Nhl Lockout

NHL's lockout

September 16, 2004 the National Hockey League had a labour dispute that led to a lockout. The dispute was about the end of the collective bargaining agreement (CBA). The National Football League has a working salary cap for the teams in their league. NHL is trying to establish the same type of system that the NFL has. The negotiation between the NHL Players association and the NHL did not come easy. The disagreements were that NHL clubs spent too much on player's salary. The clubs spent over 76 percent of their revenue on the players. With the salary cap the NHL was trying to instill, players felt that the idea was unfair and inflexible. The players didn't want to cut their salaries.

The fact is that the NHL commissioner Gary Bettman and the league are having problems keeping clubs out of the negatives in revenue. NHL Players Association (NHLPA) is negotiating with the league on concepts to achieve cost certainty. Some of the options were to have a luxury tax like the one baseball leagues used in North America. The problem with that is that it would not help the league get out of debt. Salary caps, like the one used in the NFL and MLS, were also brought forth to the table but the NHLPA felt that it was to unfair and would not satisfied the salary of the players. "NHLPA's executive director Bob Goodenow disputed the leagues financial claims. According to the union, 'cost certainty' is little more than a euphemism for a salary cap, which it had vowed never to accept." (Wiki)

The critical issues are what kind of agreement the league and the NHLPA going to reach once the labour contract is over and how long the lockout would be? Long lockouts would lead to critical lost in revenue. Like in 2002-03 when "North American sports - and collectively lost 273 million dollars" (Wiki). Which one of the salary caps are the commissioner and the NHLPA going to agree on was another big problem. NHLPA wanted to keep a "marketplace" system that they already have installed but the problem with that is the league don't claim less of their loss then reported. That means each club would have been put in more debt which would put NHL in financial problems.

The stakeholders are first of all the NHL fans, players, commissioner, staff and other personals for each NHL clubs, and the NHL clubs in general. It is unfair for the fans of the NHL to go through a whole season without hockey. Each blue collar American arrives home every night tired and wants to catch up on their current teams. It unfair for the fans to wait because of labour disputes that don't involve them. In financial terms the league would lose a lot of consumers. The league would also be in danger of losing current fans and lost interest of building new ones. Starting back over with their fan base and building it back up again will be hard. If the NHL goes on a long strike it will force the players to find different ways to make a living. Either that means working other jobs or going to different leagues to play. That in turn might lose some key players and up in coming stars. That means the commissioner will lose his job due to lost in NHL and each NHL club will lose money. Staffs and personal will have to find different jobs.

Some alternatives I think that would help the NHL is to follow what the NFL is doing and make a more reasonable salary cap. I don't remember the NFL ever going on strike because of any labour disputes. If it works for the NFL for this long it would work for the NHL. NFL is a much popular sport in the U.S. then the NHL and I believe that is due to the NFL consistently build new fans and they work well under the salary cap with no disputes or lockouts. The players union proposed different options that include a luxury tax, fixing the entry level system, and taking out five percent of players salaries. The problem with that is it would favor the players more than the league itself.

Lockout made hockey look bad in North America. International hockey countries like Canada will look down on American sports and not take them seriously for not doing so well with their own league. In Europe 388 NHL players played in Europe because of the lockout. Russia, Sweden, and Czech Republic all tried and cash in on Americas misfortune not keeping their hockey league. America doesn't want another strike like they had because it makes the players look selfish and the NHL look unstable to outside countries and the public in America.

The Consequences of the lockout the season is increasing popularity in other sports and recreational activities. NHL lockout is one of the reasons people turn to different ways to spend their time like Texas hold'em. The popularity of Texas hold'em has definitely benefited from the lockout replacing "stud poker" as the most commonly played card game in the United States. Televised events like Worlds Championship Poker gained TV ratings due to the helping of the NHL lockout. That is one of the reasons TV networks like ESPN is not bidding for a new contract with the NHL. Instead they have to make individual networks that specializes in the NHL i.e. OLN. Canadian sports such as Canadian Football League has bulster in fan support because they had no hockey to lean on.

Players wanted more favorable salary cap but that will make teams spend over 70 percent of their revenue income on paying players salary. General counsel Bob Goodnow of the NHLPA was so unreasonable against the leagues offer of a salary cap that after the lockout was settle he was quickly replaced. Since this is so one sided the market for the