Much has been written about the current NHL lockout, and what (if any) progress is being made. However, many writers, myself included, have been derelict in our duty of explaining why the lockout occurred to begin with. As every good historian knows, knowing why something happened is as important as knowing what happened.
Let’s begin with the Collective Bargaining Agreement set forth by the league after the 2004-05 lockout. This agreement put the current salary cap structure (which is tied to league revenues) in place. So therefore, the players’ share of revenues (between 54-57%) was dependent on league revenue as a whole. By the end of the CBA this past season, players were receiving the high end of the range (total revenue was up over $3.3 billion), due in large part to a significant resurgence of the fan base. It’s worth noting that the last lockout barely affected ticket sales, so the owners will be willing to play hardball for longer, knowing that it’s very likely that the base will continue to watch hockey no matter what.
Fast forward to today. The player’s union is essentially arguing that the previous CBA was perfectly fair, and that the rapid increase in league revenue should not lend itself to a new CBA. After all, it’s the players that put their bodies at risk. The owners are saying that the last deal was more than fair to the players, and that the owners need to “retrench”. Retrench is really just a kind word for saying “we want more of the pie.” The owners are looking to reduce the player’s revenue share from 57% all the way down to 47%. As I’ve mentioned in other columns, this really would throw a wrench in the plan of some GMs who have spent big bucks this off-season.
While there are other issues at play here, including adjustments to the players defined benefit plans and whether or not pro players should be able to play in the 2014 Winter Olympics in Sochi (an interesting debate in its own right), there is no doubt that revenue sharing is playing the biggest role. It remains to be seen if the players will decide to take a smaller share of larger revenues, or if the owners will decide to adjust their demands, but from the looks of it, we’re heading down a dark path.
Photo Credit: Associated Press
