How Likely Is The Next NHL Lockout?

“Lockout” might be a word that strikes fear and bad memories to hockey fans, but with the current rumors of labor unrest in Major League Baseball, are we on the verge of another NHL lockout?

If any of you follow baseball, you know that the biggest stories dominating the headlines aren’t about Spring Training and what’s happening on the field. Instead, those headlines are about what’s not happening in terms of free agency and about a potential labor stoppage unless things change. Why should this matter to hockey fans? Well, even though the sports are different, they still share the realm and business of professional sports. Also, consider the frequency of NHL lockouts, the thought of another professional sports strike raises a few eyebrows.

With the MLB seemingly on the verge of another lockout, how close is the NHL to another work stoppage? First things first, the current NHL Collective Bargaining Agreement, which is basically the contract between players and owners, lasts until the end of the 2021-2022 season. However, both the NHL the NHLPA have the opportunity to opt out in September of 2019.

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The main issue at hand with Major League Baseball is few contracts are being given out to major players, as owners would rather spend the money on cheaper replacement options to increase profit and their bottom line.

A hockey equivalent would be if John Tavares, Steven Stamkos, and Tyler Seguin all became free agents at once. Instead of signing them the NHL owners filled their rosters with AHL type players instead. We all know that’s a scenario unlikely to happen in today’s NHL, but it’s what motivating baseball players to work out.

One figure thrown around to justify their dissatisfaction is that even though Major League Baseball makes $10 billion a year, only a tiny amount of that is spent on player’s salaries. The current NHL CBA mandates that 50% of revenue can be used to player contracts, so the NHL largely avoided that problem.

So what about the problems that are likely to affect the NHL and their players? Emily Kaplan of ESPN published an article this past November interviewing current players on what issues they want the NHLPA to negotiate. The two main ones ended up being escrow and the Olympics.

Escrow is the amount that the NHL takes out of each player’s paycheck in case revenue fluctuates for whatever reason, but namely the Canadian to United States dollar exchange rates. Imagine if your boss gave you your paycheck and said, “hey I don’t think we’re going to meet our sales goal for this month, so I took $100 out of your paycheck just in case”.  That’s the real world equivalent. At the end of the year players may receive some of it back, sort of like a tax refund, but that doesn’t change the fact that roughly 10%-20% of their checks were taken year round.

One of the players interviewed in the article, Eric Staal, suggested freezing the salary cap to reduce or get rid of escrow instead of having it fluctuate yearly.

"“It’s a fine line because if you freeze the salary cap, there will be a few guys that likely won’t get jobs, so that’s the hard thing. Because the cap isn’t escalating and those large-market teams aren’t spending on those guys, so there will be a few guys who won’t get jobs because there won’t be room.”"

Lack of jobs and contracts is what’s causing the MLB players to want to strike, so maybe that’s not the best course of action big guy.

Then there’s Olympic participation after the NHL barred its players from going to the 2018 Winter Games. It’s worth noting that Olympic Participation was not included in the last CBA and was left to be decided upon on a separate basis. Putting it in the CBA will guarantee players to get the chance to represent their country and not leave it open to negotiates. The longer the player wait to ask, the longer the NHL has to say no.

Most sports lockouts and strikes come down to one thing – money. While the passion for the game and love of their country NHL players have is immense, Olympic participation would likely take a back seat to the money and salary issue at hand.

Of course, the NHL can always pull the “let’s talk about this one later” card they did in 2013 in terms of Olympic negotiations. Plus, by the time the next CBA is up for discussion, two new teams will have entered the league. More teams mean more money, so expect that argument to be used for higher player salaries.

If there’s another problem not mentioned, it might be a more in-depth look at currency manipulation. Yes, that issue was sort of touched upon with the escrow payments, but the fluctuation of currency and taxes can greatly affect a player’s take-home pay. A player playing on a United States-based team in a low tax state will realistically be making more money than a player playing in Canada. Or what about players that get traded across borders during the duration of the season? It might not be a make or break issue, but it’s one that will probably come up in one way, shape or form.

So will the NHL lockout again in the near future? The players interviewed all said they don’t want a lockout to happen, but if history repeats itself for the fourth time just over 25 years, we might be seeing one. But if there is one, it will be driven by the unique problems that the NHL faces, and not just a response to Major League Baseball’s problems.