- The Washington Times - Saturday, June 26, 2004

RALEIGH, N.C. — The NHL is projecting an operating loss of nearly $250million for last season, a little less than the $272.6million loss for the previous campaign. Together, those figures raise the league’s flood of red ink during the past decade to more than $1.8billion.

Commissioner Gary Bettman disclosed the loss during a highly animated, 65-minute press conference here yesterday. The meeting with the press came on the eve of today’s entry draft — the last major NHL event before the current labor deal expires Sept.15.

Not surprisingly, Bettman remains as resolved as ever toward a radical restructuring of hockey’s economics.

“The [collective bargaining agreement] did not work this year. We lost lots and lots and lots of money,” Bettman said. “This system is irretrievably broken. We need a fundamental system change, but the union won’t talk about it.”

The fiscal loss extended over 20 teams and improved over the previous season almost exclusively because of a strengthened Canadian dollar. Final figures for the 2003-04 season will be compiled and audited later this summer. Union officials, however, consistently have questioned the veracity of the NHL’s financial reporting.

“The union only seems interested in complaining about or mischaracterizing the financial situation,” Bettman said. “They know what the situation is.”

While teams make draft picks this weekend with an eye toward the future, most notably Washington and its No.1 pick overall, that forward outlook remains cautious at best. Several negotiation attempts between NHL management and the players association have produced no meaningful progress, and a lockout is widely expected.

Owners want to link revenues and player salaries, while players want a continuation of the current marketplace-based system under which average salaries have more than tripled in 15 years.

“What they’re trying to do is negotiate a fixed amount of spending of players, and to us that’s a salary cap,” said Ted Saskin, union senior director of business affairs. “If they want to discuss a marketplace system, we’re more than willing to talk. But we won’t negotiate a cap.”

Saskin said yesterday he just received his copy of the latest financial reports and could not comment specifically on them.

In another telling comment, Bettman said he was not interested in pursuing a luxury tax system that also would seek to rein-in ever-spiraling salaries. A luxury tax is used in baseball, and hockey players last fall proposed one in a package that also would have included a 5 percent across-the-board salary reduction.

The offer, according to the union, would have generated about $200million in fiscal savings in the first year and $300million in the second, essentially matching the level of losses currently being registered. But Bettman said he asked the union to guarantee those cost savings and received a quick refusal.

“We disagreed with their methodology, but we said if those were the savings, we could have something to talk about,” Bettman said. “But they’re not guaranteeing anything. We don’t have a few years to see if this works out. We’re out of gas.”

That seemingly would leave a salary cap as the only acceptable solution for owners. To that end, union leaders have said repeatedly that management ideally seeks a hard salary cap of $31million, a level already exceeded in 2004-05 contract obligations by six clubs with at least four others yet to come as rosters get filled.

Bettman fervently denies he sought a cap of that level or even a hard cap at all. He and other league executives say they are open to several methods of firmly linking player revenues and salaries, but he declined to elaborate.

The two sides plan to meet July 19-21 to negotiate further. Bettman has said there remains plenty of time to strike a deal; baseball reached its last labor agreement less than four hours before a strike would take effect. But he acknowledged time is beginning to run short.

“There’s still plenty of time. Getting together is not the issue. But the more this goes on, the smaller that word ‘plenty’ gets,” Bettman said.

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