Bloomberg News

NHL Owners Approve Collective Bargaining Deal as Players Wait

January 09, 2013

The National Hockey League’s Board of Governors approved a new collective bargaining agreement as the it prepares to begin a lockout-shortened season.

Players are due to vote on the proposal this week.

Details of the 10-year agreement and a specific start date of the season won’t be revealed until after the players vote.

NHL Commissioner Gary Bettman announced the approval during a press conference in New York today. He told players, fans and sponsors, “I’m sorry.”

“I know that an explanation or an apology will not erase the hard feelings that have built up over the past few months but I owe you an apology nevertheless,” he said.

The world’s top professional hockey league and its players’ union agreed on the contract’s framework Jan. 6, ending the shutdown that began Sept. 16 and forced the cancellation of 625 games, or 51 percent of the original schedule with each team playing 82 games.

During the lockout, many of the sport’s top players competed in European leagues, such as Russia’s Kontinental Hockey League.

The NHL will have a full playoff schedule, with 16 teams competing in four rounds of best-of-seven-game series for the Stanley Cup championship.

The NHL, which had $3.3 billion in revenue last season, gave up about $1 billion to get the 10-year deal that reduced the players’ share of the earnings to 50 percent, the New York Times reported without saying where it got the information.

Lockout History

The latest work stoppage was the second time in the last seven seasons that owners shut down the league following the expiration of a collective bargaining agreement.

The previous lockout resulted in the loss of the 2004-05 season, the only time an entire schedule of one of North America’s four major pro sports leagues was wiped out in a labor dispute. It also was the first year since 1919 that the Stanley Cup wasn’t awarded.

In the 1994-95 season, a lockout ended Jan. 11 and a 48- game schedule began on Jan. 20.

The most recent dispute centered on how players and owners would split revenue that grew 50 percent by last season from $2.2 billion in 2003-04. Under the previous agreement, players received 57 percent, or $1.9 billion, of league revenue.

The negotiations also involved length of player contracts and funding of the union’s pension plan.

The collective bargaining agreement runs through the 2021- 22 season, with both sides having the right to opt out after eight years, the Associated Press said.

Salary Jump

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

In comparison, the average National Basketball Association player makes $5.15 million, the highest among North America’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 lockout contributed to a 14 percent slump in Canada’s sport, performing art and heritage institution category in October to the lowest level since the last NHL disruption in 2005. The sector’s output of C$4.91 billion ($4.97 billion) was the lowest since May 2005 and down from C$5.72 billion a year earlier. Seven NHL teams are in Canada.

Peter Swinburn, the chief executive officer of Molson Coors Brewing Co. (TAP:US), the NHL’s official beer sponsor, told the Canadian Press in November that it may seek compensation from the league for games lost. The brewer said on Nov. 15 that its sales in Canada dropped by as much as 9 percent in the first four weeks of the fourth quarter compared with the same period a year earlier.

To contact the reporter on this story: Michael Buteau in Atlanta at mbuteau@bloomberg.net

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


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