NHL Lockout 2012: 5 Reasons Lockout Will End Before Winter Classic
After a summer of swirling rumors, NHL fans had their worst fears confirmed—a 2012 NHL lockout. However, there are numerous factors suggesting that an NHL season will almost certainly resume before the 2012 Winter Classic.
The main issue for the current lockout circulates around the 57 percent of NHL revenue that the players currently make. NHL Commissioner, Gary Bettman, wants this number to drop to 46 percent, which would increase the owners' share of the revenue from 43 percent to 54 percent.
Bettman is hopping on the lockout bandwagon after seeing both the NBA and the NFL recently go into lockouts.
“In two other leagues, the N.B.A. and the N.F.L., their players have recognized that in these economic times, there is a need to retrench,” Bettman said (via the New York Times).
The players, represented by the NHLPA and its leader Donald Fehr, do not feel that they should have to endure another pay cut.
“From the players’ standpoint, it’s the owners’ insistence that after seven years of record revenues and massive concessions the last time, they want the players to take another significant, absolute rollback in their compensation,” Fehr said (via the New York Times).
For the third lockout in 20 years, all of which have transpired during Bettman’s time as commissioner, the players and the owners will push and pull to come to terms. However, there is more on the table during this lockout than either of the previous two—the NHL cannot afford to hold out.
Here are five reasons why the 2012-13 season will resume before the start of the 2013 Winter Classic.
Because "The Great One" Says so
According to the National Post, NHL Hall of Famer, Wayne Gretzky, does not think the lockout will kill the 2012-13 season and whatever No. 99 says, goes:
“I believe in my heart, maybe because I’m such a big hockey fan, that they will be playing by Jan. 1. I think the hard part … was the last negotiations [in 2005] when players agreed to a salary cap. Now that there is a salary cap in place and revenue sharing, I ultimately think a deal will get done here and [they will be] playing hockey this year.”
Gretzky went on to speak about how he would have felt if he had to take a whole year off during his career:
“There’s no way I could have taken a year off because there is no way I would have known what to do in the middle of my career taking a year off," he said (via the National Post). “That was my life.”
Gretzky personally believes the season will resume before the Winter Classic:
“They’re smart men and very intelligent,” Gretzky said about the heads of both groups, NHL commissioner Gary Bettman and NHLPA executive director Donald Fehr (via the National Post). “It’s just a matter of getting a deal done.”
This Is Not the 2004 Lockout
The 2004 lockout was a vicious battle between the players and the owners with many difficult issues at its core. The animosity that existed in 2004 is absent from the current lockout and it should be a lot easier for the two sides to come to an understanding.
The main issue of ’04, a salary cap:
In 2004, Bettman and the owners demanded there be a $35 million salary cap and “cost certainty,” which would give the players a 50 percent share of league revenue, according to Sports Illustrated.
Bob Goodenow, the leader of the NHLPA at the time, was unwilling to give in to Bettman’s salary cap request and had warned players to prepare for the possibility of a two-season lockout. Goodenow felt that once the salary cap was officially put into place, owners would continue to bully the players into giving up more and more of their pay—hence, the 2012 lockout.
"The bottom line is, if they want a hard (salary) cap, we'll sit out for the rest of our lives,” said Bryan McCabe, former players’ union representative and defenseman for the Toronto Maple Leafs, in 2004 (via NHL.com).
As of right now, any owners who speak publicly about the lockout can be fined by the NHL. Such action has already been taken against Detroit Red Wings Senior Vice President Jim Devellano.
"The owners can basically be viewed as the ranch, and the players, and me included, are the cattle," said Devellano (via TSN). "The owners own the ranch and allow the players to eat there. That's the way it's always been and that the way it will be forever. And the owners simply aren't going to let a union push them around. It's not going to happen."
TSN reports that Devellano’s fine was in the range of $250,000.
So far, this is the only major public statement made by an owner; nothing in comparison to some of 2004’s remarks.
During the 2004 lockout, former Philadelphia Flyers owner, Ed Snider, had much harsher words to say, specifically toward NHLPA leader Bob Goodenow:
“I might jump over the table and choke him to death. That would not be good. That’s why they keep me out of the negotiations,” said Snider (via the Philadelphia Inquirer).
Snider was not reprimanded for his comments about Goodenow.
Currently, there is still respect between the two sides, despite their differing opinions—this is subject to change as the lockout drags on.
Numbers Argument due to lack of transparency:
According to Sports Illustrated, the NHL released a report during the 2004 lockout by former U.S. Securities and Exchange Commissioner, Arthur Levitt, saying that the players received 71 percent of the league’s $1.9 billion revenue during the 2002-03 season.
This was disputed by Goodenow, who countered by issuing his own report stating that there was $100 million of unreported hockey revenue that had been kept by four teams.
There was much less transparency in the league’s funds in 2004 than there is now. Such accusations would be much harder to pull off in the current lockout.
More Money on the Table
According to Sports Illustrated, the NHL recently amassed record revenues of $3.3 billion—a 33 percent increase from 2005-06. This is not surprising, considering the NHL signed a ten-year deal in April of 2011 with NBC. This brought more hockey games to more fans than ever before. The deal itself was worth approximately $2 billion.
If the NHL does not have a 2012-2013 season, the league will still receive its money from NBC. The catch is that one season will be added to the contract between the league and NBC and the money paid during the locked-out season will cover the payments for the television rights to that season.
Apart from TV rights, the league will miss out on revenue from ticket sales, advertising, and events like the All-Star game and the Winter Classic.
According to the Ottawa Citizen, the NHL has already lost $100 million in revenue from canceling the preseason—marking the first blow to the league’s wallet.
Consistent Scheduling of Formal Talks
Donald Fehr of the NHLPA and Gary Bettman have already met several times to discuss some peripheral issues, as well as financial requests. Though there is no sign of either side budging, the fact that the two sides are even willing to meet, and so frequently, is a good sign.
In 2004, no formal talks took place in October and November. Today’s effort between both sides did not exist back then.
No progress was made after today’s discussions and the two sides have even shown signs of tension:
"Unless they [NHLPA] show some willingness to compromise, I don't know how we get this done,” said NHL deputy commissioner Bill Daly (via CBS.com).
The NHLPA replied saying that by “compromise,” the league really means, “they didn't give us what we want yet.”
The good news:
Tweets from Tom Gulitti stating that the two sides are likely to speak again tomorrow and have considered bringing a federal mediator to future discussions.
NHL and NHLPA have discussed idea of bringing in a federal mediator, but it doesn't sound like that's going to happen yet.— Tom Gulitti (@TGfireandice) October 2, 2012
Don Fehr said he would probably speak with Gary Bettman again later today or tomorrow.— Tom Gulitti (@TGfireandice) October 2, 2012
As long as the two sides are talking, there is still hope for a season.
The Winter Classic
The Winter Classic is an NHL gold mine that many hope will be the break the 2012 NHL lockout. It would be hard for Bettman and the team owners to cancel the event and watch all of that money disappear.
According to the New York Times, the NHL makes $300 million in television rights alone from the Winter Classic ($200 million comes from the league’s deal with NBC and $100 million from CBC in Canada).
HBO cameras are also rolling in games leading up to the Winter Classic, as the network conducts its annual documentary series 24/7. The program gives an on-the-ice and off-the-ice look at the teams involved in the Winter Classic. Needless to say, there will not be an HBO documentary series for the NHL to cash in on if there is no Winter Classic.
That, in accordance with ticket sales for over 115,000 seats in Michigan Stadium, merchandising, and advertising, amasses to a tremendous amount of money that the league will be missing out on if the NHL cancels the Winter Classic.