A new study by the longest-serving chairman of the U.S. Securities & Exchange Commission paints a grim portrait of the NHL's finances.

At a Thursday afternoon news conference, Arthur Levitt, who is also a former chair of the American Stock Exchange, presented his financial report in support of NHL commissioner Gary Bettman's long-standing claim that the league is bleeding red ink.

"I am satisfied that conservatively speaking, the league had a combined operating loss of $273 million US for the 2002-03 season," said Levitt.

Bettman has claimed in the past that the NHL's total losses amounted to nearly $300 million last season.

"They are on a treadmill to obscurity. That's the way this league is going," said Levitt, who said the league had combined operating revenues of $1.996 billion.

"The current relationship between league-wide player costs and league-wide revenues is inconsistent with reasonable and sound business practices," Levitt reported.

"Player costs of $1.494 billion, or 75 per cent of revenues, substantially exceed such relationships in both the NBA and the NFL as those relationships are set forth in their collective agreements."

"I have to say, I would not underwrite as a banker any of these ventures, nor would I invest a dollar of my own personal money in a business, to me, appears to be heading south," added Levitt.

"The condition of the league is as we've been portraying it," said Bettman. "To describe them as things that he (Levitt) wouldn't invest in under the current economic system is, to say the least, very sobering."

The NHLPA called the Levitt report "simply another league public relations initiative."

"To suggest the report is in any way independent is misleading," the players' union said in statement.

"We continue to believe that a market system, not a team of hired-gun accountants, provides the best measure of the value of the hockey business. In a market system, the owner decides how much to pay the players," the statement added.

Levitt's study deals directly with the state of the league's business as it relates to negotiations with the union for a new collective bargaining agreement.

Commissioned by the NHL one year ago, Levitt claims he set strict conditions to assure the objectivity of his findings. The Players' Association, however, has questioned the legitimacy of the report because Levitt was paid by the NHL.

Levitt revealed at the press conference that he was paid in advance by the NHL in order to remove any perception that his findings might be influenced by the fee he received from the league.

Levitt called his findings "as close as being unchallengeable as anything I've ever been associated with."

"I was given total carte blanche to go wherever I wanted to and ask whatever questions I wished to ask," Levitt said during the news conference. "I visited clubs, I spoke to owners, I spoke to financial officers."

In the past, Bettman has quoted figures that come from the NHL's central accounting system, Unified Report of Operations.

Levitt told reporters Thursday that "it is my opinion that the teams of the NHL have, in all material respects, accurately reported the financial information requested by the league's UROs."

According to Levitt's report, 11 NHL teams made an operating profit last season, amounting to an average of $6.4 million. However, 19 teams averaged losses of $18 million, putting the average loss among all 30 teams at $9.1 million.

In the past, the NHLPA has publicly characterized Bettman's assertion that the league is in dire financial trouble as grossly exaggerated. According to the union, teams have under-reported the money they bring in by tens of millions of dollars.

The NHLPA has also referenced a report by Forbes Magazine that the league had under-reported income in excess of $186 million.

The current collective bargaining agreement, which has been in place since 1995, is set to expire on Sept. 15, 2004. The next negotiating session has yet to be scheduled.

Levitt's report is of particular note because one of the major obstacles that has stalled negotiations between the NHL and the Players' Association is the union's skepticism over the NHL commissioner's financial numbers.

With Levitt's report tucked under its collective arm, the league is expected to press forward with its proposal of a system that it says ensures cost certainty – that players' salaries won't exceed profits – in future negotiations with the union.

Bettman has argued that under the current collective bargaining agreement, which has been extended twice, average NHL salaries have grown from $572,000 in 1993-94 to $1.79 million last season – an increase of 212 per cent.

According to the league's numbers, 76 per cent of total revenues last season went to player costs. The other 24 per cent went to pay for coaches, travel, building costs, marketing and advertising.

Levitt's report pegged the number at 75 per cent.

The NHL is looking for a collective agreement that would see a 60-40 split of revenues and expenditures that is more in line with the three other major North American sports leagues.

The NHL argues that the NFL spent 64 per cent of its total revenues on player salaries, compared to 63 per cent for Major League Baseball and 58 per cent for the NBA.

The union views the NHL's 'cost certainty' scheme as a form of hard salary cap, and is reluctant to accept a system that fixes players' salaries to a percentage of revenue, when it isn't sure whether the NHL's numbers are accurate.

The union has said that it won't even discuss the issue of 'cost certainty' until it can be certain of the NHL's revenues.

"I'm sure that those who have adversarial interests will question motives ... but I feel so strongly about this, I would be prepared to meet with anyone – unions or the players – to explain the process," Levitt said.

Bettman hopes the two sides can now come together to negotiate a new collective agreement.

"Now is the time to get this behind us and reason together in attempt to take this game forward, to make it healthy for the benefit of everyone associated with it."

Levitt said he intends to send a letter to NHLPA head Bob Goodenow inviting him to review the study.