- The Washington Times - Wednesday, July 16, 2003

The majority owner of the Washington Capitals yesterday warned that the NHL is on thin ice and stringent economic changes are needed in a hurry if the league is to continue in its current form.

Ted Leonsis made his views known in an “Owner’s Corner” report to fans posted on the team Web site, www.washingtoncaps.com.

Leonsis’ comments were significant because he is believed to be the first person other than league commissioner Gary Bettman to spell out in very clear language the problems that face the NHL at the end of next season, when the league’s collective bargaining agreement expires.

“It’s obvious our league is going through tough times,” Leonsis wrote. “When the collective bargaining agreement expires after the 2003-04 season, the NHL will be seeking changes to the current economic system. I don’t know what those changes are but there is a new landscape on the horizon. We need to be competitive in the short run but we’re also committed to long-term success.

“In general, our revenues are flat at best and expenses are escalating,” he continued. “The current business model doesn’t work. It’s extremely clear in our market that increasing ticket prices to meet growing player salaries is not the answer.”

Various high-ranking sources inside the league and the players’ union have forecast a long lockout starting in September 2004. Some believe the work stoppage could last a season and a half, possibly two full seasons before agreement is reached on economic reform.

The key words are “salary cap” — an economic plan owners say they must have to survive and one that the union says it will not even discuss.

Bettman, in his many pronouncements on the subject, never uses the two words, even in answer to direct questions. Likewise, Leonsis did not use the words yesterday, although there are few other options available.

“This season we expect to win our division and get past the first round of the playoffs,” Leonsis wrote, “then put an eye toward the [Stanley] Cup. Vancouver, Ottawa, Minnesota, Edmonton and Tampa Bay were all good teams with payrolls between $20[million] and $32million. Our payroll last season was in excess of $50million.”

The figure $32million has been the one unofficially passed around by executives within the league as the salary cap figure the NHL will be shooting for in negotiations with the union. Last season 20 of the league’s 30 teams were above the $32million figure while only five had salaries of less than $30million. Five teams had salaries above $60million, led by the New York Rangers, who passed the $80million plateau at the trading deadline — substantially more than Atlanta, Nashville and Minnesota combined.

“We all agree that hockey is a great sport but significant adjustments are crucial if our game is to be competitive and viable in the future. I’m confident we’ll persevere,” Leonsis wrote.

“The negotiation of a new labor agreement has the potential to be a distraction,” he said in what has to be a classic understatement, focusing, he wrote, instead on a new season.

It was the first time Leonsis has commented publicly since April20 when he said he would be reconsidering his financial commitment to the team after poor turnouts for the club’s three home playoff games. He also spoke of a lack of cooperation with Washington Sports & Entertainment, which operates MCI Center, a subject that is said to have been cleared up.

“I continue to be hard at work at AOL … my day job,” he wrote. “But for the most part I have been low key because I have nothing new to talk about.”

He briefly addressed the subject of player personnel, possible trades and what he believes are the team’s needs.

“Recently much has been written … about the possibility of trading some of our players. As you know, I never comment on potential trades. But I will restate that we always are open to any trades or new developments that will improve our club,” he wrote.

There have been widespread reports, never denied with a straight face by club officials, that the Caps were trying to trade right wing Jaromir Jagr to the New York Rangers with a wide assortment of player(s) coming south in return. Jagr makes $11million a season with five years to go on his contract, plus an option year. Talks are currently in limbo.

“We continue to explore the best possible combination of skill, character and grit,” Leonsis wrote. “We need more players — possibly younger players — who demonstrate more passion and hunger and joy to be playing this great game.”

The latter, perhaps, was a reflection on another statement he made after the Caps were eliminated by Tampa Bay in six games: “Their stars played better than our stars.”


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