NHL Cancels Winter Classic, Regular Season Probably Not Far Behind

The NHL announced on Friday the cancellation of the Winter Classic.  As the Classic goes, so goes the season.  Go ahead and make other plans, get your ticket refunds, trade in your Caps merchandise for Wizards, because there is not going to be a hockey season.

This may seem like an overreaction, but I’ve said all along that if the Classic were to be cancelled, the season would not be far behind.

The NHL has lost its biggest event of the season.  According to ESPN, the Classic had 3.5 million viewers last year.  Every game of the Stanley Cup finals averaged about 3 million viewers.  The Classis is the signature event, the one day every year when hockey is relevant.  And now, it’s gone.

Yes, it is only the beginning of November.  There is plenty of time to save the season, but it does not matter. Even if the NHL and NHLPA came to an agreement tomorrow, the Classic could not be brought back.  Deputy commissioner Bill Daly told reporters as much.

Rumors of the cancellation had been circulating for over a week.  The reason why the NHL waited until Friday was because when the announcement was made, it was final.  The event takes months of planning and preparing.  An outdoor rink does not just appear over night and an event of this magnitude take time to pull off.

With the Classic gone, both sides will struggle to come to an equitable deal.  The players have lost all of their leverage.  The only thing they really had to threaten the owners with was the Classic.

The lockout began with each side feeling out the other.  How long would the league be willing to let this drag out?  Perhaps if the players could hold out until they could threaten the league’s cash cow, the owners would be willing to offer a better deal.  Now  the NHL has lost its biggest, most profitable, most important event of the year.  The players have overplayed their hand, and the league is going to make them pay for it.

Two weeks ago, the NHL offered the players a 50/50 deal.  The NHLPA responded with three counter proposals that gave them more than what the NHL was offering and the NHL quickly rejected those proposals.  Why would the NHL now give the players a better deal?  The owners would never have locked the players out if the regular season were that important to them.  They will risk this season to get the upper hand in the negotiations.

The owners have come to a point where they can force a better deal for themselves on the players.  Before, the goal for the NHL was to come to an equitable agreement in order to save the Classic and the regular season.  Now, the goal is to get the best deal they can possibly force from the players.

Think about it this way, in a hostage negotiation, what happens when there are no more hostages to exchange?  That’s when the SWAT team goes in.  The players have nothing left to negotiate with.

The NHLPA turned their noses at the NHL’s proposal two weeks ago.  They will not simply cave in now, but they also cannot hold out as long as the owners can.  The longer this drags out, the more desperate they will become.  When this is over, the players will look back at the NHL’s last proposal and wish they had accepted it because the offers are only going to get worse from here on out.

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NHL Cancels More Games, Season Suddenly in Jeopardy

As the NHL locked its doors for the second time in eight years, the feeling among most experts was not whether we would have hockey, but when.  This might be the fourth work stoppage in 20 years, but with the lost 2004-05 season still fresh in everyone’s minds, both sides knew they had to come to a quick agreement for the good of the game.  Right?

 

Apparently not.  The NHL announced today that it has cancelled all regular season games through November 30^th.  There is also some speculation that the Winter Classic could be cancelled as early as Monday.  For the first time during the lockout, the season seems to be in real jeopardy.

 

From the beginning, this lockout seemed to be a gross miscalculation by the NHL.  Granted, players rarely “win” in these scenarios, but the NHLPA had more leverage than commissioner Gary Bettman initially acknowledged.

 

The players received escrow payments in October worth 8% of last season’s salary.  Many lockouts end quickly as the sting of the first missed paycheck begins to sink in for the players.  That was not going to happen this year.  Also, unlike in 2004, the NHL now has the Winter Classic to protect.  If the players could hold out until November, then they could use the Winter Classic as a major bargaining chip against the league.

 

Last week, the NHL offered a new proposal to the NHLPA which they posted in full on their website.  It offered the players a 50/50 revenue split and a chance for a full 82 game season.  The NHLPA responded with three counter proposals that the league immediately rejected.

 

While the NHL could have considered the proposals more thoroughly, the players used some pretty creative math that really did not come close to what the owners were asking.  Now the NHLPA has miscalculated.  They may have approached last week’s talks with an eye still on the Winter Classic, but the offer was about as good as it was going to get.  That’s not to say the players could not have negotiated further, but to offer three proposals that were way off the mark cost them an 82-game season.

 

If the league does cancel the Winter Classic as it is threatening, it is not as if the players could come back and accept the previous offer.  It is off the table.  Once the Winter Classic is cancelled, the players lose all of their leverage.  The owners will have no incentive to save the season and the players will end up with a much worse deal than the one the owners offered last week.

 

Of course, the Winter Classic has not yet been cancelled and all the speculation around its cancellation is just that, speculation.  The NHL could be spreading the rumor in an attempt to bring the players back to the table, but the players cannot afford to call their bluff.  There is still time for a deal to get done to save the season.  Now that negotiations have broken down and both sides engage in finger pointing, the outlook suddenly looks very bleak.

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NHL Locks Out Players for Second Time in Eight Years

At midnight Sunday morning, the former NHL CBA expired and at 12:01 the players were officially locked out.  The NHL and the NHLPA were unable to reach an agreement on a new CBA and are now locked in an all too familiar labor dispute.  The last lockout happened in 2004 and resulted in the loss of the entire 2004-05 season.  Are we headed for another year without hockey?

While there are several issues that separate the two sides, the main dispute is over money (what else?).  Under the last agreement the player’s received 57% of generated revenue.  After watching the NFL and NBA lower the player revenue in their disputes last year, the NHL owners now look to lower this number considerably.  Most of the league’s offers made to the NHLPA would reduce the player’s share to about 47%.  While it may not be unreasonable for the owners to expect the players to receive a percentage comparable to other leagues, the players see a dangerous precedent being set by Commissioner Gary Bettman.

This is now the second lockout in eight years and the third in 18, all under Bettman.  Eight years ago, the NHL demanded a salary cap be a part of the new CBA.  The players refused, but both the league and the owners felt so strongly a salary cap was needed, they were willing to lock the players out for a full season.  The players eventually caved and gave up major concessions including a salary cap.  Just eight years later, the players find themselves locked out again.  This time, however, they have the memory of the concessions made on the last CBA.  Why did they give up so much if only to be locked out again during the very next negotiation?  Katie Strang of ESPN reports that the resolve of the NHLPA and the players is much stronger than it was eight years ago, and it’s no surprise; should the players cave again it would tell Bettman that locking the players out will always give him the upper hand.

There’s also a feeling among the players that they are being forced to fix the problems the owners created.  While the league complains about players getting paid too much, teams continue to offer massive contracts.  The biggest free agent splash in the offseason came when Zach Parise and Ryan Suter signed contracts for 13 years with the Minnesota Wild worth $96 million each.  These contracts would have once been shocking, now they seem common place.  If the teams think the players are paid too much or signed for too long, then they should not be offering those kinds of deals.

Hopefully Bettman is aware of the player’s sentiments and does not underestimate their resolve or this could be a lengthy lockout.  In situations such as this, there seems to be “unofficial” deadlines that bring both sides back to the negotiating table at various times during the dispute.  The first such deadline will be towards the end of September when the start of the regular season is put in jeopardy.  Some sort of dialog will begin, be it formal or informal.  If both sides recognize the other is serious, a real negotiation can take place.  If not, then the dispute will stretch into the regular season.

Usually, the first games missed also bring the two sides together when players start to miss their pay checks and owners start to refund ticket sales.  This year, however, the players will receive escrow payments in October equal to 8% of their 2011-2012 salaries.  Players will not be feeling the same pinch they usually feel in the early season and once the calendar hits November, the players can really make the owners sweat.  Why?  Because at that point the lockout will be putting the Winter Classic in jeopardy.  This season’s Classic could perhaps be the biggest and most successful as it features two of the most storied franchises in Detroit and Toronto playing at the Big House in Michigan.  The Winter Classic is one of the largest, most important events of the NHL season; something the league will not want to lose.

If a deal does not get done before the regular season, I do not think either side will get serious until late November/early December.  The players know the owners will be more likely to make a deal in November and with escrow payments and a stronger resolve, the players will not give in.  The question is what happens should the unthinkable happen and the Winter Classic is cancelled.  This is the first labor dispute where the Winter Classic will be an issue.  Just as the players do not want to always cave when locked out, the owners may not want to set a precedent of caving when the Winter Classic is threatened.  If it reaches that point, kiss the season goodbye.  The owners will drag it out to force concessions from the players and it will mean the loss of yet another NHL season.

While both sides try to calculate the resolve of the other, they both may have seriously miscalculated the resolve of the fans.  Let’s face it, hockey is not a popular sport in America.  It is not nearly as popular as the NFL, MLB, or NBA and yet it seemingly faces the most labor disputes.  In 2004, there was a sense among the fans that the lockout would ultimately help the sport and would mean a stronger league and lower ticket prices.  Instead, ticket prices have risen on average 39% since 2005 and the league is locked in its third labor dispute in 18 years.  At some point, you are asking too much.  Don’t expect them to understand why you could not get a satisfactory deal eight years ago and don’t expect them to feel sympathy for the millionaires who get paid to play hockey.

The NHL cannot continue to abuse a beleaguered fan base because at some point, they won’t come back.  Should this lockout last a full season, it will do irreparable damage to the league.  The NHL will not emerge in a stronger financial position, but will lose every casual fan.  Only the most die-hard fans will remain and the NHL will have cemented its position as a secondary sports league.