N E G O T I AT I N G O N

THIN ICE
NHL
Preparation

Parties:i) NHL - Gary Bettman, Bill Dalyii) NHLPA Bob Goodenow, TakSashiniii) Players

Interests:i) Minimum salary cap for playersii) Salary

to revenue tie up.iii) Added benefitsiv) Maximum
compensation for players

Value:Increase no of game.

BATNAi) NHL- Close operationsii) NHLPA- agreeme

nt on present dealiii) Players- Move to other clubs.

ZOPA:$43 million to $50 Million

During Negotiation

We opened our negotiation by identifying the

key issues in the negotiation.
I. Salary Cap
II. Salary to revenue relationship

Anchored Price- $43 Million

Agreed Price- $ 46.5 Million

65% revenue to salary linkage

Key Learnings

By adding more value, both the parties can be

satisfied as they are more likely toaccept one or the
other value proposition.

In order to reach on a common solution, it is

important to empathize with otherparty.
On September 15, 2004, the existing collective bargaining agreement (CBA) between the
National Hockey League (NHL) and the National Hockey League Players' Association (NHLPA)
expired. Because the two sides had failed to negotiate a new CBA by that date, NHL
Commissioner Gary Bettman locked out the players--no hockey would be played, no revenues
would be collected, and no salaries would be paid. The key issues in the negotiation were the
league's demand for a salary cap and for the linking of salaries to league revenues. The players
opposed both of these demands. After months of near-fruitless negotiation, Bettman threatened
to cancel the entire season, a move that would destroy billions in revenue. Provides a rich history
of the two sides' relationship and an account of the negotiations that led up to the season
cancellation threat. Asks students to analyze the power tactics that each side has used to its
advantage in prior negotiations and to propose strategies that might help either side pull off a
successful negotiation in the current context, which involves entrenched positions, complex
issues, and severe distrust. Hbr

NHL on Thin Ice as CBA Set to Expire

By Seana Smith
Published July 25, 2012
FOXBusiness

The National Hockey Leagues current collective bargaining agreement is set to expire September 15, and as
we inch closer to the deadline, the NHLs future appears to be on increasingly shaky ground.
Its an all-too-familiar situation for the league; just eight years ago, the NHL became the first of the U.S.s big
four professional sports leagues to lose an entire season to labor disputes. At that time, it was a different world
of sports, and the amount of money negotiated was significantly less.
Labor talks between the NHL and the NHL Players Association are in the fifth week of discussions in Toronto.
The NHLPA is sitting down with Gary Bettman and league owners before making its first counter proposal to
NHL executives recent labor demands.
Less than two weeks ago, owners submitted their first proposal to the NHLPA, asking for major concessions
spanning several areas. NHLPA executive director Donald Fehr has indicated the union is getting closer to
responding to the league's initial demands.

The split of the total revenue from the leagues business operations is in focus. Reportedly, the NHL is asking
for a bigger chunk of the revenue share, seeking to increase its current stake of 43% to 54%. League revenue
reached an all-time high of $3.3 billion last season, so an 11% drop in players revenue share roughly
represents a $300 million loss.
Critics of the collective bargaining dispute question the motives behind NHL commissioner Gary Bettmans
proposal. After the NHL successfully dodged the economic slowdown by posting seven consecutive recordsetting revenue seasons, should owners risk slowing down momentum?
Marc Edelman, Barry University School of Law Professor, states one major threat of a lockout will be losing
fans, which can lead to lower ticket sales.
If you look back to 2004, it took three years for the TV audience to return to levels reached prior to the
lockout, said Edelman. Its clear neither side will come out a winner.
The NHLPA will likely fight the proposal, raising the possibility of a standoff from both sides.
I dont think this will be easily resolved. The initial proposal from the owners to the players is a fairly draconian
proposal, said Robert Boland, NYU Professor of Sports Management & Sports Business. For the NHL to
issue a proposal like this after what was a pretty good couple of years including an improved TV contract and
consecutive revenue increases seems to be unjustified. To demand such radical changes from the players is
an extremely strong proposal.
Player sympathizers argue fans buy tickets to see the action on the ice. Its the players who bring the
excitement to the rink, generate revenue and attract major marketing deals. Lucrative league-wide TV
contracts which are a major element of revenue generation will stale.
NHL owners are likely encouraged by the results of last summers CBA negotiations in the NFL and NBA where
player unions were forced to concede to revenue reductions.
Following two significant lockouts in the NFL and NBA and no legal resolution in favor of the players, the NHLs
proposal has to be regarded as the league using leverage to change the economics of the game, said Boland.
Both leagues experienced brief lockout as the result of CBA disputes. The NBAs first month of the season was
wiped out and the NFL experienced a shortened training camp.
Revenue division is not the only topic in the collective bargaining discussions; salary caps, salary arbitration
and player contracts are also being reviewed.
The salary cap, which correlates directly to revenue, rose from approximately $39 million in 2005-2006 to about
$70.2 million this year. The rise enables teams to offer lucrative contracts, exacerbating the issue that
financially struggling teams bottom lines get squeezed by high-priced players.

And as the salary cap rises, so does the salary floor. The minimum payroll rose from just over $21 million
following the last labor dispute to approximately $48 million last season, further straining fiscally unstable clubs
while the most valuable teams like the Toronto Maple Leafs, New York Rangers and Montreal Canadians
headed straight to the bank.
The salary cap and floor will attempt to maximize parity while ensuring financial success for all teams, whether
in a small or large market. CBA negotiations highlight franchises attempting to cut labor costs to boost profit,
but widespread financial achievement is no easy feat.
However, creating an environment in which all teams can thrive economically is nearly impossible, and it will
take more than renegotiating revenue shares and salary caps to come up with a solution. Franchises will also
need to increase and maintain total profits.
NHL players and owners will wrap up talks in Toronto this week and resume negotiations in New York on
Monday and Tuesday.
The NHL regular season is slated to start October 11
Below is a free essay on "Negotiating On Thin Ice" from Anti Essays, your source for free research papers, essays,
and term paper examples.
Negotiating

on

Thin

Grand

Ice

Canyon

University

LDR

610

Negotiating

On

Thin

The 88th National Hockey League season did not start due to the league lockout.

Ice

It would be the first time the Stanley Cup would

not be awarded to the top team since 1919 and the first American professional sports league would cancel a complete season due
to a labor dispute.

The issue that led up to the disagreement between the players and the owners were salary arbitration, free

agency, and guaranteed contracts.

The lockout started September 16, 2004 and it lasted until July 22, 2005 approximately 310

days after both the NHL owners and players ratified the collective bargaining agreement.

A collective bargaining agreement is the

ultimate goal of the collective bargaining process. Typically, the agreement establishes wages, hours, promotions, benefits, and
other employment terms as well as procedures for handling disputes arising under it.

Because the collective bargaining agreement

cannot address every workplace issue that might arise in the future, unwritten customs and past practices, external law, and
informal
Should

agreements
these

are

as

important

parties

to
reach

the

collective
an

bargaining

agreement

agreement?

as

the

Why

written
or

instrument
why

itself.
not?

And Yes because failing to reach an agreement would be a disaster. The main reasons why they should want to reach an agreement
is for the fans who faithfully follow the game along with the players who just want to play the game.

The agreement should be

reached not to satisfy the owners and the players, but satisfy the fans that support both the players and the owners.
What were the barriers to reaching a negotiated agreement (psychological, structural, and tactical)? The main barrier between the
two parties is money.

The owners believe the players salaries were extremely high for the revenue the owners were earning. The

NHLPA believe the owners were not being honest when it came to reporting...