Bloomberg News

NHL Owners Lock Out Hockey Players After Contract Expires

September 16, 2012

The National Hockey League locked out its players after a new collective bargaining agreement couldn’t be reached before last night’s deadline.

It’s the second lockout in the past seven seasons and the third since the 1994-95 campaign, which was shortened to 48 games. In the previous lockout, the 2004-05 season was canceled and the Stanley Cup wasn’t awarded for the first time since 1919.

John Dellapina, a spokesman for the league, said in an e- mail last night that barring an unforeseen development the players would be locked out at midnight and that the NHL would not issue a statement announcing the decision.

NHL Commissioner Gary Bettman and Don Fehr, executive director of the NHL Players’ Association, were unable to come to an agreement after exchanging contract proposals during meetings in New York City over the past four days.

“We spoke today and determined that there was no point in convening a formal bargaining session in light of the fact that neither side is in a position to move off of its last proposal,” Bill Daly, the NHL’s deputy commissioner, said yesterday in a statement. “I’m sure we will keep in touch in the coming days and schedule meetings to the extent they might be useful or appropriate. We are sorry for where we are. Not what we hoped or expected.”

The players’ union was prepared to meet yesterday prior to the deadline, said Steve Fehr, special counsel to the NHLPA.

“The NHL said that it saw no purpose in having a formal meeting,” Fehr said in an e-mailed statement. “There have been and continue to be private, informal discussions between representatives of both sides.”

Scheduled Start

The season is scheduled to begin Oct. 11, and the sides are arguing over player compensation and revenue sharing.

On Sept. 12, owners offered players 47 percent of hockey- related revenue, with a loss of about $256 million in player salaries next year. The offer was one percentage point more than in their previous proposal, Fehr said. Under the latest deal, players received 57 percent.

The union’s Sept. 12 offer, according to Fehr, tied the players’ share to revenue growth, with the proportion decreasing as hockey-related revenue increased. Under the plan, should league revenue grow at the same rate as the past 10 years, the players’ share would decrease to 54.3 percent in the first year, then 52.5 percent, 52.0 percent and rise to 52.3 percent in the fourth year, Fehr said.

Other contentious issues include salary arbitration and the length of unrestricted free agency.

The league’s total revenue, buoyed by a 10-year, $2 billion television contract with Comcast Corp. (CMCSA:US)’s NBC, swelled to an estimated record $3.2 billion last season from $2.2 billion in 2006, according to the NHL. The league hasn’t said how much of this year’s revenue is profit.

Player Salaries

Before the start of the 2011-12 season, the average NHL player salary was $2.4 million, up from about $1.5 million when the agreement began at the start of the 2005-06 season.

In comparison, the average National Basketball Association player salary was $5.15 million, the highest among the U.S.’s four major sports leagues, for 2011-12. The average salary for a National Football League player was $1.9 million, the lowest of the four leagues, with Major League Baseball’s $3.3 million average salary ranking second behind the NBA.

The current collective bargaining agreement was reached after the 2004-05 season was wiped out.

To contact the reporters on this story: Mike Buteau in Atlanta at mbuteau@bloomberg.net; Eben Novy-Williams in New York at enovywilliam@bloomberg.net

To contact the editor responsible for this story: Michael Sillup at msillup@bloomberg.net


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