Tuesday, August 28, 2012

The NHL Lockout, Part I


I am a sports fan. I love baseball. I love basketball. I especially love American football. I can even get into a women's soccer game every now and again. But hockey?

I will admit it - though it is not safe to do so up here in Canada. I am not a hockey fan.  Before I go into hiding, I'll you know why. Two words: Labor disputes.

I stopped watching hockey in 1994 when the lockout happened. I wasn't the only one. It took the league several years to return to the same fanbase as the season before. Not quite as long as it took Russian GDP to return to its pre-Soviet collapse levels, but I am sure that it felt that long and it was just as cold. Okay, that was a terrible joke.

I started watching again in 2003 because, why not? The basketball season was long and there really is not much to do mid-season. Fantasy sports had not been invented - or really, widely played - at that time, so us sports fans had to find something to do. What happened, next? Another NHL Lockout.

At this pace, I will begin watching hockey again by next year or the year after. The timing works out well. I am in Toronto now. I know how people feel about their hockey up here. I am sure that apathy towards the sport would be treated with more hostility than rooting for the wrong team. But you know what is on the brink of happening again? Another lockout.
Last year half the basketball season was canceled because of a lockout. It was the year after my Dallas Mavericks won the NBA championship. I should have been excited to see if they were going to repeat. But it was just too hard to get back into. I watched a couple of games, but it just didn't feel the same anymore. The season was collapsed too thin. Everyone just looked too tired all the time. Miami and Oklahoma City played well because the young bounce back faster than the old; an unfair advantage. It wasn't the same.

The NHL, NBA, NFL, MLB, and all of their respective player unions are all fighting about the same thing. How to split revenue between players and their owners - especially in the wake of the financial recession. The owners are hurting. Things have become unsustainable.

When the economy was roaring, the owners were willing to take a loss for their teams - literally. By combining the sports team into an umbrella corporation with a thriving (usually parent) company, they could write off the losses of the sports franchise to protect the profits of the growing business from taxes. What happens when you no longer have a growing business that needs tax protection? Well, it's not such a good deal anymore to be an owner. The money losing corporation plus the money losing sports franchise is bad news all around. Sports teams are now being asked to break even or even turn a profit.

 Hockey team owners were sponsoring the sport out of pride (and tax protection) more so than other professional sports, which lead to more bankruptcies in other sports. In other words, more NHL owners were losing more money on their teams than their NBA or NFL counterparts. To add insult to injury, the NHL's revenues are significantly less than the other three major professional sports. And to rub the salt into the wound a little bit more, the split between players and the owners were the most generous out of all four professional sports. Mind you, none of this is the players' fault. They have played well and the sport has been increasing in popularity. They still make significantly less money than other professional athletes. This is why we are now at a lockout position with the NHL.

Note about 30 seconds in.


I'll go into more detail tomorrow about why I don't expect this dispute to be solved any time soon, but to say this... A lockout will hurt revenues (and the fanbase) again so much that no one wins by holding out. Hopefully the season will start on-time - or at least they will not make the mistake of crunching the schedule together.

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