Labor Changes Sought Despite Revenue Growth

Since Gary Bettman was elected the NHL’s first commissioner in December 1992, the league has undergone astonishing changes.

On the business side, Bettman has helped attract national TV coverage and major national advertisers, raising the NHL’s gross revenues to about $1.9 billion. With the hard-won backing of owners, he oversaw the participation of NHL players in the Winter Olympics, building a 17-day break into the schedule to accommodate the 1998 Nagano Games and a 12-day break for the Salt Lake City Games earlier this year.

In the last decade, the NHL has grown to 30 teams, many in nontraditional cities such as Tampa, Nashville, Dallas and Anaheim. Announced attendance has set a record for average (16,760) for four consecutive seasons and has surpassed 20 million each of the last two seasons. Eleven teams played to 99% or more of their capacity last season, boosting the league average to 91%

Before participating in the retirement of Wayne Gretzky’s King jersey Wednesday at Staples Center, Bettman addressed a wide range of issues during a meeting with Times reporters and editors:

Question: The Walt Disney Co. has retained a New York investment bank to sell the Mighty Ducks. What is your understanding of where that stands?

Answer: I don’t think there’s a real anxious desire on their part to sell the club. They want to make sure whatever happens, the team is playing in Anaheim. I haven’t been told there’s any immediacy on their part.

Q: Would it be a blow to lose Disney as an owner, because Disney was hailed as a new corporate owner when the Ducks and Florida joined the league?

A: I am more than comfortable with the ownership of the Mighty Ducks. We’ll see what happens. I hope they never sell but if they do, it will be for reasons less to do with sports than other imperatives.

Q: Your league is the next one to deal with labor and collective bargaining [its labor agreement expires Sept. 15, 2004]. This is a major deal for you. How are you approaching it?

A: We have had phenomenal revenue growth, but as fast as we’ve been able to grow revenues, salaries have grown even faster. This has resulted in two forms of disparities. The first is the disparity between revenues and salaries. The other is the disparity among teams in terms of what they can afford to spend, and that disparity, as in all sports, is exacerbated by big-market/small-market [issues], and in our case it gets even more exacerbated because of our Canadian franchises and the currency issue.

We as a league, by the time we get to 2004, will have operated under this [collective bargaining agreement] for 10 years, a good period of labor peace. And in many ways, we have been able to grow the league, but it has led to these other problems. We need a fundamental change in the economics of our game. And the underlying principles of that change, which is something I and all our governors of all our clubs are fully supportive of, is, we need a program of cost containment so we can control our costs relative to revenues such that all our teams can be competitive and economically healthy. And we want that to be applicable where all our franchises are currently located.

We are not interested in relocation. We are not interested in contraction.

We believe that with the right economic system, all of our clubs will be fine, and that’s something we’re committed to. I am on the record as requesting the players’ association to begin the dialogue as soon as possible. This goes back many months now, because I think the problems will get worse over time until 2004. And the worse they get, and the longer we take to address them, the harder it will be to fix--but they have to be fixed.

The union’s response is, they like the status quo and they’re not interested in talking about changing right now. That is their legal prerogative. That doesn’t mean I think it’s the right thing or a good thing but it is their legal prerogative.

Q: Does your model include subsidizing small-market teams through revenue sharing?

A: I don’t believe in revenue sharing in a vacuum. I happen to believe that when you have an inflationary system or revenue sharing without a cost certainty, there is actually more inflation. It simply spreads around the problem, it doesn’t fix it.

I also believe players are entitled to be fairly compensated and they’re entitled to share fairly in the growth of the league. This is not an anti-player campaign. This is about getting an economic model that works, because in the final analysis, if we don’t have the right economic model, it’s not good for the fans. All your fans, on Day 1 of the season ... should have hope and optimism that their team has as much chance as any other team to win. And that’s what we have to get to.

Q: What would be the consequence if you didn’t get a model you could live with?

A: Nothing good. Which is why we’re committed to this. If my choice is short-term pain or bleeding to death over time, we will take the short-term pain.

Q: When Bud [Selig, commissioner of baseball] was here before they reached their labor agreement, he told us if they didn’t get a deal they could live with, they would lose six to eight teams. Could you be specific like that?

A: I don’t envision a scenario where we don’t fix the problem when we have the opportunity to do so. I view 2004 as the opportunity to get this right and fix it. I don’t want to speculate about what would happen if we didn’t, because I’m committed to getting it fixed, but it wouldn’t be good.... I’m not interested in just having the Canadian franchises merely survive, I want them to be fully competitive and healthy. We owe it to all our fans to ensure all our teams can be healthy and competitive.