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NHL could get caught in economic crunch
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But Bettman was referring to season ticket and luxury suite sales, which are the lifeblood of the NHL accounting for most of the attendance. He and the team owners are likely breathing a sigh of relief that the economic crisis didn't occur during the spring and summer when season tickets are sold.
Game-day ticket sales, however, are another matter and could see a decline this season if economy-minded fans find them too expensive.
Bettman did acknowledge that sponsorship at the local and national level was down. The problem is likely attracting new advertisers now reluctant to pay out big bucks for television, radio and rink board ads.
Concession sales such as food, beverages, programs, parking and souvenirs could be another area of concern.
According to the website www.teammarketing.com, the average price last season at an NHL game for a beer was $5.75, a soft drink cost $3.17, a hot dog $3.66, parking $11.92, a program $2.98, and a souvenir cap $15.67. Those prices could prove too expensive for hockey fans keeping a close eye on their budgets.
Another troubling factor is the decline in value of the Canadian dollar. Trading on par with the American dollar a few months ago, the "loonie," as the Canadian dollar is nicknamed, has declined in recent weeks, sliding this week to under 90 U.S. cents.
With the six Canadian teams reportedly accounting for more than 30 percent of league revenues last season, a decline in the Canuck buck could have significant consequences.
An economic slowdown — the politically correct term for "recession" — might not have a significant impact upon the league's big markets. But it could hurt teams like the Atlanta Thrashers, Nashville Predators, Phoenix Coyotes, Florida Panthers and Columbus Blue Jackets, who have been struggling at the gate. Another tough season at the turnstiles combined with an economic slowdown could result in mounting losses, increasing the possibility of those clubs going up for sale.
The impact could also be felt on players' salaries for next season, which since the 2005-06 season have been rising significantly along with the league's salary cap. Ottawa Senators owner Eugene Melnyk suggested to the Ottawa Citizen that the league's salary cap could soon dip from its current high of $56.7 million to as low as $50 million.
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| As the economy continues its downturn, the pain on Wall Street will be felt in the wallets of many NHL teams. (Richard Drew / Associated Press) |
A decline is certainly possible. The cap could also still increase, but only marginally, and would certainly be less than the recent increases of roughly $6 million per season over the past two years.
If, however, next season's salary cap should plateau or even decline as Melnyk forewarns, there won't be as much money available to next summer's crop of unrestricted free agents. That could prompt more UFAs to re-sign with their current teams over the course of this season rather than risk not getting a better deal on next year's open market.
It could also result in more teams losing depth players they might have otherwise retained, sending them into the welcoming arms of the European leagues, especially Russia's Kontinental Hockey League.
A decline in the cap could also affect the players' escrow payments.
Under the collective bargaining agreement, a percentage of the salaries are held in escrow until season's end. If league revenues grow higher than anticipated, the players get most or all of that money back with interest. But if revenues this season are lower than projected, the players might not get that money back. That possibility has already sparked speculation that it could prompt the NHL Players Association to re-open labor talks this summer.
But given that the NHL lockout ended only three years ago and the players are still doing well salary-wise, it is doubtful that issue could force them to vote to return to the bargaining table.
It remains to be seen how much of an impact the economic woes have on the NHL, but you can bet more players, agents, general managers and team owners will be keeping a close — and perhaps nervous — eye on how things unfold this season.
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