Gary Bettman: 25 years and counting

[edog37]

You do realize that the league may cease to exist because the NHL refuses to acknowledge CTE. Any half wit could have improved the NHL and frankly the position the league is in now is far from optimal.

The league has been run by half wits for decades prior to Bettman, so this premise is factually incorrect. And by what definition do you consider optimal? The league has never been in a better position than now....

 

[edog37]

As many have said, Bettman is good for the owners but the product is nowhere near as entertaining. His hands are likely tied with this due to the fact that insurance costs in regards to contracts and injuries are rising. I'd say my biggest issue and failing he did was mid 90's, but this was pushed by ownership, just done poorly. Expanding in to none traditional markets with no real plan. The Fox deal with the glowing puck supposedly pushed the league to try and expand in to large metropolis areas where they could try and convert other major sports fans to come to hockey. Atlanta, Florida, Phoenix, Anaheim etc etc. A few of those have worked out long term, but the Atlanta/Florida/Phoenix issues have been a black eye. All in all he will have made the league a legit money maker, but he has failed to turn it in to one of the major sports in the USA as a whole, I would be curious to see how many billions were spent trying to do so.

this statement is wrong. The plan to do so was to expand the league's footprint beyond the Canadian/Northern US region & was a conscientious decision. The results have been mixed, but there was a clear plan in place.

 

[BKIslandersFan]

Once again this notion that expanding to non traditional market began with Bettman is absolutely laughable.

 

[Noldo]

Could you see a way how Bettman could have approached the 2004 CBA negotiations and implement hard cap without losing the entire season? Unless such an approach can be imagined, the loss of season is only on negative on Bettman but not an irredeemable mistake. If that was the price to pay, the decision was worthwhile.

I suspect that in respect of CTE Bettman’s tone will change as soon as the current legal matter has been resolved, mirroring the development in NFL if my memory serves me right?

I think the biggest issues with Bettman are:

• failing to recognize what makes expansion markets work and not pushing tighter integration of expansion teams during their early years (SE division left to take care of itself)

• Underestimating the connection between the entertainment value of the game and market value of the sport and therefore not prioritizing actions that would ensure that skill would be on display prominently

 

[cutchemist42]

So how much of the idea to go to the Olympics was Bettmans? Would we consider the NHL going to the Olympics as a failure, and does that fall on him? Should he have realized there was no path to growth from them?

 

[The Shrike]

To evaluate Bettmans performance properly, just look at average revenues and franchise valuations of the NHL, NBA, NFL, and MLB in 1993, and compare them to today. In terms of percentage of increase, how does the NHL compare to the other three leagues?

 

[The Roy Of Ottawa]

 

[Bixby Snyder]

Add to that 4 relocations...

All for the betterment of the league.

 

[CartographerNo611]

He increased revenue by plopping down new teams every where and taking Cable TV stations to the cleaners. Cough cough Rogers/NBC while selling out to corporate. Great for the owners yes, debatable for fans.

Outside of everyone being able to skate faster, a lot due to advancement in hockey technology, the on ice product has become a lot more robotic, especially in the last 5 years.

 

[TheLegend]

In all the talk about the number of relocations in this thread not one person has acknowledged the fact he prevented two more from happening and facilitated one city who lost a team via relo in getting one back.

Bettman isn’t perfect by any means but you can’t deny the league has grown beyond what many would have ever expected it to under his tenure.

 

[GuelphStormer]

ive always thought of bettmen like ken linseman ... a real weasel, but a brilliant one you'd die to have on your team because he knows how to win.

 

[awfulwaffle]

To evaluate Bettmans performance properly, just look at average revenues and franchise valuations of the NHL, NBA, NFL, and MLB in 1993, and compare them to today. In terms of percentage of increase, how does the NHL compare to the other three leagues?

Probably lower. Might have something to do with the amount of people that tune in.

 

[Tawnos]

In all the talk about the number of relocations in this thread not one person has acknowledged the fact he prevented two more from happening and facilitated one city who lost a team via relo in getting one back.

Bettman isn’t perfect by any means but you can’t deny the league has grown beyond what many would have ever expected it to under his tenure.

He facilitated two cities in getting their teams back. One via expansion and one via relocation.

 

[tucker3434]

I feel like his southern expansion is a bit half assed. It’s kind of a “if you build it, they will come” approach, but they won’t come unless you give them a reason to. I know it’s really up to the owners to gets butts in the seats, but it seems like there should be more advance prep between the league and the cities to make hockey interesting to new people.

I know revenue has grown under his watch, but getting southerners to care is the biggest unsolved growth opportunity the league has and I don’t think he’s done much to fix it.

 

[Icedog2735]

To the greatest Bettman detractors, I ask what would your plan have been to accomplish what you think Gary should have. I've read a lot of comments that "his" Southern strategy has not worked, he has not "grown the game correctly", the game is "less popular", etc. Coming into the job on Feb. 1, 93, there were already expansion teams in "non-traditional" markets including San Jose and Tampa with Miami and Anaheim already slated to begin in 93-94. Minnesota was more or less already slated to move, eventually to Dallas, and the writing on the wall was becoming clearer for the three WHA hold overs of Quebec, Winnipeg, and Hartford. If anything I would say the growth (economically and on-the-ice) of the game was very slow early on in his tenure but I attribute that more to the economic structure of the league. Let's face facts if there was still a no salary cap system akin to the late 90s, the league would be dominated by 5-6 teams that could spend. Not good for business.

So for those who believe Bettman has not done a good job, what would your plan have been coming into the job in the winter of 1993?

 

[BrainyBomber]

To the greatest Bettman detractors, I ask what would your plan have been to accomplish what you think Gary should have. I've read a lot of comments that "his" Southern strategy has not worked, he has not "grown the game correctly", the game is "less popular", etc. Coming into the job on Feb. 1, 93, there were already expansion teams in "non-traditional" markets including San Jose and Tampa with Miami and Anaheim already slated to begin in 93-94. Minnesota was more or less already slated to move, eventually to Dallas, and the writing on the wall was becoming clearer for the three WHA hold overs of Quebec, Winnipeg, and Hartford. If anything I would say the growth (economically and on-the-ice) of the game was very slow early on in his tenure but I attribute that more to the economic structure of the league. Let's face facts if there was still a no salary cap system akin to the late 90s, the league would be dominated by 5-6 teams that could spend. Not good for business.

So for those who believe Bettman has not done a good job, what would your plan have been coming into the job in the winter of 1993?

Sure I'll only argue on economic grounds. By expanding and keeping teams in markets that are loss leaders and ignoring markets that would have generated big profits the league has lost out on a cumulative fortune in the tens of billions.

Despite being subsidized by the league's richer franchises to the tune of $10-15m annually through revenue sharing most of the sunbelt teams still lose millions annually. Meanwhile by ignoring potentially lucrative markets that would neither drain shared revenues nor post their own losses, the league has missed the boat.

The claimed reason they have done this is to (1) grow the game and (2) finally score a lucrative national TV contract. Neither has occurred.

The current national US TV contract is $200m annually (24 teams) while it is nearly double that in Canada (7 teams). See Canada has more avid hockey fans than exist in the US despite having 9 times lower a population and the gap hasn't closed much under Bettman despite massive US expansion. Canadian teams generate over a third of the league's revenue even though they number 22.5% of the teams.

Studies have shown that Canada can easily support a dozen profitable teams. They would have generated a far higher TV deal, not been a huge drain on NHL central revenue, or posted their own individual losses unlike Arizona, Florida, Carolina, Columbus, Tampa, Nashville and Atlanta (defunct).

I'll direct you to foremost data expert and all around massive hockey fan AMERICAN Nate Silver:
My best guess is that the economically optimal distribution of N.H.L. franchises would look something like the schema in the chart below. This would include two new teams in the greater Toronto area, one new team in Montreal and one new team in Quebec City. In lieu of a second team in Vancouver, Seattle — a marginal hockey market but probably better than several United States cities that already have N.H.L. teams — would get a franchise in the hope that support might spill over into British Columbia and other parts of the Pacific Northwest. New York would retain its three, while Los Angeles (which has no more N.H.L. fans than Philadelphia or Boston and fewer than Vancouver or Montreal) would be shaved to one. The six United States markets with fewer than 300,000 N.H.L. fans would lose their teams.

 

[MNNumbers]

Sure I'll only argue on economic grounds. By expanding and keeping teams in markets that are loss leaders and ignoring markets that would have generated big profits the league has lost out on a cumulative fortune in the tens of billions.

Despite being subsidized by the league's richer franchises to the tune of $10-15m annually through revenue sharing most of the sunbelt teams still lose millions annually. Meanwhile by ignoring potentially lucrative markets that would neither drain shared revenues nor post their own losses, the league has missed the boat.

The claimed reason they have done this is to realise (1) grow the game and (2) finally score a lucrative national TV contract. Neither has occurred.

The current national US TV contract is $200m annually (24 teams) while it is nearly double that in Canada (7 teams). See Canada has more avid hockey fans than exist in the US despite having 9 times lower a population and the gap hasn't closed much under Bettman despite massive US expansion. Canadian teams generate over a third of the league's revenue even though they number 22.5% of the teams.

Studies have shown that Canada can easily support a dozen profitable teams. They would have generated a far higher TV deal, not been a huge drain on NHL central revenue, or posted their own individual losses unlike Arizona, Florida, Carolina, Columbus, Tampa, Nashville and Atlanta (defunct).

I'll direct you to foremost data expert and all around massive hockey fan AMERICAN Nate Silver:
My best guess is that the economically optimal distribution of N.H.L. franchises would look something like the schema in the chart below. This would include two new teams in the greater Toronto area, one new team in Montreal and one new team in Quebec City. In lieu of a second team in Vancouver, Seattle — a marginal hockey market but probably better than several United States cities that already have N.H.L. teams — would get a franchise in the hope that support might spill over into British Columbia and other parts of the Pacific Northwest. New York would retain its three N.H.L., while Los Angeles (which has no more N.H.L. fans than Philadelphia or Boston and fewer than Vancouver or Montreal) would be shaved to one. The six United States markets with fewer than 300,000 N.H.L. fans would lose their teams.

BB - While I agree on a few points, there are some things missing in Silver's analysis. So, this is my own combination of all the factors involved.....

US teams: Yes, there are 24 (soon 25). Yes, these constitute the larger dollar figure recipients of revenue-redistribution. And, yes, it's true that the presence of such has not really helped the US TV deal.

HOWEVER::::::In a hypothetical world where Toronto has a 2nd team, Southern Ontario has it's own team (3 in the market), and Quebec has a team, while Arizona, Florida and Carolina (the 3 little pigs who always are named in such conversations) DO NOT, what actually happens.....????

Well, first, the owners of the 3 teams in Canada do better on their bottom line than the owners in the current markets. But, what happens to the other 28 owners? Well, the main thing that happens is that their cost-of-business goes up. The salary cap structure demands that all teams spend in relation to the average HRR of a team in the league. So, moving those 3 teams probably raises the total business of the NHL by about 100M a year (maybe more, considering local broadcast contracts....lets say 124M for easy figuring, but it could be more). Since league wide HRR is up by that much, players get half, so it costs each team in the league 2M/yr to make this change.

Now, what happens to broadcast revenue: Well, in the US, nothing, really. The absence of those markets won't change what the contract is worth, because there are few people in those markets watching national games. In Canada, regionally, TV goes up, especially with respect to Quebec because French. But, Canada wide......do those other 2 teams near Toronto really result in more eyeballs watching the national broadcast? I'm not sure. Remember, there needs to be 60-100m EXTRA every year in the pot for the other owners to make this work out for them, and I don't think the contract goes up that much.

So, while the individual teams would be healthier, the league as a whole (which really just means the other owners) doesn't change much. And, that's why it doesn't happen.

 

[BrainyBomber]

Now, what happens to broadcast revenue: Well, in the US, nothing, really. The absence of those markets won't change what the contract is worth, because there are few people in those markets watching national games. In Canada, regionally, TV goes up, especially with respect to Quebec because French. But, Canada wide......do those other 2 teams near Toronto really result in more eyeballs watching the national broadcast? I'm not sure. Remember, there needs to be 60-100m EXTRA every year in the pot for the other owners to make this work out for them, and I don't think the contract goes up that much.

So, while the individual teams would be healthier, the league as a whole (which really just means the other owners) doesn't change much. And, that's why it doesn't happen.

The Canadian TV deal is $435m annually so I would wager it would most definitely increase beyond the 60-100m you quote.

Quebec has over 8m people and Ontario 14m so going from 2 to 6 franchises would increase TV ratings substantially. A good portion of Quebec dislikes the Habs and most Canadians hate the Leafs they would gladly support new regional teams. Hockey hotbeds Hamilton and Quebec each have a 1m people. What's more is it would finally create a derby matchup beyond the tepid NYR-NYI-NJ one. Having one each in Toronto and Montreal would generate greater interest.

 

[MNNumbers]

The Canadian TV deal is $435m annually so I would wager it would most definitely increase beyond the 60-100m you quote.

Quebec has over 8m people and Ontario 14m so going from 2 to 6 franchises would increase TV ratings substantially. A good portion of Quebec dislikes the Habs and most Canadians hate the Leafs they would gladly support new regional teams. Hockey hotbeds Hamilton and Quebec each have a 1m people. What's more is it would finally create a derby matchup beyond the tepid NYR-NYI-NJ one. Having one each in Toronto and Montreal would generate greater interest.

I respect your opinion, but I feel I will agree to disagree on the result of the contract. I think that, in the first place, the present contract is a large overpay. In the second place, I feel that most interested people are already watching the national games.

But, as I say, that's just my opinion.

And, my major reason for the post was to point out, again, that the health of one individual franchise does not equate to the health of the league in its entirety. Every owner has his own set of numbers, and what's good for Arizona might not be best for Boston.

 

[BrainyBomber]

I respect your opinion, but I feel I will agree to disagree on the result of the contract. I think that, in the first place, the present contract is a large overpay. In the second place, I feel that most interested people are already watching the national games.

But, as I say, that's just my opinion.

And, my major reason for the post was to point out, again, that the health of one individual franchise does not equate to the health of the league in its entirety. Every owner has his own set of numbers, and what's good for Arizona might not be best for Boston.

I respect your opinion as well but a final point.

You haven't mentioned the subsidies via revenue sharing that the rich clubs do for the bottom feeders.

10 teams generate half of the league's revenue and they give 15% of their revenue to the bottom feeders. This alone makes it much more lucrative for Boston (using your example) to have another lucrative Toronto franchise in the league than a loss-leading sunbelt one.

 

[MNNumbers]

I respect your opinion as well but a final point.

You haven't mentioned the subsidies via revenue sharing that the rich clubs do for the bottom feeders.

10 teams generate half of the league's revenue and they give 15% of their revenue to the bottom feeders. This alone makes it much more lucrative for Boston (using your example) to have another lucrative Toronto franchise in the league than a loss-leading sunbelt one.

Revenue sharing:
You have a point, but the 15% goes no matter who is on the bottom. Boston isn't going to be a recipient. Nor are TML or NYR. The proportion that comes from the top teams for the rev sharing goes by HRR ranking. I don't think that Hamilton would come in ahead of Boston, so Jacobs is on the hook for the same amount regardless.

Now, if you want to argue that in the next CBA negotiation, that there would less need for rev sharing because the individual HRR of each team would be closer together, and therefore, the 15% rule (or whatever it is) would be lessened, then I would say.....That is correct, it MIGHT happen.

 

[BrainyBomber]

Revenue sharing:
You have a point, but the 15% goes no matter who is on the bottom. Boston isn't going to be a recipient. Nor are TML or NYR. The proportion that comes from the top teams for the rev sharing goes by HRR ranking. I don't think that Hamilton would come in ahead of Boston, so Jacobs is on the hook for the same amount regardless.

Now, if you want to argue that in the next CBA negotiation, that there would less need for rev sharing because the individual HRR of each team would be closer together, and therefore, the 15% rule (or whatever it is) would be lessened, then I would say.....That is correct, it MIGHT happen.

There would have been no need for revenue sharing if the worst bottom feeding sunbelt teams hadn't been awarded teams and if Toronto and Montreal's incredibly lucrative market share had been eaten into with new local rival franchises.

Similarly, back on to the TV contracts. Canada's 7 teams have to share their national TV deal ($435mCDN) with the same loss-leading US teams. Since the national TV deals are divvied up equally.
Canada per team generates $62m CDN
US per team generates $8m

Canada has been disproportionately funding the NHL beyond any reason. It makes far more sense to have more Canadian teams and less American ones to help balance this.
Based on the current TV deals and according to Nate Silver's economically optimal franchise locations that I provided, it would then atleast be a more reasonable:
Canada: $39.5m CDN
US $12m

 

[zetajerk]

There would have been no need for revenue sharing if the worst bottom feeding sunbelt teams hadn't been awarded teams and if Toronto and Montreal's incredibly lucrative market share had been eaten into with new local rival franchises.

Similarly, back on to the TV contracts. Canada's 7 teams have to share their national TV deal ($435mCDN) with the same loss-leading US teams. Since the national TV deals are divvied up equally.
Canada per team generates $62m CDN
US per team generates $8m

Canada has been disproportionately funding the NHL beyond any reason. It makes far more sense to have more Canadian teams and less American ones to help balance this.
Based on the current TV deals and according to Nate Silver's economically optimal franchise locations that I provided, it would then atleast be a more reasonable:
Canada: $39.5m CDN
US $12m

"Blah blah blah I don't want to share my toy"

You do realize that all the pro sports league's have revenue sharing, right? And if you get rid of the markets you have, then the resulting new bottom feeders are in the screws now. Instead of Arizona, Florida, etc getting RS, it's now NJ, Colorado, Columbus, NYI, Winnipeg, etc. Or is it ok if they get handouts?

 

[Icedog2735]

All interesting and good points for both sides of the argument, Brainy and MNN. A few things:

What figure would we look towards to state that the US TV contract is indeed lucrative? ABC/ESPN paid $120M/yr for rights from 99-04. This then feel to an offer of $60M/yr from ABC/ESPN and eventually $70M/yr from Comcast/NBC. To then come back and get $200M/yr over the course of a 10 year deal I would say is a relative success. Now we'll see what the next deal holds, but to think the NHL would instantly get a US contract similar to the other leagues at the time is a bit naive.

I also respectfully disagree about the net benefit in viewership given more franchises in Canada, namely Hamilton and/or a 2nd Toronto team. I agree that franchises in those markets would generate significant revenue, but TV viewership I think you would find would stay consistent. Not living in Canada perhaps it is not fair for me to say but I simply get the perception that in Canada you really aren't going to create a huge number of new NHL fans. A team in Hamilton will probably generate some new fans but will likely also pull from Leafs fans who now have a team closer to where they live. For arguments sake if Toronto and Hamilton each have games on Saturday night and Toronto currently gets 3M people watching their games, I don't think Toronto would simply continue to get 3M while Hamilton taps into a new group of people who never watched NHL hockey. I think with the argument of trying to generate new fans you present a better case for a team in Saskatoon or Quebec then in GTA, other economic issues aside. I just have to believe the league, run by billionaire businessmen, have done the requisite market research to make these decisions and aren't just running their business on the opinions that many think they do, that they are a group of men that would avoid putting a team in Canada at all costs just because.

I will say I think with a team in Seattle on the horizon, the expiration of the CBA, and the negotiation of a new US TV contract, the league is at a definite crossroads where it could set itself up for further growth over the next 10-20 years or it could mismanage some of these situations and become stagnant in terms of growth, etc. Along with everything we have debated add in the harnessing of new technologies such as VR, the growth of special events such as the World Cup, the Olympics, the rumored Ryder Cup idea from a few years ago, and the use of social media to connect with the new generation of potential fans. Honestly, the most popular hockey has been recently in the United States has been when the US has had major games in the Olympics, most notedly the 2010 Gold Medal game, even the bronze medal win over Canada at Worlds just now got a headline on most major sports sites. Why not start harnessing that into a Ryder Cup style event where you can make a series out of it every 2 years and bring it around to specific markets you want to pinpoint. Just a thought but there are a lot of ways the league can continue to move forward.

 

[BrainyBomber]

"Blah blah blah I don't want to share my toy"

You do realize that all the pro sports league's have revenue sharing, right? And if you get rid of the markets you have, then the resulting new bottom feeders are in the screws now. Instead of Arizona, Florida, etc getting RS, it's now NJ, Colorado, Columbus, NYI, Winnipeg, etc. Or is it ok if they get handouts?

I'm not arguing for no revenue sharing just that the NHL's bottom feeders are much worse proportionally compared to other North American sports leagues. By cutting them out the next batch above them would not harm the revenues of the other clubs nearly as much.

They have been holding the league back for ages and will continue to do so.

I most definitely want to share our toy. I wish hockey was more international and I want it to grow more in the US and especially expand in Europe but I just wish we were getting more back from the NHL for sharing our toy - as you put it.