Why is There an NHL Lockout?

Photo courtesy of Carlos Osorio / Toronto Star

By Bob Haynes (@BobHaynesJr)

The inevitable has happened. The NHL has locked the players out again as the deadline came and went without a sound on 9/15/12. This was pretty much expected as the two sides have actually had very little negotiations and the proposals made by each side were light years apart. So now who is to blame for this situation and how will this lockout affect the future of the NHL? Also, the most important issue is how can a deal be reached quickly?

Agents, Players, and Free Agency

Since the last lockout that cost an entire season to the negotiations, the cost of free agency has driven player’s salaries through the roof. In 2004 the salary cap was initially set at $39 million per team. Prior to the lockout the salary cap has risen to $70 million per team. This represents almost a doubling of salary paid to players since the 2004 season. A major reason for this is the support of the fan support for the game as the new rules to open the game were applied which created record revenues. So this has created more money in the pool and the agents and players have created salary demands that have driven the price to operate up. The reason is because the salary cap is directly tied to the revenue of the league, and in my opinion this is the problem

The greed of the players is again at the forefront as top end players sign to play overseas, what kind of message is this sending to the union? “You guys stay home, do not get paid, and work things out so that I can return and still make more money?” This is a time for solidarity by the players – meaning that the stars should not run overseas and continue to get paid while the others do the dirty work.

General Managers

The amount of money available to the GMs for players as the salary cap has grown have allowed the GMs to reach and over pay to get the player under contract. A good example here is the offers made to Zach Parise and Ryan Suter this summer. These players are both really talented players however they are not in the same class as other players at this salary level (see Sidney Crosby contract). This creates unrealistic expectations on the players and many times creates a situation where the player simply cannot live up to the salary. Further examples from past Free Agency years where contracts were too big for the players are: Scott Gomez, Ville Leino, etc.

Don Fehr and NHLPA

Don Fehr took way too long to get up to speed on the issues. These CBA negotiations should have started last year no later than the Winter Classic and conducted quietly. By waiting until after the draft to even start talking simply did not allow enough time to negotiate. The NHLPA also sees a different deadline for a solution. The NHL set 9/15 and yet the players do not miss any revenue until 10/17 for their first paycheck.

Gary Bettman and the NHL

The picture painted by the commissioner at the Stanley Cup Finals of record revenue by the league told a very different story than the initial offer by the owners of a salary rollback and how the finances of the league is not working under the current CBA. Asking for a rollback AND a smaller percentage of revenue to the players was a bad line in the sand as a starting point.

Conclusion

In conclusion the real losers here are the mid-range and lower range players and the fans. The owners are already wealthy and will not have to pay the contracts, the top end players will be able to play overseas if they like, and young stars will be moved to the AHL. The mid range NHL players are left out as well as low range AHL players that will be pushed aside for young NHL stars in the AHL. Finally the fans miss out on the games that they spend their hard earned money upon. Without the games, the fans will find other outlets for their money and a prolonged work stoppage will negatively affect the bottom line of the game long term. The two sides need to be in a room and negotiating continuously. They might also want to take a lead from the American politics landscape by doing the opposite of what is happening in the US on a daily basis.

The only way to close this issue is to negotiate which has the following definition: Negotiation is a dialogue between two or more people or parties, intended to reach an understanding, resolve point of difference, or gain advantage in outcome of dialogue, to produce an agreement upon courses of action, to bargain for individual or collective advantage, to craft outcomes to satisfy various interests of two people/parties involved in negotiation process. Negotiation is a process where each party involved in negotiating tries to gain an advantage for themselves by the end of the process. Negotiation is intended to aim at compromise.

So where is the compromise? The compromise is exactly in the center somewhere. Both sides need to move toward the center and the deal can be reached quickly. The owners cannot ask for a salary rollback. The players must give on contract terms – especially length of the deal.

Good Night and Good Hockey!