Hockey Lockouts: Slap Shot or Cheap Shot
Lockouts have been an effective tool for sports team owners in their bargaining agreements since 1994. A lockout in sports means that owners have suspended players from playing, without pay, until the owners and players can come to terms on a bargaining agreement. Previously, before lockouts players would strike during the playing season which put pressure on owners because their revenue was at risk, while the players had already received their paychecks. Players react differently to the changes in their salaries resulting from a lockout.
Specifically, in hockey, the most notable lockouts in recent history were the 2004-2005 and the 2012-2013 seasons. In the 2004-2005 season, the owners and the players
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union were unable to come to an agreement which led to the entire season being lost. The lost season was estimated to be worth roughly two billion dollars in lost revenue for the teams and roughly one billion dollars in lost salaries from the players. The 2012-2013 was a bit different, the league and players union were able to salvage about forty percent of the season. However, highly anticipated events such as the All-Star Weekend and New Year’s Day Winter Classic games were cancelled (The hockey lockout of 2012-2013, 2013). From 1993 to 2003 average player salaries rose over a million dollars. This rise in average salary caused the league to claim in 2004, that they had lost nearly two billion dollars in the past decade (1993-2003). The negotiations in 2004 were centered around the idea of “cost certainty,” which would be implemented by a salary cap. The players union was decisively opposed to the idea of a salary cap and insisted that salaries should be based on market conditions. The league made a last-ditch effort to save the season by dropping the demand that salaries do not exceed fifty-five percent revenue. The union was then open to a salary cap, however, both sides were unable to come to an agreement on what the cap should be so the season was lost. The players union finally agreed to a salary cap for the 2005-2006 season and onward (The hockey lockout of 2012-2013, 2013). Negotiations in 2012 were focused on how the “money pie” was to be distributed among owners and players. In 2012 the revenue share given to the players was fifty-seven percent. The league noticed the trend of successfully cutting revenue share from the players in other sports organizations such as the National Football League, Major League Baseball, and the National Basketball Association. The league initially wanted fifty-seven percent of the revenue share which would have left the players only with forty-three percent. After a few back-and-forths with the league and players union, they were able to agree on a fifty-fifty split between the owners and the players (The hockey lockout of 2012-2013, 2013). The owners of teams in the National Hockey League issue a lockout whenever they feel like the players are taking too much of the “money pie.” A lockout is more advantageous to the owners because they get to withhold the paychecks of the players until the league and players union come to an agreement. The owners can justify a lockout because of previous data that shows that there is a small residual effect of cancelled games on subsequent attendance. Attendance from the 2003-2004 season to the 2005-2006 rose by nearly half a million (The hockey lockout of 2012-2013, 2013). One problem that the owners face is the fact that they are in a monopsonistic market. Fans of their respective teams will pay a lot of money to go see their favorite players. This means that the owners can not simply find other less experienced players to fill their spot. Being in a monopsonistic market also means that they do not have any games in their inventory while there is a lockout/strike in process. Owners can set their demand of the revenue share high to start, but as the days go by they must lower their demands if they want to make a deal with the players union and avoid losing the season. In the case of the 2004-2005 season the league wanted cost certainty through issuing a salary cap. The league and players union never came to an agreement on what the cap should be so they ended up losing the entire season. However, this led to the players union agreeing to a salary cap in 2005-2006 to avoid another potential lockout (The hockey lockout of 2012-2013, 2013). The National Hockey League Players Association, otherwise known as the players union, was formed in 1957 by several players at the time and some lawyers.
The goal of the players union was to make sure that the players were paid and treated fairly. For the same reasons that the owners were at a disadvantage being in a monopsonistic market, the players union were at an advantage. They knew that the players had to stay if the league wanted their fans to be happy. In recent times players have gotten the better end of the deal so the players union was mainly attempting to mitigate the loss of player’s salaries (The hockey lockout of 2012-2013, …show more content…
2013). One of the objectives of the 2012 negotiations for the players union was to have more revenue sharing between hockey teams. According to Forbes, Toronto has the most valuable franchise, worth one billion, and the Saint Louis has the least valuable franchise, which is worth around one hundred and thirty million. They argued that the longevity of the league depended on sharing due to the rich-poor disparity. The Montreal Canadians, New York Rangers, and Toronto Maple Leafs made up over eighty percent of the leagues revenue back in 2012. At the same time, thirteen of the thirty teams had lost money. A reason for the rich-poor markets is due to the location of the teams. Teams such as the Montreal Canadians and the Toronto Maple Leafs are in a prime location since hockey is the most popular sport in Canada. While the market in Nashville suffers because it is warmer so less people had the opportunity to play the sport for themselves (Smith, 2012). The league ended up making it easier for teams such as the Nashville Predators by having less penalties for not making certain salary cap targets. In the 2012-2013 season both the league and players union could have benefitted from an immediate agreement. The league would have gotten the revenue from the season and the players union would have gotten acceptable salaries for the players. Their failure to come to an agreement immediately is known as the Hicks paradox. The Hicks paradox is solved by the back-and-forth negotiations from the league and players union. The spread becomes tighter when the season is on the line and owners risk losing their revenue while players risk losing their salaries. Whenever the league and player union’s concession curves meet at an equilibrium they will then settle the bargaining agreement. In the case of the 2012-2013 the two parties decided on a fifty-fifty split of the revenue (The hockey lockout of 2012-2013, 2013). At the end of negotiations, players ultimately lost money since their revenue share went down by seven percent.
This drop in salary affects every player differently. If the player is playing for the fame or just to play hockey for a living then the player will have a much flatter indifference curve. This means that the player will be more indifferent to wage changes than the average hockey player. If the hockey player’s main reason for playing is the money then they will have a much steeper indifference curve. This means that the player will react more to the wage changes than the average hockey player (Laing, 2011).
When a player has their salary reduced they tend to shirk or have less production during the season. Production typically refers to the number of goals and assists a player has while playing games during a season. Players tend to shirk when their salaries are reduced because they aren’t given incentive to try harder if they are being paid less. This is more so the case when the player is just in it for the money or has a steeper indifference curve (The hockey lockout of 2012-2013,
2013). Lockouts in hockey ultimately affect everyone involved and some are resolved faster than others. Sometimes the two parties can never come to an agreement and the season is lost, which happened in the 2004-2005 season. An immediate resolution to a lockout exists, but usually takes longer due to the Hicks paradox. The two parties usually go back and forth until they run the risk of losing the season. They then settle where the two concession curves meet which is at equilibrium. The players union has the upper hand in bargaining agreements due to monoponistic nature of the market in the National Hockey League. Players tend to shirk more when they have their salaries lowered due to their being no incentive for them to try harder. In the end lockouts end up favoring the owners because they received more of the revenue share.
Fortunately for the NHL, they had/ have the Chicago Blackhawks, the Franchise to bring hockey back. The Chicago Blackhawks started the 2012-2013 series with a 24 point streak, meaning that they went 24 games with at least 1 point gained in each game. As many people don’t pay attention until the season has hit 20 or so games, the Hawks, had come to break the lockout of that particular attention span causing more attention towards not only the NHL , but for the Blackhawks themselves. As fans joined the progressing bandwagon, the NHL was gratefully coming out of the “drought” with numourus sponsorships with companies, and gaining profit from their
Through channels of competitive balance, the leagues have put restrictions on free agency. The MLB does this by requiring players to be in the league for six years before declaring free agency, and the NFL puts a restriction on free agency for some players, done by allowing teams to match offers players have received from other teams. Determining a player’s MRP becomes an easier process than in the labor markets of other industries due to the availability of statistics of player’s and their contribution to their team’s success. The difficulty of this process lies in the determination of how revenues for a team are produced.
Business deals happen every day; Contracts expire, renew, and are negotiated without the public knowing for many large corporations and even sporting leagues. However, some contract changes cannot escape the media’s attention. The National Football League (NFL) is facing an expiration of its Collective Bargaining Agreement (CBA) (NFL Lockout Now One Month Old). Currently, the agreement has expired and NFL team owners have selfishly chosen to “lock” the players out. The term lockout means that the players are essentially not allowed to participate in any team activities or duties until the owner’s rescind this lockout. While many believe this is simply a battle between team owners and a player union, it can only appear to most as a selfish act of the NFL owners trying to rich, greedy men in expensive suits, and the only people they are hurting, are the fans of football.
When I think of what it means to be Canadian, one of the first things that come to mind is hockey. This is true for many Canadian’s as hockey was and is an integral piece of the formation of the national identity. However, when people think of playing hockey their attention usually turns to the men in the National Hockey League or other top men’s leagues and tournaments. Even so, Canada has come a long way from its beginnings, when women were not even considered persons under the law until 1929. While it has taken many decades for women to receive more recognition in the world of sport, today shows great improvements from the past. A key reason that women are not treated the same way as men in regards to hockey is due to how the game began;
Sports show how athletic a person is or how well they at doing a certain thing. If you're good at running then you could do track. But some sports may require a lot of skill, such as hockey. Hockey is a sport that you play on the ice with ice skates.You play 82 games plus playoffs, and multiple games per week To play hockey you need to know the basics, know the rules, and how difficult it can be.
People can brake a bone walking down the street, hockey is not any different. In youth
“The NHL (national hockey league) is not in the business of comforting people, they’re in the business of entertainment, and if fighting represents a way to differentiate themselves from an entertainment stand point, then fighting isn’t going anywhere” In the 2014-15 season 1,230 games were played, and out of those games 391 fights were in action. 29.91% of games had fights, 45 games had more than one fight. Taking fighting out of the game of hockey is too big of a risk. I think the fans will be disappointed and the entertainment level will go way down. In my paper I’m going to write about why fighting in hockey should stay and why people think it should also.
Poplawski, Wade, and Michael O'hara. 2014. The Feasibility of Potential NHL Markets under the New Collective Bargaining Agreement. Journal of Sports Economics. (1): 64-77.
Many people can easily picture this scene in their minds: the roaring crowds, the smell of easy- to-eat foods, and the thousands of people all dressed in the same colors. That’s a description of game day at a major college. College sports bring in a lot of money, yet their players don’t receive any money. Many people view this as something that needs to be changed while others believe that only professionals should be compensated. In the essays “Let Stars Get Paid” and “College Athletes Should Not Be Paid”, both authors give their opinions on whether or not college athletes should be paid. College athletes should not be paid because they already receive many benefits from being athletes.
Ticket prices can have a major impact on professional sports. The difference in ticket prices are what helps and hurts attendance at professional sporting events. When it comes to ticket prices there are many factors that can affect the price per ticket. In this review there are three main categories that are being focused on: (a) attendance, (b) pricing strategies and (c) ticket sales. Each category has different factors that affect ticket prices differently. In attendance, there was the economic crisis that started in late 2007. Strikes can happen at any time in professional sports. There is also the probability about the opposing team and its affect on ticket prices for those events. For pricing strategies, there are two main strategies that can be used for a professional sports team: (a) variable pricing and (b) dynamic pricing. The final factor discussed is the team’s decision process of setting ticket prices. There are four main areas that are being reviewed for ticket sales: (a) tactics used to increase ticket sales, (b) team owners’ role, (c) second hand ticket markets, and (d) price inelasticity. This review will show substantial evidence in each category that affects ticket prices for professional sports in America.
As population continually increases in the Southern states, the NHL is moving teams into large Southern cities. In an effort to increase profits and popularity, the NHL has increased the number of teams in the league and moved into Southern cities that have never had hockey teams before. The problem is that hockey is not as popular in the South as it is in the North. This expansion in the South has lead to huge monetary losses to Southern teams and very low attendance numbers. The NHL should not have expanded the league into Southern cities and should keep NHL teams farther North.
effect by the NBA to put a limit on beginning salaries, so some measures are
The argument that college athletes should be paid as been ongoing for many years. With the growing rise of college athletes’ popularity in the media, many people believe that college athletes should be paid, but they do not see the negative effects of the payments. The payments of college athletes could cause their price of enrollment to rise, forcing many students to transfer to other universities or not attend college at all. It may also cause fan ratings to drop because the relatability factor would disappear. Along with university budget cuts appearing, academic scholarships and athletic scholarships would disappear. College athletes should not be paid because college athletes are students and not professional players, the deep connection
The countering argument made to justify the pay disparity in women’s professional sports is the revenue generated by it male counter parts exceeds their total revenue validating why their wages were exceeding higher. This argument is getting outdated. Even though there may be some truth in that proposal the popularity in women’s sports continues to grow every single day. But the wages stay
When addressing the value of entertainment, there is without a doubt, that we as a society value entertainment highly. But there is no reason that these athletes, who are here to merely entertain us, get paid higher wages than those that save our lives and teach us such as medical doctors and teachers. I find it ridiculous that players make millions of dollars a year, and yet demand more. The entertainment that these athletes provide is solely entertainment; it is not essential to the function or productivity of society. If I were to become a professional football player I would not complain about my salary for many reasons. I am playing the sport that I love and getting paid for it. The minimum wage for football is well over $100,000 a year, as is for many professional sports. These reasons by their lonesome are enough to warrant that the salary professional athletes are paid is suffice.