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