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NHL work stoppage comes as no surprise
By Gary Araki September 18, 2004 |
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In Downtown San Jose, there is a big building that could be just like some of the large industrial complexes around Silicon Valley that have been vacant since the dot com bust occurred in 2000. In this case, it’s the HP Pavilion at San Jose (a.k.a. Shark Tank) that the Silicon Valley Sports and Entertainment group who own the San Jose Sharks and operate the facility for the City of San Jose. SVSE might have up to 44 more dates in which to put other events in the Tank to attempt to replace the revenue, lost by the Sharks. The NHL Board of Governors met this morning in New York and ratified that a lockout should proceed since negotiations have broken off between both sides. September 16 was supposed to be the beginning of the 2004-2005 season starting with training camps. As it stands now, the entire campaign could come to a crashing halt. Commissioner Gary Bettman addressed the media after the press conference, and he reaffirmed that all thirty ownership groups are behind a plan in which the salary question must be answered before a CBA can be agreed on from the NHL owners’ perspective. “This action is not taken lightly -- or eagerly -- and when the Union wants to stop the posturing and acknowledges that the problems are as real as our Governors' resolve to fix them, we will be here, ready to make a fair and meaningful agreement that will usher in a new era for our game. “My pledge, at this difficult moment, is that we will correct this untenable situation the right way -- not with Band-Aids and half-measures, but in a way that will ensure the health and excitement of our game for years to come. This game's future depends upon getting the right economic system. In the absence of such a system, there is no future for our game. As difficult as today is, the reality is, we had no choice in the face of the Union's continued refusal to address economic problems that are clear to everyone but them,” Bettman said. He supports the resolve of the NHL ownership to not open the 2004-2005 season unless the salary situation is resolved. When the owners had the previous lockout in 1994-1995, they conceded to the players’ demands without any salary cap resuming the season in January 1995 with an abbreviated schedule. So after the current collective bargaining agreement expired, we knew this was coming... It’s not a big surprise to anyone that a work stoppage was going to happen in September 2004. Even back as far as last September, when the San Jose Sharks pre-season began for the 2003-2004 season, it was rumored that the 2004-2005 season might be peril if the two sides could not work on getting a CBA that would rebalance the league and also install some salary caps to assist some of the teams who show a financial loss after every season. Without getting into a confusing financial analysis, the big numbers that stick out to anyone who looks at them, is the fact that the NHL collectively for the 2002-2003 season brought in $1,996 million in revenue while the cost for players salaries was $1,494 million. 75% of the NHL revenue went to players’ payroll, which makes the NHL the largest percentage of revenues being spent on salaries among the four major professional sports. The players association proposed a plan in October 2003, where a luxury tax similar to baseball would help balance salaries and clubs that spend more would be taxed accordingly and that money would be redistributed to the clubs that need the assistance. But that idea was turned down. The NHLPA proposed another solution in early September that was promptly turned down by the NHL and basically stopped negotiations between both sides. So now what? The first effect of this lockout will be that some of the staffs of the individual clubs will now be laid-off from their jobs, as it’s been reported by some of the teams earlier this summer. Training camps won’t open and for the San Jose Sharks, their first pre-season game was supposed to be in ten days at the Tank when the Phoenix Coyotes were supposed to be in for a Saturday night match-up has been cancelled. Second, the local businesses suffer. When you look economically at what a NHL franchise does for a city, it’s amazing how many people are affected by a sport that fills an arena for 41 to 44 dates. Downtown San Jose will be a loser in this lockout if it continues for the season as some have predicted for three reasons. One: Merchants downtown will have some slow days and nights as Sharks fans will not have a reason of going to the Tank and they won’t be spending money at the establishments in the area. Two: Anyone and everyone who somehow earns a living either full time or part time with the operations of the Shark Tank for hockey is affected. This includes ticket takers, security people, Sharks staff, Arena Staff, janitors, etc. The list goes on how many people it takes to run a place like the Shark Tank for one night of hockey. Think about others, like the hotels, the merchandisers, food suppliers, etc. Even those of us in the media are affected. Because there are no games to report on, we won’t get paid by the outlets we represent. It’s staggering when you look at the possibility of a professional sport being canceled for the entire season and how many people are going to be affected economically. Third: The future of NHL Hockey. It’s been stated time and time again by others in the sports world that lockouts and strikes do not help the sport. Baseball has been through this and the damage that has been done with the walkout in 1994 has taken until a few years ago to get fans back into baseball. Hockey has a much larger problem because it has the smallest fan base. The Sharks showed this year that sellouts of 17,496 became a rarity this year. Finding new hockey fans in the South Bay is a struggle since hockey is one of those sports we (as native Californians), didn’t grow up with. Some of the San Jose fan base are converts who have been attracted to hockey after watching it for awhile or having moved from another city. Many of us “natives” are usually converted by someone who probably has a hockey background of being from the Eastern US, or at least had lived in “snow country” which Silicon Valley is definitely not. Demographically in an area like this, the “base” of people who follow hockey is going to be small. The ratings both on the local and national television ratings prove it. Furthermore, NHL revenues are the worst in professional sports and hockey translates better when seen live. The Sharks will have a large hurdle to clear if and when hockey does return to the Tank. Will the fans continue to flock to the Tank to support the team? Or will the fan base “boycott” the games for awhile? Only time will tell and how much damage is done in the media between the players and the NHL ownership that will influence the fan who has the all mighty dollar he or she puts down with more dollars to purchase their tickets to watch NHL Hockey. Short Term: It’s probably a sure bet that at this point the first month of the regular season is probably a done deal unless negotiations begin immediately. But as of now, there are no talks scheduled between both sides since the NHLPA was probably waiting to see if the lockout did occur. Bettman did say that the clubs have been informed that they could go ahead and release their respective arenas for their dates for the next 30 days. This would then put us almost to where the 2004-2005 regular season was scheduled to begin on October 13th. Now the long wait begins to see if there is a reason for Sharks fans to make the pilgrimage to Downtown San Jose for 41 home games starting on October 13th. Both sides of this issue are very stubborn, and it seems talks between the two isn’t going to happen until, maybe after the 2004-2005 season is canceled? It sure seems that way. Gary Araki is in his third season of covering the San Jose Sharks for SportsRadioService.com, and is also the Sports Director for KLIB AM 1110 in Sacramento, and KPTL 1300 in Carson City, Nevada. |
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