Time was when an NHL player was happy to have enough money to pay his dental bills. No longer. Hockey players, who once performed at slave wages compared with their baseball, football and basketball counterparts, have forced several teams to open their safes and fork over the funds.
The team that gave away the combination to the vault is none other than the St. Louis Blues. For 23 seasons, St. Louis was nothing more than a mom-and-pop franchise, paying its players nickels and dimes and, at best, turning a meager profit. Over the past six seasons, the Blues have never finished more than four games under or more than six games over .500. Although they made the playoffs each year during the 1980s, only once did they advance beyond the second round.
But as low as St. Louis was in the standings, it ranked even lower on the pay scale. In fact, it had the stingiest payroll in 1989-90. Over the years, general manager Ron Caron traded the Blues' better talents to contenders for groups of lower-salaried players. Indeed, between '86 and '88, Caron sent 10 players to the Calgary Flames, and six wound up helping the Flames win the Stanley Cup in '89. However, one of those trades with the Flames brought to St. Louis right wing Brett Hull, now 26. The son of Bobby Hull, hockey's greatest left wing, he had excellent bloodlines but a thick waistline. Last season, though, young Hull lost weight, became a 72-goal scorer and played out his option.
It was assumed, quite naturally, that St. Louis would do what it always had done with a star player: lose him. "That wasn't the attitude toward just the hockey team in this town," says the Blues president, Jack Quinn. "The feeling that permeated the fans here was that the muckety-mucks who ran sports in this city had let everything get away: Jack Clark [the former Cardinals slugger who now plays for the San Diego Padres], the football Cardinals, everything. Bobby Hull was quoted last year as saying, 'They don't have enough money in the city of St. Louis to sign Brett.' That really hurt. The input we got from the fans was that they were unequivocally willing to pay higher ticket prices to keep him."
So in June, Hull, who made $125,000 last season, signed a four-year deal with the Blues that calls for annual salaries of $1.16 million, $1.5 million, $1.6 million and $2.2 million. The contract, negotiated for Hull by Bob Goodenow, who next year will become executive director of the NHL Players Association, also includes a $600,000 signing bonus and easily attainable performance bonuses that could bring Hull's first-year salary to $1.5 million.
This was a breakthrough contract. Wayne Gretzky of the Los Angeles Kings will make $3 million this season, counting deferred payments. Mario Lemieux of the Pittsburgh Penguins will earn $2.3 million. But these two players are in a separate universe—nobody fills seats the way they do. The next-highest-paid player last season in straight salary—bonuses, deferred payments and perks promised by handshakes not included—was the Edmonton Oilers' Mark Messier, the league MVP, who made $832,000. (Steve Yzerman's total compensation with the Detroit Red Wings was an estimated $1.4 million, but his base salary was $700,000.)
Before lines could form outside other teams' offices because of the ripple effect of the Hull contract, the Blues dropped an even bigger bomb. In July they presented an eye-opening offer sheet to Scott Stevens, 26, a free-agent defenseman who last season had earned $300,000 with the Washington Capitals. Even though Stevens had made the end-of-season All-Star team only once in his eight previous NHL seasons, St. Louis offered him a $1.4 million signing bonus and a four-year contract calling for annual salaries of $775,000, $875,000, $975,000 and $1.1 million. Washington did not exercise its option to match the offer, electing under the NHL's highly restrictive free-agent system to take compensation in draft choices instead.
Following the Stevens signing, teams and agents sparred lightly for almost two months to see what Harry Sinden, the Boston Bruins' venerable general manager, would do about the new contracts he had promised Ray Bourque, the best defenseman in the league, and tough, talented right wing Cam Neely. In late August the Bruins raised Bourque's salary, which had been $500,000 in 1989-90, to $1.1 million a year for the next four seasons. Neely went from $325,000 per year to $3.65 million over four years. Soon a number of other top players—including defenseman Al MacInnis of Calgary, winger Rick Tocchet and goalie Ron Hextall of the Philadelphia Flyers and center Denis Savard (page 88) of the Montreal Canadiens—signed deals that will earn them $1 million a year or close to it (chart, below).
Now that the stars are raiding the vault, it remains to be seen whether a few of the loose bills waft down to journeymen players. Sinden projects a league-wide increase in player salaries of 20% to 30% this season. He says most teams will be forced to cross the threshold of what the league has long considered a prudent player payroll—50% of total revenues. Without question, Sinden and other general managers would like to have Caron's scalp. "What the Blues did was their business," says Sinden, "but they cannot shirk the fact that what they did has hamstrung everybody in hockey."
It ought to be remembered, though, that the penurious Sinden has cried wolf on rising costs before. Boston is the nation's sixth-largest television market—and a hockey-mad one at that—so the Bruins are in position to earn more TV money than most other teams. The new Boston Garden, scheduled to open in time for the 1993-94 season, will have 104 luxury boxes and 4,000 more seats than the old Garden. The new place will make a grand bomb shelter in which the Bruins will be able to withstand salary fallout.
Mark this: The NHL will be able to live with higher player salaries. Granted, the $2 million a year each team takes in from the league's combined TV deals with the Canadian Broadcasting Company and SportsChannel America doesn't compare with what teams in other sports get from their national television packages. (Baseball teams will average $14 million this season; NFL teams, $26 million; and NBA teams, $8 million.)
But the NHL can rely on making a bundle at the box office. Approximately 70% of league revenues come from ticket sales, a percentage far higher than that in any of the other three sports. And so far, there hasn't been a fan rebellion over an almost uninterrupted series of ticket-price increases. "I can remember sitting in meetings where we said no one would ever pay $20 to watch a game," says one NHL executive. "We still don't know at what point the people will say no." Clearly, the NHL doesn't think it will be anytime soon: Nine of the league's 21 teams are planning to build new arenas with increased seating capacities and luxury boxes.
Expansion cash also is on the way. One team, the San Jose Sharks, will join the NHL next season, and right now the league has 10 applicants for what it hopes will be six more new franchises by the year 2000. Each franchise, including San Jose, will pay a $50 million membership fee—in all, $350 million to be divvied up by the league's existing teams. When 10 applicants are unfrightened by a $50 million initiation charge, it's ridiculous to paint a bleak financial picture for the NHL.
This is not to say that spiraling salaries won't put some franchises closer to red ink than others. "My fear is for the future of hockey in Canada," says Pat Quinn, president of the Vancouver Canucks. Considering the passion with which Canadians embrace the sport, this may be akin to questioning the future of candy with children, but it's true that the NHL's seven Canadian teams all have genuine worries. At the current exchange rate, they have to pay their players 15% more money to match the average salary on U.S. teams. The tax bracket most players fall into in Canada (at least 42%) is higher than that in the U.S. (28%), and Canada's cost of living is higher.
There's also some concern for teams in small markets on both sides of the border. "We're in a danger zone," says Buffalo Sabre general manager Gerry Meehan. "Everything has to go right for us to make money." However, the same argument was made in behalf of small-market baseball teams when free agency was in its infancy in that sport 14 years ago. Since then, not one major league team has relocated or gone bankrupt.
According to NHL president John Ziegler, only one of his league's teams, the Minnesota North Stars—which finished $6 million in the red—lost a substantial amount of money last season. The former owners, George and Gordon Gund, who insisted that they couldn't survive in Minnesota, were allowed to divest themselves of the North Stars in return for their purchase of the San Jose expansion franchise.
How about St. Louis? The Blues, who are owned by a group of local businessmen, turned a modest profit last season, when they drew 15,813 fans per game, 1,300 short of capacity, even with one of the lowest ticket scales in the league. Since the Hull re-signing and the Stevens deal, season-ticket sales—despite an average increase in ticket prices from $18 to $22—jumped from 9,200 to 12,250. Over the season, the Blues expect to make an additional $3.5 million in ticket revenue, more than enough to cover Hull's and Stevens's salaries this year.
The Blues decided that they couldn't afford not to pay Hull. They say they were tipped off that if they did not sign him before he became a free agent, on July 1, Red Wing owner Mike Ilitch would offer him a huge amount of cash and several of his Little Caesars pizza franchises—a package St. Louis could not have matched. After the Blues signed Hull, they were approached by Stevens's agent, Richard Bennett. Says Caron, "We began to think, Why not do to somebody else what someone else was going to do to us?"
But the price was steep. Under the terms of the NHL's collective bargaining agreement, St. Louis owes the Capitals two No. 1 draft picks within the first seven choices overall during the next two years. If the Blues can't satisfy that requirement, St. Louis must give Washington its next five first-round picks. "Stevens is an excellent two-way defenseman who is tough and will complement the defensemen we have," Caron says. But Stevens also has been inconsistent throughout his career.
Even if Stevens doesn't make an immediate difference, St. Louis should get good value from him over the next four seasons. At the current rate of salary escalation, when Stevens's contract expires, he will probably no longer be among the highest-paid defensemen. By then the Blues may be in a new arena, which will make it easier for them to pay big salaries.
Just how severely various teams will be squeezed depends on two unanswered questions: How much more money, if any, will the NHL get when its U.S. TV deal is renegotiated at the end of this season? And, how militant will Goodenow be when he directs negotiation of a new collective bargaining agreement for the players, also after this season?
The NHL's much-criticized $51 million, three-year deal with SportsChannel America has delivered a lot more money but a lot fewer households than did the league's previous arrangement with ESPN, which, unlike SportsChannel, can be seen all over the country. Broadcast analysts and league insiders believe that hockey will have a truly national cable deal next season at a modest increase in rights fees. In the long term, expansion on the West Coast and into Florida and the Southwest—some applications from those sun-splashed areas have already been received—could rekindle over-the-air networks' interest in carrying hockey. And there is always pay-per-view TV, a natural for the NHL with its upscale demographics.
As for the bargaining table, Goodenow is bound to be a much different cat than his predecessor, Alan Eagleson, who was accused of an array of conflicts of interest, among them the fact that his individual clients included both players and coaches and that he had a close relationship with the league owners in matters like the NHL's international activities. Goodenow will have no cozy relationship with the NHL bosses and will wear a single hard hat into negotiations. "In the past, players collectively supported teams that were losing money," says Goodenow. "We're not going to do that anymore. Why should 500 guys take a substandard arrangement to support two or three franchises that are grossly mismanaged?"
However nervous become the hands that write the paychecks, the NHL should thrive. If revenues can't keep pace with salaries, the league can always swipe an idea from the NBA. It's called the salary cap. In short, any pains that hockey feels in this new gilded age should only be growing ones.
After Stevens (2) and Hull bagged their loot, teams showered money on other players.
Expansion, a big revenue raiser, may soon take the NHL to warm-weather spots where ice is only rumor.