The Coming Ice Age

Mammoth Revenue Problems, Looming Lockout, Limited Fan Base Could Leave Game in the Cold

As the NHL enters the second half of its season, many teams are playing before sparse crowds, TV ratings continue to slip and players and owners are hunkering down for what many expect will be the longest work stoppage in professional sports history.

A chasm between the owners and the players' union over how -- or even whether -- to control skyrocketing salaries is all but certain to lead to a decision by the owners to cancel part if not all of next season when the current collective bargaining agreement runs out in September.

The looming lockout has many fans worried that some of the game's brightest stars from Europe and Russia may never return to North American ice. And with the economic stability of several franchises in question, some are debating whether all 30 teams would survive an extended layoff.

"I'm nervous," said Washington Capitals owner Ted Leonsis, whose club expects losses of $30 million this season and routinely plays before thousands of empty seats at MCI Center. "The league is in trouble."

According to the league's figures, NHL teams could lose an estimated $300 million this season. Twenty clubs are losing money, according to the latest Forbes magazine analysis. Two teams filed for bankruptcy last season before new owners were found, and at least one franchise, the Mighty Ducks of Anaheim, has been for sale for years without finding a buyer even though the team came within one game of winning the Stanley Cup last spring.

NHL Commissioner Gary Bettman says the sport's business model is broken, and he has staked the health of the league on achieving a labor agreement that he believes will be an economic cure-all by capping player salaries. Salaries have tripled from an average of $558,000 in 1993-94 to $1.79 million last season, overwhelming the growth in league revenues, which will reach about $2 billion this season.

"The irony of our situation is that the bigger we've gotten as a league and the more revenue we've generated, the worse our economics have gotten," Bettman said. "With the right system all of our teams will be healthy and well-supported."

The National Hockey League Players Association insists owners are making more money than they admit, and it is adamantly opposed to any labor agreement that would put a ceiling on salaries.

"We believe in an open marketplace and we don't believe in a cap system," said Ted Saskin, the union's senior director and general counsel. "Everything we've seen from the NHL suggests that their vision of cost certainty isn't anything other than a salary cap system, and they know this is a complete nonstarter for us."

But hockey's problems run deeper than finding a way to align salaries with revenues.

The NHL historically has been a regional sport, best seen live by its fiercely loyal fan base. The league's big bet to embed itself into mainstream American sports culture by expanding into non-traditional U.S. hockey markets in the last decade has not brought the buzz, or the multibillion-dollar national television windfall that it hoped for. The NHL in 1999 began a five-year contract with ABC/ESPN that earns each team just $4 million annually, a fraction of the $80 million for each NFL team or the millions that NBA and Major League Baseball teams earn on their national deals.

Expansion has brought a decline in the quality of play, in the eyes of the sport's critics, as an increasing number of clubs with diluted talent seek to mimic a successful, but boring, defense-oriented style of play that has led to a drop-off in scoring and may be turning away fans. The league averaged 6.7 goals per game in the five-year period from 1990-91 through 1994-95, peaking at 7.2 in 1992-93. The average goals-per-game figure this season is 5.0.

Many players, coaches and fans are wondering how long the league's arenas will be dark once a new Stanley Cup champion is crowned in June -- and whether the NHL will survive a lockout in its current form.

'Not an Easy Sell'

In the last 13 years the NHL has grown from a 21-team league composed predominantly of clubs in the northern United States and Canada to a 30-team entity, with its 24 U.S.-based franchises spanning the sport's northern heartland and the Sun Belt. When Bettman was hired as commissioner in 1992 he was charged with growing the NHL, making it geographically suitable for a national television contract in the United States and entrenching it as the fourth major professional sport in the country. Three years after the league added its latest franchises, in St. Paul, Minn., and Columbus, Ohio, many question whether Bettman has achieved his goals.