In a perfect world, NHL hockey would exist for its own sake. Decisions would be made based on what is best for the NHL. Making money would not be the driving factor behind NHL decisions. Hockey would be.
However, we don't live in a perfect world. We live in a world where every aspect of the game is sold to the highest bidder. We live in a world where finances impact every decision made by the NHL.
James Mirtle had a very good post showing how the NHL's finances have been doing for the past several years. He plots the NHL revenue after inflation during the Gary Bettman years.
It is a bit of a simple minded analysis because nothing is done to correct for expansion that has occurred (during this time, four teams have been added to the NHL - the Atlanta Thrashers, Columbus Blue Jackets, Minnesota Wild and Nashville Predators). He does not try to adjust for the rise of the Canadian dollar (or decline of the American dollar) during this period. Exactly what value to use as the inflation rate is also a complex question. The fall of the American dollar on the world currency market might show recent inflation to be even higher than it is shown in Mirtle's analysis (similarly, the inflation rate in earlier years might also be incorrect). The NHL revenues are also somewhat questionable. While they have been defined under the current CBA (for the last two seasons), this definition of revenue did not exist in the earlier years and revenue numbers in earlier years may not be exactly the same under the current calculation.
However, the story is quite clear. In 1993/94, when Gary Bettman first came first came to power as NHL commissioner, the NHL revenue was $732 million. It grew annually (with exception of the 1994/95 lockout season that had only 48 regular season games per team) to over $2 billion in 2003/04. Even when inflation is taken into account, NHL revenues more than doubled during this period. This was not good enough for the NHL and led to the lockout that killed the entire 2004/05 season. Since then, while revenue numbers have been increasing in terms of raw numbers, they have declined when inflation is taken into account. From Mirtle's numbers, post inflation NHL revenues last season were less than the 2002/03 numbers.
We have a situation where NHL revenue in real terms has plateaued or even began to decline. This is after the previous growth (which was still not good enough to prevent the loss of a season from the lockout) which was in many ways fuelled by unsustainable revenue sources such as expansion and the building of new NHL arenas.
The current NHL is still looking for further unsustainable revenue sources in order to maintain their current numbers. There is talk of further expansion. New jerseys were brought in this season in an effort to increase merchandising revenue. Last season, the NHL retired the number of nine players (Ken Dryden, Dale Hawerchuk, Brett Hull, Mario Lemieux, Mark Messier, Luc Robitaille, Serge Savard, Mike Vernon and Steve Yzerman) in an effort to create special events to bring more fans to the arena. Nine players cannot have their numbers retired each year; there are far less than nine players worthy of this honor retiring annually. This is all an effort to grow (or at least maintain) flat revenue numbers.
What this means to the fan is despite the fact that NHL hockey is fine, further gimmicks will likely be brought in to try to find the magic formula to grow revenues. The game will change and likely in negative ways. There will likely be franchise relocation (starting with Nashville). There will likely be further labor problems as the NHL owners try to extract further concessions from the players in an effort to grow their revenue. These are all bad things for fans. The fan doesn't care if the billionaires who own hockey teams make more money or not. The fan just wants to see good competitive hockey games. In fact, if financial problems of the league create a larger supply of cheap tickets to NHL games this is a good thing for a fan.
These numbers are foreboding to the NHL. They are particularly to Gary Bettman's leadership. It might be a sign that his days as NHL commissioner are numbered.
From a business of hockey standpoint that more affects fans, Mirtle suggests that the salary cap may drop as a result of these trends. I doubt that is the case. There are enough mechanisms built in to keep the salary cap rising to prevent that. In any given season, an automatic 5% increase in revenue is assumed when calculating the next season revenue. As revenues grow (in raw pre-inflation) numbers, the player's share of the revenue also grows.
What can the NHL do about this? In my perfect world, they shouldn't do anything directly. They have over $2 billion in revenue and that should be more than enough to make everyone happy. I wish they could divide up their money without it affecting the fan so often. Let the game of hockey be. Do not bring in any more half-baked measures designed to increase revenue (no larger goals, no more expansion etc.). If a couple weaker market teams die or move, then let it happen. There is no value in changing the game of hockey to save the weak.