NHL CBA Talks: Do Rising Jet Fuel Prices Really Justify Player Salary Cuts?

CHICAGO - MAY 28: National Hockey League Commissioner Gary Bettman speaks at a press conference at the United Center on May 28, 2010 in Chicago, Illinois. (Photo by Jonathan Daniel/Getty Images)

One of the more frustrating aspects of the NHL CBA negotiations is not only the mind-numbing rhetoric from both sides of the table, but the occasional use of financial data to back up certain arguments. We don't get to see anything comprehensive, just a nugget which seems to bolster the argument of whoever is currently speaking.

During yesterday's media availability, for example, NHL Commissioner Gary Bettman cited rising fuel prices as one area in which the owners don't have the flexibility to reduce costs like they're trying to do with player salaries:

Q: The players said they requested or asked the league if there were costs other than player costs that the National Hockey League would consider reducing. How would you respond to that or how did you?

Bettman: We've done a very good job of growing revenues, particularly at the top line, so that HRR has increased. I don't think it makes sense to be putting that limitation on how the clubs run their business.

A lot of the increases and costs over the last seven years have related to things that we've done with respect to the players. Whether or not it's trainers, massage therapists, coaches, the fact that jet fuel has increased in the last five years 175% for the chartered jets that we use to move the players around.

Zowie! If those jet fuel costs are soaring so much (get it, soaring... OK, sorry) then reducing the amount that NHL teams travel over the course of a season would certainly be a good thing.

But have jet fuel costs really risen like the Commish says, and are they significant in the overall scheme of things? One player agent cast doubt on that this afternoon...

Allan Walsh is never shy about touting his clients' interests, and this afternoon he called out that specific angle by the Commissioner, making it look suspicious:

So, Bettman says costs are up over the last five years, Walsh says they've gone down since 2008... who to believe?

Hmm, if only one could look at a chart of historical jet fuel prices to sort out these conflicting characterizations. Oh, thanks Index Mundi & the US Energy Information Administration!

Jet_fuel_prices_medium

Conclusion? Current prices (at the far right) are indeed much higher than 5 years ago as alluded to by Bettman, and as compared to the beginning of the expiring NHL CBA in 2005. They are only up by about 60%, not the 175% that Bettman cites, although perhaps NHL planes require some premium variation (laced with maple syrup, perhaps, to satisfy Canadian sensibilities).

Walsh's comparison is pretty disingenuous, however, coming off a pricing peak that has little to do with the overall trend in such expenses for NHL teams.

The better question is, how much of a factor does this really play in the big picture? Again, referring to the Levitt report which the NHL produced in 2004 (PDF), total Operating Costs for all teams came to $282 million, or about $9.5 million per team.

Those Operating Costs consisted of coaching & front office salaries, trainers, equipment, training facilities, medical costs, and yes, travel costs, of which only a portion relate to jet fuel.

Bottom line? I don't think the jet fuel issue is significant, but it's frustrating when public appeals misrepresent the situation. We get it, the owners want more money and the players don't want to give up what they believe they already have.

Quit the posturing and work on finding a solution. Somehow, both sides should be happy with the $3.2 billion being showered upon them annually by loyal (but for how long?) hockey fans.

And in the meantime? Short those jet fuel futures!

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