In 2004, professional hockey experienced an unprecedented full-season lockout before returning to profitability. So why are players being asked to take another cut?
In 2004, the National Hockey League shambled into a season-ending labor lockout that turned out to be a financial blessing. The owners and players struck a deal that cleared away years of accumulated problems and revitalized a sport that had seemed to be nearing collapse.
Yet less than a decade later, the league is on the brink of another full-scale crackup. The owners and Players' Association are locking horns once again, this time over a far pettier set of issues, and if they can't negotiate a new collective bargaining agreement by September 15th, they may be forced to start cancelling games.
What's going on? It seems that sports owners may be learning a frightening lesson: lockouts, even when they're over small bore stuff, can turn out to be very good for business.
The NHL was hurtling towards a much-needed reckoning before the 2004-05 lockout, the only labor stoppage in the history of major North American professional sports to wipe out a league's entire season. In its 2004 feature on the business of hockey, Forbes reported that 17 of 30 NHL teams had posted a financial loss the previous season, and that owners had hemorrhaged $210 million over the previous two years. As California State University economist Paul Staudohar explained in a paper for the U.S. government's Bureau of Labor Statistics, the league's national television revenue had dwindled to a piddling $2 million per team by 2003, a time when breakneck expansion into nontraditional markets (the NHL exploded from 22 to 30 teams between 1992 and 2000) had thrown the NHL's finances--and its talent pool--into flux.