My spectator sports life normally has symmetry about it. Six months of the year I care about the Washington Nationals and six months of the year I care about the Washington Capitals.
While I notice that Washington has a professional basketball team and have flung in my face that it has a professional football team, they do not register in the same fashion.
This year, however, balance has been broken when the hockey owners through their commissioner Gary Bettman locked out the players until a new Collective Bargaining Agreement (CBA) was signed. The season has now been canceled through the middle of December and with the recent breakdown in talks, more games are expected to be canceled. There is even the now less remote possibility that hockey will not be the only professional sport to cancel an entire season but instead be the only professional sport to cancel two seasons.
For those unfamiliar with the issues involved, the last agreed to CBA put in place what is called a hard salary cap. Teams were not allowed to spend more than a specific amount of money on player salaries (there was also a floor that had to be reached to make sure every team was trying to field a competitive team). The total expenditure was to be 57% of total hockey revenues.
Even with those restrictions, the pressure to win (which hopefully is still considered a reasonable goal) lead owners to figure out ways to let us say ‘bend’ the rules by coming up with creative contracts which ended up being counted against the cap (upper expenditure limit) inconsistently with what was really being paid to the player in question.
The goal of the owners therefore was to accomplish the following in negotiating this new CBA:
- Lower the percentage allocated to the players to 50%
- Change the definition of hockey related revenues so that the 50% was applied to a lower number
- Put in place restrictions relating to contracts to protect the owners from themselves
One complication that then arose was the change from 57% to 50%, if done quickly, would actually prevent the teams from paying fully already agreed to contracts; thus the owners were asked to invest in what has been called “make whole” contributions to cover current contracts above the 50% allocation.
There was one other significant change between the last CBA negotiations and this one. In the past Gary Bettman has dealt with incompetent union leadership which caused the players to split. This allowed an owner strategy of basically just being stubborn to work in the end, especially when it became clear that Bettman was prepared (and ultimately did) cancel an entire season.
This time however the hockey players hired Don Fehr, the former union head for professional baseball, who has been through this kind of negotiation many times before. Baseball, as Tom Boswell pointed out, finally came to terms with Fehr, and as a result both baseball owners and players have ended up doing very well and with relatively peaceful labor relationships, http://articles.washingtonpost.com/2012-11-21/sports/35509401_1_fehr-factor-baseball-union-three-collusion-cases.
Fehr evidently negotiates by getting under the other side’s skin, irritating them to make them make poor decisions and insisting on negotiating everything. I suspect that ‘take it or leave it’ as a negotiating ploy does not work well with Fehr. Bettman’s typical if-you-don’t-like-it-I’ll-take-my-puck-home approach has not worked as well as it did in the past.
From the articles I have been reading, it seems that both sides at long last have agreed to most of the financial issues and have gotten very close to agreeing on the make whole part. There were still some arguments over how to close the contract loopholes and the length of the CBA itself. The last offer from the owners was to increase the make whole provisions to what seemed like an acceptable amount and with that to offer answers to the remaining issues. The entire package was a take it all or leave it offer.
Fehr of course ignored the take it all part, said fine to the financial numbers and went on to start negotiating the remaining issues. Bettman, visibly angry over Fehr’s doing that, said everything was now off the table and stopped the negotiations.
Now, walking out in ‘anger’ is a recognized negotiating tactic. However it is not particularly effective if you keep doing it, the Bettman has now done this two or three times during this set of negotiations and it is not particularly effective with Fehr.
In addition, at least in my opinion the owners have spent (wasted) too much energy trying to make the point that they feel Fehr is detrimental to coming to an agreement and that the players should keep Fehr out of the negotiations. In previous years this might have worked but not this one.
In the end, I get the sense that Gary Bettman and some of the owners are having trouble separating out the business and financial issues, which are merely at the end mathematics and money, and the emotional issues of Fehr driving them crazy.
Hockey and especially hockey fans who are among the most fanatic and loyal of all sports fans are the losers in all this. While I am not a particularly big fan of Donald Fehr, Gary Bettman is being paid something like $7m/year to act like an adult. Thus far, he is not rising to that bar in my opinion.
