About seven years ago, National Hockey League Commissioner Gary Bettman
realized that the 1995 collective bargaining agreement between his
ownership group and the players wasn’t working. For five years, the NHL owners mantra has been: If we can get through 2004, we
will be fine because that’s when we will get a new economic system.
The owners stood their ground and shut down the industry and waited out the players, which was unprecedented in the past century of North American major league sports. The owners got what they think they wanted: A salary cap that will assure cost certainty. The players will still be well compensated but the days of eight, nine and ten million annual contract deals are gone.
No matter how much he was derided, NHL Commissioner Gary Bettman never wavered from what he set out to do years ago: change the NHL’s economic system.
The details of the NHL’s new collective bargaining agreement will soon be available, once both sides ratify the documents. But make no mistake, the owners got what they wanted: cost certainty. Players will still make a lot of money, but the days of owners handing out contracts to players with yearly salaries of $10 million are over. The NHL now has a salary cap that will reduce player salaries from about 70 cents on every dollar taken in to about 54 cents.
The league, which has seen three franchises declare bankruptcy since 1995, can now re-launch the NHL brand.
The NHL lockout has had an effect on other sports. NBA Commissioner David Stern, who at some points castigated the National Hockey League Players’ Association’s opposition to a salary cap, had a ready example for National Basketball Players Association Executive Director Billy Hunter and his players. If Hunter and the players wanted to test Stern and his owners in the recently concluded collective bargaining talks, Stern would simply lockout the players, reduce his offer and let the players sit.
In the end, Hunter took the NBA’s offer and backtracked on a number of issues, including contract length and the imposition of a minimum age. Money trumped all other issues.
Major League Baseball, with its collective bargaining agreement ending in 2006, no doubt watched Bettman in action. Even though baseball is generating more revenue than ever, an attempt will be made in the winter of 2006 to cut player costs. MLB narrowly escaped a job action in 2002 but the NHL’s owners stance may make it easier for baseball owners to take on Donald Fehr and the baseball players.
There may be some ripple effect on the NFL, although the fight over money is not necessarily between the players and owners in Paul Tagliabue’s league. The owners and players have pretty much agreed how the pie should be split, but the owners haven’t decided how they should split up player expenses among the ownership group. The NFL fight is between high revenue owners like Dan Snyder and lower end teams like Minnesota, New Orleans and Oakland.
Bettman was much maligned during the lockout. But he stuck to his guns and got the owners what he set out to get back in 1999, 2000 and 2001 when he saw the league’s collective bargaining agreement ratified in 1995 didn’t work out for his group. The NHL now may be on such solid financial footing that financiers will be snapping up money-losing franchises, which would grow the business.
It’s a big win for Bettman and the NHL’s future.
It is ironic that at roughly the same time the International Olympic Committee voted to expel baseball from its London Olympics in 2012, Major League Baseball was finalizing plans for the inaugural World Baseball Classic, which will take place next March.
The IOC’s international sports experts have told the world that baseball just doesn’t cut it. MLB, in concert with national baseball federations around the world, disagrees with the IOC and will stage the sport’s biggest international event ever.
MLB and the various national baseball federations worldwide don’t need the Olympics, the IOC or its president, Jacques Rogge. Baseball is better off staging its own event free of interference from Rogge, who has criticized MLB’s drug policy and would have forced Olympic baseball to play under IOC mandates.
Baseball is far better off controlling its global event than being stuck as just another Olympic sport fighting for television time. Baseball has never been an Olympic signature sport like figure skating or gymnastics.
The World Baseball Classic will be controlled by baseball people, which means baseball can set up international media coverage for its product and control TV, radio, and Internet rights. Baseball, not the IOC, is in charge of picking the countries that will host games. Baseball can also market its stars in every country competing in its World Cup and also be in charge of marketing its merchandise.
The notion that baseball needs to be part of the Olympics is wrong. The NBA’s international growth was accelerated by the various Dream Teams (including the all-college players team in 1984 that featured Michael Jordan).
But the sports marketplace is different than it was in 1984. The NBA had just signed a new collective bargaining agreement with its players in 1983 that included a salary cap, which allowed the league to keep its 23 franchises.
The league put together an All-Star squad that included the NBA’s biggest names and marketed the “U.S. Dream Team.” The U.S. was part basketball, part celebrity, part entertainment. Baseball cannot sell just a U.S. team internationally because so many of its best players come from other countries.
MLB is reaching out internationally with the hope it can capture a share of the European and African marketplace. MLB has established a foothold in South America, Australia and Asia. The whole goal of this endeavor is to open new markets and generate more interest in the sport.
MLB and baseball federations worldwide have the ways and means to put on a successful tournament next March and in 2009.
Neither the U.S. nor baseball is a big loser in the IOC decision to drop baseball and softball as Olympic sports following the 2008 Beijing Games.
In fact, if anything, MLB comes out ahead because it does not need to deal with Rogge or his IOC delegates.