Case Study - Make Green Delicious

Topics: National Hockey League, Wage, Free market Pages: 2 (610 words) Published: March 31, 2013

A. -------------------------------------------------
Introduction/Statement of the Problem:
As the executive director of the National Hockey League Players’ Association (NHLPA), Bob Goodenow is faced with the issue of developing a communications strategy for the NHLPA. It must establish a strong bargaining stance for the players that effectively communicate their position on the salary cap issue, while also retain the loyalty of hockey fans.

B. -------------------------------------------------
The current Collective Bargaining Agreement includes a limited salary cap and entry-level salary cap, and expires September 15th, 2004. It is no longer successful at controlling rapid growth in player salaries and forming a direct link between salary growth and league revenues. The Unified Report of Operations claims that the majority of NHL teams have lost money in recent years. Owners believe that there are “major deficiencies in the current contract that has led to significant financial losses and a competitive imbalance. Smaller teams can’t compete with larger teams; therefore the league can’t be competitive. There is a transition from a local market to a league-wide market, so players’ salaries are escalating to levels that are unsustainable. Entry-level salary caps are ineffective due to signing bonuses. The NHL revenue growth equals 173%, while the players’ salary growth equals 261% over the term of the CBA. The players’ salaries account for 75% of NHL revenues, which is much higher than other sports. Owners believe a mechanism is needed to control player salaries and tie them to revenues. Players question the validity of the financial information, URO, and Levitt Report. Players argue against the proposed solutions and say free market forces should determine players’ salaries. There is no validity in the owners’ financial statements, which may support that the lack of revenues is...
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