Potential revenue-enhancing plan could rescue NHL

No group of major league athletes in North America is more vulnerable to the economic ramifications of the coronavirus’ impact on sports than hockey players.

That is why I believe the NHL, with substantial input from the NHL Players’ Association, will attempt to be as creative as possible in either saving some remaining portion of the regular season that would precede a somewhat traditional playoff format or in creating an expanded playoff tournament.

Because generating revenue is critical not only to the athletes’ short-term needs, but for the long-term sustainability of the NHL’s hard-cap league. How ugly do you think it will get if the cap is reduced next season because of this pandemic?

According to individuals with ties to both management and labor, it was unclear whether teams would continue to pay players during the “pause” in the season that was announced Thursday afternoon.

“No details about anything, yet,” one front office executive texted, while an agent said, “Haven’t been told.”

Section 17 of the Standard Player’s Contract grants teams permission to withhold pay if the NHL, “suspend[s], cease[s] or reduce[s] operations … because of any condition arising from a state of war or other cause beyond the control of the League …”

But the NHL, run by attorneys who understand the meaning of terminology, chose to use the word, “pause,” rather than, “suspend.” And we are told there are those within the NHLPA who believe that the teams will be obligated to continue paying their players on a twice-monthly basis through the scheduled end of the season on April 4.

The problem for the players is that even if they do get paid during the shutdown, they’d likely have to return all of it if the league does not reopen or cannot generate commensurate revenues upon reopening. The players are locked into a 50-50 partnership with the league. Approximately 15 percent of the regular season remains with 100 percent of postseason revenue outstanding.

If the season is not resumed, or if revenues do not meet projections upon reopening, then not only would players likely receive no refund of the 14 percent escrow deduction that has been applied to their paychecks this season, they’d all but certainly wind up giving money back to the league to correspond to a 50-50 split.

This is what partnership is all about.

Next year’s cap is based on a formula that relies on this year’s revenue. If the season is canceled, the league and union could agree to set the cap at, say, this year’s $81.5 million number if both parties envision an immediate rebound to traditional consumer habits and ticket-buying behavior.

But maybe not. Regardless of a bargained number, no one should expect the PA to use an escalator. And a flat cap — if that — would wreak havoc on the league in which half of the teams are using long-term injury exemptions to be cap compliant.

Indeed, there is a possibility the league and union could adopt an amnesty buyout policy for this offseason in which buyouts are not applied against the cap, as was the case coming out of each of the past two Owners’ Lockouts.

In this league, it is all about the cap and to a huge number of players in the union, it is all about escrow. Which is why, if pro sports return to somewhat normal within the next two-to-three months, the NHL is going to want and need to generate a splash for the playoffs to generate excitement and revenue. Hard to work up enthusiasm for a May 14, Game 81 between say, the Ducks and Kings.

Which is why I can envision adoption of an expanded tournament, including perhaps 20-24 teams, featuring knockout rounds and whatever other bells and whistles the league could create in order to attract interest across the continent. As the Red Wings are the only team to have been eliminated from playoff contention, the league could adopt a 30-team invitational.

This would obviously not be about the integrity of the competition — and why would it be now, when it never is? — but about maximizing revenue. Hey, maybe bid out the final or the final two rounds to a neutral site willing to pay enormous sponsorship dollars for the tournament. The final, you realize, could be played in the middle of July.

The NFL moved to a 16-team Super Bowl tournament following its 1982 strike season. Things like this can be done. More playoff teams, more playoff games, more playoff revenue, healthier cap.

Of course, nobody knows. But we do know that the NHL, which was the second pro league to announce a “pause,” is also the league that would be affected the most seriously if forced to cancel it all.