Market Power

Musings by an academic economist on the power of markets and the power over markets.

Tuesday, November 09, 2004

Lies, Damned Lies, and Labor Relations in the NHL

The Labor strife in the NHL is really getting interesting. While professional hockey is the 4th most-popular professional sport in the 4 major American professional sports, the labor market is global. Many NHL players have signed contracts overseas which allows them to keep in playing shape and earn an income while the lockout goes on with little end in site. You can follow your favorite players here. Skip Sauer mentions here that the NHL All-Star game, while cancelled in the US, is effectively going to be played in Russia. In any case, this strengthens the position of the union.

In the wake of some dissension among the players, the NHLPA convened a meeting 10 days ago with player representatives from each team to keep them informed of the situation. The Sports Business Journal (a for-pay site) now reports that the NHL Players’ Association has accused the league of anonymously sending players’ agents a memo that describes various lies made by the NHLPA. Union leaders are supposedly telling fibs to players in order to keep the rank-and-file on the same side of the rink. One of those lies regards guaranteed contracts. See here from the official NHL website about this particular bit of “misinformation.”

The NHL also claims that the misinformation is meant to sway public opinion towards the union’s side. Read here.

Bargaining power is the name of the game. The side that gets more of it and uses it effectively gets settlements tilted its way. There are many sources of bargaining power in labor relations, including 1. alternative sources of income for employees and employers; 2. public relations. It’s apparent that the employees are doing better than the employers right now in terms of alternative sources of income - and pretty soon the league is going to begin losing its national TV money. Advantage: players.

The league seems to be working harder to get public sentiment on its side. The NHL even has a webpage devoted to keeping the public informed here which talks of “distortions”, “inaccuracies”, and “misleading” statements made by the union to its players. The NHLPA has devoted no resources on its website to defend itself to the public – yet.

Right now, it looks like the union has a bit of the upper hand in the current situation. Whether they will keep it is another matter altogether.