Southern California caught NHL fever earlier this year. It was the first time that I've seen car flags, viewing parties, television news focus and large-scale excitement for hockey. Had the Kings' Stanley Cup drive been a movie, it would have faded to black and been followed by a flowering of interest in hockey. Instead, the players are locked out and the amount of publicity and interest around the NHL has been allowed to wane.
The National Hockey League has a unique penchant for self-destructiveness in the way it conducts negotiations for a new Collective Bargaining Agreement. They have met the enemy and they are the enemy. The take-no-prisioners approach of Commissioner Gary Bettman toward the players assures maximum damage to the brand and fan appeal of the NHL.
The current impasse and lockout is a sure path to mutually assured destruction. The National Football League is the overwhelming first preference of American sports fans. Roughly 180 million fans saw at least one televised game last week. They have developed a series of ancillary revenue sources that have pushed the average value of a franchise to more than a billion dollars. The Cleveland Browns sold earlier this year for that figure. League growth is a direct result of labor peace. They signed a new CBA in the summer of 2011 that covers ten playing seasons. Those negotiations concluded before a single pre-season game was played. Fans did not have the spectre of millionaires fighting with billionaires at a time of national economic distress rubbed in their faces.
And everyone knows that the games will be played and the action will stay on the field. Major League Baseball had a disastrous strike in 1994 and attendance dropped by 40 percent. It took the McGwire-Sosa home run race to bring the sport back in favor. They learned the lesson of the value of labor peace. The gross revenues of MLB have quadrupled since and the focus is on building brand and driving revenue. The NBA missed part of last season with a Pyrrhic lockout from which it is still recovering.
The NHL has never had the status and popularity of those three other team-sport leagues. Pro hockey developed as a sport centered in Canada, the Northeast, and parts of the upper Midwest. Snow doesn't fall in much of the country, and skating and hockey can be acquired tastes. Many fans of other sports haven’t seen hockey played and don't know the rules.
The NHL embarked on a major expansion of its reach throughout the 1990's. The sport started to catch fire in the Sun Belt states. Young people crowded arenas in Florida, Texas, Arizona and California. They were gaining momentum and popularity -- and then came the 2004 lockout. The 2004-05 season was lost. That was already Commissioner Bettman's second lockout since taking office, we are now experiencing the third. The 2004 meltdown had a chilling effect on the growth of the league. The players ended up accepting a 24 percent reduction in existing contracts and the imposition of a salary cap.
Since 2005 the NHL worked hard to rebuild its popularity. Annual industry revenue has grown from $2.2 billion to $3.3 billion under the expiring contract. The last Stanley Cup pitted teams from the No. 1 and No. 2 television markets, and Los Angeles has the champion.
Player revenue, even with a cap, has grown to 57 percent of hockey-related revenue and the league has been thriving. Just when the NHL substituted exciting action on the ice in place of brand-killing labor stoppages it has fallen on its own sword again. We all know what the definition of insanity is.
The NHL is attempting to reduce player share of revenues by 10 percent to a figure of 47 percent. When a league is thriving and growing, it is hard to make the argument it should result in lowered player compensation. Don Fehr, who headed MLB's Players Association for years is now the head of the NHL Players Association. Fehr is a tough and wily negotiator who brought baseball players untold riches. He knows how to inform and unite players so that they form a solid, unshakable bargaining unit. With Fehr representing the players and confrontational Bettman representing the owners, the possibility for a lengthy deadlock looms large.
The NHL needs to look at the bigger picture and concentrate on building their brand and fan base. This lockout is the wrong tactic at the wrong time.
-- Leigh Steinberg has represented many of the most successful athletes and coaches in football, basketball, baseball, hockey, boxing and golf, including the first overall pick in the NFL draft an unprecedented eight times, among more than 60 first-round selections. His clients have included Hall of Fame quarterbacks Steve Young, Troy Aikman and Warren Moon, and he served as the inspiration for the movie "Jerry Maguire." Follow him on Twitter @SteinbergSports.
