Players Being Asked to Pay a Hefty Price for Coming Back to Work
As the NHL inches toward returning to play, amid an increase in positive COVID tests among players and the possibility of a second, perhaps more serious, wave of the virus coming, two questions come to mind.
First, what exactly is the motivation to be a hub city for the NHL playoffs? And second, why are the players being asked to assume so much risk, not the least of which is to their long-term health?
With respect to Question No. 1, I’ve never quite understood the fascination with being a hub city. To be sure, the four finalists – Toronto, Edmonton, Chicago and Las Vegas – have been pushing hard to be included in a scheme that will have no fans from either in the city or outside and will have a short-term and negligible boost for a few hotels and restaurants, all the while introducing 600 people into your bubble. And when it comes to credible sources for the right information on COVID and ways to curtail it, they don’t come much more credible than Dr. Bonnie Henry, the provincial officer of health for British Columbia. Back when Vancouver was a serious consideration to be one of the cities, Henry was all for the plan, but not at the expense of bending the rules and public health guidelines that had served the province so well in preventing the spread of the virus. That essentially put the brakes on Vancouver’s bid to become a hub city.
Question No. 2 is equally vexing. We get that players want to play because that’s what they’re programmed to do. And we get that they like to be paid for it. If the players report back to work, they’re almost certainly going to receive their last paycheck of the season and do their part in reducing the amount of escrow they’ll have to pay to make up for the shortfall in league revenues. As it stands, about $3.9 billion of the projected $5 billion revenues has been collected, with the players on the hook for half of that shortfall, which comes to about $550 million. The playoffs could recoup perhaps as much as $400 million of that back, which would add $200 million to the players’ contribution.
But beyond that, the players are being asked to risk much more than the owners here. You can rest assured that the powerful men and women who own these teams won’t be getting facewashed, sweated on and spat on by their opponents. Granted, it has been established that the possibility of a tragic COVID outcome for a young, uber-fit athletes is ridiculously low, but there’s still a risk.
As far as the economics, the players coming back to play this season is being tied in with the collective bargaining agreement. The good news is that it will secure labor peace in the NHL for a few more years, but the players will end up paying for a long time to make up for revenues that were lost through absolutely no fault of their own. One way or another – through a frozen salary cap, salary rollbacks or escrow payments that will be spread over a number of seasons – the players will have to pay their share.
NHL Players’ Association executive director Don Fehr said on the record early in this process that neither side would use the restarting of the season to gain an economic advantage. But the reality is that the pandemic has created the economic landscape that exists right now. And you have to negotiate based on the economic landscape. So the players might get the Olympics back, but at what price? The owners, who have said all along that they need a salary cap because they take all the financial risks, are essentially telling the players they have to assume the risk for a pandemic for which it was not insured. Although the players, led by Artemi Panarin of the New York Rangers, who said that the escrow system must be fixed before the players even think of hitting the ice again, are starting to find their voice. It will be interesting to see where that goes.
And this part of it is not fair, but it’s a reality. And that is that hockey teams are appreciating assets and players, for the most part, are depreciating assets. The reason why it’s so costly to become an NHL owner these days is that franchise values have increased multifold, particularly since 2005 when the league achieved cost certainty. Most players, on the other hand, have between three and five years to make their money, and if this is the time that is crucial for them, they lose. While Auston Matthews will peak into his portfolio sometime tomorrow and see that it’s grown by $15.2 million, which is how much he’ll receive in signing bonus, players such as Alexis Lafreniere will pay over the next couple of years for a situation of which they were no part.
The bottom line is this. If the Toronto Maple Leafs are sold in 10 years, the amount the franchise has risen in value will make the COVID-19 crisis a blip on the screen. Not so much for the players, who at first blush to seem to stand to gain a whole lot by going back to work.
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