Sports Law Blog
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Sunday, February 08, 2004

NHL Labor Update: During the NHL All-Star weekend, much of the focus has naturally been on the impending labor show-down between the league and the players. Gary Bettman expressed cautious optimism in his State of the League address, urging patience from fans as a new Collective Bargaining Agreement is negotiated to ensure "stable franchises" and the ability of fans "to enjoy outstanding hockey entertainment at affordable prices." Bettman also stressed the goal of a "competitive environment in which their favorite team has just as good a chance of making the playoffs and possibly winning the Stanley Cup as any other team."

The players, on the other hand, sound much more defiant than they did at this point last year. Many players expect a shutdown of up to two years, and many have made plans to play in Europe or for the World Hockey Association. Players such as Jeremy Roenick believe that they have the better bargaining position:

"I think it [a shutdown] is scarier for the sport and for the owners than it is for the players," Roenick said. "The
players can play in Europe; they can play in different leagues. The owners? They can lose their franchises. They have
to deal with the buildings that sit empty.

"Is Buffalo going to stick around? Is Carolina going to stick around? Is Ottawa going to stick around? Calgary?
Edmonton? These teams are not going to be able to withstand one or two years [with no games]."

However, this may just be big talk from one player who is both a bonafide star and financially stable. For every franchise that folds, an additional 20 players will be out of work. In addition, players that are older or less talented could very well have their careers ended by a prolonged lay-off, with younger, more talented players ready to step in after play resumes. However, if players can indeed find work (albeit for much less pay) in other leagues, something not available to professional football or baseball players, the lock-out could have less of a dramatic impact and continue for years.

What the players must also realize is that with the league's current economics, a number of the franchises mentioned by Roenick could fold, anyway. The harsh reality of the NHL is that without a salary cap, smaller market teams, especially those run on the weaker Canadian dollar, will quickly be unable to compete with their larger-market opponents. NHL salaries are growing exponentially, but the league's revenue is not, creating a wide economic disparity.

Finally, both the leagues and the players must examine if the fans will still be here after two years. Fans in Canada will always love hockey; unfortunately, the real money for salaries is below the border. The last work stoppage to cancel a championship, in baseball in 1994, severely impacted the game's popularity and television ratings. However, while baseball had a strong base from which to fall, hockey stands on "thin ice" as it is. Ratings for hockey telecasts are well below those of the other "Big 4," as well as most golf tournaments and NASCAR races. The NHL has done good work building the league's popularity, especially in new markets, but newer fans will quickly turn to the NBA or college basketball to fill the winter sports months. When the game resumes, several franchises may fold and countless others could be facing years of financial ruin. Initially the burden will fall on the owners, but eventually the players will also be impacted.

The NHL has numerous problems, and it remains to be seen what shape the labor war will take. But one thing is for certain-- the NHL is headed for big change, one way or another.