‘Fehr’ing Another Lockout

*The following is a paper that I submitted for my Sports Agency class.

As a diehard fan of the National Hockey League (“NHL”), the thought of another lockout occurring is incredibly frightening.  Moreover, with former executive director of the Major League Baseball Players Association (“MLBPA”), Donald Fehr, recently taking over the reigns as executive director of the National Hockey League Players Association (“NHLPA”), I find myself downright anxious.[1]  After falling into a deep hole as a result of the lost 2004-05 season, in recent years, the NHL has slowly climbed its way back into the hearts of the everyday American-sports fans.  The NHL’s TV ratings have reached all-time highs,[2] a long-term TV broadcasting deal has been secured,[3] and the games have perhaps never been as close or as exciting.[4]  Another lockout would be absolutely devastating to the NHL’s progress.

I.  The NHL’s Current Collective Bargaining Agreement

The NHL’s current collective bargaining agreement is set to expire on Sept. 15, 2012, only a few months after the completion of the 2011-12 season.[5]

The agreement, which was formally reached between the NHL and NHLPA after several months of negotiations on July 22, 2010, was originally set to expire following the current season (2010-11), however, on June 22, 2010, the NHLPA exercised its right to extend the agreement for a seventh year.[6]

The NHL’s current collective bargaining agreement is a significant departure from the pre-lockout agreement.  Specifically, “the [current] agreement has three distinct changes” from the prior agreement: a hard salary cap, a revenue sharing system, and an immediate twenty-four percent rollback on all player salaries (which occurred only once at the time of the agreement).[7]  Unquestionably, the most considerable provision of the current collective bargaining agreement is the hard salary cap.  The hard salary cap proscribes a maximum and minimum dollar amount, dependent upon the league’s revenue, that each team can spend on its payroll ($39 million and $21.5 million, respectively, in 2005-6).[8]  As a consequence, for teams to remain within the maximum and minimum salary cap limits, individual player salaries can not exceed a particular amount, nor can they fall below a certain amount ($7.8 million and $450,000, respectively, in 2005-06).[9]

As the amount of money available for the players to earn was significantly reduced, the current collective bargaining agreement was, and still is by many, considered to be a significant loss for the NHLPA.  To put both the team and individual salary caps into perspective, sixteen teams spent over $39 million on their payrolls in 2003-04 (the highest being the Detroit Red Wings at $77,856,109)[10] and eighteen players made over $7.8 million (the highest being Peter Forsberg and Jaromir Jagr at $11 million).[11]  The amount of money left on the table resulted in a lot of blame placed on the then executive director of the NHLPA, Bob Goodenow.  As a result, on July 28, 2005, Goodenow was asked to step down as the NHLPA’s executive director, and he eventually resigned less than two weeks after the current collective bargaining agreement was reached.[12]

II.  The ‘Fehr” Factor

Enter, Donald Fehr.  After “go[ing] through three different executive directors and los[ing] several key management people since the . . . lockout,” the scrambling NHLPA reached out to Fehr, who had initially offered only limited advisement to the NHLPA, to be their new executive director and saving grace.[13] The players desperately sought Fehr because, as he demonstrated throughout his thirteen years as the executive director of the MLBPA, he certainly knows a thing or two about representing players.

Particularly, Fehr has earned a reputation for being a combative negotiator on behalf of his players.[14]  For example, in the 1980s, he secured $280 million in damages for the MLB players by legally challenging the MLB owners’ collusion.  Furthermore, perhaps more famously, he led the MLB players through a couple of work stoppages, including the 1994-95 strike, which resulted in the cancellation of the entire 1994 World Series.[15]

Essentially, Fehr’s experience “prove[s] that he’s [more than] willing to sit his players out,” and with the NHLPA in need of precisely that kind of a strong, combative leader, his hiring could serve as a “clear warning sign that there’s a difficult road ahead.”[16]

III.  What Lies Ahead

As the NHL’s current collective bargaining agreement does not expire for nearly a year-and-a-half, I can only speculate as to what lies ahead.  However, one thing is for certain, by having an executive director with “CBA combat experience” in their corner, the NHLPA is likely going to see more favorable results this time around.[17]  What will those results be?  Adrian Dater of the Denver Post reported last year that “there [were] whispers that, under Fehr, the players might try to abolish the current hard salary cap and get a soft-cap, luxury-tax, revenue-sharing style system [like] baseball has had for the last seven years.”[18]  This rumor makes sense, given that Fehr’s experience comes from the MLB, and he’s familiar with that type of system.

However, let’s not forget about the leader on the NHL’s side, Gary Bettman.  He’s also a feisty negotiator who has successful collective bargaining agreement experience under his belt.  In fact, given the results of the 2004-05 lockout, I think it’s safe to say that he has secured his position of NHL Commission for life.  If presented with the rumored proposal above, “Bettman would [likely] say ‘over [my] dead bod[y]’ to a giveback of the hard salary cap.”[19]

The early indications from Fehr are that he will not pursue a lockout.  When hired, he said that: “[w]e treat a work stoppage as a last resort.  It’s something you consider only when you perceive all other alternatives have failed.  Do I anticipate a stoppage?  The answer is no.”[20]  If an agreement can not be reached, perhaps both sides may even let the current collective bargaining agreement be grandfathered in for the 2012-13 season until a new agreement is reached.  Ultimately, given Fehr’s history, and knowing that the players will want to push back, until Sept. 15, 2012, I’ll personally be ‘Fehr’ing another lockout.