Monday, July 30, 2012

Why The NHL's 46% Revenue Share Proposal Isn't Nuts

Many were not happy with the NHL's proposal to roll back the players share of revenue by 11 points - from 57% to 46%.

Some described the proposal as unrealistic, crazy, obtuse, a slap in the face and off the charts crazy. Others have just said that it was not terribly polite.

The NHL's revenue share proposal wasn't nuts. A new industry standard has emerged in big league North American sports leagues when it comes to what share of revenue the players get. That new industry standard is somewhere between 47 and 51%.

In the NBA, the players get 50% of revenue give or take 1% depending on the health of the league. NFL players get about 48.5% of league revenue. MLB does not have a cap but rather a luxury tax; however the player shares works out to about 47%.

Prior to the lockout, NBA players were getting 57% of revenue (just like the NHL) and the NBA's first proposal was 46% (just like the NHL). The leagues can be distinguished to a certain extent given that NBA owners were claiming losses in excess of $1 billion over three years and also allged their business model was broken. Still, the comparison is noteworthy.

So it wasn't unreasonable as an opening move for the NHL to come in at 46%. The league has sought to align itself with other North American leagues.

Will it stay at 46%? That is unlikely. That number will probably climb to the 50% mark - or perhaps slightly higher. For that to happen, though, expect the NHL to seek other concessions from the NHLPA.

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