In the increasingly ugly battle between the NHL’s owners and players, it has become apparent that neither side is going to win. With each passing day, the NHL slips further from the forefront of the American sports scene, losing ground to its formidable competition while failing to attract new fans.

The NHL is holding firm in its viewpoint that cost certainty is a must in any new collective bargaining agreement, while the players’ association is unwaveringly opposed to any form of salary cap. Numerous reports indicate that the NHLPA, led by Bob Goodenow, is preparing a new proposal that will include a luxury tax, but NHL Commissioner Gary Bettman reiterated yesterday that the league would not consider such a proposal.

“They claim that will fix our problems, I’m here to tell you today … that a luxury tax will not work and it will create a potential for future disaster in the NHL,” Bettman told the Edmonton Chamber of Commerce yesterday, according to the Canadian Press.

Bettman pointed to the Edmonton Oilers and Calgary Flames as examples of franchises that “don’t have a future if we don’t fix this the right way.” Dismissing a luxury tax as “guesswork,” Bettman reaffirmed his intention to stabilize the NHL’s most cash-strapped franchises. His words echoed those of Bill Daly, the NHL’s executive vice-president, who last month said that, “a luxury tax cannot and does not produce certainty.”

Both Bettman and Daly are obscuring the fact that a punitive luxury tax could in fact be a workable solution within the owners’ desired parameters. The owners are reportedly angling for a $31 million salary cap; a luxury tax by which teams would be taxed tenfold for each dollar they go over a $31 million threshold would in effect accomplish the same thing as a hard cap.

Likewise, the players are showing a glaring lack of foresight when they say they won’t accept a salary cap under any circumstances. For example, a $31 million salary cap with a “Larry Bird exception” – one that would allow teams to spend beyond the cap when re-signing their own star players – could result in untaxed payrolls in the $40-50 million range.

It seems inevitable that a system with some salary drag will be implemented at some point, yet the two sides have not met since September 9. They are rapidly running out of time to reach an agreement: Arenas are booking non-hockey events 45 days in advance, and if the league does not begin play by the end of January, the 2004-05 season will be canceled.

Once that happens, the league will attempt to ice teams filled with replacement players. That may well be the way forward, but it seems that both sides owe it to themselves to keep the game’s greatest players in their NHL uniforms.

In order to settle this dispute, the NHL and NHLPA must first of all agree on a method by which team (and league) revenues are to be calculated.

The players have complained that Arthur Levitt’s report – which backed up Bettman’s claims that a majority of franchises are losing money – was compiled without their input, and that it fails to include important sources of income such as luxury suites. An accurate representation of the league’s economics would enable the owners and players to finally agree upon the size of the pie over which they are fighting.

Once that is accomplished, the two sides must then determine a reasonable percentage of the total revenue that would be received by the players. From there, the league could then focus on more important issues, such as ways to improve the game and grow its ever shrinking television audience.

The last time Lord Stanley’s treasured chalice was kept on mothballs, it was in 1919, when a flu epidemic forced officials to cancel the Cup Finals between the Montreal Canadiens and the Seattle Metropolitans. Several players on both sides became seriously ill, including Canadiens defenseman Joe Hall, who died less than a week after the series was canceled. The circumstances are less dire this time, but if the 2005 Stanley Cup is canceled, the NHL will continue, as Levitt so eloquently put it, on its “treadmill to obscurity.”

Mr. Greenstein is the editor in chief of INSIDE HOCKEY (insidehockey.com).