Divide and Conquer: The Strategy of the NHLPA in this Labour Dispute

The dreaded day is about to occur!  Everyone, under your desks!

On Saturday, most analysts, fans, players and owners are expecting that the NHL will lockout the NHLPA in this latest round of their on-going labour war.  At this point we’ve heard the reasoning from both sides, we’ve heard the rhetoric from both sides, and we’ve heard the offers.

I’m not going to get into who is right and who is wrong because ultimately CBA negotiations are never about who is right and who is wrong.  The “winners” in any work stoppage are almost always the party with the most leverage.  The party who is able to weather the financial losses that any work stoppage brings, and who has the least to lose by continuing to hold out for a better deal.  That’s just the way it is, and the way this works in industry.  The only certainty is that the losers are the fans.

In the last lockout the players were able to hold out for one full season, but the owners’ pockets were apparently deeper because they were able to hold out longer.  The union eventually caved, and the players gave massive concessions to the owners, and subsequently fired most of the union executive within months of reaching the new deal.

Some will say that the last NHL negotiation was fair and was an equitable contract between parties.  While this may be true in theory, it ignores the simple fact that the owners got nearly every concesssion they wanted from the players.  In fact, when you compare the opening offer from the owners in the summer of 2004 with the actual deal signed in the summer of 2005, the two are nearly identical.  There is no doubt about which side caved in that negotiation.

The owners are certainly fighting a strategy involving a war of attrition.  They realize that players’ careers are short, and the majority of NHL players will be missing large paycheques, paycheques they will never recoup even in a new CBA.  This is the reason that players caved last time, and this is the reason owners think they can ask for such big concessions again.

There are few options for the players if they don’t work in the NHL.  Some may go to Europe, but for the most part the European Leagues do not pay at the same rate as the NHL (with a few exceptions for some players, of course).  This means that as long as games are missed a player is giving away part of his potential career earnings.  The owners are counting on players arriving at the fact that a pay cut is better than no pay at all, resulting in the players folding like a wet suit.  Realistically the owners are correct.  The players will eventually cave, and it’s just a matter of time until that happens.

So then what can the Players Association do? The PA’s strategy must be to divide the owners; to create tension in Board of Governors meetings and create in-fighting between the owners.  They need to plant a seed in the owners’ that they, too, are losing money during the lockout, and that they will not recoup the fixed costs that all teams have.  They must force enough owners to agree with the PA proposals to end the lockout.

How to go about this?  Divide and Conquer.

A major factor in all NHLPA proposals has been to increase revenue sharing between teams – increasing the shares that big market clubs pay towards subsidizing the small market clubs.  This is obviously something that will be attractive to the small market clubs and will be something that they will like when they discuss the proposals in a Board of Governors meeting.  Meanwhile, the big market clubs will hate the proposal and oppose subsidizing the league’s weaker franchises.  In this way they create tension and disagreement in the BoG, and maybe even gain voices that support the NHLPA’s proposal.

The NHLPA has also asked that teams be limited in how much money they can spend on management and scouting.  This would again be an issue that small market teams would be strongly in favour, while big market teams would vehemently oppose.  There has been much talk that having a bigger and better scouting staff is a way that a big market team can use its financial muscle to gain an advantage in this CBA.  The PA is proposing to take away that potential advantage.

We also see the NHLPA bringing legal actions to prevent the lockout in Quebec and Alberta.  If these are successful, does that mean we’ll have a 3-team league?  Of course not.  There still won’t be any games played.  But what will happen if the NHLPA is successful in its arguments, is that the owners of the Montreal Canadiens, Edmonton Oilers and Calgary Flames will be unable to lockout their players and be forced to pay them their full salaries despite there not being any games.  They will also be forced to keep the arenas and practice facilities open as usual and accessible to the players.  This will increase the expenses for these teams, while not providing them any of the revenue they normally receive.  As a result, the owners of the Canadiens, Flames, and Oilers would become divided from other team owners and want to end the lockout.

The third issue is regarding contract lengths.  The NHL’s proposal is to limit contract lengths to a maximum of five years.  However, since July 1, 2012, to today, 10 NHL teams have signed a total of 15 players to contracts or contract extensions of six or more years.  Clearly there is already some disagreement amongst owners as to an appropriate length of a contract to a good, young player.  Is this an area the players can exploit to create further dissension among owners?  It will be something to watch.

Wait, is there dissension amongst owners already?  I can almost guarantee that tomorrow you will hear from that NHL that its BoG voted 30-0 in favour of a lockout.  Ridiculous.  The league’s owners will not publicly want to show any sign of weakness.  But make no mistake about it, if you see the vote may be 30-0, but that is just for appearances sake.  There are some teams who do not support this lockout, but who, and how many?

We don’t know, but there is discussion behind closed doors about playing hockey.  If enough voices turn to this, we will see the owners cave, the players get a decent percentage of HRR and other favourable contract terms and importantly for us, a return to hockey.  If too few fans’ voices are heard, we will see the lockout continue until the players cave.

As fans it would be great if both parties would negotiate a fair resolution to this issue, meet in the middle, and get the season started on time.  It’s what’s best for the game.  At the end of the day most fans just want their hockey.  But coming to a “fair” resolution is what this battle needs to be about.  The pessimist in me is worried, as it’s not the way the owners have acted with their previous proposals, and therefore I don’t believe it’s the way this will go down either.  The lockout will end when one side wins and the other side loses, when one side caves, and the other stays strong.  Now its just a matter of us waiting for that to happen.

Don’t hold your breath.

Follow me on Twitter – @LastWordBKerr

5 Comments

1. 

   Maksim Vasilyev

   September 13, 2012 at 8:28 am

   Do you think that our voice CAN be heard? I somehow think that unless the marketing guys show up with some solid attendance and growth numbers about data from post-lockout in 05 and where the fan attendance is today, no matter how many letters we send it will fall on deaf ears.

   Reply
   • 

     Ben Kerr

     September 13, 2012 at 2:11 pm

     The more letters you send, the more you sign petitions, the more protests you make, the more show the owners that you want hockey, can’t live without it, and in many ways will come running back as soon as the lockout is over.

     If you really want to scare the shit out of the owners and make them wonder if they are hurting their business in the future with this lockout, the best thing to do is ignore them. Go spend your money on junior or NCAA hockey, or on another sport, or on concerts, art galleries, or another hobby. Don’t watch the numerous lockout shows that will come out, watch something else. Show them that you can move on from hockey and that without it you will find other interests and pursuits. That will actually scare them.

     Reply
2. 

   BB Hockey

   September 14, 2012 at 10:12 am

   Good article Ben, a few points though, in respect of your response to Maksim, you are absolutely correct on why we are standing on the edge of another lockout. Unlike baseball, which saw a large loss in attendance, growth and overall fan base after their last strike, the fans of the NHL came flocking back in groves as if it was the end of prohibition and beer was finally being sold again. The PA has admitted that growth has not only been achieved but sustained since the last lockout so how can you truly scare an owner that a lockout will cost them fans? Unfortunately I think it will take more that simply stop talking and writing about how much we miss hockey. Also unfortunate, but I think there needs to actual stop going to NCAA, CHL or AHL games as well over a strike, it does negatively affect those teams that are actually playing, but by supporting them you are also saying to the owners that there is a hunger for hockey out there.

   Secondly, to your point about revenue spliting, there has been a number of articles published in mainstream media about certain franchises looking forward to a year off as it would cut their losses. This added to the fact that owners have steady flows of income from other sources owners are certainly better able to weather the storm so to speak. Getting the small market owners to side with the PA about revenue sharing is one thing, but if the option is skipping a year with less of a loss on the books than not, good luck getting the small market owner to the table. I fear that once the lockout occurs both players and owners will take a break from talking, owners will focus on their other financial interests while players will look for work (other than Bobby Ryan who says he will take the year off in California) and the fans will be left with media reports that all is quiet on the Western front for sometime.

   This morning I have started to now see the American Thanksgiving date pop up all over the place as the next big deadline, it would coinside with the outdoor classic kicking off a shortened season, it would allow the league to gain revenue from the HBO series which has suggested that end of November is a deadline for the start of filming, as well as after American Thanksgiving you get into the holidays where fans, players and management dont want to be stuck around a table.

   If a lockout occurs (which most people agree it will), how do you keep the PA and league interested enough on continuing talks so that a deal can be ironed out by mid-November? Will the players be starved enough to cave again, will your divide and conquer occur so quickly as to make owners all of a sudden become reasonable? Who knows, the pessimist in me sees another season lost.

   Oh and one final point, on the PA side of things, you can expect them to be eager to rush out and sign an owner friendly deal after the last mass firing. This just adds to the stalemate right now.

   Again, good read and I hope you are right, with an outcome that hockey returns soon, although that sentiment is exactly why the owners still have a foothold, even I know at this point in time, I would still return in some form or another.

   Reply
   • 

     Ben Kerr

     September 14, 2012 at 1:01 pm

     I don’t think I was optimistic on a time frame though. I merely think that one of the two sides needs to fall for a deal to take place. I doubt that is going to happen any time soon though. Both sides are super competitive, and neither will want to be seen as the loser in this dispute.

     But make no mistake, there is little reason to believe that the two sides can find “common ground” at any point in the near future. So what we have is two sides waiting for the other to fall, and trying to encourage the fall through a divide and conquer style strategy. Thats the end game here, but it may be many months of entrenched positioning before it happens.

     Reply

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