As of 12am Sunday morning, the current collective bargaining agreement expired. With no agreement in place, the owners have decided to lock out the players, putting the 2012-13 season in jeopardy.
Lockout Became Inevitable
It was almost an inevitability for this to happen as the two sides weren’t even close to reaching an agreement.
The biggest point of contention is how hockey-related revenue is to be split between the two sides. Both sides have agreed how hockey-related revenue is calculated; however, there are still issues surrounding entry-level contracts and free agency.
Under the previous (now expired) CBA, the players received 57% of league revenue, which one would have to argue was a pretty good deal, so it’s not surprising the owners wanted that figure to be rolled back.
The league’s final offer was for five years and had the players getting 49% or revenue, rolling it back to 47% by deal’s end. The players association countered with a roll back starting at 54.3% working towards 52.7% by the time the deal would expire.
“We spoke again today, and in light of the fact that neither party has indicated an intention to move off of its last proposal, we have decided that there is no point in convening a formal bargaining session,” NHL deputy commissioner Bill Daly told The Canadian Press. “We will keep in close contact in the coming days and if anything changes, I am sure we will be in touch.”
Basically what it breaks down to is there was a 5% discrepancy between each sides’ respective offers, which seems like a small, insignificant number … until you factor in that the NHL’s revenue is $3.3 billion annually. So that five percent is really a $165 million dollar difference.
This will be the third lockout in Gary Bettman’s tenure as commissioner and the second in the past decade. Formal negotiations were halted days before the expiration of the CBA. Special counselor to the NHLPA Steve Fehr claimed the union requested the two sides meet before the deal expired but were turned aside by the the NHL.
“[Executive director] Don Fehr, myself, and several players on the negotiating committee were in [New York] and prepared to meet,” he said in a statement. “The NHL said that it saw no purpose in having a formal meeting. There have been and continue to be private, informal discussions between representatives of both sides.”
How Did We Get Here?
Revenues have skyrocketed since the last NHL lockout, which wiped away the entire 2004-05 season. Since then league revenues have increased by over 57% and the sport has seen an unprecedented level of parity with 29 teams making the playoffs in that time and seven different Stanley Cup champions.
Conversely, the average player salary has increased from $1.45 million to $2.55 million, which is an increase of 76%. One could argue that contracts are getting out of control with these ludicrous front-loaded, 10-plus year contracts. Something had to change. So you can’t really blame the owners for trying to sort out that issue.
But at the same time, they’re the ones dolling out these monstrous contracts. The players’ main issue is that they feel the owners should have to honor the contracts they’ve signed their employees to.
Why should someone have to take a pay cut when both sides have signed a piece of paper entitling them to a certain amount of money?
“How do we win? We’ve already lost,” Calgary Flames forward Mike Cammalleri said. “We’ve given money back. Our proposal has huge concessions. Overall sentiment as a player coming out of this is we looked it up and down and our proposal is beyond fair, beyond equitable, it’s beyond something that the owners should be excited about, it has huge concessions, it addresses problems, makes for a healthier league.”
A significant rollback would let owners off the hook for paying above market value for certain players.
Under their terms a guy they signed for $5 million a year would now make $4.6 million, rolling back to $4.5 million by the end of the CBA. In a five-year deal, that would mean taking over $2.5 million out of that player’s pocket and putting it right into the owner’s.
It’s an issue of principle: if you make an agreement, even if it’s a bad one, you should honor it.
The lockout is perceived as a bully tactic by the NHL, which appears to be using it as a bargaining tool to get what they want, on their terms. Will it work? Maybe so maybe not. The last lockout really didn’t benefit them too much since they relinquished 57% of revenue to the players and lost a full year’s income.
Plenty of Losers
The effects of the lockout will be felt immediately. Within a week or so the first preseason games are expected to be cancelled, further jeopardizing the season starting on time or at all with each passing day.
It will be to toughest on non-elite players, the Mike Browns of the world, the third and fourth liners. The top-level talent will have no problem finding work overseas, albeit for no more money than two thirds of their current contracts. But for most NHLers this is not a viable option.
Those players will be working for nominal pay or nothing at all, while trying to keep their skills and fitness up to par so they are still competitive when and if the season resumes. The players who will get work overseas will be looking to play in the Russian KHL, as it’s the most lucrative option, while others will be heading to Switzerland, Sweden, and Finland.
The fans are arguably the biggest losers in all of this. Not only are they robbed of watching the sport they love, they have to deal with petty bickering between billionaire owners trying to squeeze money out of millionaire players while trying to divide a pretty sizable pie.
Why can’t we all just get along? Why can’t the NHL and the NHLPA just love each other and work towards a fair deal, say 50/50?
Only time will tell who comes out on top in this situation. One can only hope something gets worked out quickly and painlessly so hockey isn’t lost for another full season.