Devils Caught Between 'The Rock' and Hard Place

The NHL canceled the 2004–05 season, a desperate measure taken ostensibly because player salaries had risen to levels that were no longer affordable to a large majority of the teams. Eventually, the NHL's powers-that-be got what they wanted: a salary cap system that fixes the players' collective income to a specific percentage of the combined revenues of the 30 franchises.

But as was pointed out in this space numerous times during the collective bargaining agreement negotiations, because the NHL teams' revenues are primarily gate-driven, there is little or no correlation between an individual team's income and the combined income of all 30 clubs. What the Rangers charge for tickets — or what their broadcasts earn for owner Cablevision's MSG Network — is thoroughly and completely irrelevant to the finances of the Islanders, for instance. Without meaningful revenue sharing — as has proven so successful for the National Football League — the new CBA has actually only served to widen the already-considerable gap between the league's haves and have-nots. And things aren't much better for the league's "middle class."

The Devils, one of the most successful sports franchises over the past 15 years, operated in relative anonymity for most of that time, despite playing only 8.6 driving miles away from Madison Square Garden.

Much of the blame for the Devils' paltry support was directed toward the team's on-ice style, their "clutching and grabbing" deemed the primary reason why the NHL's overall popularity waned during their period of on-ice prosperity. But in reality, where the Devils played (Continental Airlines Arena) and the large number of empty seats that greeted them for home games even during the postseason (on most nights, up to 25% of the seats were vacant) was more the problem than anything else. Had the Devils been wearing blue and playing their home games at a jam-packed MSG, their vaunted defense would be canonized rather than maligned, and Hall-of-Fame goaltender-to-be Martin Brodeur would be a household name, at least in the New York area if not across America.

But last season, the Devils averaged only 14,176 fans per game at the Continental Airlines Arena, only 26th-best in the NHL. The building's capacity of 19,040 was considered too spacious for the Devils, and its lack of first-class amenities was held up as a primary culprit in the team's constant battle to grow its fan base.

This year, the Devils are leading the Eastern Conference and playing their games at the brand-new Prudential Center — what should be a recipe for certain success at the gate. But though their average attendance per game has risen to 15,323, they are still only 23rd overall in the NHL (and 20th-best when measured as a percentage of the arena's overall capacity). If the Eastern Conference's finest club is only 23rd overall in attendance despite playing in a glistening new facility, then clearly something else is amiss.

One obvious problem is the simple cost of attending a Devils game. Team Marketing Report conducts an annual study during which they determine the Fan Cost Index (FCI) to attend games in each of the 30 NHL cities. The index gives a representative look at the cost of taking a family of four to a hockey game; it comprises: four average-price tickets, two small draft beers, four small soft drinks, four regular-size hot dogs, parking for one car, two game programs, and two adult-size caps.

This season, following a 17.4% price increase that accompanied their move into the Prudential Center, the Devils' FCI is $365.67, fourth-highest in the entire NHL and the highest among the 24 teams based in America. With the cost of attending a Devils game so high, it's little wonder why more casual sports fans haven't gravitated towards a team only the Yankees can rival with regard to on-ice/field success.

With the payroll maximum and minimum tied inextricably to overall league revenues, numerous factors are conspiring against Devils fans in particular and NHL fans in general. Now that NHL players are guaranteed a fixed percentage of league revenues, there are only two obvious ways for the owners to increase their profits. One is for television revenues to increase — an unlikely short-term proposition, given the low ratings. The other, much easier, path is to increase ticket prices.

Capitalizing on the fans' loyalty might not sound particularly savory, but by all indications, it's working. The average FCI has risen by about 18% over the past five years, from $240.43 to $282.95. Not coincidentally, the salary cap was set at $39 million for the season following the lockout (2005–06) and rose to $50.3 million for this season, or an increase of 29% over just three seasons.

And most of the rest of the difference between the FCI's increase (18%) and the cap's (29%) is not attributable to increased television revenues, but rather to an increase in the value of the Canadian dollar. The "Canuck buck" is now on par with the American dollar, around 10 cents higher compared to the American dollar, than it was during last year's FCI survey.

Prior to the lockout, at the 2004 NHL All-Star Game, NHL commissioner Gary Bettman theorized that with the "right economic system," teams could lower ticket prices. That might have sounded nice in theory, but the evidence is incontrovertible and the results indisputable. At the Prudential Center, and everywhere else in the NHL where price increases can be sustained, ticket prices will continue to rise. With the players guaranteed a fixed percentage of revenues, and with the owners' other operational costs rising at least at the rate of inflation, the only way for them to maintain — much less increase — profits is to raise ticket prices. Perhaps some owners would prefer otherwise, but in the all-for-one-and-one-for-all world of this one-sided CBA, such charity is effectively impossible.

Mr. Greenstein is the editor in chief of InsideHockey.com.