Hockey Lockout Paper
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“I have no choice but to announce the formal cancellation of play for the 2004-2005 NHL season”. These words from the NHL commissioner Gary Bettman were what hockey fans like us had feared for months when he announced this on February 16, 2005. This was an embarrassing moment for the NHL and action needs to be taken immediately. Any problem affecting so many people inside such a large industry is never simple, nor is the solution. Things need to happen before next season however before the credibility of the NHL is tarnished even more. With the lights in the great arenas off and the ice now silent what can be done to save this great game?
One common misconception many people have is that the players are on strike, the last strike however was back in 1992. In this situation the owners have locked out the players. The leagues old collective bargaining agreement which was agreed upon after the 1995 lockout expired on September 15, 2004. This was an agreement by the NHL and the NHLPA (the players association) and it set the rights and obligations of both the players and the teams of the NHL. Basically what it comes down to is no hockey with an expired agreement.
The leagues argument is that the players salaries are too high, up 240 percent from 1995 according to CBC sports online on March 28, 2005. All thirty teams are required to provide a detailed list of hockey related income and expenses; the players say that the legitimacy of the leagues financial reports are questionable as they underestimate cable revenue and some did not even report concessions. Players further question the Leagues reports because Arthur Levit, the man hired to do the reports, was paid by the NHL.
In the last collective bargaining agreement the owners thought they had found a solution to the problem with rising salaries. The agreement brought an end to a four month lockout and added a rookie salary cap, restrictions on free agency, as well as new arbitration rules. This agreement which has since expired was considered a victory for the owners. Owners thought that limiting how much a player could earn in his first few years and preventing him from being an unrestricted free agent, giving him the power to negotiate a much higher salary, until after age thirty-one would slow down the fierce rise in salaries. Before the agreement expired however, salaries were still on the rise due to contracts featuring singing and performance bonuses which in effect neutralized the work that had already been done.
The players association and owners met many times before February of this year. No new agreement was reached and this ultimately led to the cancellation of the season by Commissioner Bettman. Although the problem that brought play to a halt is financial, in order to bring back the league so it will stay strong and the public will care about it again the solution must involve more than just a new collective bargaining agreement.
With such a complicated problem the only effective solution has to be intricate enough to fix all aspects of it. The solution will not be permanent if only the financial aspect is addressed. Changes in the leagues structure as well as in the atmosphere of the games themselves must occur for the NHL to thrive again.
Hockey is the only one of the four major sports to be in financial crisis right now. One of the problems they face is that they over-expanded. The NHL added teams in places where fan base wasnt strong enough; additionally, more teams tend to spread the talent level out. Currently the NHL has thirty teams and I propose to eliminate four of them. The Columbus Blue Jackets, Phoenix Coyotes, Nashville Predators, and Atlanta Thrashers are the franchises that should be eliminated based on revenue, revenue of other teams in the area, and fan base. Cutting back on teams will strengthen the talent pool of the league, as well as helping to play a roll in the next portion of the solution.
Currently the NHL has a higher percent of revenue going to players than any other major sport as shown below. This has much to do with the fact that it is the only major sport without a formal salary cap or some method of tying player salaries to team revenues. An economic framework for the game needs to be established. Although steps were made towards this in 1995, it was not enough. A hard salary cap needs to be agreed on and revenue sharing between franchises should be implemented. By cutting out four of the weaker teams of the NHL profit sharing will not be as skewed. The league as a whole will be bettered since both parties will now have an interest in total revenue.
One other problem in the NHL is the cost of tickets. Ticket prices need to be lowered so more people can afford to go to hockey games. The average ticket price for an NHL game is a hair under 50 dollars and if you had a family of four that would cost 200 dollars just for the tickets. If people cant afford to go the games how can they be expected to take an interest in the sport? This is why ticket prices need to be lowered.
Structure and finance are not the only ways in which the game needs to change. The NHL needs to seriously reconsider their marketing plan and their target atmosphere for the games. Marketing to a younger generation and changing the image is a great way to restore public confidence and love in the game. One of the greatest challenges of overcoming a play stoppage in major sports is rebuilding fan loyalty and trust as Baseball found out in 1993. The game is ultimately for the fans and no comeback is complete unless their needs are also addressed. Hockey itself is electrifying and if you get people back into the arenas people will learn and remember that. With youthful sponsors you can bring in a louder more excited crowd adding to the intensity of the game. Overseas, countries in Eastern Europe, like Russia,