Bettman, Fehr and the Idea of an Industry Growth Fund

[Irishjim]

By JEFF Z. KLEIN

The N.H.L. Players’ Association’s enhanced revenue-sharing plan may wind up going nowhere with Commissioner Gary Bettman and the owners – or perhaps enough owners of struggling teams, seeing a lifeline that the league’s current revenue-sharing scheme does not provide, will demand that parts of the players’ plan be accepted.

Either way, there is one counterintuitive thing about the union’s $240 million revenue-sharing proposal: $100 million of it would be controlled largely by Bettman.

That part of the union proposal, called the Industry Growth Fund, was revealed by Don Fehr, the players’ association executive director, in a conference call with reporters on Friday but has received little attention since. And while most believe that the extremely cool reception Bettman gave the union’s overall proposal last week signals a rejection of enhanced revenue-sharing, it may not necessarily.

The notion that the union’s revenue-sharing plan may yet find favor with owners was floated by an unnamed N.H.L. player agent to Aaron Portzline of The Columbus Dispatch in an article Sunday, although this anonymous agent was basing his speculation on his knowledge of various teams’ finances.

“I think as many as eight N.H.L. owners would accept the N.H.L.P.A.’s initial proposal, and there’s probably four to six others who would find the proposal acceptable enough that they could tweak a couple of things and live with it,” the agent said.

This may sound like nothing more than wishful speculation, a hope that the owners are not entirely serious about cutting players’ salaries by 24 percent. Realistically, the N.H.L. is almost certainly headed for a lockout on Sept. 15, just three and a half weeks after Bettman and Fehr meet again in Toronto on Wednesday.

Nevertheless, the players’ revenue-sharing plan may just hold enough appeal for struggling owners for Bettman to accept it, in some form, in whatever collective bargaining agreement eventually emerges. After all, the N.H.L. is a league, according to Forbes, in which the Toronto Maple Leafs made an $81.8 million profit last season and the Columbus Blue Jackets lost $13.7 million. Even if Jeremy Jacobs and Ed Snider, the powerful Bruins and Flyers owners, are against more revenue-sharing, in the end each team gets only one vote on a collective bargaining agreement.

“I still remain hopeful that proposal will remain the basis for discussion as we go forward,” Fehr said Friday of the players’ offer.

The N.H.L.’s current revenue-sharing plan is by far the least generous among North America’s four major pro sports; some estimates of how much money is shared go as high as 12 percent of the owners’ revenues, but most put the figure at 4.5 percent to 6 percent. Struggling teams like the Blue Jackets, Islanders, Panthers and Stars get little relief from wealthy clubs like the Maple Leafs, Rangers, Flyers and Bruins.

The owners’ current revenue-sharing plan is estimated to have distributed about $150 million last season. Bettman said the plan has undergone minor adjustments in the owners’ proposal in these talks, putting the amount to be shared as high as $190 million.

Under the union’s $240 million revenue-sharing proposal, the players would get increases of 2 percent, 4 percent and 6 percent in the three years of a new agreement. Revenue-tied increases above those percentages that would go to the players under the current agreement would instead be set aside for revenue-sharing.

“Part of the enhanced revenue-sharing would be the creation of what we have called the Industry Growth Fund, which would put $100 million a year to go directly to the assistance of teams that need it,” Fehr said Friday.

“There would be some discretion as to which teams and what amounts and how they would be done,” Fehr continued. “A large part of that discretion, under our proposal, would be vested in the commissioner’s office.”

Bettman’s discretion in the union’s proposed Industry Growth Fund would differ from the baseball commissioner’s discretionary fund, which Bud Selig is allowed to distribute in any way he sees fit. For example, last year Selig lent the Mets $25 million in discretionary funds while the team was reeling from the Bernie Madoff fallout.

Bettman would not have complete discretionary control over the N.H.L.’s Industry Growth Fund, and it would be specifically earmarked for revenue-sharing. Nevertheless, the option to appeal to Bettman for discretionary funds might intrigue owners like the Blue Jackets’ John McConnell or the Islanders’ Charles Wang.

That is what the union is counting on as talks resume in earnest this week.