SBJ/December 17-23, 2012/Labor and Agents

Your guide to NHL’s point of no return

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Talks between the NHL and NHL Players’ Association over a new collective-bargaining agreement continued last week. But last week also saw the league cancel another set of games, and the lockout moved closer to entering its fourth month. Games through Dec. 30 now have been canceled, meaning a total of 526 games have been called off — nearly 43 percent of the original regular season — and players have gone without six of the 13 paychecks they normally would have received during the course of the season.

With so many issues unsettled, and with the season seemingly hanging in the balance, the following offers a look at where things stand and, perhaps more critically, where they may be headed in the coming weeks.

How much longer can negotiations go before Commissioner Gary Bettman would cancel the entire season?

The answer to that question can perhaps best be found by working backward. In recent interviews, Bettman has said he could not envision the league playing a schedule with fewer than 48 games. In order to play a 48-game regular season and not have the playoffs extended deep into July, a deal would have to be done no later than mid-January.

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48


Fewest games Gary Bettman is likely to accept for a regular-season schedule

There’s precedent for that, looking back to the first of the league’s three lockouts over the past 18 years. In the 1994-95 season, a CBA was not completed until Jan. 11, 1995. A 48-game schedule subsequently was played between Jan. 20 and May 3, and a full postseason followed, with the New Jersey Devils winning the Stanley Cup on June 24. The NHL draft was then held July 8, two weeks later than usual.

In 2004-05, the full year lost to a lockout, that season was not canceled in its entirety until Feb. 16. It is believed that Bettman will not wait that long this time around to cancel the season if a deal cannot be reached. He seems determined to have at least a 48-game schedule and does not want to have the season extend to July. Time is running out.

Why is 48 the magic number for minimum number of games per team?

No one in 1994-95 knew that future lockouts would lie ahead for the league, so the game was largely embraced upon its return. Only a minority of league observers view the Devils’ Stanley Cup win as tainted in any way as a result of coming after a shortened season. But now, with the 2004-05 lost season still a relatively fresh memory for most, fans are less likely to be as forgiving about a significantly abbreviated season. Some NHL die-hards might settle for even the tiniest of schedules, but many more season-ticket holders would rather have a full year refunded than pay for a fraction of a compromised season. It’s a long shot that the league would consider a season shorter than 48 games.

If a deal is done in the next month, how much time would be needed until the first regular-season game?

A minimum of two weeks would best serve the NHL. More than 100 NHLers are playing in Europe, so a brief transition would be necessary. An unhurried training camp would help lessen the chance of early-season injuries. With such a tight schedule — say, 48 games in 14 weeks — a severe groin strain or hip flexor could keep a star off the ice for almost half the season. After another long lockout, the NHL will want to produce high-quality hockey.

What is the state of employment around the NHL?

Want a bright side? Considering that 526 games have been canceled, things on the employment front could be a lot more grim than they are. (OK, so “bright” is a relative term.)

The NHL on Oct. 1 went to a four-day workweek and corresponding 20 percent pay cut for its employees. Some teams — including Montreal, Columbus, Ottawa, St. Louis and Vancouver — have taken similar steps.

In Calgary, the Flames on Dec. 1 implemented a 40 percent pay cut for top executives while holding the line on salaries for employees making $50,000 or less.

Many teams, including Buffalo, Pittsburgh, Los Angeles and the New York Rangers, have retained employees at full scale. Only Florida, Edmonton and the NHL-owned Phoenix Coyotes have announced layoffs.

If the season were to begin next month, current employees could be expected to be restored at full salary. However, if the season is canceled, layoffs and severe pay cuts would follow — as they did in 2005.

At what point does the NHL start to owe money to NBC, its U.S. television rights holder?

33


Game broadcasts lost through Dec. 30

A canceled season would simply result in a year being added to the back end of NBC’s 10-year contract with the NHL. That deal is set to run through the 2021-22 season.

An abbreviated season would not be so cut and dried. Besides missing the Winter Classic and a Thanksgiving Friday matinee between the Rangers and Bruins, NBC’s slate of weekend games had not been scheduled to kick in until Jan. 20. For NBC Sports Network, however, by Dec. 30, 33 games will have been lost from the channel’s schedule. Some compensation will be due the network.

One broadcast industry source said that if the league were to play a shorter schedule, network officials would meet with the NHL about the matter after the lockout ended.

It is also worth noting that NBC’s NHL talent — including its top announcing team of play-by-play man Mike Emrick and analyst Pierre McGuire — have continued to be compensated in full during the lockout while being used sporadically on broadcasts of college games.

What about NHL Network?

Primarily owned by the league, the network has opted not to be a news-gathering service for its viewers. When Bettman held a news conference Dec. 6 to explain why that week’s round of CBA talks had broken off, it was shown live on TSN and Sportsnet in Canada, but not the NHL Network. Instead, NHL Network has continued its offseason programming — a combination of old games and countdown shows — and its daily talk shows have been scrapped. The league has used NHL.com as its only in-house news provider.

NHL Network’s plans to move its studios from Toronto to Connecticut in 2013 are also indefinitely on hold.

How about arenas? Don’t arena managers need to start filling dates?

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11
Canceled Hurricanes games so far

0  Number of those dates that arena has filled with other events

They do, but it has been nearly impossible when the NHL has, in most cases, canceled games only two weeks at a time and with little lead time. For example, the scrapping of Dec. 15-30 games came on Dec. 10; games scheduled for Dec. 1-14 were canceled only on Nov. 23. The biggest cut came Oct. 26, when the first 326 games of the season, through Nov. 30 were called off.

But even a month’s lead time is not sufficient time to book, promote and sell a concert or family show. PNC Arena in Raleigh, for example, would have hosted 11 Hurricanes games by now, according to the team’s original schedule (the Hurricanes would have already played 20 on the road). None of those dates opened up by the lockout were filled with substitute events.

What is the latest with the league and its sponsors?

While league partners aren’t happy with the NHL’s second lengthy lockout in eight years, it is still too early to get a clear picture of any long-term damage. Kraft Canada pulled its sponsorship of Hockeyville — in which a small Canadian town wins money for its youth hockey programs and hosts an NHL preseason game — but Kraft plans to relaunch the program in 2014. The NHL has yet to lose any major sponsors.

If the league plays a shortened schedule, advertisers will be entitled to partial refunds.

An agency marketer, whose group administers local and national NHL sponsorships, said there are various thresholds — everything from adding elements and make-goods to a handshake on a full extension.

“It’s not as simple as, ‘We miss X, you get Y,’” said the marketer, who requested anonymity.

Michael Neuman, managing partner of Scout Sports and Entertainment, which is the agency for Geico and other league and team partners, said a season with integrity is important to sponsors.

“What we’d like to see is for them to salvage a season of 40 to 50 games, but the key is the playoffs,” Neuman said. “Anything less than 40 to 50 games would make it hard for the avid hockey fan to take the season seriously.”

The NHL declined to comment.

What will the NHLPA do if the season is canceled?

A couple of NHL agents, speaking on the condition of anonymity, said they believe the NHLPA will decertify as a union if the league cancels the season. The agents requested anonymity because they were not authorized to speak publicly on behalf of the union. These agents added that the potential threat of decertification may be something that causes the NHL to think twice before canceling the season.

“I think Bettman knows that if they cancel the season, the NHLPA decertifies, and they have a mess on their hands,” said one agent. What’s likely to follow in that case, as seen last year with the NFL and NBA battles, is antitrust litigation, and labor talks turning into legal briefs.

Not all agents interviewed last week were of the same mind on what might happen, though. Some thought it very likely that a deal would be struck within two weeks.

So what is Bettman’s endgame?

If talks remain fruitless as Christmas nears, expect the commissioner soon after to announce a deadline for a CBA to be completed in order to save the season.

Staff writers Terry Lefton and Liz Mullen contributed to this report.

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