Olympic play may harm NHL teams

February 26, 2014

USA_vs_Norway_-_Faceoff_(5)In research that has become very timely with the conclusion of the 2014 Sochi Winter Olympics, an article published in the International Journal of Sport Finance suggests that NHL teams who have players who played in the Winter Olympics are likely to experience a drop-off in success.

The study, conducted by Neil Longley of the University of Massachusetts, is titled The Impact of International Competitions on Competitive Balance in Domestic Leagues: The Case of the National Hockey League’s Participation in the Winter Olympics.

Longley’s research was featured in an article in The New York Times (linked below), which examined just how teams who had star players in the Winter Olympics, may be affected during the remainder of the season. Interestingly, the study suggests that players representing the host country, in this case Russia, may experience the greatest decline in performance once they rejoin their NHL teams.

http://www.nytimes.com/2014/02/25/sports/hockey/study-says-top-nhl-teams-may-decline-after-sochi.html?smid=fb-share&_r=0

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Devils in Trouble

August 8, 2013

The New Jersey Devils of the National Hockey League (NHL) are reported to be in severe enough financial trouble that the league is considering taking over the team.  Current owner Jeff Vanderbeek, a former Lehman Brothers executive, was not able to meet payments on his newly restructured loan which was suppose to help ease payments.  Forbes reported earlier this year that the Devils have are more than $230 million in debt, which is around the amount that the Atlanta Thrashers were in debt before they were purchased and moved to Canada.  Curiously, Forbes is also reporting that the NHL does not want the Devils to declare bankruptcy as the Phoenix Coyotes did.  Rather, they are going to try and take control of the team and then help find a new ownership group to takeover the Devils.

The takeover seems to have some logic to it, as we have seen teams like the Los Angeles Dodgers get taken over by Major League Baseball to get rid of incompetent ownership and management.  The Dodgers were bought out at a major profit, and the team somewhat rejuvenated.  While I do not think there will be any “mega” offers for the Devils, the franchise has won Stanley Cups in recent memory, and was once one of the dominant clubs in the NHL.  With the league taking over the team, they may be losing out on the $25 million they are currently owed from Vanderbeek, as well as the $55 million in salaries that are due to players this season.

While it does not surprise me that another team has had such financial troubles in the NHL, to see one in one of the larger markets in the league may be a sign of several things.  It could be poor management from a financial perspective, an owner trying to bite off more than he can chew, or it could be that the metro area cannot support that many professional hockey teams.  In any case, this will probably be another point in the argument by the owners to get an even larger split of the revenue the next time they negotiate a collective bargaining agreement.


Lockouts and Scabs

September 26, 2012

The NHL lockout claimed more victims today, with “just under 20” employees of the St. Louis Blues being laid off by the organization.  Additionally, other employees have taken pay cuts or switching to a four day work week.  Layoffs are spreading around the league, the Florida Panthers even have laid off their mascot.  Some are comforted that Bettman is not taking pay while the league is locked out, but it is important to note that he is the lowest paid commissioner in the major North American sports.  Still he took home close to $8 million in salary last year.

There has been some other news in the NHL, and much of it seems to be coming out of Alberta.  First, the Edmonton Oilers are said to be considering Seattle as a potential site for relocation.  While Bettman and the Edmonton mayor have been telling fans to note worry, it is worth noting that the Oilers owner was in Seattle to talk relocation.  Also coming out of Edmonton is the news that the Oilers and the Calgary Flames are trying to have the lockout ruled as being illegal in the province.  The NHL and NHLPA lawyers have congregated in Alberta, where they are currently arguing in front of the Alberta Labour Board as to whether a lockout is legal by the laws of the province.  It would be curious to see how this turns out.  If the lockout were found to be illegal in Alberta, though a similar motion has already been struck down in Quebec courts.

In other lockout news, the NFL referee lockout is still continuing, and the fans are angry.  Last night in a key final play, the replacement referees seem to have made a mistake which changed the outcome of the game away from the Green Bay Packers to the fortune of the Seattle Seahawks.  Individuals across the country now bemoan the “horrid” refereeing in the NFL, yet they continue to watch the game.  Former 49ers QB Steve Young came out and said that if people are really so angry that they don’t like the product with replacement referees, they should stop watching.  That doesn’t seem to be the case, as ESPN’s Sportscenter scored ratings around a 5.0 for their midnight broadcast.  This is about four to five times higher than the normal viewership during this time period.  It seems that the bad refereeing is almost drawing more attention to the league.

New Jersey state senator Stephen Sweeney isn’t amused by the referees.  He has proposed that New Jersey consider banning replacement referees from working games in the state.  Senator Sweeney is naturally a Packers fan.

Yet here we see government now trying to get more involved in sport, should they not be working on more important things than whether your favorite team had proper officials for their game?


More movement in the LA sports scene

September 19, 2012

Today the Los Angeles Times published an article noting that Anschutz Entertainment Group (AEG), my former employer, headed by billionaire Phil Anschutz, was looking for someone to buy out the rights to their Los Angeles based sport properties.  Included in this are the Los Angeles Kings of the currently locked out National Hockey League (NHL), the Stapes Center where the Los Angeles Lakers and Clippers play (NBA), as well as the Los Angeles Galaxy of Major League Soccer (MLB).  This move came as a surprise to me, as AEG had long been working towards building a football stadium in Los Angeles in order to attract a National Football League (NFL) team.  As the plans have stalled several times and have moved forward and backward several times, it could be that AEG has finally decided to give up on the project, and abandon all their other Los Angeles projects as well.

At the same time, this is not the first time that AEG has sold off sport properties.  The company was one of the main investors along with Lamar Hunt to help get the MLS started in the 1990’s.  AEG once held the three major market teams in the MLS, the Chicago Fire, Los Angeles Galaxy and New York/New Jersey Metrostars.  Since then they sold of the Chicago Fire, as well as the Metrostars.  The Metrostars were purchased by Red Bull for a price reported around $100 million, which many thought was a great deal for AEG to sell off an MLS franchise at such a high price.  Now it seems that AEG is moving away from the MLS and is selling off a lot of their sport properties.  Additionally, it could be a combination of getting out of soccer while they can, selling off a franchise from a locked out league, and the LA football stadium problems that has pushed them in this direction.

In either case, if AEG does sell of the properties it will be a major change in the LA sports landscape.


Quick Update: NHL Lockout Official

September 17, 2012

Greetings, last night the National Hockey League (NHL) officially locked out players, making this the third lockout of Gary Bettman’s tenure as league boss.  I find it absurd that someone would be allowed to be the commissioner of a league after two lockouts, but now his leadership has presented us with a third one.  Of course, he really works for the owners, so as long as he is keeping the thirty or so super rich individuals across North America happy, he will stay in his job.

On Saturday, Bettman continued in doing his work for the owners when the league told the head of the players’ association (Donald Fehr) to not even bother trying to get a last minute face-to-face meeting to try and bring the sides to a compromise.  Granted, this may have been a waste of time as the sides are still too far apart on any deal happening.  The players had already taken a 24 percent cut in salaries to end the previous lockout in 2005, now the owners want the players to drop the percentage of revenues they share by around 8 to 10 percent.  The players weren’t going to agree to this, the Collective Bargaining Agreement was thus allowed to expire, and thus we are now in a lockout.

In my opinion the league has continued to slash costs, the previous time the league had some good arguments to reduce costs, but this time around it seems as if they just want to slash costs because they can.  The NHL is scheduled to begin play in October, but that seems to be in doubt as there is no way a deal will get done in time to get players to training camp and ready for the season by then… unless those players bolt to Europe.  The exodus has already begun, Evgeni Malkin has already left to play in the KHL in Russia.  The KHL was well prepared and set out rules about the number of players from the NHL a team can sign during a lockout, and that the salaries can’t exceed 75% of what the player makes in the NHL.

Already several players are headed over to play in Europe which makes me think that with other revenue sources for many players readily available, this lockout could last a long time. One wonders if this could be the end of the NHL as we know it.


If the NHL locksout, who gets Ovechkin?

September 5, 2012

As Bryan reported in the previous post on the blog, the NHL labor negotiations do not seem to be headed in a good direction.  My students have gone from posting comments on our class site for governance from: “will the negotiations get done?” to: “If a puck drops at center ice, and no one is in the stadium, does it make a sound?”.  Clearly there is some cynicism from the fans as we have already been under two work stoppages in the Gary Bettman era of the NHL.  The second one hurt the league, forced them onto an obscure Cable TV network, but supposedly solved a lot of the revenue issues that existed, right?  Wrong, the revenue issue seems to be getting more problematic and is the core issue that is sending these negotiations down the tube.

Many are already talking about the NHL lockout, and one league with high interest is the Russian professional KHL.  Being one of the highest quality leagues in Europe, it is a naturally attractive location for players to go and make some money while the lockout continues.  The big question already seems to be who has first dibs on Russian star Alex Ovechkin.  Ovechkin is in the headlines as Dynamo head Mr. Rotenberg said that he doesn’t want Ovechkin on his team, and will not go after him if there is a lockout.  Okay, no big deal.  Except it is a very big deal, so big that the KHL President came out and said that Dynamo should have the first rights to Ovechkin, as they have the “moral right” to him.  That’s right, the teams owner says he doesn’t want Ovechkin,  but the head of the entire league says that he should be on the team.  It is a confusing situation, and it looks like there is even more arguing and fighting going on between the teams and the league over who gets Ovechkin.

Some say Dynamo has the birthright to Ovechkin, who would technically be a free agent when coming to the league.  Others say that it should be open season.  In either case, at least Ovechkin knows that if there is a lockout, he will still have many courting his services.


NHL Realignment

December 6, 2011

Reports surfaced last night that the National Hockey League has approved realignment. Instead of having two conferences with multiple divisions, the league is having four conferences with no divisions. For a list of the conferences, see this TSN article.  The NHL placed an emphasis on time zones and geographic rivalries with the new alignment.  With the alignment also comes a couple of additional changes.  First, the schedule will be more balanced in that teams will play all member teams at least twice (home and home).  Within the conference, teams will play other teams 5 or 6 times.   Second, the first two rounds of the playoffs will consist of intraconference matches, which effectively means a “pod” type system.

The exact financial implication is unclear at this time.  However, one can speculate that overall travel costs for the regular season will be lower for the entire league with a more balanced schedule.  Second, having the first two rounds of playoffs with close geographic competitors not only reduces travel cost for participating clubs, but also should increase the competition between the teams.  Overall, realignment looks like a positive step for the NHL and its clubs.  Hopefully, they do not take a page out of the Big Ten Conference “playbook” in terms of naming the conferences.