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Skyrocketing Salaries Sputter, For Now
Up The Boards
By Dirk Hoag
Friday, December 19, 1997

There has been a great gnashing of teeth and plenty of grumbling from the owners regarding rising salaries in the NHL in light of the new Paul Kariya and Eric Lindros contracts, but considering how things appeared just a few months ago, the owners (and fans) should consider themselves lucky.

Remember how the market looked after Chris Gratton hit the $9 million signing-bonus jackpot, courtesy of the Philadelphia Flyers? Analysts around the league predicted that if Gratton drew that kind of money, then the real superstars, like Kariya and Lindros, would command upwards of $10 million a year, if not more. After having seen the ludicrous contracts paid to NBA players recently, there was every reason to believe that a new era was at hand.

But something derailed this crazy train of excess. There seems to be an underlying uncertainty around the NHL about future revenues - as seen by the lack of long-term contracts. Lindros, Kariya, and Derian Hatcher each signed for two seasons. Joe Sakic got a three year deal. Mike Modano signed a one-year pact in hopes of negotiating again next summer, as did Doug Gilmour.

The league recently signed a new 5-year contract with the Labatt Brewing Company and the CBC netting more than $50 million per year for Canadian TV rights, a substantial increase from their previous contract with Molson. In a couple more years, the U.S. rights go up for grabs, and nobody truly knows where the bidding will stop. For players, the risk of signing a multi-year deal is that should the U.S. TV contract prove lucrative, salaries around the league will rise while they lag behind. For owners, it's hard to project what future revenues will look like, so making such a major commitment to one player is difficult, particularly in the injury-prone sport of hockey.

For fans, the good news is that for now, at least, tickets prices aren't likely to keep rising to support an entirely new level of player compensation. On the contrary, some teams have realized that they are testing the limits as to how much the public will pay for tickets, and Pittsburgh management has openly stated that a rollback in prices might be necessary to once again fill up the Civic Arena. For the moment, it seems, fiscal responsibility has become trendy in professional sports. Enjoy it while it lasts!

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