pool thins, the league will be putting a poorer-quality product on the ice. The upward spiral of wins, ticket sales, and revenue in Europe will be mirrored in the opposite direction over here: fewer wins, lousier games, lower ticket sales, lower revenues, less money to spend on good players, which means fewer wins, and so on.
There’s a salary cap in basketball, sure. Why hasn’t this happened to the NBA? Where the heck else are players going to go? Italy? Japan? What about the NFL? There’s a salary cap there too. But have you seen many players snubbing their NFL teams to go play in the Canadian league? Methinks not so much. These sports truly have a monopoly on talented players, because there are no other leagues that rival them. Not so for hockey, where viable professional leagues have been flourishing in Europe and Russia for decades. There is an established (and growing) fan base and solid ownership abroad, ready and willing to make a substantial investment in premiere talent in order to boost their bottom line. The NHL is in trouble, and they have nobody to blame but themselves. Adding to their misery is that the owners are, collectively, too proud to admit what they’ve done to themselves, even if they were smart enough to realize it. Which they aren’t. They will all wake up one day and find themselves without a fan base, without a team, without a league. And it couldn’t happen to a nicer bunch of hyper-capitalist mercenaries.
Who suffers? The fans, and the great sport of hockey. The paradigm shift with the most recent collective bargaining agreement was the death knell for this great sport, put to a slow and painful death by 30 bankers and the impotent homunculus who calls himself Commissioner. When it’s all over but the crying, let’s be sure to lay the body at their feet.










