Saturday, October 27, 2012

NHL Armageddon 2012: a sport at its crossroads

The National Hockey League lockout passed its 40th day Thursday, a monumental day in a labor dispute that if not settled in the coming weeks or months will cripple the sport.  Eight short years ago a league imposed lockout resulted in the cancelation of the 2004-05 NHL season. Today, the league once again stands at the edge of the abyss with the sport hanging in the balance.

In an offer presented to the NHL Players Association on October 16 NHL commissioner Gary Bettman proposed the NHL and the league’s players share in hockey related revenues (HRR) on a 50-50 basis.

The previous collective bargaining agreement that expired on September 15 gave the players 57% HRR and the owners 43%.

The offer Bettman made to NHLPA executive director Don Fehr was rejected. Fehr and the NHLPA made three counter offers to the league’s owner’s on October 18 each suggesting the players would consider the 50/50 split but only if all current contracts were guaranteed at their full market value and only over the lifetime of the NHLPA’s proposal.

The NHL which initially offered the players 43% HHR in their first offer to the players in July, made their October 16 offer in hopes of preserving an 82 game NHL schedule, which would have seen the NHL season open on November 2.

One of the real concerns now is moderate NHL owners, a large group of owners who were ready and open to negotiating an agreement with the players based on a 50/50 share will join a smaller group of hardline NHL owners who believed the NHL’s offer to move from offering the players 43% to 50% was far too generous.  Those owners want to see the NHL lower their offer to the players from 50% or either 47% or 43% of HRR.

The other side of the coin how the NHLPA are going to react is even scarier. Don Fehr spent much of his professional career as the executive director for the Major League Baseball Players Association. MLB does not have a salary cap as does the NHL, the National Football League and the National Basketball Association. When asked if the NHLPA would attempt to have the salary cap removed for the CBA, Fehr suggested all options would be considered.

 Both scenarios offered result in the same end game – scorched earth, the end of the NHL as we now know it.

“Thursday was the latest we could stretch it for an agreement for a full season, because if we go past Nov. 2, we can’t play a full season,” Gary Bettman said following the Barclays Center press conference at which the Islanders’ 2015-16 move to Brooklyn was announced.

“We can play an abbreviated season, but we would rather play a full season.”
“The fact of the matter is that there are just sometimes you need to take a deep breath because it’s clear you can’t do anything to move the process forward,” Bettman said. “We’re at one of those points right now because we gave our very best offer.

“That offer, for better or worse, was contingent upon us playing an 82-game season. So I think things in some respects may actually get more difficult.”
The league is expected to offer the players 47% of HRR a move that will result in a great deal of anger from the NHLPA in the next few days.

All is not lost, the 2012-13 NHL season is far from over. The tough talk that both sides will be making in the next few days is nothing more than talk. Heading into the lockout the NHL knew there was little if any possibility an 82 game schedule would be preserved. At the same times the NHLPA is well aware both the NBA Players Association and the National Football League Players Association reduced their respective revenue share to 50% from 60% and 57% respectively.

There are several issues the NHLPA needs to consider. First the 50/50 split their “union brothers” playing in the NBA and in the NFL had to accept. The average NHL player salary in the 2010-2011 season was $2.4 million. The minimum NHL salary during the same season was $500,000. The average NHL career is between four and five seasons. The average NHL player cannot afford to lose the millions of dollars he’ll earn if the 2012-13 NHL season isn’t played. With the league now considering a much shorter season NHL players stand to lose millions of dollars in lost wages.

Fehr offered this late Wednesday:  “The players made multiple core-economic proposals on Thursday that were a significant move in the owners’ direction," he said.

"We are and continue to be ready to meet to discuss how to resolve our remaining differences, with no preconditions. For whatever reason, the owners are not. At the same time they are refusing to meet, they are winding the clock down to yet another artificial deadline they created."

While the next few days are going to be rough for the NHL and the fans of the frozen sport, far more critical are the next four weeks.

Gazing into a crystal ball the NHL and the NHLPA will make several more attempts at averting the complete cancelation of the 2012-13 season. Both sides know if the 2012-13 season is canceled and that will not happen until mid-January at the earliest, the National Hockey League will suffer irreparable damage, the long-term effects will be catastrophic. As the saying goes “it’s always darkest before the dawn” the clock has yet to strike midnight on the 2012-13 NHL season but for hockey fans it just appears that way.

For Sports Business News this is Howard Bloom

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