NEGOTIATION PUTS HOCKEY IN THE PENALTY BOX (pg 532)
Not every negotiation ends on a good note. Just ask National Hockey League (N.H.L.) Commissioner Gary Bettman, who, on February 16, 2005, cancelled all of the games remaining in the season following a 5-month lockout by the owners. Though professional sports such as hockey and baseballs have had close calls with losing an entire season, Bettman’s decision was a first: The whole schedule was lost. Said Bettman, “This is a sad, regrettable day.”
On the other side of the dispute, Bob Goodenow, executive director of the N.H.L.
Player’s Association, similarly regretted the impasse. He said, “Yes, we apologize to the fans.” Though the repercussions to the league and its players are obvious, canceling the season also had ramifications on a broader level, including lost of revenues for local businesses and N.H.L. game merchandise sales.
So, why did Bettman cancel the season? The primary issue was a salary cap, but Goodenow said, “The players never asked for more money. They didn’t want to be locked out. Gary owes the apology. He started the lockout. We’ve done an awful lot to try to get to a fair resolution.” According to reports, negotiation began when the league attempted to lower the average salary from $1.8 million per year to $1.3 million per year – a 28 percent decrease. The league’s reason? Although the N.H.L.’s total revenue had reached $2.1 billion a year, players were paid 75 percent of this revenue. According to the league, this high percentage kept the league from being profitable and directly contributed to the league’s loss of $479 million over the past two seasons. The player’s union then countered with an offer to reduce salaries by 24 percent rather than the 28 percent the league wanted. Bettman then tried an alternative solution: to persuade the union to accept a salary percentage of no more than 55 percent of league revenues. Instead of reducing pay to an average level, the...
Please join StudyMode to read the full document