Breaking The Nhl Silence-bargaining Errors

Lynne Kiesling

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]


11 thoughts on “Breaking The Nhl Silence-bargaining Errors

  1. Am I a sucker because I will continue to support the NHL by buying season tickets even after they screwed us for a season?

  2. I would add that I don’t think there is any sport where TV is a worse substitute for live attendance than hockey. I never had a bit of interest in hockey after seeing it on TV – only going to my first game got me interested.

  3. I would say even further that live games and TV games are complements, not substitutes. As Coyote says, I think that seeing hockey live is an important input into making TV hockey enjoyable, because it enables you to imagine what’s going on off-camera and fill in the aspects that the camera can’t fully capture.

  4. I would say even further that live games and TV games are complements, not substitutes. As Coyote says, I think that seeing hockey live is an important input into making TV hockey enjoyable, because it enables you to imagine what’s going on off-camera and fill in the aspects that the camera can’t fully capture.

  5. On goalie stickhandling: The only rule change with which I disagree, whole-heartedly, is the restriction on goalies playing the puck. Such a skill has revolutionized the game and provides the team with a goal keeper skilled in this art a competitive advantage that is well earned. As a long-time goalie, I can assure you that skillfully lifting the puck with with a trapper on the left hand, holding a stick with an approx. 4″ paddle, held away from the body due to myriad pads affixed to the chest, elbow and shins, while standing on a couple millimeters of steel is a tough task. However, I agree that the goalie so committing should be fair game (which would even up the immense skill of NHL keepers).

    Based on my experience, I’ll also contest your implication that restricting stick work by goalies will increase glove saves (at least the big, sexy saves that come from shots from the point). If the puck is dumped in behind the net, I contend that the glove may be used to smother more attempted centering passes or wrap-arounds, but not necessarily glove saves. I contend that increased propensity for an unimpeded dump in will result in more play in and around the crease. However, pucks in that area (at least in my experince in college club and men’s skilled beer-league hockey) generally pop into the goalies trapper in somewhat unartisitc ways. I don’t think that is the substitute you are seeking.

    [end of defensive goalie rant]

  6. On goalie stickhandling: The only rule change with which I disagree, whole-heartedly, is the restriction on goalies playing the puck. Such a skill has revolutionized the game and provides the team with a goal keeper skilled in this art a competitive advantage that is well earned. As a long-time goalie, I can assure you that skillfully lifting the puck with with a trapper on the left hand, holding a stick with an approx. 4″ paddle, held away from the body due to myriad pads affixed to the chest, elbow and shins, while standing on a couple millimeters of steel is a tough task. However, I agree that the goalie so committing should be fair game (which would even up the immense skill of NHL keepers).

    Based on my experience, I’ll also contest your implication that restricting stick work by goalies will increase glove saves (at least the big, sexy saves that come from shots from the point). If the puck is dumped in behind the net, I contend that the glove may be used to smother more attempted centering passes or wrap-arounds, but not necessarily glove saves. I contend that increased propensity for an unimpeded dump in will result in more play in and around the crease. However, pucks in that area (at least in my experince in college club and men’s skilled beer-league hockey) generally pop into the goalies trapper in somewhat unartisitc ways. I don’t think that is the substitute you are seeking.

    [end of defensive goalie rant]

  7. I agree that live and televised games are complements, not substitutes, but only for those who have actually attended a live game. For the uninitiated, I contend that live v. TV is perceived as a substitute and the economic behavior of the uninitiated would play out as such. The perceived marginal utility of attending versus watching on the tube would be measured as if the goods were equal, thus the spectator will continue to choose the good with the lowest cost (TV). The vicious circle of TV -watching would continue until the fan got sick of bad American hockey broadcasting (the camera work, not so much the announcing) or scored complimentary tickets.

    While I’m on it, why must US broadcasters incessantly zoom in and use zippy camera technology which makes me lose sight of the puck and thus the flow of the game? We don’t have the luxury of three replays per down, like football, to assess the development of the game play. Make like the CBC – zoom out and let me see the game!

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