New NHL Deal Has “Marginal” Benefits For Blue Jackets

Blue Jackets players practice last week before ratifying a new labor agreement that will put them back on the ice Saturday. Experts say the new deal will have marginal benefits for the Jackets.
Blue Jackets players practice last week before ratifying a new labor agreement that will put them back on the ice Saturday. Experts say the new deal will have marginal benefits for the Jackets.

After a four-month lock-out, the Columbus Blue Jackets begin their season Saturday night in Nashville against the Predators.

Many hockey fans hope the new labor agreement will help teams like Columbus and Nashville become more competitive. But as WOSU reports, relief for small market franchises, like the Jackets, will be minimal.

The new collective bargaining agreement between the NHL and the players’ union is not much different than the one that expired before the lockout.

There are a couple changes that could help the Jackets, both involve sharing revenue from ticket sales, TV rights and other sources.

First, the new deal increases revenue sharing among teams. Big market teams like Boston will share more money with smaller market teams like Columbus.

While it means the big market franchises will become more solid, the ones in smaller markets also will receive more money.

In theory, the extra funds can be used to secure better players and help smaller market teams be more competitive, attract more fans and make more money, right?

“The benefit will be marginal. It’s there, but I don’t think it’s going to go a long way,” Andrew Zimbalist, Smith College economics professor in Massachusetts, said.

Zimbalist puts the new rules into perspective. He said the bottom 15 hockey teams will share about $50 million dollars. So on average, he expects each team to get about $3 million. Good but not great news for a franchise that has been losing money.

“Sure, it will be marginally helpful, but does it get them back to even on the bottom line? No. And does it make them profitable? No, it doesn’t make them profitable.”

The labor agreement also changes another revenue sharing component: the revenue shared between owners and players. Under the old deal, players got 57 percent of revenue; teams got 43 percent. Now the players and teams split the revenue 50-50, so more money for the owners. On average, Zimbalist said that will give teams an additional $7 million a year.

“So you put $7 million and $3 million together and now you’re getting closer to being able to bring these teams back to profitability. But I don’t think you’re getting all the way there,” he said.

Blue Jackets president Mike Priest said the new labor deal mainly enhances the old one. He remains cautiously optimistic of any benefits for the Jackets.

“We’re waiting a little bit to see the impact of that. We do believe, however, that we will not go backwards. There will be more teams involved in the pool, and the pool of dollars are to grow on a percentage of revenue basis,” Priest said. “But the key will be the league as a whole and its ability to continue to generate revenues to determine how much of a revenue sharing piece we’d be able to get.”

There’s also a new provision that could generate more trades throughout the league, and help smaller clubs, like the Blue Jackets, who may not have been able to afford costly trades in the past.

Priest said there’s very little in the new labor agreement that will have more than a marginal effect on the Columbus hockey team. In fact, he said there are some new provisions that will cost the team more money.

For example, veteran players will now have their own hotel room when they’re on the road instead of sharing one. And new trades will have some of their relocation expenses paid.

“You know, they’re not on a macro sense real significant dollars, but when you add those dollars up in a market like Columbus, it will be noticeable. But on the whole, we should enhance our situation,” Priest said.

For now, Priest is mostly focused on ticket sales. He said the team’s corporate sponsorship has remained strong during the lockout. Now comes the hard part, filling arena seats after a terrible season and a long divisive labor dispute.

“In order for a team to reach a break-even point, you’re going to have to sell at the league average of paid admissions and we still have work to do to get us there.”

That work begins Saturday night.

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