Lockout Thoughts: The End is Nigh

At one point or another, every generation believes that theirs will be the last before the end of the world. If you’re a fan of hockey, that point may be upon us. Yes, the league has locked out twice in the previous 20 years, but those were different: I’m definitely too young to remember the 94-95 lockout, and it sounds like it was incredibly stupid, but they also figured it out in a matter of months, not years, and had a Cup winner that year. The 04-05 lockout is a different story entirely, yes the league lost the whole year, but it needed to lose the entire year—the game had become completely unwatchable and so ridiculously unbalanced that the NHL literally couldn’t make money.

Yes it took a long time to work out the details, but when the game came back it was incredibly more appealing to fans: the rink was opened up, the scoring was increased, and perhaps most importantly, the 05-06 season marked the arrival of so many of the league’s new superstars. Let’s not forget that Ovechkin and Crosby both played their first games in 05-06, as well as Henrik Lundqvist, Shea Weber, Mike Richards, and Zach Parise, among others, and what impact that had on fan consumption. The salary cap that was installed after the lockout has made the game incredibly competitive: the Toronto Maple Leafs are the only team that hasn’t made the playoffs since the lockout, but that certainly isn’t because they’re unable to be financially competitive (pretty sure they are the most valuable NHL franchise). All of this has contributed to a literal explosion in revenues, the NHL’s $3.3 billion for the 2011-12 season is more than $1 billion better than they were when the league last locked out (numbers from here), on average, each and every NHL franchise is worth $36.67 million more than it was just 8 years ago. The cap has further helped the Players to average almost $1 million more per season (quick calculation, check out a real cool breakdown here) than the pre-lockout days. Despite that, there are still teams that aren’t making money. So here we are again… 

The Players met today, apparently 283 of them (with most Europeans supposedly staying home, like Malkin, who is preparing to play for Magnitogorsk in the KHL on Sunday barring a miracle) and gave a rousing presentation of how they were not going to cave into the pressures of the Owners. First Donald Fehr spoke and said some things, and then for the first time a specific Player spoke, and that player happened to be none other than Sidney Crosby (again, you think he’s important to the public conception of the NHL?) Of course I didn’t get to watch the presser live, but I’ll try to distill the important things from it:

Fehr’s Speech:

  • The first thing that Fehr stressed, which should not be overlooked, is that the PA doesn’t believe in “artificial deadlines” like September 15. They want to work until this is resolved, and don’t feel that anything should change just because the previous CBA will be expired. This stands in stark opposition to Gary Bettman who yesterday threatened to pull the Owners’ most recent offer on the fifteenth if the Players don’t agree to it before then.
    • A number of Players have said that Bettman’s claim is a bluff, and the PA wasted no time in calling it. If you ask me, it has to be a bluff, it simply won’t work for the Owners to pull their offer.
    • If the Owners pull their offer and refuse to talk to the Players, who are very rhetorically reiterating that all they want to do is keep talking, they will get buried in an avalanche of pure hate from the fans. Is that going to change the opinions of the owners? Probably not, Ed Snider et al will probably just stuff their ears with hundred dollar bills and pretend nothing is happening.
    • Just a thought but how much power do the big market owners really hold? The constant rallying cry for the Owners is “the fans always come back.” Is that really true? I wouldn’t exactly say that the fans of the poor market teams “came back” in 2005-06, it’s for this exact reason that the small market teams don’t have any money and can’t afford the salary cap as it is now.
  • Fehr really emphasized the need for “shared sacrifice” between Players and Owners and emphasized that to this point, the Players have been willing to talk about concessions more than the Owners.
    • He also made a direct appeal to the wealthiest owners—”The Players are prepared to partner with high income teams.”
    • The problem is that the high income teams seem the least willing to compromise and the most outspoken about sharing revenues.
  • A familiar theme that’s been emerging is the PA mantra of “put yourselves in our shoes,” and Fehr made sure to call on that type of imagery again. It’s also true that the average NHL player, who makes almost $2.5 million a year, can afford a 10% pay cut than someone who makes say $25,000 a year.
  • When he was pressed about what impact the NHL pulling their offer on September 15 would have, Fehr commented that the PA would probably be in position to pull theirs as well.
    • Could have fooled me, but I didn’t think there’s was even on the table anymore.
    • Did they ever come up with a counterplan to what the Owners countered with last week? I really didn’t think they did, so that seems like something of a hollow threat…

From there Fehr dropped his party piece: perhaps the Players might make a proposal after the lockout that eliminates the salary cap entirely from the NHL.

I’ve said it before but Donald Fehr was in charge of the MLBPA in 1994. The MLBPA was the last player’s union to actually wage a strike against the league. You can say what you want about baseball economics, but ultimately it is true that MLB is the only league since 1994 to not have a lockout or any kind of work stoppage. MLB is also the only league that doesn’t have a salary cap, and it’s the only league that has actually waged a strike on behalf of players in the 2 decades. I really hope it doesn’t come to that, but from the outset, it’s been hard not to look at Fehr as the guy who made MLB what it is today, for better or worse.

Further, what’s the worst that could happen if the NHL did eliminate the salary cap? I mean you would have to have really thick skin, but if you were a small market team, you could easily decide to dump payroll and be horrible. If the difference for the Florida Panthers between being the team that won their division last year, or being last in the league is that 3,000 more people show up, why shouldn’t they have the right to dump salary and eke out a profit on the margins rather than being forced to spend to a cap floor, which has been raised to such a high level by the prosperity of other teams that you’re losing money just to compete?

We aren’t saying that we support a plan to end the salary cap in the NHL, but it is not impossible to see where the Players could be getting some of their plans from.

In some ways this statement from Fehr was the sum of all fears. It was nothing more than a “we tried” speech, and that’s exactly what the fans didn’t want to hear from the Players. It was all a lot of “show” without any actual power behind it. Hopefully both sides will continue to talk, but I don’t feel confident one way or the other if I’m honest.

Hopefully tomorrow we’ll be back with a look at Crosby’s comments to the media as well as Gary Bettman’s statements that came after the PA spoke.

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