Bettman's bottom line buried beneath cap

Ted Saskin was sort of right, and sort of wrong.

Certainly, when the NHL Players' Association senior director said this week that NHL commissioner Gary Bettman was not the right man to lead the league, he could point to some points of NHL history and commerce as meaningful evidence. Saskin's inflammatory comments got everybody in the hockey world chattering, of course, and may indeed have been a rhetorical prelude to the union's announcement that it has a new proposal to give to the league next week aimed at ending the 78-day-old impasse.

Apparently, if the union doesn't believe Bettman should be in charge, they still understand that he is the man to talk to.

For me, the biggest strike against Bettman has been the way in which the entertainment value and overall quality of the game on the ice has deteriorated under his watch.

But we digress.

Saskin's point, when he answered the question of Bettman's suitability for his current position with "not from what I've seen so far," probably was more directed to the business end of the league.

And that's where this gets interesting.

The league has repeatedly pointed to enormous financial losses in recent years, claiming last year alone the 30 clubs lost a collective $273 million. This week, Bettman was in Calgary and Edmonton telling one and all of the dire straits in which the league finds itself.

If that were really the case, however, would he still be running the NHL?

After all, the league's owners have had more than a decade of Bettman rule, lots and lots of time to see whether the former NBA executive has the stuff to make them money. Based on the fact he's still in the job, and the fact these guys aren't running a charity or a make work program for the homeless and indigent, you are forced to conclude that they must like what their top officer is doing, correct?

Specifically, this is a league that is more about franchise values than it is operating profits, largely because there is no gigantic U.S. television contract to provide a guaranteed return on investment. How you make money in the NHL is still mostly about how much you paid for your team and how much you can sell it for.

And that is what this labor fight with the union is about -- franchise values.

The league is motivated to do what it is doing -- and we're all starting to understand the potential damage to the sport and the industry that is in the offing here -- out of the need to solidify and bolster franchise values across the league.

You think the Minnesota Wild or Columbus Blue Jackets care if they can make $5 million in profit every season? To some degree, yes, but they care a lot more if the $85 million franchise fee they paid in the late 1990s doubles.

When the Buffalo Sabres and Ottawa Senators went bankrupt and then were sold at bargain basement prices to Thomas Golisano and Eugene Melnyk, respectively, it undercut franchise values across the league. Ditto for the manner in which the Atlanta Thrashers were packaged to a new buyer, essentially for nothing.

NHL owners would like to make money on a cash-in, cash-out basis, but they can deal with operating losses as long as the franchise values are improving.

That's where the big money is in the NHL.

But while the Sens, Sabres and Thrashers hurt the overall picture last year when they were sold, its worth looking at the recent sale of 50 percent of the Vancouver Canucks to understand the total picture, and to understand why Bettman is seen by the board of governors to be good for their business.

The Canucks, founded in 1970 for the expansion fee of $6 million, were valued last month by Forbes Magazine at $148 million. That put them 15th of 30 NHL clubs, precisely the spot that NHLPA boss Bob Goodenow says is the place where a new collective bargaining agreement should be directed to be fair to both sides in this dispute.

In Goodenow's view, a fair CBA isn't designed to meet the needs of the wealthiest team or the poorest. You aim for the middle.

Several years ago, the Canucks under Brian Burke were one of the loudest teams calling for the Canadian government to provide tax relief and assistance to the country's NHL clubs or risk losing them to U.S. locations.

Then, the Canucks claimed to be losing in excess of $20 million per year, some of that caused by the discrepancy between the U.S. and Canadian dollar, which at that time had sunk to below 63 cents in comparison to the American greenback.

Since then, the Canucks' financial picture has improved considerably, as has the team's performance on the ice, to the point the club is believed to have turned profits of $15-20 million in each of the past two seasons.

Last month, a wealthy local businessman named Francesco Aquilini demonstrated his belief in the success and value of the club by purchasing 50 percent from Orca Bay Sports and Entertaiment, which is controlled by Seattle-based billionaire John McCaw.

If the business was in such bad shape and in the throes of an ugly lockout, why would an otherwise successful businessman buy in?

"Every business has its issues," said Aquilini. "I'm confident there will be a quick resolution and we'll get back to playing hockey."

Maybe Aquilini is wrong, and this is a bad investment. But the fact is there were other suitors for the Canucks, money people who believed a team that can make money without a salary-cap system will be even more profitable under a new scheme featuring across-the-board spending restraints.

"If the Vancouver Canucks can make money in an environment where there is no cost certainty, then they can make even more money in an environment where there is cost certainly," University of Illinois sports law professor Stephen Ross told the Canadian Press.

To a large degree, there is still the widespread belief that Canadian teams are among the most endangered in the NHL. This week, Bettman told audiences in Alberta that teams like the Flames and Oilers desperately need a new CBA with cost certainty.

"Franchises like (the Oilers) and the Flames don't have a future if we don't fix this right away," said Bettman.

But the truth is the Canadian teams are faring far better than many of their U.S. counterparts these days, helped by the enormous improvement of the Canadian dollar in recent months. Clearly, you'd rather own the Oilers or Canucks than the Mighty Ducks.

In general, however, the profitability and sale of the Canucks would suggest that the franchise value picture for NHL clubs isn't that bad despite the fact teams are losing money.

Saskin said this week that Bettman is the wrong man to lead the NHL, and that may be true.

But the owners will keep him as long as they can make money, and that means as long as the value of the majority of franchises improves.

And if the Vancouver Canucks really represent the financial middle, Bettman is probably held in high esteem by most of the suits who pay his salary.

Damien Cox, a columnist for the Toronto Star, is a regular contributor to ESPN.com.