Could the NHLPA Form Their Own League?

Arena owners may jump at the chance to fill their buildings in the absence of an NHL season. (Natalie Lutz/Flickr)

With the National Hockey League six weeks into its third lockout since 1994, the thoughts of many around the game of hockey have drifted to possible alternatives. While college and junior hockey are tremendously entertaining in their own right, some have begun to wonder about the feasibility of a new, player-run-and-owned professional hockey league emerging as an alternative to the NHL.

Could the NHL Players’ Association form its own league? And what would they need to do that?

To answer this question, we’ve turned to Marc Edelman, an associate professor at Barry University’s Dwayne O. Andreas School of Law specializing in sports business law.

MONEY

To be a professional hockey league, you require two major components: players and money. Without either of them, you’re not a league and you’re not professional. In order to attract the best players, you require money to pay them. The number of owners you can attract, and the degree to which you can lure them in as partners and investors, determines how many teams you can run and how many jobs you are creating for players.

Edelman notes that an example of how this can trip up a potential players’ league can be found in baseball’s failed 1890 players’ league, formed by John Montgomery Ward.

“The players went off and started their own league, but they needed some money,” explained Edelman. “So they went ahead and they gave a stake, or a share of ownership in the league, in exchange for some funding, exactly what you’d expect if you were starting a business. And everything was good, until they needed more money. And they did the same thing and the same thing again. The idea for a league went out the window within a couple of years because what happened was each time they needed more money, they went back to the deep pockets and give the deep pockets a bigger stake in the league.”

Eventually, the financial framework of the players and owners became more and more like the prior system that the players were trying to escape in the first place. This is exactly the type of situation that the NHLPA is currently involved in and presumably a type of situation they would like to avoid if they constructed their own league.

“Would the players be able to construct this in a kind of way that they’re able to get the money they need to start it without losing the control?” pondered Edelman.

But let us presume that the NHLPA would be able to find partners willing to join them in this venture – which may be difficult given that in a record revenue year for the NHL as many as 18 NHL clubs reportedly lost money. Once you have your partners and your seed money, you need to develop a fully-fledged business plan in order to get your business partners a return on their investments.

That’s where arenas come in, and that’s where things get a bit more complicated.

ARENAS

Presuming you find enough funding to start a league with a fair amount of teams, you need arenas for those teams to play hockey in (and where you can charge money for fans to watch them play).

Generally-speaking, the arenas of the National Hockey League fall into two major ownership categories.

• Publicly-Owned (18): Anaheim, Buffalo, Calgary, Carolina, Columbus, Dallas, Detroit, Edmonton, Florida, Minnesota, Nashville, New Jersey, NY Islanders, Phoenix, Pittsburgh, St. Louis, San Jose and Tampa Bay
• Team-Owned (12): Boston, Chicago, Colorado, Los Angeles, Montreal, NY Rangers, Ottawa, Philadelphia, Toronto, Vancouver, Washington and Winnipeg

It should be noted that in almost every situation where a team leases its arena from a government agency, the team itself is also the manager of that facility. (Example: the Calgary Flames manage the Scotiabank Saddledome and lease their dates from the City of Calgary and the non-profit Saddledome Foundation.)

Now, in addition to being arenas that host sporting events, these buildings are also businesses hoping to make money. While the National Hockey League is not operating games, these buildings stay vacant on game-days. For purely financial reasons, it’s likely that arena managers – particularly in publicly-owned buildings – will want to fill their calendars as much as they can.

“As they cancel games, it’s going to leave the arenas with open dates with nothing to put in there,” noted Edelman. “And they’re going to be looking in any way they can for alternative entertainment events. So that’s one way, at least in the short-term, to get dates in. The other thing is, from an arena standpoint, it would be advantageous to them to fill the rest of their dates.”

In the case of privately-owned arenas, generally-speaking the owners are entirely within their rights to rent to whomever they wish to. However, this is subject to potential challenges based on anti-competition concerns, most likely under the “essential facilities doctrine.” Used in the past to challenge the exclusive lease of the Washington Redskins to RFK Stadium (in Hecht v. Pro-Football Inc.) and a blockage of the sale of the Chicago Blackhawks based on a refusal to sign a lease (in Fishman v. Wirtz), the “essential facilities” doctrine requires there to be no other suitable venue in the market area for a team to play in and that the construction of such in a market area would be cost-prohibitive (to the point of effectively creating or enforcing a monopoly).

In the case of most NHL cities, however, there are usually suitable secondary arenas in the local market areas and any players’ league challenge would have to likely argue for a particular stature of arena. (A team wishing to promote world-class professional hockey in the city of Calgary, for instance, would have to argue that doing so would not be possible in any of the area’s other arenas).

It should also be noted that in Canada, competitive practices are governed by the federal Competition Act and would be subject to different scrutiny. The only NHL-related decision by the federal Competition Bureau was related to the league’s franchise relocation policy (in regards to attempts by Jim Balsillie to move a franchise to the Hamilton area) where the league was found not be operating in an anti-competitive manner in a 2008 decision.

PLAYERS

A prospective players’ league would likely need to offer star players, like Sidney Crosby, NHL-competitive money. (Jeanine Leech/ Icon SMI)

Once you have money to invest in your league and you have places for your teams to play games, you need to find players willing to play. A lot of factors would probably play a part in figuring out how many players join a players’ league, and which ones.

The number of teams fielded would decide what proportion of the 690 (or so) NHLPA members would get to play. Beyond that, it would be difficult to predict which players would vie for spots in the players’ league, as it would likely depend on the salaries offered. (Similarly, this would also dictate which players do not get spots in this league.) For the best players, it would likely take salaries competitive to what they would make in the NHL for them to take a chance on an untried venture. However, this factor could also inflate costs (in an effort to lure good players to the league and attract fans) and potentially make the league more beholden to their investors (as mentioned earlier).

The contract status of the players may also create potential problems.

“If the players are under guaranteed contracts, and then the NHL were to re-start and the players don’t want to perform, technically they’d be in breach of their contracts,” explained Delman. “In terms of the labour position, my understanding is that there are a number of players that are currently going overseas to play, at least during the lockout. I don’t see any fundamental difference between that and them going and trying to start their own league.”

Under the current collective bargaining agreement, players failing to render their services or that “in any other manner materially breach” their contracts may have their contracts terminated by their contracted NHL club. While the lockout is underway, players playing elsewhere aren’t violating their contracts because there’s no active league for them to be playing in. That would change if the NHL returned to the ice.

“I think the biggest issue would be if a limited group of players went off and did this, they settle the collective bargaining agreement, and then the players are in breach of contract because they’re working for themselves as competitors,” said Delman.

COULD IT HAPPEN?

Maybe.

As Delman mentioned, a players’ league has been attempted in the past in baseball. Professional hockey players may be at a disadvantage for this kind of a scenario in-as-much as hockey is a comparably more expensive game to organize and run than baseball or basketball. Logistics would need to be figured out and getting a large enough initial investment to lease arenas and cover other costs, as well as having enough financial resources to lure locked-out NHLers to take a chance on your league, would be tremendously challenging.

If you believe that the 30 most interested, most qualified and most financially suitable investors to own major-league hockey teams are already doing so, then a players’ league probably seems like a pipe dream. That said, there are always curious parties around the NHL’s periphery and it’s possible that any of the past suitors for the Phoenix Coyotes, for instance, could be convinced to join up.

If suitable financing could be acquired, it’s likely that arenas in most markets would be willing to offer such a league dates, at least until the NHL returned. The other challenge would be attracting enough star players and offering a high quality product, otherwise the potential fan-base may simply view such a league as a watered-down pretender to the NHL throne.

Is it likely? Probably not, as there are significant hurdles in place.

Is it impossible? Definitely not.

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The author would like to acknowledge posters “Resolute 14″ and “MagicPixels” at the CalgaryPuck message board for creating a thread that inspired him to write this.

This article was originally published at: The Hockey Writers.