Arthur Levitt has seen the numbers, and the former chairman of the US Securities and Exchange Commission says they don't add up. By his ledger, the NHL is headed for disaster.
"They are on a treadmill to obscurity," said Levitt, briefing the media yesterday in New York, following what he claims to be an extensive review of the league's finances. "That's the way the league is going. Something's got to change."
According to Levitt, who was paid $250,000 by the NHL to conduct his review, the 30-team league last season lost $273 million, within approximately 10 percent of what league directors have been estimating for months. On revenues of $2 billion, said Levitt, the league paid out some $1.5 billion in player salary and related benefits -- a 75 percent payout that would greatly surpass any of the three other major North American sports leagues.
"I have to say," said Levitt, who worked with an accounting firm that he said billed the NHL some $500,000 to scour the books, "I would not underwrite as a banker any of these ventures, nor would I invest a dollar of my personal money in a business, to me, that appears to be heading south."
Levitt said 19 clubs lost money in 2002-03, at an average of $18 million per team. Eleven teams, no doubt including the Bruins, finished with an average profit of $6.4 million.
"As an investor, I'd have to say it is totally inconsistent with reasonable business practices," he said, commenting on the 75 percent payout to the players.
As expected, the NHL Players Association promptly raised pinched eyebrows over the report and its release to the public, which, it noted, was apprised of the figures before the union.
"We continue to believe that a market system, not a team of hired-gun accountants, provides the best measure of the value of the hockey business," union boss Bob Goodenow was quoted in an NHLPA release.
The collective bargaining agreement between players and owners will expire Sept. 15. Unless the sides can reach an accord, based on considerable salary rollbacks and what the league defines as cost certainty, it appears the players will be locked out for the second time in 10 years.