UI400-01 Business Ethics
The recent NHL lockout caused by disagreement in the distribution of revenue between players and owners provides a perfect scenario for the examination of the different ethical theories involved in a dispute of such kind. The Lockout showcases opposite viewpoints on subjects such as players/owners share of revenue, the payroll range, and revenue sharing between teams. It also shows how social responsibility comes into play when such an event is effecting millions people throughout different parts of the world. How people perceive ethical theories involving this issue can be very interesting, and it has been all over the news for months. By taking a better look at these arguments from both sides and even those neutral, a better understanding can be made as to what ethical theories they rely on, and how a resolution can be foreseen. Definition and History
The ethical theories that will be more intensely studied while discussing the distribution of revenues between players and owners are theories of justice, theories of deontology and theories of utilitarianism. Over the past decade there has been a lot to talk about when it comes to the NHL and their inability to come to agreements. During what would have been the 2004-2005 season, the NHL became the first professional sports league in North America to cancel an entire season due to a labor dispute. In numerical numbers, the cancelation of the season ended up costing the players 1 billion in lost salaries and 2 billion in revenue from tickets, media, sponsorships and concessions (Fatsis, 2005). As you can imagine it caused tremendous problems for people whose jobs rely on an NHL season; whether it be the players, owners, stakeholders, fans, or even the bars and restaurants around the stadium that count on NHL fans for a big part of their business, they were all effected.
After finally coming to an agreement, the NHL was back in action for the 2005-2006 season all the way up to this year. It only took seven more years until they had to go through this frustrating process once again. This year’s dispute is more about revenue sharing rather than salary caps and rule changes which was of major concern in the 2004-2005 lockout. Since the past lockout the average franchise worth in the NHL has grown from 163.3 million to 239.9 million which is a 47 percent increase, so you can see why this has been a growing concern over the past few years. To compare it to the 2004-2005 season, in 2004 the owners demanded a 25 million dollar salary cap but eventually agreed to 39 million. As of the 2011-2012 season the league is coming off a 64.3 million dollar cap and players are asking to increase it to 69 million. The league revenues have grown from 2 billion in 2004 to 3.3 billion in 2012 and with all this new revenue the owners feel that they should at least get half. The owners were originally trying to cut the players portion of revenue from 57% to 43% but just recently offered to give 49, 48, and 47 percent, respectively, over a three year plan. The players didn’t agree to it and counter offered a four year plan giving 54.3, 52.5, 52, and 52 percent respectively but they have still yet to agree on anything (Jones, 2012).
Ethical Theories Involved
While looking at the different viewpoints from both sides of this ethical issue, it is important to keep in mind the varying ethical theories of justice. The two theories we will discuss will be procedural justice and distributive justice. Distributive justice says that burdens and benefits shall be distributed to each person as an equal share according to individual need, individual effort, societal contribution, that persons rights, and merit (Lamont, 2008). The second theory of justice is procedural justice. Procedural justice makes clear distinctions between procedures and outcomes, or rather the means to the end. Certain aspects of these criteria can...