The NHL lockout turns 2 months old on Friday. Here is where damage is being done:
Players: On Thursday, players missed their third paycheck. They have now technically already lost 19.4% of their 2012-13 pay. But that figure isn't permanently settled. What players would receive in a shortened season still would have to be negotiated, but if, for example, an agreement is reached and the NHL plays a 68-game schedule starting on Dec.1 they would likely regain some of those lost wages. A 68-game schedule represents 82.9% of an 82-game NHL game, and players could logically expect to receive 82.9% of their 2012-13 salary. That's what happened when the NHL played a 48-game season in 1994-95. For $10 million Tampa Bay Lightning center Vincent Lecavalier, who received no signing bonuses and isn't playing in Europe, that would be a loss of more than $1.7 million from this year's salary. And even after prorating player salaries is complete, their final take won't be settled because one of the major issues in collective bargaining is the owners' desire to drop players' share of hockey-related revenue from 57% to 50%. If that occurs, players will have a portion of their paychecks placed in escrow to cover the possibility that their share exceeds the agreed-upon percentage.
Revenues: The NHL was a $3.3 billion industry last season, and the league was anticipating a 5% increase in revenue for the 2012-13 season. Players had been using a 7% growth expectation. Now, the NHL is projecting revenues to be down a minimum of $350 to $400 million if the season starts up. More important, owners and players don't know if fan backlash over the lockout will affect growth. Even if they can get a season started in December, they can't be sure of which direction revenues will head.
Collateral damage: The economic impact in the business community of NHL cities is significant because of lost hotel night stays, restaurant charges and other local business spending erased by canceled games. Various news reports have also linked lower beer sales in Canada to the lockout. Arena workers lose pay for each canceled game. Meanwhile, employees of the NHL, or some of the 30 NHL teams, have also been affected, even though they have no stake in the outcome of the lockout. The league office has gone to a four-day work week, with a corresponding 20% pay cut, and some, not all, teams have had layoffs and pay cuts. The number of employees varies significantly from team to team depending on market size and relationship with the arena, but the office staffs would range from 65 to 110 employees. The hockey operations staffs would be in the range of 25 to 30, counting general managers, assistants, coaches, scouts, trainers, medical personnel, etc.
Classic letdown: The cancellation of the Winter Classic robs the NHL of its best opportunity to sell the game to non-fans. It has become part of the New Year's Day television landscape, and non-fans seem to tune in just to live the romance of outdoor hockey. They will regain the boost of setting the attendance record in Ann Arbor, Mich., because the next Winter Classic will be played there. But the NHL will have no place on national television this year on Jan. 1, 2013, and that is a major loss for the sport.
Off the air: The NHL's deal with NBC has been a game-changer, showcased last season when every NHL playoff game was televised. The momentum of last spring's compelling playoff coverage has been lost. NBC has made the NHL the centerpiece of the NBC Sports Network, and the network has been forced to fill those spots with other programming. Since ratings are down, revenue has to be down for those time slots. If the season is canceled, NBC does receive another year added onto to its deal with the NHL.
Lost opportunity in L.A.: The Los Angeles Kings ended a 45-year championship drought by winning the Stanley Cup last June, but their ability to fully capitalize on their success has been shortchanged by the lockout. Momentum will have to be rebuilt after the lockout is over.
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