Lockouts and Scabs

September 26, 2012

The NHL lockout claimed more victims today, with “just under 20” employees of the St. Louis Blues being laid off by the organization.  Additionally, other employees have taken pay cuts or switching to a four day work week.  Layoffs are spreading around the league, the Florida Panthers even have laid off their mascot.  Some are comforted that Bettman is not taking pay while the league is locked out, but it is important to note that he is the lowest paid commissioner in the major North American sports.  Still he took home close to $8 million in salary last year.

There has been some other news in the NHL, and much of it seems to be coming out of Alberta.  First, the Edmonton Oilers are said to be considering Seattle as a potential site for relocation.  While Bettman and the Edmonton mayor have been telling fans to note worry, it is worth noting that the Oilers owner was in Seattle to talk relocation.  Also coming out of Edmonton is the news that the Oilers and the Calgary Flames are trying to have the lockout ruled as being illegal in the province.  The NHL and NHLPA lawyers have congregated in Alberta, where they are currently arguing in front of the Alberta Labour Board as to whether a lockout is legal by the laws of the province.  It would be curious to see how this turns out.  If the lockout were found to be illegal in Alberta, though a similar motion has already been struck down in Quebec courts.

In other lockout news, the NFL referee lockout is still continuing, and the fans are angry.  Last night in a key final play, the replacement referees seem to have made a mistake which changed the outcome of the game away from the Green Bay Packers to the fortune of the Seattle Seahawks.  Individuals across the country now bemoan the “horrid” refereeing in the NFL, yet they continue to watch the game.  Former 49ers QB Steve Young came out and said that if people are really so angry that they don’t like the product with replacement referees, they should stop watching.  That doesn’t seem to be the case, as ESPN’s Sportscenter scored ratings around a 5.0 for their midnight broadcast.  This is about four to five times higher than the normal viewership during this time period.  It seems that the bad refereeing is almost drawing more attention to the league.

New Jersey state senator Stephen Sweeney isn’t amused by the referees.  He has proposed that New Jersey consider banning replacement referees from working games in the state.  Senator Sweeney is naturally a Packers fan.

Yet here we see government now trying to get more involved in sport, should they not be working on more important things than whether your favorite team had proper officials for their game?


If the NHL locksout, who gets Ovechkin?

September 5, 2012

As Bryan reported in the previous post on the blog, the NHL labor negotiations do not seem to be headed in a good direction.  My students have gone from posting comments on our class site for governance from: “will the negotiations get done?” to: “If a puck drops at center ice, and no one is in the stadium, does it make a sound?”.  Clearly there is some cynicism from the fans as we have already been under two work stoppages in the Gary Bettman era of the NHL.  The second one hurt the league, forced them onto an obscure Cable TV network, but supposedly solved a lot of the revenue issues that existed, right?  Wrong, the revenue issue seems to be getting more problematic and is the core issue that is sending these negotiations down the tube.

Many are already talking about the NHL lockout, and one league with high interest is the Russian professional KHL.  Being one of the highest quality leagues in Europe, it is a naturally attractive location for players to go and make some money while the lockout continues.  The big question already seems to be who has first dibs on Russian star Alex Ovechkin.  Ovechkin is in the headlines as Dynamo head Mr. Rotenberg said that he doesn’t want Ovechkin on his team, and will not go after him if there is a lockout.  Okay, no big deal.  Except it is a very big deal, so big that the KHL President came out and said that Dynamo should have the first rights to Ovechkin, as they have the “moral right” to him.  That’s right, the teams owner says he doesn’t want Ovechkin,  but the head of the entire league says that he should be on the team.  It is a confusing situation, and it looks like there is even more arguing and fighting going on between the teams and the league over who gets Ovechkin.

Some say Dynamo has the birthright to Ovechkin, who would technically be a free agent when coming to the league.  Others say that it should be open season.  In either case, at least Ovechkin knows that if there is a lockout, he will still have many courting his services.

The NBA looks like it will be back just in time for Christmas

November 26, 2011

That’s right, after all the fighting between various groups that was highlighted in several posts here at the blog, the NBA owners and players association has come to a handshake deal after a 15 hour bargaining session lasting Friday and Saturday morning.  If the deal is accepted (they only have a handshake deal at the moment), the league is scheduled to begin play on December 25th, Christmas Day.  Reports coming in are saying that the first game will be a rematch of the finals, with Dallas playing Miami.  I don’t know if it the Holiday season that got the two groups together again to get a deal, but the owners are claiming that it wasn’t time or the calendar which was forcing them to get things done.  Really, it seems that the mounting financial pressures on both sides was what really helped get to the point where they are at now.  As ProBasketballTalk (NBC Sports) notes, the owners were not looking forward to losing an entire season of revenue, and the players were not looking forward to losing an entire season of salary.

So now that it looks like the NBA will be back, there is still the question of how long it will take for fans to get back into the league.  Research shows that attendance and fan interest in professional sport leagues tends to drop off after the league goes through a lockout.  And this was no short lockout, it lasted 149 days, and was the end point of almost two years of negotiations.  The NBA looks to overcome one big hurdle, but the new obstacle which may cause a drop in revenues is the lack of interest from consumers.  I’ll be curious to see how many people show up to games once it starts back up.

NBA losing sponsors

November 15, 2011

The NBA players association has decided to vote on decertifying.  There are still plenty of discussions about how this process will work out, but things are bleak, and most sport analysts and fans are writing off the entire season.  Lucky for fans of basketball, NCAA basketball has started and there are plenty of prime match-ups all week long.

But as the lockout now looks to be here for the long term (as if the previous few months wasn’t long enough), those who advertise and sponsor the NBA have begun to pull out their sponsorship of the league.  The Milwaukee Journal Sentinel reported that MillerCoors has pulled out its sponsorship of the Milwaukee Bucks during the lockout.  The value of the deal is unknown, but it is known that MillerCoors spends over $100 million a year on sport advertising alone.  As the lockout proceeds, it is most likely that more and more companies will not want to associate itself with the league.  As fan perception of the league, its players, and owners is all down, it makes sense for companies to pull out.

This is probably only the beginning, and the league looks to lose a lot more revenue sources as the lockout extends.

NBA on the verge of shutting down for the year?

November 14, 2011

Sure looks that way.  The players have just rejected the owners latest offer.  Derek Fisher the Union player representative is on television, quite emotionally talking about the issue.  He is announcing as we speak that the players have rejected the offer and will file an antitrust suit against the NBA and its owners.

Things looked positive on Friday, and everyone (even myself to some extent) were thinking that a deal was possible.  It turns out that the two sides couldn’t come together after the weekend, and it looks like this might be the end of professional basketball in North America until Fall of 2012.

I think a lot more people might pay attention to college basketball this winter/spring as the premier sport to pay attention to, alongside the NFL.

Will the new NBA season proposal hurt London Olympics Basketball?

November 11, 2011

The final deadline that David Stern put into place for the union to accept the owners proposal about the CBA or else things would get progressively worse.  Yet, the two sides are still at the table, which seems to indicate either than David Stern’s threats convinced the union, or that this was a shallow threat and that both sides have ignored as they made progress in talks.  In either case, things seem to be moving in a positive manner in the NBA CBA negotiations, though both sides still have distance between them.

The players are still moving towards decertifying the union today, and agents don’t like the new proposal either because it takes away their power.  Of course this means that many agents are telling the players to not agree to the new deal, and keep fighting the owners.

David Stern has proposed that if the deal gets done soon, the NBA could play a 72 games season (only losing 10 games off the schedule), including full playoffs, and would end only about a week later than the previously proposed season.  So how do you get in that many games in that little of time?  You obviously give players a much tougher and grueling schedule.  As ProBasketballTalk notes, its pretty much a schedule packed like sardines in a can.

This causes some issues I think.  First, with a tight schedule and shorter rest periods, players are likely to be more prone to injuries and fatigue.  This could actually be costly for some players who are required to play certain number of games for bonuses in their contract.  Really by playing a 72 game season, the NBA owners really look like they are trying to recoup as much lost revenue as possible.  If you look at tennis this year, there has been an increase in the number of injuries because of them playing one of the toughest schedules in history.

Then comes the Olympics.  Now that NBA stars play in the Olympics, it becomes worrisome that some NBA players might have to play a very hard schedule and then head to the Olympics with less time to rest and prepare.  I wonder if this might effect basketball at the Olympics in a negative manner.  Many star players might choose to sit out (or be injured) to just try and recover in time for the next season.  While it is only one week in difference from the previous cycle, the scheduling and number of games in such a short amount of time is the real issue.  The body can only handle so much.

Does America really care about the lockout?

November 10, 2011

A few interesting tidbits as the NBA labor talks continue.  I would like to point out that the deadline set by David Stern has passed, and they are still in sessions, which seems to hint that the deadline wasn’t the final offer as Stern made it out to be.

While not the best of science, the Poll Position polling company decided to conduct a poll on whether Americans really care about the NBA lockout.  While they only surveyed a small sample, they did find that 76% of those responded that they didn’t miss the NBA.  12% didn’t care either way, and another 12% stated that they missed the NBA.  If we extrapolate these numbers with a back of the envelope calculation, about 36 million of America’s roughly 300 million individuals miss the NBA.  That is a pretty large group of individuals who would like to see the NBA back and playing again.  In sports economics we often look at fan demand, attendance and viewership of sporting contests.  While it is probably the case that more Americans prefer to see the NFL than the NBA, the lockout does seem to be preventing a significant portion of the population from seeing games that they would like to see.

In an article of Forbes.com, Patrick Rishe notes that the losses the owners are claiming are not necessarily the truth.  Forbes estimates of revenues and team values are never perfect, but they are estimating that the league actually is not losing as much money as they are claiming.  It is noted that with the current estimates they are saying about 17 of 30 teams in the league have lost money, and that this is attributable to the structure of the league.  Dr. Rishe calls for stricter salary caps and steeper luxury tax to help fix some of the economic issues he sees in the league.  While neither the Forbes numbers nor the owners numbers are usually one’s we can fully believe, there are many who may lean towards the direction of Forbes.  Owners in professional sports leagues have been notorious for hiding profits, and reporting losses for their teams.  This helps to support the claim that owners are always saying they are losing money and that they need to lower salaries and have a larger piece of the revenue split to make up these costs.  The NBA has shown some franchises having very large yearly losses, but as long as teams keep their books hidden from the public eye, we will always have to doubt the owners argument.

Former Toronto Blue Jays VP Paul Beeston once said:

“Under generally accepted accounting principles, I can turn a $4 million profit into a $2 million loss and I could get every national accounting firm to agree with me.”

Hat-Tip (H/T) to vortex forum user “Surfing on a Rocket” for the link to the poll article.