Lower payrolls should mean lower ticket prices

Updated: July 12, 2005, 2:42 PM ET
By Terry Frei | Special to ESPN.com

Under most circumstances, the vote here is to let the business set its prices and the marketplace both rule and react. That includes the pricing of tickets for sports and entertainment, or advertising rates in newspapers or on broadcasting outlets and Web sites. Every day, we weigh the cost and the attraction and make decisions.

Case in point: A hundred bucks for Crosby, Stills and Nash? Uh, nope. The wallet stays in the pocket. But a hundred bucks for Crosby, Stills, Nash and Young? That's more like it. With "Shakey," the son of a Canadian sportswriter, in the mix, at least one of the four still has his musical slap shot. But the NHL has weakened any argument for keeping artificial restraints out of the ticket-pricing arena.

Regardless of one's feelings about the merits of the opposing positions in the lockout, this much is indisputable: The owners are saying their marketplace requires further artificial controls to make the business viable.

Fair enough.

So we don't feel guilty or presumptuous about saying that the imminent implementation of a salary cap that will lower payroll costs for many franchises means savings should be passed along to the ticket-buying public.

Next season.

A handful of teams have at least hinted of plans to cut ticket prices. They include St. Louis, Dallas, Pittsburgh, Anaheim, Ottawa, San Jose and Buffalo. Others have said they won't cut, and that list includes Carolina, Montreal, Minnesota, Atlanta and the Islanders. The Isles, in fact -- undoubtedly because of the bargaining strength their recent, ahem, success gives them -- not only won't cut prices, but have announced a plan to levy a $50 surcharge if accounts are not paid in full by July 29.

Some other organ-eye-zations -- such as the Colorado Avalanche, whose player payroll will be cut roughly by one-third if the expected salary cap comes into play -- are on record as saying they haven't decided and won't announce anything until after they know the exact terms of the settlement.

More cuts should follow around the league, in most, if not all, markets.

Otherwise, all this rhetoric about the NHL's hanging tough during the lockout on behalf of its fans and the cause of affordable tickets wasn't just hot air. Especially in the markets where payrolls will be drastically slashed, it's not enough to say that the cost certainty will allow the franchises to freeze prices for the foreseeable future. That's lame, and it's not enough, for a lot of reasons.

One involves a phenomenon that elite, or at least high-ambition, franchises should accept as a compliment. As ticket prices climbed in markets such as Detroit, Philadelphia and Colorado, the justification was that their aggressiveness was expensive and continued competitiveness required higher prices. Sure, sometimes that wasn't borne out in the playoff results, but we knew what they meant, and it at least was a defensible position -- even before we moved to the issues of high demand and finite supply.

Those franchises chafed at some aspects of the league's lockout intransigence. That NHL stand was encouraged and even made necessary because less ambitious and successful operations didn't mind the lost season. But those high-profile franchises now are going to be willing to accept the immediate windfall of suddenly and drastically reduced player payrolls. At the end of the 2003-04 season, 10 franchises -- Detroit, the New York Rangers, Dallas, Philadelphia, Colorado, Toronto, St. Louis, Los Angeles, Anaheim and Washington -- were listed with payrolls of over $50 million.

So at least those teams should pass along the savings, even if they, as some were, willing to accept a much higher cap. Even if they, as some do, have waiting lists for season tickets. Even if they can, at least in the short term, "get away with" maintaining their prices at levels designed to support much higher payrolls. And even if the league's lockout strategy helped diminish other revenue streams, including television income. That's not the fans' fault.

Think that's out of line?

Well, then, we'll call in an outside witness.

With the end of the collective bargaining agreement and a likely lockout looming, here's what commissioner Gary Bettman said at the 2004 NHL All-Star Game weekend: "With the right economic system, we can take the pressure off of ticket prices, and I believe with the right economic system, many, if not most of our teams, will actually lower ticket prices. I believe we owe it to our fans to have affordable ticket prices.''

Bettman added, "More than a majority of our teams would use the opportunity of economic stability to lower their ticket prices.''

Also, in announcing the cancellation of the season on Feb. 16, Bettman said that the league probably would have to do "a lot of things" to recover from the toll of a lost season, including "with our fans in terms of ticket prices."

Plus, in pure pragmatic terms, cutting ticket prices seems a reasonable business decision in at least some of those markets. Dallas and Colorado are two of them, because demand slipped in the former and it would in the latter if the Avalanche regresses significantly and for any length of time. (And before anyone chimes in with the tired cliché that Denver and Dallas love winners and not hockey, that's fine, as long as it comes with an acknowledgement that attendance slips in Montreal, Vancouver, Boston, Calgary, Edmonton and elsewhere when the on-ice fortunes slide.)

The cheapest seat in the lower bowl for Avalanche games in 2004-05 was listed at $99, though season-ticket holders got a 10 percent break and few single-game tickets were available. Yes, Peter Forsberg committed to play for MoDo for the entire season, but that primarily was a surrender to the pending lockout. Colorado fans grimace, but pay those prices because they're accustomed to an elite roster. Dan Hinote as the second-line center, with Forsberg virtually forced to sign somewhere else, would be a whole new game.

That wouldn't be the Avalanche's "fault," but it shouldn't be their windfall, either.

And the same argument applies to other franchises.

If he still has the job, Bettman should twist arms and mandate at least 20 percent cuts in those markets where the payrolls will go down at least $10 million next season, and recommend at least cosmetic cuts everywhere. Cuts at least would confirm that the fans and owners were, in a sense, in this together.

It's the least they can do.

Terry Frei is a regular contributor to ESPN.com. He is the author of "Third Down and a War to Go" and "Horns, Hogs, and Nixon Coming."

Terry Frei

ESPN.com contributor
Terry Frei is a regular contributor to ESPN.com. He is the author of "Third Down and a War to Go" and "Horns, Hogs, and Nixon Coming."