Article

July 2013

The hockey lockout of 2012–2013

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Under the previous agreement, there was no limit on the duration of player contracts. Under the new agreement, contracts for free-agent players are now limited to 7 years, or 8 years if a team re-signs its own free-agent player. Clubs will no longer be able to circumvent the salary cap by backloading contracts with balloon payments.40 Amnesty buyouts—which enable teams to waive unproductive players—were adopted by the NHL, and two amnesty buyouts are allowed ahead of the 2013–2014 or 2014–2015 season.

Revenue sharing among clubs increased from $150 million under the old agreement to $200 million under the new one. Although negotiations took place over both salary arbitration and eligibility for free agency, these provisions remained unchanged. The minimum salary also remained unchanged for the current season, at $525,000, but was scheduled to rise to $750,000 by 2021–2022. Appeals of disciplinary suspensions of more than five games, formerly heard by the commissioner, could now be submitted to a neutral arbitrator. The annual draft of new players previously featured a lottery among the bottom five teams to determine which team had the number-one overall pick. This practice was changed so that all 14 nonplayoff teams would be eligible for the lottery.41

An unaddressed issue in the new agreement is whether the league will release players to participate in the Winter Olympic Games. Although players were released for the 2006 and 2010 Olympics, their 2-week absence interrupted the regular NHL season. The league has considered dropping the practice, which is popular with the players who look forward to the 2014 games in Sochi, Russia.

Although an agreement was reached in the nick of time, fans were upset that it took so long to accomplish something that might have been done months earlier, when it looked like a 50–50 division was where the sides would end up. Bettman and Fehr were criticized for risking the season, awakening the specter of the 2004–2005 breakdown. The Hockey News called for Bettman’s firing.42 Bettman apologized to fans, and mea culpas flowed from players and front offices around the league. It is unlikely that Bettman will be fired as a result of the lockout; that decision is for the owners to make, and they are apt to be pleased with the capture of revenue share that he orchestrated. The lockout’s bottom line is that the owners prevailed by a wide margin, as did their counterparts at the NFL and NBA in 2011. Winning came with a price, however, as owners lost about $2 billion in revenue and players lost about $800 million in salary.43

Although league attendance rose in the seasons after the past hockey lockouts, it is not certain that history will repeat itself. Still, fans tend to be forgiving, especially as time passes. The majority of the NHL ticket base comprises season ticket holders, who, in general, are more invested and loyal than fans who purchase single-game tickets.

All major team sports—baseball, football, basketball, and hockey—now have long-term agreements that will allow the public to focus on the entertainment of sports rather than on interruptions caused by wrangling over money. Squabbles between labor and management will doubtless continue, but without work stoppages for several years.

Notes

40 Sielski, “NHL races back to business,” p. B2.

41 Klein, “Shortened season,” p. D2.

42 Jeff Z. Klein, “Official vote on agreement; unofficial on Bettman,” New York Times, January 9, 2013, p. B15.

43 Michael Farber, “The case for expanded playoffs,” Sports Illustrated, January 21, 2013, p. 34.

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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.