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Why another lost season is possible

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The 2013 Winter Classic at Michigan Stadium will be the biggest edition of the popular event, but that may not be reason enough to force the owners and players to come to terms on a new CBA by January 1 if there is a lockout. (Dave Reginek/NHLI via Getty Images)

By Stu Hackel

The inevitable differences between the NHL owners and players on core economic issues finally got some articulation in the aftermath of Thursday’s collective bargaining negotiations. Commissioner Gary Bettman didn’t use the “L word,” but he came pretty damn close.

So while the two sides will continue working on the non-economic parts of the CBA, those matters will be the sideshow compared to the action in the center ring of this circus. That part of the discussions will resume on Tuesday in Toronto when the NHLPA offers its counter-proposal to the owners’ opening shot of salary rollbacks and contractual givebacks. The chasm between what each side wants from the agreement was given its voice on Thursday when the players presented their objections to the owners’ proposed system of revenue sharing.

Asked how far apart the sides are, NHLPA Executive Director Don Fehr responded, “There’s a meaningful gulf there.”

Bettman: “We obviously have a wide gap to bridge on a whole host of issues.”

No, this is not encouraging. And while many people think that a lockout-shortened season would likely begin with the Winter Classic on January 1, there are reasons to think again.

With both sides acknowledging after their two-hour meeting that they are looking at the next CBA in very different terms, the chances of the season beginning in October as scheduled seems dimmer now than at any time since their discussions began last month. And while Fehr has said on numerous occasions, including Thursday, that there’s nothing that legally prevents the players from going to training camp and starting the season without a contract — “if there is a lockout, someone has to choose to do that,” he noted — Bettman’s remarks seemed to lean toward the owners making that choice.

“I reconfirmed something that the union has been told multiple times over the last nine to 12 months,” Bettman told reporters. “Namely, that time is getting short and the owners are not prepared to operate under this collective bargaining agreement for another season, so we need to get to making a deal and doing it soon. And we believe there’s ample time for the parties to get together and make a deal and that’s what we’re going to be working towards.”

Asked if Sept. 15 was a hard deadline, Bettman responded, “Our efforts are going to be devoted to trying to make a deal.” He then reiterated that owners have no desire to operate under the current CBA.

However, NHL spokesman Frank Brown said in an e-mail to Eben Novy-Williams of Bloomberg News that it was “not wrong” to interpret Bettman’s remarks as implying that the NHL would lock out its players without a new deal. Brown stressed, however, that Bettman never referred directly to a lockout in his remarks. Nevertheless, the implication was clear.

In the eyes of many fans — who merely want to see hockey and not suffer through another lockout only seven years after an entire season was wiped out  — the fact that one side would prevent the schedule from starting on time while the other says it would be happy to keep skating and keep talking clearly paints the owners as the bad guys. The owners’ side has tried to make the case that there’s a deal to be reached, but the players have been dragging their feet and are happy to allow the CBA to expire on Sept. 15 in order to make the owners look like the villains.

Those perceptions may or may not be accurate but, regardless, they are not the heart of what divides the two sides. They seem to have fundamentally opposed views on the core economics of the league. The NHL views the problem as rooted in the players getting too much of the business’s revenue and that the team owners are spending too much on salaries. The NHLPA counters that the way to assist franchises that are having trouble paying expenses is for the clubs to share more of their revenue. The league maintains it already has meaningful revenue sharing and plans to enhance it. The players respond that the owners’ plans to enhance it will come entirely from the salary cuts the league wants to impose, not from the wealthy clubs’ coffers.

During the talks on Thursday, the NHLPA made a presentation that was directly related to the owners’ proposed revenue sharing system which the NHL linked to its proposed new salary cap that would cut the players’ share of revenue from the current 57 percent to somewhere between 46 percent and 43 percent.

As Fehr said, “It didn’t look to us like (the NHL’s suggested form of revenue sharing) was the way to go.”

The players’ primary objection? After examining league’s proposal, the PA determined that the money the NHL planned to distribute to less-wealthy clubs would, in practical terms, not be funded by the wealthy clubs but with money derived from cutting salaries. “The most important thing from our standpoint is that, essentially, all the revenue sharing payments made by individual teams they get back, and then some, in reduced player salary,” Fehr said.

As the PA sees it, under the NHL plan, it’s the players who would shoulder the economic burden of the league’s enhanced revenue sharing plan. That’s not going to acceptable to them.

“We’re not close on that issue (revenue sharing),” Bettman agreed, “and, frankly, revenue sharing is part of the bigger economic picture.” From the owners’ point of view, that bigger picture focuses on salary reduction. “The fundamental proposal, our initial proposal, is that we need to be paying out less in player costs,” Bettman said.

So the two sides differ philosophically on how to solve the league’s purported economic problems, but this is a league that has experienced record revenue growth in the past seven years, most recently $3.3 billion. Of course, the NHL’s record revenues still don’t put it anywhere near the other major pro leagues. The NFL leads the pack with $11 billion. Major League Baseball takes in around $7 billion. The NBA is closest to the NHL, with $3.8 billion, but its expenses per club are far lower. The NBA has far fewer players under contract and all the associated costs are lower; consequently, the NBA is far more profitable than the NHL.

But you probably didn’t come here for the economic news. You came for the “Whether Forecast,” as in whether training camps will open and the season will start as scheduled on Oct. 11.

A lot of people believe we’re headed for a lockout and truncated season; Toronto media personage Howard Berger, for example, wrote on his blog on Friday that a “hockey executive whose name is familiar to any person with even casual interest in the sport said: ‘Forget about watching the NHL until the new year. There is virtually no chance our league will open for business until Jan. 1. Detroit and Toronto will play the first game of the season, outdoors, in Ann Arbor, Mich. You can pretty much expect that a 60-game schedule will follow with the current playoff structure of four rounds. That’s the best-case scenario right now. I can’t imagine our league starting up at any point in October, November or December.’”

That’s a common belief. But why?

Why should we expect the season to somehow magically materialize by the New Year?

Because that’s when the NBC TV schedule starts and the big money rolls in, comes the answer. But that’s not when the NBC schedule starts. It begins the day after Thanksgiving. But what about the big NBC money? Won’t that tempt the owners to settle earlier? Guess again.

According to Larry Brooks in The New York Post, NBC pays the NHL between $150 million and $160 million whether there’s a lockout or not. But the NHL can’t forgo the Winter Classic can it, the big hype at The Big House and all that? Well, why not? The big buildup is part of the big hype at The Big House, but with no season beforehand, there won’t be any HBO 24/7, the best promotion this game gets. The Winter Classic and all its accompanying festivities could easily wait until the next full season. [UPDATE: Jeff Z. Klein reported in The New York Times that the NHL has a clause in its agreement with the University of Michigan for rental of Michigan Stadium that allows for the league to cancel the game and forfeit only $100,000 of the $3 million rental fee.]

Berger believes that the NHLPA will fold when the New Year rolls around, that the owners “will bring the players to their knees once again. That is no slight toward the NHLPA membership or its proven, battle-hardened leader. It’s just that players want to play” and don’t want to lose time on their careers.

I think my old friend Howie is underestimating the work that Fehr has done in educating and organizing the NHLPA.

Won’t the owners feel the pinch of lost revenue if the games aren’t played? As David Shoalts writes in Friday’s Globe and Mail, “Because the NHL bounced back with seven consecutive years of revenue growth after wiping out an entire season, many owners were convinced they can do it again. With the players better educated this time around and more determined, it is not a recipe for a full season.”

In fact — unless the two sides can figure out how to mesh their contrasting views of where the business should go — it may be a recipe for no season at all.

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  • Published On Aug 10, 2012
  • 11 comments
    ch2003ml
    ch2003ml

    Since it looks like a lockout is inevitable, anybody know how long will it be before it becomes obvious that the entire season will be lost?  Just wondering, because if this happens, they are going to have to find teams from outside the NHL to play for the Cup.

     

    http://web.archive.org/web/20071216083200/http://www.tsn.ca/nhl/news_story/?ID=153935&hubname=

    dnic101777
    dnic101777

    This will destroy this sport in terms of television viewing if they think for a second people will flock back to them they are sorely mistaken.

    G
    G

    If the season is delayed significantly or lost, it will be in large part because of greed in Toronto and Montreal, two of the top revenue teams that stand to lose the most in the case of expanded revenue sharing.  The two most famous/historic Canadian franchises being primarily responsible for depriving Canadians of the sport they love the most!  

     

    Fans came back to the NBA post-strike earlier this year, and they came back strong to the NHL this past half dozen years after 2005. They'll come back this time as well.  Bonus, who really cares to see the prolonged and ultimately not very meaningful 82 game regular season?  October and November games mean zip.  Rev it up in December, shortened season, playoffs as usual.

    DanCzarnecki
    DanCzarnecki

    This better not happen!  In 2 weeks from today, I'm going to be moving up to Minnesota to atttend college at the University of St. Thomas, and I have big plans with some people to go see the first Wild preseason game.  I would hate to have those plans crushed!  This would absolutely suck for the Wild because they just acquired 2 pretty good players, Zach Parise, and Ryan Suter.  Losing this season for them would mean a lost opportunity for the playoffs for the Wild.  If there has to be a lockout, let's just hope it's not for the whole season.

    John4
    John4

    Another Lost Season!  Hockey players better be careful.  Soon people will realize that they are fools if they pay more than $7 for a ticket to see an NHL game.  And what fool would pay $8 for a beer at a hockey game?  Mind boggling stupidity.  A Lost NHL season would greatly benefit the economy of the USA.  Save some of that wasted money.  Begin a savings account with a credit union and promise to never attend another NHL game.  If you really want to see a hockey game, go to a college hockey game and save lots of money (all hockey games appear the same anyway!).  Be honest.  Does anyone really think it would be a shame if the NHL disbanded?  And if so, why?  Another Lost NHL season?  I hope the next 500 NHL seasons are lost!  That would be awesome.  

    John Mayo 

    rleverything
    rleverything

    57 percent of the revenue is a lot to be giving players for the year. If anything, a 50-50 split should be what they are aiming for. You play sports guys, and the owners pay your cheques. 

    hockeyrick93
    hockeyrick93

    I'm with Fehr and the players! he knows what he's doing, look what he did for the MLB players!!!!

    Hockey players deserve more, they play the most demanding sport and every year they get ragged on!!!

    Go Players and Fehr!!!

    Stu Hackel
    Stu Hackel moderator

     @ch2003ml That link doesn't work, but regardless, the information I assume to be in it is questionable at best. The Stanley Cup is now adminsitered by the NHL and, as in the lost season of 2004-05, if the NHL does not play this season, there would be no Cup champion. That's the last time this discussion came up.

     

    The original charter of the Stanley Cup called for the Cup's trustees (there are two of them and have been since Lord Stanley donated the Cup) to decide who could challenge for the Cup and the argument made in the last lockout was that with no NHL, the current trustees had the option, if not the obligation, of designating other non-NHL clubs as eligible to play for it.

     

    However, the league took the position that in 1947, the trustees signed a memorandum of agreement with NHL president Clarence Campbell that delegated to the league "full authority to determine and amend from time to time the conditions of competition for the Stanley Cup". The current trustees agreed and that settled the issue as far as they were concerned.

     

    Thanks for your comment.

    cfh234
    cfh234

     @rleverything I agree with 50/50 but if the players don.t play then the owners don.t have anything to write checks with. Not to mention that splitting the money between 1 - 6 ways (some teams have shared ownership) pays a lot more than splitting it over 30 (team + coaching staff)

    ch2003ml
    ch2003ml

     @Stu Hackel

     

    Sorry about the link.  Here, let me try again:

     

    http://web.archive.org/web/20071216083200/http://www.tsn.ca/nhl/news_story/?ID=153935&hubname=

     

    I noticed in my original post that the entire string didn't link.  It does work if you copy and paste it into your web browser.

     

    The article, found on TSN's website and written by Canadian Press in 2006, is about a couple of guys in Canada who took the NHL to court over just what you are talking about.  The part in the article that made me think that there still could be a Cup final was this:

     

    "A new clause will be included by the NHL in a revised agreement this year with the cup's trustees - Ian (Scotty) Morrison, former head of the Hockey Hall of Fame, and former NHL official Brian O'Neill - allowing them to award the trophy to someone else if the NHL isn't using it."

     

    Ah well, just hoping for any hockey at this time...