This guy's willingness to spend is killing this league! - Rich Lam
What's the real problem with the NHL's revenue imbalance? Fifteen or so teams that can't keep pace with the Maple Leafs, or the one team that is the Maple Leafs?
The league and its players are at an impasse: the NHL doesn't want to pay as much as they’ve already committed to on player salaries, because while the league as a whole has grown its revenues at an incredible rate, not every team has been able to keep pace with that revenue growth. And because overall player salaries are directly tied to league revenues and not individual team revenues, for some franchises the player salary expense is growing faster than they can afford.
And naturally, lots of smug fans in hockey-crazy markets love to blame non-traditional and bad-team-on-ice hockey markets for not keeping pace with the revenue leaders. If those struggling teams were re-located to stronger markets, then the disparity between the haves and have-nots would be diminished, and theoretically everyone could afford increases in player costs as league-wide revenues continue to grow.
But even if the players agreed to lower their salaries (again), and even if some struggling teams were moved to richer markets (again), those solutions only solve problems in the short term (again). The NHL cannot escape the reality that not every hockey market behaves the same: there will ALWAYS be a disparity in revenue growth between markets, and if it becomes too disparate and prolonged, there will be necessarily be teams that have trouble keeping pace with the leaders.
Now that may not be too problematic if franchises experience these revenue fluctuations in a cyclical-type fashion – in years where the on-ice team is good, revenues grow faster, and in years where the on-ice teams suffers, revenue lags, for example. If all teams behaved in some similar pattern, then the revenue disparities theoretically would wash over time.
What bucks the system, though, is when a team refuses to be cyclical. Any hockey market that is perpetually rich or perpetually poor, regardless of on-ice success, inherently causes revenue disparities that will accumulate across the league until it becomes time to trigger another lockout.
Which brings me to the Maple Leafs, the richest and worst franchise between the last two lockouts. Toronto was the only team to not make the postseason since the last lockout, yet despite not offering any on-ice reason for financial success, they’ve well outpaced the league in terms of revenue growth. Maple Leafs fans are nuts and numerous, and they’ll apparently spend money on any hockey product, regardless of quality. In terms of market behavior, the Maple Leafs represent a serious outlier in this league, and per the business model the NHL wants to continue using, outliers over time cause lockouts.
So yes -- let's relocate the goddamn Leafs, and if we're feeling really inspired, maybe the Rangers and Canadiens as well. And let's relocate 'em good -- somewhere in Idaho or Utah or Mexico City where they can't go revenue crazy.
What’d be the result of such a move? Well, mainly, there’d be a significant decrease in league revenue, which should sufficiently lower player salaries to the point of universal affordability. And without the insane markets causing huge revenue disparities across the league, all teams could grow their revenues at a more equitable pace. No more would non-traditional markets have to try like crazy to keep revenue pace with the impossible Leafs; no more would player salaries skyrocket because of such silly markets; and heck, there’s even the possibility of no more lockouts.
(Of course, the league could theoretically keep a team in Toronto if it really wanted, but then the solution would have to involve way more league-wide revenue sharing, and that apparently ain’t happening.)
So pack up your bags, Maple Leafs. Nothing personal, mind you, but per the NHL’s business model, it really doesn’t make sense to keep teams in such overly-traditional markets. Toronto has ruined the revenue equitability of this league for far too long, and I think this lockout finally provides a good opportunity to stop it.
Go problem solving.