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NHL Lockout: Your Questions Answered Part One

October 15th, 2012 at 11:13 PM
By Mack Lester

'Washington Capitals' photo (c) 2009, Keith Allison - license:

Once again, for the third time in less than 20 years, the NHL owners have locked out the players. Millions of fans are asking “Why? Why would you deprive us of this great sport?” There are many different reasons, more than most think of at first, so let's shed some light on the subject:

Why is the lockout happening now?

September 15th marked the expiration of the last Collective Bargaining Agreement between NHL owners and the players union. It was a 7 year contract between the two sides that was finally agreed upon and ratified after the last lockout in 2004-05, which sadly lasted the entire season. Following the expiration of a deal that created many new restrictions on player salaries, but still providing them with 57% of the shared NHL revenue. Now the owners want to cut the players share substantially in the new CBA they’ve proposed. In the proposal the player’s share would drop to approximately 46% giving the owners significantly more money. What’s interesting about this is the fact that the NHL has been growing and receiving more revenue as a whole each year. In the end, the owners really want a bigger piece of the pie.

What happens if no agreement is made soon?

Most likely what will happen is at least another hockey season with no NHL. The minor leagues like the AHL and the Canadian minor and junior hockey leagues will continue to play. Even some NHL players are still eligible for minor league play and will be able to stay in the western hemisphere and compete, while other players choose to travel and play in the major European leagues like the KHL. In most, if not all, cases the players who have relocated their skills for the time being are taking pay cuts. Obviously the NHL payers would’ve found themselves other leagues a long time ago if they paid more money. As this lockout continues, it is looking more and more like there will be no NHL games this season.

Who’s to blame for this?

Blame for the lockout is being thrown all over the place. First there is blame on the players, for not wanting to lose money from their already big contracts and have even more restrictions on how contracts are made up. Then some blame the owners for wanting more share of the revenue when they already have tons of money. Thirdly there is Donald Fehr, representative for the players union who is also in part responsible for the big MLB lockout in the 90s. Finally there is Gary Bettman, commissioner of the NHL and the only commissioner to have a lockout under his tenure; in fact Bettman has all three of the lockouts on his belt.

Concerning the players, they are justified in rejecting the NHL’s new CBA proposals. After giving in to most of the owner’s demands in the last lockout, they are asked to sacrifice again. Compared to the other major professional sports, top NHL players don’t make the same as the superstars in say football or basketball, and definitely not as much as baseball. Players are the reason that the NHL has been growing. Case in point, is Alexander Ovechkin of the Washington Capitals. His superstardom has revitalized the franchise, boosting ticket and merchandise sales, won multiple division titles, and has consistently appeared in the playoffs in recent years.

Many people might see the owners as rich guys who are looking at ways to get richer. This is both true and false. A larger revenue share for the owners means that smaller market and struggling teams, such as Columbus Blue Jackets and Florida Panthers, can have more money to try and produce a more competitive team. Some owners don’t want a lockout at all. Having one can basically wipe out large amounts of profits if not all for some owners. Others are just fine with the lockout and can wait it out for years if necessary thanks to other profitable interests.

Finally, the two men who are probably taking most of the heat, NHL commissioner Gary Bettman and NHLPA executive director Donald Fehr. Both men are seen as the stubborn executives who are unwilling to compromise with each other. In reality they are just representing their respective sides’ wishes. Fehr is responsible for fighting for the needs of the players, the main attractions of the game. On the other side commissioner Bettman represents the Board of Governors, the governing body of the NHL made up of owners and representatives from each team. When it comes to the CBA neither of these men have the final word, anything brought to the table by these two men have to be accepted by the parties they represent first.

Are there any economic effects from the lockout?

Yes! Aside from the regular revenue going to the owners from each game played at home, the cities that each team plays in loses revenue from the out-of-towners coming in the big city to see their favorite players, the local, state, and federal governments losing out on all those taxes they collect off the thousands and thousands of salaries that aren’t being paid. Numerous employees sitting in offices at different franchises are either being laid off or cut back in hours. The city of Ann Arbor, Michigan, set to host the Winter Classic this year at Michigan Stadium will lose out on approximately $83 million in city revenue as long as the lockout continues. The craziest effect is that economists speculate that a season long lockout would cause the nation of Canada to lose approximately $1.8 billion in GDP. Still think a lockout is worth all that?

Make sure to check back in a couple of days for part two!

Tags: Alexander Ovechkin, Hockey, Lockout, NHL, owners, Washington, Washington Capitals

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