A Look At The Nhl Lockout

2563 words - 10 pages

In January of 2003, fans of the NHL had reason to be optimistic. With the league’s active collective bargaining agreement between the player’s association (NHLPA) and the owners set to expire in September of 2004, NHLPA executive director Bob Goodenow and league commissioner Gary Bettman had a private meeting to open the negotiation process. This private meeting had information leaked to the public not long after with the general feeling of optimism abound. Over the next few months, parties and counsel from both sides would hold several closed door private meetings, though the public was not aware of progress or the general nature of the talks. With all but the most advanced fans ignorant to the bargaining process and the business side of hockey, there seemed no reason to be skeptical about the labor talks with the current deal’s expiry date a year away still. In October of 2003, though, NHL fans everywhere were shocked with the results made public from the first public meeting between the two sides: the players’ union and the league were miles apart on an agreement, and the eleven and a half months remaining in the current deal may not be long enough to strike an agreement. A work stoppage was imminent.The sports industry generates nearly $200B USD annually across the world. Of this, 14 percent is based on advertising, 13 percent relates to merchandise, 13 percent pertains to spectator spending, 12 percent is attributable to operating expenses, and 10 percent is tacked on to gambling, with the remainder spread out across many small areas and trickle down industries. With such a large aggregate product for the industry, the fifth largest player on a continent should consider themselves in good shape. At the time of the NHL lockout, the league was in no position to risk a work stoppage, though. Participating in the broad category of entertainment, the NHL is a relatively small player. However, if you limit the parameters of their market to the sports industry, the NHL could (debatably) be considered the fifth largest player but could be argued down to eighth or ninth, too. In Canada, where the NHL’s core operations emanate from and where six of its thirty teams call home, the NHL is by far the largest sports player. However in the crowded U.S. market, the NHL was struggling to maintain viewers, develop committed fan bases, fill arenas, and move merchandise for its unfamiliar game, all of which obviously hampered its ability to attract advertising revenues. Competing in the United States sport market, the NHL was a struggling middle tier player that really could not afford reputational or product damage.Having described the challenges facing the NHL in the sports industry, one wonders how the league could allow a work stoppage to take place; clearly the issues at hand must have been grave. At the aforementioned October 2003 meeting, each side tendered an initial offer that the opposite side found to be ludicrous. The...

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