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Paul Kukla Kukla's Korner

Published on Tuesday, December 1, 2020

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The View From Both Sides

from Eric Macramalla at Forbes,

Requesting amendments to a ratified agreement is a big deal and the NHL knows that. So to approach the Union for further concessions means the league is seeing something new and material that requires urgent attention. Indeed, the NHL believes that its financial assumptions have so dramatically changed such that this coming season is no longer financially viable within the four corners of the existing framework.

So what has changed for the league? It’s fans - or more precisely no fans. The NHL didn’t anticipate that it wouldn’t have fans in arenas this season. Most were expecting some return to normalcy in Fall of 2020. That has now been pushed to at least the Fall of 2021. So there was a belief fans would be back; they will not.

That substantially alters the financial outlook for the league. Under the existing framework, players will take home $1.6 billion in salaries. With league revenue hovering around $1.8 to $2 billion without fans in attendance, players would account for 80% of league revenue. That’s a far cry from the typical arrangement of a 50/50 split of league revenue.

The NHLPA, however, is banking on an additional $1 billion injection of revenue by way of some fans attending some of the games. If that is indeed the case, then the players would take home closer to 53% of league revenue, which presumably would be far more palatable for both sides.

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