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NHL, NHLPA “Cautiously Optimistic” They’ll Avoid Work Stoppage in ’20
The Athletic published a story indicating that despite the option to re-open the league’s collective bargaining agreement in September, the NHL and NHLPA share a mutual desire to avoid a work stoppage in 2020. Author Pierre LeBron reasoned that there is no “(single) major issue that is so paramount that either side wants to go to war over (it).” While there’s “cautious optimism” the 2 sides will be able to work out an agreement without a lockout, speculation about potential labor strife continues to exist because of the league’s history (see: 3 work stoppages in the last 25 years).
Howie Long-Short: Harvey Schiller is a distinguished sports executive, having served as Executive Director of the United States Olympic Committee, Chief Executive Officer of YankeeNets, President of Turner Sports and President of the Atlanta Thrashers. I asked the former NHL club executive, considering the owners got the hard cap & larger percentage of gross revenues (from 43% to 50%) they sought during the last round of negotiations, is there anything left to negotiate for that would be worth locking the players out to get?
Harvey: I don’t think that there’s any benefit to locking the players out. You don’t want to hurt your fan base. You have some clubs just trying to survive (so, they need the revenue that the games bring), fan demographics are more fragmented than ever, and there are other sports trying to take the league’s market share; you don’t want to get crowded out while you’re sitting at home doing nothing.
There are also whispers of further expansion. You hear stories about Kansas City, Houston and maybe another club in the Toronto area. There’s a lot of upside for the NHL, so it’s not in their best interest to have a lockout. Unless there is a major issue that the public is not aware of, I would think that the owners would try to work something out.
What would motivate the players to pass on concessions the owners might offer to extend the deal and strike?
Harvey: That’s a difficult question to answer, but the addition of new franchises (and the massive expansion fees they generate) is among the reasons; the players see that money coming in and want their share.
I think that the players have gotten more sophisticated (see: record number of NCAA alumni) and they have access to more information with the rise of social media over the last 10 years; so, much of what the players desire on their end is a reflection of what’s happened in the other (Big 4 sports) leagues with regards to market cap sharing etc. The competitiveness of the Russian league, the European leagues and the growth of the sport itself has also drawn more of the players’ attention to the game’s financials.
Some of the league’s biggest stars (see: Tavares, McDavid, Stamkos) signed front-loaded contracts that have been touted as “lock-out proof”. Are the players prepared financially to withstand a lockout?
Harvey: The concept of “lockout-proof” contracts, that’s all agent driven; it’s a good opportunity for the top players to extract more from the teams up front. The problem of course is the drastic difference in salaries between the best players (Connor McDavid will make $19 million this season as the league’s highest paid player) and the average or low-salary players ($700,000/season is the league minimum). The stars may have contracts that are “lockout-proof”, but most players don’t and the players’ association has to represent the needs and wishes of every player; they can’t be solely representative of the league’s elite players.
You mentioned the Russian League (KHL) and some of the European Leagues. Wouldn’t their existence give the players leverage in negotiations?
Harvey: There’s a big gap between the NHL and every other professional hockey league in terms of player compensation. NHL teams have $79.5 million to spend in 2018-2019, KHL teams will have just over $12 million to spend for the 2019-2020 season; it’s not a viable alternative yet, but as those franchises become more valuable it’ll likely become one.
Fan Marino U.S. Olympic hockey has given sports fans thrills with both amateur/collegiate (see: ’60, ’80) and NHL players (see: T.J. Oshie), but there’s no question it’s more fun to compete with Canada, Czech Republic, Finland, Russia and Sweden (Big 6) when we send the professionals. The players want to play, but ownership understandably prefers their high price investments not take the additional (2 weeks in middle of season) risk.
The Athletic said that gaining approval to participate in the Olympics is a “must” for the players this time around. Do you agree with that sentiment?
Harvey: There’s strong interest on the part of Russian players to participate for Russia – and maybe with players from a couple of other countries – but, it isn’t the North American players clamoring to play. The players now participate in the World Championships, which gives them another venue to represent their country. I’m not sure that the whole Olympic thing will be a sticking point in the negotiations.
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While we won’t be publishing “hot takes” on LeBron’s relative greatness to Jordan, we will be offering up the most relevant sports related business news, in easily digestible bites, with commentary from both the sports money and sports fanatic perspectives.
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Howie Long-Short and Fan Marino will be providing their expert opinions on each story. They have slightly different areas of expertise. Fan Marino is a firm believer that the SEC is the premier football conference. Howie Long-Short knows it as the Securities & Exchange Commission. Fan Marino lives and dies with the college selection of 5 star, blue chip recruits. Howie Long-Short spends his days analyzing blue chip stocks. Howie Long-Short knows that Black Monday occurred on October 19th, 1987. Fan Marino swears it happens every January after Week 17. You get the point.