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Home | Sports | Minnesota Wild

Michael Russo's Sunday Insider: NHL players brace for concessions

The union is taking steps to deal with the possibility that players will have to give back to cover shrinking profits.

By MICHAEL RUSSO, Star Tribune

Last update: November 2, 2008 - 11:12 AM

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WILD WEEK IN REVIEW

Record: 2-2

• After a 3-2 victory Monday over Chicago allowed the Wild to open the season with a 6-0-1 record, Minnesota became the last NHL team to lose in regulation Wednesday in Dallas, then lost 2-1 at home Thursday to Montreal thanks to an 0-for-10 power play. Success returned in a 3-2 victory Saturday over Phoenix.

STAR TRIBUNE'S STAR OF THE WEEK

Mikko Koivu, center: Assisted on all three goals in Monday's victory to give him an NHL-leading 12 assists at that point. He has assisted on 12 of the Wild's 25 goals this season.

THIS WEEK: Three games

Tuesday: at San Jose, 9:30 p.m.; Thursday: at Colorado, 8 p.m.; Saturday: at Vancouver, 9 p.m.

• The Wild continues its four-game trip in San Jose, maybe the NHL's best defensive team. The Sharks held the high-scoring Pittsburgh Penguins to 11 shots last week. The Wild, one of two teams to not play a divisional foe yet, then opens its Northwest Division schedule in Denver and Vancouver.

THE QUOTE

"I don’t know if the corners are a little wider or what, but there’s something here that makes it tougher." — Center Eric Belanger on American Airlines Center in Dallas, where the Wild has lost nine games in a row.

MICHAEL RUSSO

More from Minnesota Wild

Goals and assists, wins and losses are issues NHL players care most about, but Paul Kelly is giving his players a lesson on economics.

As the NHL Players' Association executive director began his second fall tour last week, one key topic was explaining why the union has decided to put 13.5 percent of each player's salary into escrow.

Under the collective bargaining agreement, players put money into escrow in case salaries exceed 57 percent of hockey-related revenues. If that happens, money is refunded to the owners from the escrow account after the season.

NHL revenues reached a record $2.6 billion last season, but because of the uncertainty in today's economy and the decline in value of the Canadian dollar (down to 83 cents against the U.S. dollar Friday), Kelly proposed the record escrow number.

"The worst thing that can happen is for us to not withhold a sufficient amount and we have to go back to the well and ask our guys to ante up additional funds to meet their obligations," Kelly said Tuesday during an interview with the Star Tribune in Dallas.

After Year 1 of the CBA, the players received 100 percent back plus interest. In Year 2, they got 97.5 percent back, and last season they got 105 percent back.

Kelly's concern is that a strong Canadian dollar -- it averaged 99 cents to the U.S. dollar over last season and topped at $1.10 last November -- accounted for $75 million of the NHL's hockey-related revenue last season.

"If the Canadian dollar dips down to 88 cents or less against the U.S. dollar, you can take that $75 million right off the top," Kelly said. "So as a starting point, you're in the hole by $75 million. Last year, the 12 percent growth that we experienced, 3 percent -- or a quarter of the total growth -- was attributable to the [six] Canadian teams."

Why does the lousy economy matter? It results in fewer paying fans attending games (just look at the Wild's swing through Atlanta, Florida and Tampa last month), which results in decreased revenue. That could result in the $56.7 million salary cap decreasing.

"If you experienced no revenue growth and the Canadian dollar stayed soft, the cap would likely come down $3 million per team," Kelly said. "If you saw a reversal of revenues, like revenues went down say $200 million and the Canadian dollar stayed soft, the cap could potentially come down to $50 million."

That would create an unprecedented issue for teams that have contractual long-term commitments and suddenly have only $50 million to outfit a team. There could be cap casualties because there's no contingency plan for getting over-the-cap teams under the cap. Players would lose their jobs via buyouts or getting trapped in the minors.

"You'd also see a salary squeeze when it comes time to trying to sign players next summer," Kelly said. "There will be consequences."

It's one reason the Wild has to be cautious signing Marian Gaborik to an exorbitant extension. While Gaborik's injuries already present a risk, getting stuck with an expensive, immovable contract could cripple a franchise and affect future signings to players such as Brent Burns and Mikko Koivu.

Kelly said he feels "the sport is pretty well positioned to weather most of the storm of the economic crisis certainly this season, although I can see the cap coming down $2 or $3 million."

Of course, always the union chief, Kelly smiled and said, "If I got a guy like Marian Gaborik, who's as talented as he is and who has as much potential given his age to be a long-term, tremendous performer for the Wild, if I'm the GM of the Wild, I want to lock him up any way I can."

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