Why increased revenue sharing could benefit owners more than players

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Much has been made about the benefits of increased revenue sharing, although the conversation has often been framed as a boon for the players.

In the long run, that might not be true, according to what sports management guru Rodney Fort* told The Globe & Mail.

“What basic economic theory tells us about revenue sharing is that it doesn’t change relative value on the margin,” Fort said. “Eventually it drives player pay down, ultimately their revenue is the source of the sharing. It’s surprising to me that the NHL doesn’t want more of it.”

That point brings up two interesting questions.

1. Why won’t the owners go for it?

Fort believes that it might come down to politics – not just puck politics.

“Sports franchise owners tend to be politically conservative people, and [revenue sharing] flies in the face of pre-conceived notions; it has the taint of socialism,” Fort said.

2. Why would the players want an increase in revenue spending?

Conversely, if this might lower long-term earnings, one must wonder why it would appeal to players.

The article’s answer is simple: it might help them protect their earnings for next season – a clear priority for the NHLPA in the current CBA talks.

***

That provides some interesting supplementary information about revenue sharing, but there are other stumbling blocks such as the much-cited topic of big-market vs. small-market interests.

Still, if you ask experts such as Fort, the idea is at least worth considering.

* – Yup, that’s the same Michigan professor who wonders if the two sides are really that far apart.