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On Sep. 16th, hockey fans throughout the world, primarily in the United States and Canada, took a highly anticipated punch to the gut as National Hockey League owners locked out the players, effectively canceling most, if not all, of the 2004-2005 hockey season. Just for the sake of under-informed loyal hockey fans, or just anyone taking interest in the situation, let’s recount the situation.

In reality, the Collective Bargaining Agreement (CBA) has expired. This agreement governs the value and duration of the contracts of the hockey players. Naturally, the owners take whatever money remains, so this accord plays an important role in the regulating exactly who receives the profit that a team generates over the course of the hockey season. However, in the NHL you have a special situation that does not occur in most other professional sports; the NHL has a reported loss of a massive $273 million in operating costs this past year alone, according to an independent review of the NHL’s budget this past season. For emphasis on the numerical value of their loss, let’s consider the hypothetical situation that you receive a rather average allowance of $10 a week. It would take you 27,300 millennia to save up that amount of money. Obviously to the NHL, money can come in abundant amounts, yet nonetheless you have to realize that they have lost a considerable amount of money.

In addition, that independent review indicated that “Player costs of $1.494 billion or 75% of revenues substantially exceed such relationships in both the NBA and NFL as… set forth in their collective bargaining agreements.” Consequently, the NHL owners have targeted player salaries as the primary source of their massive money loss. Thanks to the expiration of the CBA, they had the opportunity to negotiate lower salaries. They hoped to accomplish this by instituting salary cap, which would regulate the overall amount which each team could spend, forcing them to spend less money in a wiser fashion. Obviously aware of the money loss, the players agreed to pay cuts, to a certain degree, but not to a salary cap, which the owners insisted upon. Unable to reach an agreement, in the end NHL commissioner Gary Bettman implemented a lockout of the players. This basically means that the NHL teams refuse to allow players to play for them, putting them out of work and out of a salary. Well, at least until they agree on a CBA; by keeping the players out of work and refusing to pay them, the owners theoretically gain some leverage in negotiations.

How exactly have the NHL staff members, players, owners and fans coped with the lockout?

In light of their sudden unemployment, players have flocked in masses to Europe. Approximately 236 of the 750 players have gone to European leagues during the work stoppage, looking for a way to continue playing their trade while still earning a large paycheck, although nothing close to what they would receive in the NHL. However, many of those players have an opt-out clause, which would allow them to return to the United States whenever they agree on a new CBA with the owners. Other players have opted to form teams and go touring, playing exhibition games against professional teams in other continents. Last, some players have remained in the United States, keeping in shape and waiting for a resolution to the situation. Curiously enough, in the wake of the labor situation in the NHL, the World Hockey Association has emerged, hoping to steal locked-out players from the NHL to form an alternate professional league. Although its efforts to start up have failed thus far, if it does manage to succeed to get up and running, it could quickly become another popular alternative for the locked-out players.

In the meantime, the managements of professional teams have focused their attention on the development portions of their organizations, which the lockout does not affect. (Those players can continue to play in minor league affiliates.) Coaches, scouts and general managers now have the time to devote their attention to their prospects in the minor league system. Meanwhile, the owners have had to sit tight, waiting for a hopeful resolution that would bring the players back and earn them a profit. Then again, maybe some of the owners hope that the season never starts. Take Carolina Hurricane owner, Peter Karmanos, who indicated that he would not really mind the lost season. He said, “I don’t particularly care… The losses are going to stop…” Reportedly, Mr. Karmanos would lose less money if no hockey season happened, at least at the rate of the players’ salaries from last year.

The problems in the NHL run deeper than the labor conflict. Although by no means an obscure or unpopular sport, hockey simply doesn’t have a fan base that can compete with those of other more popular sports, such as basketball and football. Thus it also has trouble making anywhere near as much revenue as those two sports. Indeed, the nature of the sport does not work favorably for the fans. When close to the ice, you may have the opportunity to clearly see the puck. Yet from higher up in the stands and when watching the game on TV, you have trouble distinguishing the puck and the source of the action. Consequently, the NHL has also had problems attaining the lucrative TV contracts, which would give it a much-needed source of funding.

 

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