NHL Rinkside Revelations

0:05Congratulations! You made the varsity, the podcast. My name is John Arand and I am Puck's sports correspondent and the host of this pod. And today, Greg Wyshynski joins a pod, a fellow Terp. Anyway, the NHL opened its season yesterday and in my mind, there's really been little or no buzz about it. Mind you, when I say that, I'm talking about the business behind hockey, which really seems to be in as good a place as it ever has been. TV deals are secured long term. The league signed a collective bargaining agreement with the Players Association with no rancor. That never happens. And all of the big storylines seem to be on the ice.

0:48So Greg is here to tell us what to expect this season. But before we get to Greg Wyshynski, today is Wednesday, October 8th. And yes, I'm going to talk about the sports media conference that Puck is putting on with Moffitt Nathanson again. It's called In the Arena, and we're holding it in New York next Thursday. That's October 16th. All the people who are running sports media are going to be there. Personally, I'm going to be on stage with Adam Silver, who I find to be one of the most thoughtful executives in the business. I'm also going to be on stage with the commander's owner, Josh Harris. and I'm going to try not to ask him the age-old question from NFL fans in DC, Sonny or Billy, because I know everybody picks Sonny.

1:31Anyway, the NFL's top media executive, Hans Schroeder, is going to join me on stage, as will the guy who runs all of Amazon Prime Video, Jay Marine. I've hosted a bunch of these conferences over my career, and I have to tell you I'm particularly proud of this one. So please, reach out to me directly or visit our website, Puck.News, if you want to buy tickets. Remember, October 16th in New York. It's called In the Arena. Okay, enough talk about that. Here's what's really on my mind today. It's the NFL's media rights situation. Yes, yes, I know. The NFL deals run through 2033. And of course, I know that the league can exercise an out after the 2029 season.

2:12That's still four years away. But the networks kind of want to go early and the league kind of wants to go early. So it wouldn't surprise me to see renewal negotiations start after this season. And if that happens, what becomes of the new package of games that the league may look to sell to a streamer like Netflix? The league would have to expand its regular season to 18 games for that to happen, right? And for that to happen, the NFL would need approval from the Players Association. The NFLPA certainly knows that it's carrying a really good bargaining chip. and the NFL's collective bargaining agreement, well, that runs to 2031.

2:50So what can the NFL do in the next two years if it can't convince the NFLPA to allow that to happen? First of all, the league already has seven international games that it could put into a package, and it's getting four games back from NFL Network as part of the ESPN deal that's still under regulatory review. That's 11 games right there. That's a pretty good package. But I've also heard that the league has considered taking some games from the Sunday afternoon packages. Think of like a 1 p.m. game that goes to about 5 % of the country. The league certainly would move those games to an available window.

3:25I can't imagine that it would turn around and use that game to then compete against Fox or CBS on Sunday afternoon. And if it does that and creates a package of 16 to 18 games, according to Wells Fargo Securities analyst Stephen Cahall, a new partner like Netflix could then pay up to$80 million per game for that package. Why$80 million? That's consistent with what Amazon pays. And if that happens, it could add nearly$3 billion in rights for the NFL. That seems kind of high to me, but even a billion or two billion, that's a nice number for the NFL to have. And it's why this is a topic that I'm paying way too much attention to these guys.

4:06Okay. Now let's get to Greg Wyshynski. Greg, thank you for coming on. This might be the shortest podcast that I've ever done. The business issues facing the National Hockey League going into this season, there just aren't a lot. I mean, we have Labor Peace. You have your media deals, they're set going into the next season. The players seem to get along with the league and the owners and vice versa. It's a terribly boring league for me to write about. So I just want to ask you, let's open up with just an open-ended question. Off ice, what's the storyline or two that you're really following going into this season?

4:56Well, with labor peace comes a new collective bargaining agreement. And one of the interesting things about this season is that they've fast tracked a couple of the things in the CBA. So the new CBA kicks in next September. And that's when you're going to start to see some term limits on contracts being shortened and other rules being implemented. But one of the raging controversies in hockey has been how teams have used long term injured reserves. So when a guy goes on injured reserve. He's on it for months. You could in past seasons use that open salary cap space to acquire new players. And then what would happen is that the player who was hurt would miraculously rise out of his hospital bed in the last day of the season.

5:42And then he'd be ready to play in game one of the playoffs. And oh, look, the high priced player you've traded for to replace him. He's also here now too i think in soccer they called that like the magic sponge right they the the medic medics would go out on the field with the magic sponge and magically the player would uh stand up so what the nhl and the nhlpa did because the players were not in favor of of this being a practice because it gave kind of an unfair advantage to some teams vegas has used it florida has used it in the past but tampa bay as well all of them uh pretty successful in stanley cup winning teams.

6:18So now there is a thing where if you're going to use the full salary cap space of an injured player, you have to basically declare that that player is going to be gone for the entirety of the season, regular and postseason. So to use an example, Florida lost their captain, their star, Alexander Barkoff, in the in the preseason to an MCL and ACL injury. He makes 10 million against the cap. If they want to use all that space, they've got to say he will not come back in the playoffs. I don't think they'll do that. The other thing too about the playoffs now is that there is for the first time... Wait, actually, let me stop you right there.

6:52Was that a contentious point during negotiations? It's something the league was hoping there'd be an appetite for, and there was. And in fact, a number of players that I've spoken to, although they weren't really too vocal about it before the implementation of the new cva probably because in the back of their head they thought hey my team could use this loophole themselves um have told me yeah we thought it was an unfair advantage to have to play against teams that were so far over the cap in the playoffs um because of this injury long-term injury exception that it gave them an unfair competitive advantage and so what i was gonna say is like in the playoffs now, there's also for the first time going to be a salary cap.

7:39The team that you put on the ice in any given game, the sum total of their salary cap hits has to be under the regular season cap. So in summary, they've figured out a way to stop these teams from having guys go on long-term reserve, use the salary cap space, and then have everybody be healthy on the first game of the playoffs. So that's one thing that's been very interesting to see. I've been spilling buckets of Inc. on the WNBA and the labor problems that they have, which is a great fun for me. It's a great, great fun to write about. I've been writing about the NFL. I mean, their labor deal is up, I think, in 2031.

8:20And already, they're sort of making noise about adding an 18th game. And you can sort of see where these fault lines are. The NHL, they quietly did their deal. They wrapped it up. There was no rancor. What do you put that down to? Why is that? It's a couple of things. First of all, the NHLPA has new leadership. Marty Walsh used to be the mayor of Boston, worked in the Biden administration as well. I think his approach to negotiations was more political than, say, Don Feer, who was the previous NHLPA boss who may have been a bit more combative as we know Don fear to have been back in his baseball days.

9:04It's a it's a shorter term CBA. I think it's four years is the term. And so that plays into it as well in the sense of the players. I think we're more adept to accept certain things and not fight on certain things because they can just sort of reexamine it all in the next like after four years and see where the league is then. but overall, John, it's like everybody's fat and happy. I mean, the league is making a lot of money. More will be on the way when they expand further. The players are all making a good amount of money, and I have to give Gary Bettman credit because he put out the salary cap projections for the next three seasons during the CBA negotiations.

9:54So he's basically saying, hey, players, here's where we're headed. Let's all work together and make sure that that happens. And I think it was a genius PR move because it probably put the notion in these players' heads that the league is thriving and there's no reason to really get in the trenches and fight over labor stuff when everybody's going to be making money. Here's where I'm confused. The Conor McDavid contract, where would you put him? Like number three star, number one star? He's one of the stars of the NHL, and he signs an extension with his team, Edmonton, that by any measure is below market value, right?

10:35Why did that happen? So I would say easily the best hockey player on the planet. If you want to go magnitude of star, you'd probably still put him behind Sidney Crosby and Alex Ovechkin for name recognition amongst casual fans. But I mean, anyone who tunes into SportsCenter knows the name Connor McDavid because his highlights are all over the show during the regular season. And he's obviously led Edmonton to consecutive Stanley Cup finals as well, where they've lost. And that's one of the reasons why we are looking at this contract now for McDavid. He signs a two-year deal. He's got one year left on his deal.

11:08He's got two additional ones after that. So his free agency is pushed the summer of 2028. And the cap hit on this was the real intrigue. His friend and teammate, Leon Dreisaitl, makes$14 million against the salary cap. We all assumed that even on a hometown discount, he would make more than dry saddle. He is making a million and a half less against the cap annually. That's crazy. That is 12.5 million. And again, so it's a combination of he wants to stay in Edmonton. He wants to win a cup for that city. He likes living there. He wants to give them an ample chance to extend their contention window and build around him.

11:49And he's giving away money he would otherwise earn to help facilitate that. That being said, he also looks at this team and the roster and the pipeline of prospects and everything else and says, you're on the clock. It reminds me of season four of The Bear, where the uncle puts the clock on the counter and says, we have exactly this much time before the restaurant goes under. And that's basically what McDavid did to the Oilers. You got me for one year, two more. If it doesn't work out, I put in my time. I will go make the richest free agent contract in hockey history that summer. So I'm always trying to take things that happen like that and develop.

12:27Is there a trend here? The way I hear you explain that, it sounds very unique to Conor McDavid, very unique to actually the Edmonton market, if you want to get into that. And there really is nothing that you should sort of go into Florida or Washington or New York or any of the other NHL cities markets and say like, yeah, you can apply this there. I think that's right. I think, I think, you know, McDavid, not only being McDavid, you know, a singular player in this league is one aspect of it. But also, you know, he, he feels a certain loyalty to that team. He wants to see it through. He's, he's been in, in the, in the battle with those guys now for consecutive seasons, losing in the Stanley cup final, both times in the Florida Panthers.

13:11I think it will be leading to some uncomfortable conversations between GMs and players when their contracts are up about, you know, it used to be Sidney Crosby taking less than market value was the example that teams would always use about, hey, help us out a little bit with the salary cap. Now it's going to be look what look, gaze upon what Connor McDavid did. You should do the same for us is what it's going to be. But what's funny about it is that, you know, McDavid takes this team friendly deal both in term and in money. At the same time, the NHL saw the richest contract it has ever seen handed out only about a week and a half earlier.

13:47Kirill Kaprizov, a Russian winger for the Minnesota Wilds, signed for eight years and$136 million. So total value, the richest contract we've ever seen beating Alex Ovechkin's record from I think around 2008 was when that contract was signed. And the$17 million cap hit is obviously higher than the cap hit of Leon Dreisaitl, who had that record. So it's kind of weird that the NHL saw the richest contract it had ever seen. And then like two weeks later, its biggest star take a hometown discount on his deal. And you know what I immediately think of when I hear you say that is I know you're a baseball fan as well.

14:25Baseball, which does not have a salary cap. Can you imagine the Minnesota Twins signing the richest contract in Major League Baseball history? Or what's an Edmonton equivalent? Like Seattle, maybe? I don't even know. Like a really small market sort of getting a sweetheart deal. Generally, you see these players want to get out of there. Let me take a quick break, come back, and we'll hit on a couple other topics to look for this season.

15:00but greg i want to stick with uh with my baseball analogies you're a mets fan by the way my apologies who who are the mets of the of the nhl uh i mean i would say the toronto maple leaves but they're more in the pre uh pre pre victory cubs or red sox mode i think as far as their their luck um maybe the islanders team that hasn't won since the 1980s? In the 80s, though, they won four in a row. So you can't. As you know, the Mets victory in 86 was the magnitude of winning four straight World Series. That's how important it was. And so that's why the parallel works. Point taken, point taken. The thing about, we were talking about this before we got on, the thing about baseball is we saw the Yankees play the Red Sox early in the playoffs.

15:52We're watching the Dodgers sort of play the Phillies, which is a, I haven't seen the TV numbers from that, but I'm sure they're through the roof to, to sort of big market teams. The national hockey league, the traditional Canadian clubs, of course, I mean, as well-known hasn't won a Stanley cup final and forever the past, I think it's six Stanley cups have been four of them have been won by Florida teams. and then the Las Vegas and the other one was, who is the other one? Colorado. Colorado, right. Everything we're talking about, like business is good, there's labor peace, everybody's getting along, but it seems upside down to me.

16:42Some of these traditional hockey teams just aren't as good. Does hockey not need the traditional teams to be good? Oh, no, it needs them. I don't think the issue is that the Panthers and Lightning and Vegas Golden Knights all win Stanley Cups. And in the case of the Florida teams, make multiple trips to the final and win multiple Stanley Cups. I think the issue is who they're playing to get there in some cases. So if you look at the standings from last season, here are some of the teams that did not participate in the Stanley Cup playoffs. Detroit Boston the Rangers the Islanders Pittsburgh Philadelphia Chicago those are all teams that did not play in the playoffs last year those are some of the glamorous of glamour franchises the NHL has and again it's not that we need the Blackhawks to win three Stanley Cups like they did back in the last decade what we need is for them to be a team that you know Edmonton has to go through to get to the cup final.

17:40And then you get the excitement of having that market engaged in postseason hockey. But you bring up the teams that have been winning, and that brings up another really interesting debate within the context of the NHL lately, which is the state income tax issue. And there is a notion that the reason that we see the Lightning and the Panthers and the Golden Knights and before that the Predators and Nashville all thrive is because they don't have state income tax. And the Florida Panthers in particular were able to retain three very high profile free agents, Sam Bennett, Brad Marchand, who used to be on the Bruins, and Aaron Ekblad on contracts that many consider to be undervalued, but because the players wanted to stay there and because they get more money in their pocket in Florida, they were able to pull it off.

18:26And we see it time and time again, Dallas being another example with the contracts that they have. It's been a huge debate around the league. I don't think there's a way to really solve the problem. In fact, I believe that it's just evening the playing field with the advantages that players can get living in a place like New York or Toronto insofar as endorsements and stuff like that. But there are teams that don't believe that the playing field is level because of the tax advantages that some of these markets have. Do you believe that? I think it helps. But I think ultimately what it comes down to is, you know, can you build a good team?

18:59I mean, it's one thing to be able to retain your talent, but it's another thing to actually build a championship team. I mean, you know, Seattle is a no tax team and at no point have they ever threatened in their existence to be a Stanley Cup contender quite yet. In the case of the Florida teams, yeah, there's no question that they've been able to, um, retain talent and in some cases attract talent because of the tax advantages they have. Um, but ultimately it comes down to what happens on the ice and, and there are some other really good teams that, uh, that have won the cup that don't have those advantages.

19:36All right. So I know nothing about this situation. I mean, I've, I've, I've heard it out there before a little bit, but if I'm going to push back on it, I'm going to say that the Florida teams in the NBA aren't necessarily, you know, running roughshod over everybody else or in the NFL, or there are plenty of other, uh, of, of leagues that you can take a look at where that's not actually happening. Is there something unique to hockey to where the, maybe it's happening, or maybe it's unique to the, to Florida, the, uh, to, to actually use that as part of their, their marketing to, you know, come play with us.

20:08Well, I mean, I think that the NHL salary cap functions in a different way than it does in the NBA, for example. So I do think that there's something to be said for the way that teams are able to keep themselves under the cap through contracts that if they were in another market would have been a few million dollars richer annually than they are in Florida and Texas and places like that. And look, Brad Marchand said it himself last year in the lead up to his free agency. Players do think about the tax impact on the money that they make playing in a place like Toronto, for example, that was the example he gave or a place like Boston versus a place like Fort Lauderdale.

20:49It's a real thing on their minds. Does it ultimately mean they choose those teams over others? Not necessarily, but I think it has certainly helped some of these teams maintain their talent. And then as we've been talking about, it all comes down to how you put it together on the ice just because you can attract talent or keep guys or get guys on low cap hits doesn't mean you always win. That was kind of my Columbo question. I know nothing about this, but I put it out there. Let me ask you another question about markets. The Utah market, Salt Lake City, seemed like a home run to me. It hopefully will be.

21:26By the way, sorry about that. Wasn't really a good question. It was a state. No, it's a fine question. Listen, the baseline for will it be a success for the NHL when it comes to that franchise is, are they playing in a college arena in Tempe, Arizona? If the answer know that it was a successful move for that franchise. Listen, I think one of the best things about Utah, and by the way, they are the Utah Mammoth now. They tried to be the Utah Yeti, and then they discovered there's a cooler company that's quite popular with that name and could not use that name. I think the thing that the league loves about them is their ownership.

22:03Ryan and Ashley Smith, the owners of the Jazz, I think are owners. They love having part of this league, not only because of their money, but because of how they approach things and their ingenuity and bringing attention to the market and bringing the team to the fans. But, you know, it seems like a natural place for the NHL. I mean, it's a winter sports paradise. Obviously, the Winter Olympics are going to be there, you know, in short order. And so it makes total sense for them to put a team there. And I think, you know, I I expect them to be a playoff team this year. They've got a good young core of players.

22:41If they can stay healthy and continue to kind of track the way they've been tracking, we might see playoff hockey in that market. And again, you look at the success of Vegas as an example of how important it is for a team to be relevant quickly in order to really captivate a fan base. And I think that Utah is definitely one of those teams that could use that boost. Last year on this preview pod, we had Gary Bettman was the guest. and I asked him about Arizona. This is totally an upgrade, Greg. But I asked him about Arizona, expecting him to say like, you know, they had their chance and were gone.

23:15And he spoke really fondly of Arizona, thinking that they would get another chance at a franchise. Was that just talk? I mean, do you believe that? They love that market. They think it's an important market. And obviously, like, it's a pretty big television market. I think they believe hockey can work there. The issue with the Coyotes was that the arena in which they played for many years was nowhere near where the fans were. And then by the time they finally tried to make their move to where the fans were, their reputation was in the garbage insofar as all the problems they had in Glendale. So they had this vote to build an arena in Tempe, and all of these people were opposed to it, not only the NIMBYs, but also people that didn't believe the Coyotes would follow through on their promises.

24:06So the franchise was kind of toxic at that point. When it was at a point when it was ready to put roots down, it was kind of toxic at that point. So I think they believe that with an actual arena, with cement in the ground, with an owner that they believe has the best intentions of the franchise in their favor, I think they think it could work there. Um, look, we're, we're going to add two teams pretty soon. Uh, Atlanta is going to get another NHL team. As you, as you know, Houston is, is on the runway for one. Um, that brings us to 34. That's not an even number. Uh, so we're going to probably get to 36 at some point.

24:45Um, one assumes and, and then, uh, and then go from there. Atlanta, Houston, you know, somewhere in Arizona, Tempe, Phoenix, who knows where, who, who else is, uh, sort of, uh, what other markets are possible? Well, that's just it. I don't, I don't know what that last market looks like. I don't know where it is. I mean, I think people have always been curious about a place like Portland. Um, I honestly don't know. I mean, the NHL likes to talk about all of the places that talk to them about getting teams. There was some talk about new Orleans, uh, sending some overtures to the NHL about getting into it.

25:20I remember Gary Bettman saying in the last couple of years that Omaha had reached out about a potential NHL team. So I don't know where the other one would be, but I think if you were to ask people around the league, Atlanta's a given. There's two competing groups that are trying to build an arena there. When there's that level of interest, you figure they're going back. And the NHL has been undaunted about it failing in Atlanta twice already. They believe that the business and population demographics have changed. to the point where it's advantageous to go back. Houston, as long as they've got ownership, I think is a market they want to be in.

25:55And then, you know, you figure a return to Arizona and then one more after that. Maybe the good people of Quebec, John, will finally get their hockey team back. Who's to say? Put another team in New York. Let me take one more quick break and I want to just wrap up with a couple of quick questions.

26:18And no offense, Greg, this is kind of a terrible podcast. You're not this nice of a person like you, like neither am I for goodness sakes. And all we're doing is, is we're talking about how things are looking up for the NHL. What's a, give me a red flag. What is something that has a potential to blow up that you, that you think that the league really needs to pay attention to right now? It's a sport that is more gate dependent, as you know, than other major professional sports. And so if there is an economic downturn that could seriously impact the revenues of this league, I mean, they've got strong media rights deals, but but easily it's still the league that is probably most gate dependent.