2012 Off-Season

Gary Bettman and the NHL don’t seem to get it. They never have. Since Gary took over in 1993, the NHL has seen three lockouts. Briefly, lockouts occur when the league feels that it can no longer sustain its current activities without a freshly negotiated collective bargaining agreement (CBA). Note, the league is the only one who can lockout the players. If the players are the unhappy party, they can go on strike. The CBA serves as a labor contract between the league and the players’ union on a plethora of subjects ranging from revenue, to contracts, to pensions, etc., etc.

Under Gary Bettman’s tenure, the NHL moved and expanded several teams to non-traditional hockey markets. Some have been successful and won Stanley Cups and filled stands, while others have floundered. The Phoenix Coyotes, originally the Winnipeg Jets, filed for bankruptcy in 2009 and the NHL had to take control of the team and they see some of the lowest attendance numbers in the NHL. The Bettman-expansion Atlanta Thrashers suffered so many losses and ownership struggles, that they moved to Winnipeg to become the new Jets, a city deprived of its original team by Bettman when he moved them to Phoenix to become the failing Coyotes. We can coin this the “Bettman cycle.”

In contract law, there is a term called “bad faith.” The gist of this term is that one of the parties to the contract intentionally or maliciously used deception to make the other party agree to the contract. We will examine this term with regard to the actions of the NHL.

Reports are surfacing that Bettman attempted a “bait-and-switch” of language in their CBA proposal regarding how the NHL could handle team punishments for hiding revenue (Charles Curtis- NJ.com). The league’s language was changed in such a way that Bettman would have sole control of the penalties.

Reports are also surfacing that the owners and their GMs told Gary Bettman, who in turn told the NHLPA, that they would welcome the opportunity to renege some of the contracts they offered to players (Charles Curtis- NJ.com). This of course angered the NHLPA, and why shouldn’t it? If someone offered you millions of dollars and wanted to take it back or even dump you from their roster, would you be happy about it or even ok with it? Of course not. Why is Gary Bettman, under the direction of the owners, doing this? Because they want to lower the salary cap of the NHL by ~$10M per year to $60M. That is a ~15% decrease for those not interested in doing the math.

The NHL was in a dire financial state in 2004 when a lockout took away the season. The reason they bounced back was savvy marketing. What could the NHL have possibly been marketing that would appeal to so many people and bring the league back to such great heights? Could it be players? Of course. And it was. Alex Ovechkin- drafted 2004. Sidney Crosby- drafted 2005. Jonathan Toews- drafted 2006. Patrick Kane- drafted 2007. Steven Stamkos- drafted 2008. New, young marketable players, appealing to young fans and fresh faces leading to increasing profits? You don’t say.

Fan attendance increased in post-lockout 05-06 for 25 of the 30 teams in the NHL. Moreover, the average cost (tickets, concessions, parking, etc.) for a family of four rose from $256 to $329 in 2011, per Forbes. The value of the average NHL team has increased from $159 million in 2003, to $240 million last year, and average NHL player salary from $1.6M to $2.4M (Forbes). Could it be that the reason more and more kids want to play hockey is due to young talents emerging every year and inspiring them? Could it be that the NHL is seeing record fan interest because the best players in the game are in their early twenties, bringing a new young generation of fans to the game? I think so.

Young, talented players like these are why the NHL was saved after the 2004 lockout. Young, talented players were able to bring more and more fans to the game and in turn allowed the league to increase its salary cap EVERY YEAR for the past 8 years. That is EVERY YEAR since the last NHL lockout. Coincidence? I think not.

In 2012, we saw ENORMOUS contracts being handed out left and right for big name players. Crosby- 12 yrs, $104M; Parise- 13 yrs, $98M; Suter- 13 yrs, $98M; Weber- 14 years, $110M. There were plenty of guys signed in the offseason who were arguably overpaid by their teams. For reference, go read articles by beat writers and read fan Twitters from the summer. Plenty of grumbling. Every one of these contracts was offered to players a few months before the collective bargaining agreement expired. The owners knew that the salary cap would be an issue moving forward in negotiating a new CBA, but they offered these contracts anyway. Here we are, 6-7 months later. It is January of the following year. We are still locked out, the players are not receiving their paychecks, and the owners want to LOWER the cap by 15%. The salary cap is STILL an issue the NHL and NHLPA cannot agree on. There is something fishy about this. I’m not saying that Pittsburgh, Minnesota, and Nashville are the teams responsible for the lockout. BUT, collectively, the owners knew that the CBA was going to expire very shortly after these contracts were signed, and yet they still offered them. Now, they want to lower the cap and the GMs “regret” and want to renege some of the contracts they offered.

The NHL has shown a mechanical unwillingness to negotiate with the NHLPA. A number of times when the league made proposals and the players countered, Bettman and his cronies stood up and walked out of the room. The NHL has used fruitless, and frankly pathetic, language such as “final offer,” “only offer on the table,” and “take it or leave it” in their negotiations with the NHLPA. Sounds a bit like something a small child would say when he or she doesn’t get his way doesn’t it?

Since the 2004 lockout, NHL league revenues have increased by nearly 64%. Revenues, of course, don’t translate to team profits and there are only a handful of financially viable teams in the league. There are a number of teams struggling financially. Some are struggling due to poor ownership and mismanagement, but others are struggling, because they are in places where hockey fans simply don’t exist and hockey teams don’t belong in the first place. This falls squarely on the owners and the league, not the players. Still, the players have made concessions. They have agreed to a 50-50 split of revenues, they have agreed to limiting contracts. Still not enough. How does the NHL respond? They behave like stubborn children, say “take it or leave it” and LITERALLY just walk out of the room. They try to make a preemptive strike on the NHLPA by going to court and trying to block the NHLPA from disbanding and filing an antitrust suit against the league.

We’ve heard from numerous reporters and writers from TSN and various other news outlets that there is a strong sense of distrust between the NHL and the NHLPA. Are you surprised? I’m not. The players are the ones who bring the fans to the stands. The players are the ones whose skills allow teams to market them and bring people to the arenas. Convincing players to sign for their teams by making them believe that they will receive a large amount of money and ultimately wanting to renege those contracts by masquerading under a new collective bargaining agreement? That is the DEFINITION of “bad faith.” Putting up with the NHL’s unwillingness to compromise, hearing the NHL say “final offer” countless times, watching the NHL storming out of meetings and behave like an 8th grader who just got dumped; do these things seem like the type of behavior that builds trust? Is this behavior expected to be perceived as professional? The question you need to ask yourself is, how would you feel if you were in the players’ shoes? Would you be okay with the NHL wanting to renege some contracts? Would you “trust” them? I sure wouldn’t.

The NHL needs to keep in mind that the players are the ones who rescued the league after the last lockout. The players will be the ones who will help them bounce back from this lockout. Fans don’t come to see Gary Bettman and his golf buddies at hockey games. Fans come to see the Crosbys, and the Ovechkins, and the Toewses. This lockout won’t end until the NHL decides to accept this and start showing some more respect to the players.