It has finally happened. A professional sports league has canceled an entire season due to a labor impasse. The National Hockey League will not play a single game for the entire 2004-2005 season. Who is to blame for this? Gary Bettman? Bob Goodenow? The owners?
I blame the players. They are the product. They are the ones who put themselves out there on the ice, physically competing, taking the risk that they can be harmed irreparably for the rest of their lives. And for this, they are compensated. Handsomely. However, the game is over, so to speak, on their compensation. They can make the argument all they want how they have short careers, and that the risk to physical injury is high. Sure. And yet, the average salary of an NHL player is $1.2 million. That's more in one season than most people make in their lives. Think about it. It would take an average salary of $41,666.67 for 30 years to equal the same as the average
ONE year salary of a player. Risk of injury? Players have guaranteed contracts. Get hurt; still get paid.
Why are the players "entitled" to high salaries, and the owners aren't? Why do the Detroit Red Wings, in the current environment, praying to reach the 3rd round of the playoffs JUST SO THAT THEY CAN BREAK EVEN? And to the player's union, that's ok? (Side thought: why are they called a union when no one has the same contract, and players are paid based upon merit? I've worked for a union; it doesn't work that way). Name for me another industry where salaries take up 75% of revenues, and is thriving. Can't? That's because business doesn't operate that way. What is the most successful sports league? The NFL, by far. Are you aware that it also has, by far, the hardest salary cap? There is no flexibility. Their cap is approximately $80 million, and that goes to 53 players (average of $1.5 million per player). The players "best offer" with a cap was $49 million for 25 players (average of $1.96 million per player). To quote Gary Bettman at his press conference on Wednesday "The NFL has revenues of 2.5 times the revenues that the NHL has." You can see how the NHL's revenues start to substantially tilt in the favor of the players.
What's that? No one put a gun to the owner's heads? They caused this situation themselves? Correct. They did. And now they're trying to fix it.
Actually, that's partially true. However, someone did put a proverbial gun to their heads: the media and to a lesser extent, the players themselves.
Again, the players. Let's say free agents over the last 10 years did not receive BIG contract offers from teams like the Red Wings, the Avalanche and the Rangers? That owners wanted to keep salaries down in favor of cost certaincy and "self-policing". What's the first word you would hear out of every player and union representative? Collusion. Then the league is dragged into federal court, and forced to defend themselves from trying to not create the very environment they find themselves in today. Ask Major League Baseball that story from the mid-to-late eighties.
How did the media put a gun to their heads? Let's examine Mike Ilitch, the owner of the Detroit Red Wings, the most valuable hockey franchise, and considered one of the best owners in the game. As you know, he is also the owner of Baseball's Detroit Tigers franchise. There, he was considered (and that perception, to some degree, still exists) a horrible owner. How can he be great in one league, and horrible in another? Media perception. Mr. Ilitch spends big money on his hockey salaries, and until recently, didn't spend big on baseball salaries. And the media CRUCIFIED him for this. Said he was an awful owner, that he was a cheapskate. Ironically, media perception now is that he is "overpaying" on player salaries in baseball, but that's an article for another day.
Today, I heard Doug Karsh on WXYT 1270AM make a completely asinine comment. He said, at the end of the day, it all comes down to greed, especially the greed of the owners. His two main points were that the owners are already millionaires, many times over, that they've got enough, and that they aren't thinking of "the little guy" who is getting harmed in all of this. Namely, the vendors, the people who are employed by the teams who make their money on game days parking cars, selling peanuts, etc. Let's examine these points.
The owners are rich. Yeah. So? They are also businessmen. The aren't going to stay rich by losing money. But even beyond that, the sheer audacity of that comment is flabbergasting. Who is he to say that they've got enough? What is the "magic number" of money that, once you achieve it, you need no more? Who is the arbiter of how much one person needs? How dare ANYONE tell another human that you've got enough, and you need no more! And by the way, that isn't what a salary cap does. The cap is liked to revenues. The more the league makes, the more the players can make. It's not $42.5 million forever.
And his other point, about everyone who is hurt by this situation. Sure, it is awful if anyone is out of a job, or loses income because of your peripheral ties to the lockout. It is extremely unfortunate. That being said, the next time there's a labor dispute here in Detroit with the Big 3 (soon to be Big 2, GM and Toyota) will Karsh and the media "feel the pain" of all the other, peripheral people harmed by it? I'm talking the suppliers and their suppliers, and the restaurants near the plants who also lose every time there's a strike or lockout involving the UAW? After all, there's a heckuva lot more people who are harmed every time this happens. I doubt it. I'm sure they'll side with the union against Big Business.
For me, the bottom line is this: owners set the rules for employment. They put up the capital, they employ the players, the front office, everyone. If the players don't like it, start your own league, or stay over in Europe when the NHL resumes. You know they won't, because it'll still be the highest paid hockey league in the world.
Want to talk real risk? Losing millions of dollars a year is risk!
