What the NHL Lockout Reveals About Capital and Labor
blogs.hbr.org
blogs.hbr.org
Professional football's labor economics are radically different from other sports. They have virtually no development costs associated with talent - development of talent is largely done by universities (many tax supported).
In addition the market value of players is based upon barter - trades typically don't involve transfer fees, they involve other players sometimes and usually involve draft picks.
Draft picks are interesting because high round picks are associated with a greater out of pocket expense for the team receiving them should they choose to exercise the pick - i.e. the signing bonus and salary of the first overall pick are substantial outlays, whereas a second round pick will involve less money.
The NHL has a similar system, though. They draw on NCAA and international minor league talent, neither of which are paid for by the league.
The NBA is similar, though I would argue that the out of high school and "one and done" draft rules have hurt the league much more than anything else.
Not at all. Most NHL talent development is done through an extensive farm system affiliated with and financially supported by their NHL teams, similar in some but not all respects to the MLB.
Prospects pursuing the NCAA route vs junior leagues and the AHL are widely regarded as inferior, facing significantly less stiff competition. A typical player (ie, more than 50% of current players) would grow up advancing through various levels of midget hockey, forgo college to play in one of the CHL leagues (QMJHL, WHL, OHL), from which they would be drafted by an NHL team and assigned to their AHL or ECHL affiliate. This is true even of international players, who are often sent from their home countries to stay with Canadian host families while playing in the Canadian junior leagues.
Making the NHL out of NCAA is the exception, rather than the rule. The system is much, much less subsidized by tax payer funded schooling than the NFL's.
Very few of them go the NCAA route. Those that do go that route can't be paid in any way by NHL teams, so these players are just like their NFL brethren with the exception that NFL players are a known commodity coming out of the NCAA. NHL teams picked their players before they entered college, so it's a little bit of a crap-shoot whether or not they'll turn into an NHL player.
Those who don't go the NCAA route either play for the CHL or in Europe. When they turn 18, if they don't make their respective NHL teams, they typically join a teams AHL affiliate or maybe even their ECHL affiliate. Both of those lower tiers are supported by the NHL clubs.
The resources for developing football players probably exceed those of any other sport in the world, e.g. Nick Saban earns a salary comparable to managers at top footballing clubs. And the NFL pays for none of it.
It ignores many of the detailed issues and instead makes it entirely about overall revenue using unsourced and likely made up numbers. Missing was any reference to revenue sharing and fact that some teams are turning large profits while others are losing money year after year, but the league insists on keeping teams in unsuccessful locations. The Phoenix Coyotes are a great example of this full of bad business decisions from the start, and only got worse when Jim Balsillie got involved. This shows little evidence of a successful long term plan.
I am not a fan on unions in general, but I see this as a typical issue with American business. Bad decisions are made and instead of management taking responsibility, the blame is simply put onto labour costs, wages are pushed down and the same mistakes happen again.
At minimum it should have discussed what the issues both parties disagreed with. For starters, it wasn't that the owners "still think they deserve to make an attractive profit on this game".
Only once the NHLPA took that step did the league seem to start negotiating in earnest, having previously pursued a strategy they hoped would break the union as it did during the previous lockout.
It's essentially the same tactic that ended the NBA lockout.
If you look back to the previous two lockouts, you'll see that the NHLPA was bullied (or felt like it) and wanted that to end. The hiring of Donald Fehr, a known hard liner on the side of labor with a history of labor disputes. When Fehr was hired, there was going to be a lockout. Almost no negotiation was done prior to the actual lockout which is par for the course for the NHL but something new for the NHLPA. Fehr's strategy was to make lockouts in the future not seem like such an painless move for the NHL and he did so.
As the process moved from forward after the lockout, it was the NHL negotiating with itself. All of the proposals the NHLPA suggested were only small ideas of what could eventually be in the final agreement. Each successive comprehensive NHL proposal incorporated some of the ideas the NHLPA had suggested. It wasn't until Bettman announced that there would need to be at least 48 games in the season for it not to be cancelled and that the deadline for that amount of games would be Jan. 19. Only when that deadline approached did we see the NHLPA actually counter an NHL proposal with their own, comprehensive proposal. That's when the horse trading began and the deal was done relatively quickly after that point.
Donald Fehr's strategy all along was to drag his feet for as long as possible to not only get the best deal for the NHLPA but to, more importantly, frustrate the NHL and show them that a lockout is not an easy button for labor disputes.
The owners started with a ridiculous offer and maintained the same ridiculous offer through the negotiations. In the end, the players union was forced to fold because the players did not have the same financial resources as the owners did to weather a lost season. The players union was negotiating against itself the entire time; the owners got everything they wanted.
Donald Fehr's strategy all along was to drag his feet for as long as possible to not only get the best deal for the NHLPA but to, more importantly, frustrate the NHL and show them that a lockout is not an easy button for labor disputes.
If that was his goal, he failed, miserably. It also ignores the previous two NHL lockouts, which did not turn out so badly for the players union.
It's a fault of management, not a fault of the players who have given up ground in each lockout. The leafs are a billion dollar team, the coyotes are worth almost nothing. Cutting player costs by a few million per year wont change this dynamic.
You have to wonder exactly who is benefiting from Players Associations?
Players Associations differ from most other unions because of artificial constructs like free agency, the draft, and the salary cap which are ultimately beneficial to both the players and the leagues. Beneficial, but illegal in the US. PAs collectively bargain with the leagues and give their right to sue for these things away in order to secure long term benefits agreements with sports leagues.
Disbanding the union in order to file an antitrust suit is the nuclear option, and the owners know it.
European club soccer is much closer to this model and it both creates really strong competition at the top end and a large spread between the top and bottom teams in a league. It is also very difficult to move from the bottom to the top without a huge amount of outside revenue.
Pro sports leagues in North America tend to operate as a monopoly, allowed because they have a union to balance it out. That's why both the NHL and NBA settled their lockouts right before the unions were able able to de-certify (NHL) or file an anti-trust (after decertifying in the NBA) lawsuit.
No, it doesn't. The disparity in athlete talent and revenues between teams which make the Champions League and those which don't is greater than the disparity between say, the NFL and high school football. For the past decade, the winning teams of the Champions League and its feeder legs have all been one of the top 3 highest-spending teams in their respective leagues. There's simply no contest between, say, Manchester United and some random Irish club. In contrast, most of the professional American leagues reduce the talent disparity enough that either team could realistically win a match.
I think sports leagues could do with a little less privatization and a little more Green Bay.
http://www.mirror.co.uk/sport/football/news/premier-league-c...