Strikingly Similar: the Upcoming NHL lockout

While I am not a hockey fan and don’t follow NHL hockey, I live in Canada and news about hockey dominates our media. Because of this I have learnt the following information by osmosis: the current NHL Collective Bargaining Agreement (CBA), which was signed on July 13th, 2005 (and was preceded by a 10 month lockout of the players by the owners), is set to expire on September 15th. The two sides — the owners, let by NHL commissioner Gary Bettman, and the NHL Players Association (NHLPA), led by Executive Director Donald Fehr — are currently trying to negotiate another deal.

The demands coming from the owners seem rather extreme. To me, the interesting part  is that the rhetoric we are hearing from Bettman is very similar to what we heard from NBA commissioner David Stern during the recent NBA lockout. Perhaps this should come as no surprise, as Bettman used to be third in line to the NBA throne before he started working for the NHL. Just for fun, let’s see how the NHL’s recent comments compare to what the NBA owners were saying prior to the signing of the NBA’s new CBA.

‘The players are being paid too much’

Former home of NHL Hall of Famer Wayne Gretzky

What NBA owners wanted:

What NHL owners want:

‘Teams aren’t making any money’

The Phoenix Coyotes’ arena is usually empty

What NBA owners said:

  • ‘the league loses around $300 million a season’
  • 22 of 30 teams posted losses; only a handful of big market teams are making money
  • small market teams are struggling; we might have to contract teams

What NHL owners say:

  • only a handful of teams are making money
  • small market teams are struggling; we might have to contract teams

‘Contracts are too long’

The man with the 15 year contract (photo: Jim McIsaac/Getty Images)

What NBA owners wanted:

  • shorten max contract length from 5 years to 4 years

What NHL owners want:

  • restrict length of player contracts from to 5 years, down from a max of 15 years

‘We hate free agency’

Ryan Suter left the Nashville Predators for the Minnesota Wild and their 13 year, $98 million contract offer

What NBA owners said:

  • star players leave small markets too easily

What NHL owners want:

  • players must accumulate 10 years of service before they can become unrestricted free agents, instead of the current 27 years old or 7 years of service (whichever comes first)
  • increase the length of entry level contracts from three years to five

‘Let’s go for the jugular’

Gary Bettman’s game face

What NBA owners wanted:

  • Increase entry age from 19 to 20

What NHL owners want:

  • eliminate salary arbitration
  • remove the salary floor (the minimum value of salaries a team must pay out in order to play) for at least a few teams

The facts

“Hey, you can blame me for the NBA lockout, but this next NHL lockout is all Gary’s fault!”

As with the NBA owners during the NBA CBA negotiations, the NHL is blatantly trying to run away with the players’ cash. Here are the facts:

  • since the last CBA was signed, league revenue has increased from $2.2 Billion to $3.3 Billion
  • the NHL has experienced seven consecutive record-setting revenue seasons
  • player salaries are tied to a percentage of league revenues, which means that players’ salaries can only increase when the league makes more money
  • the NHL will be making more money from new TV deals: the 2012-13 season TV deal with NBC is valued at $200 million annually, up from $75 million annually. The Canadian TV rights come up in 2014-15, and will undoubtedly lead to increased revenue as well
  • the NHL has the weakest revenue sharing of the major North American sports leagues, which means that the richer franchises make money at the expense of the poorer ones, something that has nothing to do with the players

 Living in another world

NHL commissioner Gary Bettman

“I’m not sure that there has yet been a recognition of the economics in our world — and I mean the greater world and the sports industry, taking into account what recently happened with the NFL and the NBA.” — Gary Bettman

We didn’t fall for these tactics when David Stern tried them, although the NBA Players’ Association did eventually end up agreeing to a new deal that cut player salaries. Does Bettman think that NHL players and fans will fall for these tactics now, after what happened in the NBA?

– Devin

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