"We're not making money, and that's one reason we need to fix our system. We need to fix how much we're spending right now. [The Wild's] revenues are fine. We're down a little bit in attendance, but we're up in sponsorships, we're up in TV revenue. And so the revenue that we're generating is not the issue as much as our expenses. And [the Wild's] biggest expense by far is player salaries."
That's Minnesota Wild owner Craig Leipold speaking to the local Star Tribune this past spring.
$196 million dollars
That's how much money Leipold committed to Zach Parise and Ryan Suter just a few months later when they signed their respective 13-year, $98-million-dollar deals.
Why would Leipold, after imploring that expenses were "the issue," choose to add two behemoth contracts and a fat chunk of red to his expenses just months before a possible labor dispute?
Here are some quotes from just after he signed the two stars.
"We’re going to get a Winter Classic. We’re an exciting team. We’ve got a lot of really interesting personalities on our team now. Obviously, we’re a great market. We’ve always known that. We’re a great team, we’ve got good players. We’re everything."
"This is a game changer. We're overnight changing who we are. We're changing our identity.
...
I remember talking to (COO) Matt Majka. I said, 'Matt can you do it? How much more can you sell?' This is a business decision. He said, 'I can't even answer that. I have no comparable situation to use. This is like starting over. I can only tell you it's going to be huge.'
That was it. That was the decision. And we said OK.
...
We are going to be able to skip ahead four or five steps of development and recruiting costs to get to a place that could take us three years to get to, and we can do it now."
The signings signal a desire to win and to make money, with equal emphasis on both parts. It's a gamble of the gargantuan variety for Leipold that stands to pay enormous dividends, but is also a drastic risk.
This upcoming season, the Wild were hoping to start the process of transforming from a stable, community-driven team to an elite entertainment force in the Western Conference. Exciting, fast, and winners.
However, they're not there yet. They've missed the playoffs four straight seasons and as a middling team have been unable to acquire premiere talent through the draft. They've been stuck in a rut.
Faced with a lockout and with his recent signings looming on his mind, one has to wonder what approach Leipold is taking in regards to the CBA negotiations.
Struggling teams such as Columbus, Anaheim, and the New York Islanders stand to benefit from holding out as long as possible for increased revenue sharing. They don't necessarily want to take money from other teams, they just don't want to be in the red year after year.
Successful teams like Toronto, Montreal, and Vancouver would probably rather keep as much of their money as possible. They're not trying to hoard, it's just business.
Where does the money for the increased revenue sharing come from then, if the successful teams want to keep the money they've made but help their fellow owners? The share that belongs to the players. If the owners up their share, they can use the extra cash to help each other out without feeling like they're dipping into their own money.
So where does Minnesota stand on this issue as a team that, if there's a 2012-13 season, probably won't see a dime from revenue-sharing and probably will turn a profit? The same place as Los Angeles, carrying momentum off their Cup win, and Florida, thanks to their first playoff berth in over a decade. All three teams really want this season to happen.
That would seem to categorize them with the successful clubs who stand to miss out on a lot of money if the season doesn't happen, but it's not quite like that. The Wild, Kings, Panthers were all
unprofitable last season. They stand to move into the league's top half in revenue, but that's nowhere near as certain as it is for the Leafs, Habs, and Canucks. Missing a season isn't a huge long-term financial concern for those markets. Conservative, realistic bookkeeping would dictate that without their respective recent surges, the Minnesota, Los Angeles, and Florida would continue to operate in the red.
Is a missed season enough to offset those surges? It might be. In that case, those teams might actually regress further into unprofitability in 2013-14. A lockout would take a lot of wind out of their sails.
For Leipold's wallet and hockey in Florida as a whole, it could prove debilitating. The Kings' situation is less urgent, though they stand to miss out on a great opportunity to grow, especially if the new-look Lakers take back what little thunder the Kings were able to steal.
Further complicating the issue, the argument that a season needs to happen has to be least compelling to teams barely in the black if the players don't sweeten the revenue pot. It's possible clubs like Calgary, Boston, and Philadelphia that
each made less than $4 million last season would actually end up in the red as a result of the revenue sharing process.
Taking every team's individual financial situation into account and combining them into one all-encompassing, unanimously-approved proposal has to be excruciating.
The owners are negotiating with and against each other in order to come up with a proposal that will allow them to negotiate with and against the players. The owners and players also need to work together to keep both groups happy. For the sake of the sport, this isn't a battle either side can afford to drastically lose.
It's a frustratingly shitty situation, and
that's just revenue sharing.
The two sides are also, internally and against each other, debating the salary cap floor, front-loaded contracts, guaranteed money, and a number of other issues.
And they're supposed to get everything together in the next two weeks?
That's totally fucked.
