Rob The Hockey Guy

// A Vancouver Canucks Hockey Blog

The 2012 NHL Lockout Explained

For those of you looking for a bit of clarity on why a bunch of millionaires and billionaires are arguing over who gets the bigger piece of the NHL pie, listen up! For Rob the Hockey Guy is back (I’ll try not to refer to myself in the third person ever again). It’s been a long two months off from the blog scene, but something needs to be said about yet another lockout in my favourite sport.

Both the owners and players are prepared for a lengthy work stoppage. Players like Evgeni Malkin and Joe Thornton have already signed contracts to play in Europe during the work stoppage. Next week the Vancouver Canucks will begin cutting the hours of their office staff, scaling back everyone’s work week to 4 days a week. The Ottawa Senators have gone one step further, laying off employees in anticipation of the lockout. These people are the real casualties of the NHL lockout. They aren’t millionaires or billionaires and they have no say in the dispute, yet they receive an immediate punishment.

For those of you counting at home, this is the third lockout under the leadership of Gary Bettman (the others were in 1994-95 and 2004-05). The 2012 NHL lockout is a lot different from the last lockout in 2004-05. In that labour dispute, the major sticking point was a salary cap. The owners were willing to lose a season to get it in, while the players vowed to never accept one. At that point, the players were used to getting what they wanted. In each of the previous two labour disputes in the early 90s (the strike and the lockout), the owners eventually caved. Players salaries soared, and the NHLPA seemed strong under the leadership of Bob Goodenow. It was the players who eventually caved in 2005, giving the owners everything they wanted, including a salary cap and a 24% rollback in salaries.

This time around, there isn’t a major philosophical difference in dispute. This time around, the main issue is what percentage of revenues the NHLPA is entitled to. The owners want to scale it back considerably. Not surprisingly, the players don’t. Players currently receive 57% of hockey related revenue, and the owners began these negotiations demanding that players receive 43%.

The NHLPA doesn’t have the mystique and swagger it had going into the lockout in 2004, but it is certainly more united (or at least they appear to be) than at the end of the lockout in 2005. The NHLPA’s new executive director Donald Fehr certainly has something to do with that. It will be interesting to see who breaks down first this time, because both sides are putting up a good front.

Another change from 2004-05 is the welfare of the league. In 2004, the NHL was broken. The product on the ice wasn’t good, and the popularity of the league was in decline. That’s not the case today. There are a lot more teams in the NHL today that are money making operations than they were 8 years ago, and the teams making money are really raking it in. It’s for that reason that I don’t see the NHL owners being able to stick to their guns like they did the last time.

How long will this lockout go before teams like the Canucks, Leafs, Canadiens, Rangers, Bruins, Flyers, etc. get fed up. Those teams have a license to print money during the NHL season. In fact, those teams have a license to print money during the preseason, where they sellout exhibition games while charging regular season prices. And there are a lot more teams in this situation than there used to be. Calgary, Edmonton and Ottawa will begin to lose money soon also. The Los Angeles Kings probably want to ride the momentum of their improbable Stanley Cup victory last spring. The Blackhawks, Red Wings and Penguins won’t want a work stoppage either. I could go on, but you see the point.

Of course, not every team in the NHL is making money, especially at this time of year. The owners of the Blue Jackets and Islanders stand to have the most to gain in this labour dispute, and are poised to lose money in 2012-13. Just how many other teams are in this situation remain to be seen. The NHL would have you believe that even a team as successful as the San Jose Sharks are losing money. I find that hard to believe.

The 2012 lockout is about money (duh), but more specifically, it’s about who should pay for the weak sisters of the league. The owners want to lower the salary cap across the board, to make owning a team more affordable for the likes of Phoenix and Florida. That also puts more money into the pockets of rich teams like Toronto, New York and Philadelphia, who are still reaping the rewards of the last lockout win for the owners. I could see the NHL asking for a lower salary floor, but to lower the ceiling for all NHL teams (even the successful ones) is a slap across the face to the players.

The NHL got everything they wanted in 2005, and the league has made more money than ever since then. That would suggest that the NHL has some teams in the wrong markets to me. Imagine moving teams to places where people actually like the sport of hockey? What a concept. Quebec City and Southern Ontario are waiting.

The only case the NHL can make is that the weak sisters of the league need a chance to compete. But given what the players have already given up, what they’re asking for again is preposterous. The NHL ought to move teams out of markets that have proven that they can’t support an NHL franchise. After they do that, they ought to participate in revenue sharing like they do in the NFL. If the owners are prepared to share revenue with each other, I think they’ll find the NHLPA will be prepared to give up more as well. But instead, the NHL has decided to sit back, cross their arms and demand more money.

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