Although an avowed long-time hockey fan, I have kept silent on the topic of the NHL lockout and the loss of the 2004-2005 season. Why? Disgust. I thought, and continue to think, that all parties acquitted themselves poorly. The owners and the league made strategic errors in estimating the value of broadcast rights to broadcasters, so held out for more than they should have for several years. They behaved similarly toward the players. The player’s union, in my opinion, has a long history of doing a bad job of representing the interests of the players, largely because I think they take too antagonistic a “stick it to the owners” stance. The players let the union organizers make too many clutch decisions. The result? Loss of a year’s play, a year’s value to fans, a year’s profit to owners, a year’s wages to players.
Except, that is, for the players who played in Europe. Sure, they played for less than they would have gotten paid in the NHL, but they were not in the best bargaining position by the time the opportunities arose. I think the contestability provided by the European leagues was beneficial for bringing Friday’s labor agreement into being, because it moved the threat points of the players in two ways. It gave players a credible alternative to NHL play; however, it did so at a lower wage and a lower quality of league play. So I think the bargaining range for the players compressed some and moved to the left.
I’m excited because my peeps won the draft lottery and are positioned to draft 17-year-old phenom Sidney Crosby. The USA Today argues that Crosby might be the PR goodwill that the NHL needs right now:
The 88-year-old NHL needs something special about now. The league’s 30 teams are hoping the 2.2 million fans who attended games during the 2003-04 season will come back to the rink. With ESPN not exercising its $60 million option to show games this season, hockey is the only one of the big-five pro sports without a cable TV partner in the USA.
I think Gary Bettman should hang his head in shame. If he were CEO of a publicly-held corporation and not the Commissioner of a sports league, he would have had to resign at least in the past year if not earlier. How can the league have so grossly mismanaged both its labor relations and its broadcast relations? ‘Splain me this, Gary: why should I come back to the rink? Why should I even bother to turn on the TV?
If the volume of postings to hockey blogs in the past week is any indication, there’s interest there, latent now because of the past two years of miscalculations and mismanagement. But hockey is likely to remain a niche sport, so don’t be greedy and overreaching in negotiating a new broadcast contract. Negotiate a contract that gives the broadcaster good incentives to show hockey frequently, instead of, say, showing World’s Strongest Man 2000 over and over and over… Even better than treating ESPN/ABC as having market power, how about allowing a local/cable bidding consortium? For example, Fox Sports and local Fox affiliates could put in a bid to broadcast local team games on the local affiliate, but also make several games a week available on Fox Sports. But Bettman is going to have to exercise more leadership than he might be capable of, to get consensus among the owners on a more accessible broadcast strategy.
This idea actually stems from my biggest pet peeve about local vs. cable broadcasting and the rights that the owners exercise. I refuse to attend Chicago Black Hawks games because I do not want owner Bill Wirtz to earn a penny from my business. First, Wirtz owns a wholesale liquor distributor (Judge & Dolph), and Wirtz is a classic rent seeker who has consistently lobbied Illinois and Wisconsin legislatures to reduce the abilities of retailers to shift their business among distributors. Second, Wirtz refuses to allow home games to be televised, even if they are sold out. What kind of antiquated mindset actually thinks that watching a game on TV and going to a live game are substitutes? At the margin am I more likely to buy tickets because I know I won’t be able to watch the game? Certainly not. At the margin am I less likely to buy tickets if I am able to watch the game? Perhaps, but the effect is small, and is probably small for most people. Why he continues to think that this is a profitable strategy is beyond me.
Wirtz’s troglodyte broadcast rights strategy, rather than being profit maximizing, contributes substantially to the continuation of hockey as a niche sport.
[end of rant]