Another NHL Lockout Now In Effect

At 11 p.m. central time Sept. 15, the National Hockey League’s (NHL) deadline for a new collective bargaining agreement (CBA) passed, and the players are now officially locked out.  Only seven years since a labor dispute wiped out the entire 2004-05 season, this will now be the NHL’s fourth work-stoppage since 1992, and the third under commissioner Gary Bettman. It could also be a potentially fatal blow to a sport which struggles to bring in new fans.  The season remains set to begin Oct. 11, but with no sign that either party is willing to compromise, it seems that won’t be the case.

Unlike the last lockout, which resulted in a hard salary cap and a few changes to the rulebook that were implemented to open up the game, this current labor dispute focuses more on the sharing of revenue between the players and the owners.  The 04-05 lockout, although a sad time for the hockey community, was somewhat needed, and seemed to spark a noticeable rebirth for the both the NHL and the game of hockey itself. 

As hockey became more exciting, interest rose and so did revenue, from $2.2 billion in 2006, to a record $3.2 billion last year (Bloomberg.com).  Under the recently expired CBA, the players were entitled to 57 percent of that hockey-related revenue.  In a league where more than half of the teams lost money last year, it’s hard not to see why that number won’t work, especially due to the fact that team-value in the NHL has actually increased since the last CBA was put into effect. 

According to Forbes.com, the average NHL franchise is now worth about $240 million, yet player salaries are keeping organizations from turning a profit.  A player-share closer to that of the NFL and NBA, 48 percent and 50 percent respectively, seems like the best option for a league that may not be able to sustain another lost season. 

As stated on Bloomberg.com, the owners’ latest offer to the players was a 47 percent share of league revenue, which did not entice the players, as that would mean a loss of roughly $256 million in salaries next year.  In turn, the player’s union proposed a deal linking the players’ portion to revenue growth, with the players’ share of revenue decreasing slightly each year so long as revenue continues to increase.

The NHL’s struggles to cultivate a wider fan base have long been documented. Prior to the start of last season, the average NHL player made $2.4 million, a near million dollar bump from the average salary back in 2005-06 (Bloomberg.com).  Even with a much greater share of their leagues’ revenue, the average NHL salary is significantly less than that of the NBA and MLB. Surprisingly, the NFL’s average player-salary is lower than hockey’s at $1.9 million, but that number is skewed due to the increase amount of players in the NFL. 

Bottom line: the NHL’s stars aren’t making nearly what the biggest names in other sports are.  In fact, out of the Forbes list of the 100 highest paid athletes, none play hockey. None. Not even Sidney Crosby, who, after agreeing to an extension with Pittsburgh Penguins this summer, netting him $104.4 million over the next twelve years, cracked the list.  Now, while that figure does only include Crosby’s salary,  Lebron James, who was fourth on Forbes’ list, will make $53 million in total earnings this year alone.

It’s obvious that player salaries are what’s crippling the NHL, and even though a more evenly shared revenue means a significant pay-cut, the players need to think long-term.  Giving up more now would hopefully result in a more stable league, and potentially lead to higher salaries down the road.  However, continuing under a CBA similar to the one which just expired, could very well ensure future labor disputes.

In response to the passed deadline, the NHL issued a statement Sept. 16 saying, “This is a time of year for all attention to be focused on the ice, not on a meeting room… we owe it to each other, to the game and, most of all, to the fans.”

For right now, all fans can do is remain optimistic and pray that an agreement is reached sometime within the next month or so.  Unlike seven years ago, this current lock out could be too much for the NHL to bounce back from.