Article

July 2013

The hockey lockout of 2012–2013

Although less severe than the disruption of 2004–2005, the hockey lockout of 2012–2013 resulted in the cancellation of 60 percent of regular-season games. Owners were the clear winners, securing a 50–50 split of hockey-related revenue.

The epic 2004–2005 lockout in the National Hockey League (NHL) caused the entire season to be lost, an unprecedented outcome in professional team sports. Lockouts have become increasingly common in sports, as illustrated by the lengthy 2011 work stoppages in the National Football League (NFL) and National Basketball Association (NBA).1 Although the 2012–2013 hockey lockout avoided losing an entire year, nearly 60 percent of the regular season was canceled, along with the All-Star Weekend and New Year’s Day Winter Classic games. This was the third major lockout in the NHL in the past 20 years.

Before the mid-1990s, major work stoppages in sports were predominantly strikes. The money pie to be divided between owners and players grew along with the expansion of leagues into new markets and the acquisition of lucrative national television contracts. This newfound wealth was hotly contested, and negotiations frequently dissolved into strikes called by unions late in the season. These strikes were especially costly to owners, who received the largest share of their television revenues from postseason play.

Lockouts have given owners a bargaining edge as indicated by the substantially reduced percentage of total revenue received by players in recent settlements in the NFL, NBA, and NHL.

The last big strike in professional team sports was in Major League Baseball (MLB) in 1994–1995 and resulted in the cancellation of 921 regular-season games, the playoffs, and the World Series.2 Team owners came to realize that, rather than having to face crippling strikes, they would do better to seize the initiative by locking players out before the season starts. This tactic would shift the economic burden toward the players, who would have yet to receive paychecks for games played. That lockouts have given owners a bargaining edge is indicated by the substantially reduced percentage of total revenue received by players in recent settlements in the NFL, NBA, and NHL.

Another factor contributing to lockouts is the small residual effect of canceled games on subsequent attendance. Martin Schmidt and David Berri found that attendance in years following a strike or lockout does not show a significant dropoff from that during the years before the stoppage.3 For example, attendance at NHL games in 2003–2004 was 20,356,199, and, despite the devastating lockout of 2004–2005, attendance rose to 20,854,169 in 2005–2006.4

Background

The National Hockey League Players Association (NHLPA) was formed in 1957 by several players, including Ted Lindsay, a Detroit Red Wings forward who became the association’s first president.5 The fledgling union was able to get its members a minimum salary of $7,000 and additional pension contributions from the owners, but after a year or so became inactive.

In 1967, the NHLPA resurfaced as a viable organization under the leadership of Toronto lawyer Alan Eagleson, who secured formal recognition of the union by the league. Eagleson, who assumed the role of executive director of the organization, also represented players—including the great Boston Bruins defenseman Bobby Orr—as an agent in their individual salary negotiations. However, when Eagleson mishandled Orr’s finances and misused union funds, he was convicted and incarcerated for racketeering, embezzlement, and fraud.6

Notes

1 See Paul D. Staudohar, “The hockey lockout of 2004–2005,” Monthly Labor Review, December 2005, pp. 23–29; “The football lockout of 2011,” Monthly Labor Review, August 2012, pp. 29–34; and “The basketball lockout of 2011,” Monthly Labor Review, December 2012, pp. 28–33.

2 Paul D. Staudohar, “The baseball strike of 1994–95,” Monthly Labor Review, March 1997, pp. 21–27.

3 Martin B. Schmidt and David J. Berri, “The impact of labor strikes on consumer demand: an application to professional sports,” American Economic Review, March 2004, pp. 344–357.

4 NHL data.

5 The origins of the NHLPA and early negotiations are discussed in Paul D. Staudohar, Playing for dollars: labor relations and the sports business (Ithaca, NY, Cornell University Press, 1996), pp. 147–150.

6 See Russ Conway, Game misconduct: Alan Eagleson and the corruption of hockey (Toronto, Macfarlane Walter & Ross, 1995).

1next page

View full article
About the Author

Paul D. Staudohar

Paul D. Staudohar is professor emeritus of business administration at California State University, East Bay, in Hayward, California, and a member of the National Academy of Arbitrators.