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2004–05 NHL lockout
The 2004–05 NHL lockout was a labor lockout that resulted in the cancellation of the National Hockey League (NHL) season, which would have been its 88th season of play.
The main dispute was the league's desire to implement a salary cap to limit expenditure on player salaries, which was opposed by the NHL Players Association (NHLPA), the players' labor union, who proposed an alternative system of revenue sharing.
Attempts at collective bargaining before the season began were unsuccessful. The lockout was initiated on September 16, 2004, one day after the expiration of the existing collective bargaining agreement (CBA), which itself had been the result of the 1994–95 lockout. During the lockout, further attempts to negotiate a new CBA floundered; with neither side willing to back down, the entire season was canceled on February 16, 2005. The NHL and NHLPA negotiating teams finally reached an agreement on July 13, 2005, with the lockout officially ending nine days later on July 22, after ratification by the NHL team owners and NHLPA members. The resulting CBA included both a salary cap and revenue sharing.
The lockout had lasted 10 months and 6 days, covering 1,230 unplayed games. As a result, the Stanley Cup was not awarded for the first time since 1919. Among the major professional sports leagues in North America, this was the first (and so far only) time a whole season was canceled because of a labor dispute, and the second time a postseason was canceled (after the 1994–95 MLB strike). Large numbers of NHL players elected to play in European leagues during the lockout.
The NHL, led by Commissioner Gary Bettman, attempted to convince the players to accept a salary structure linking player salaries to league revenues, guaranteeing the clubs what the league called cost certainty. According to an NHL-commissioned report prepared by former U.S. Securities and Exchange Commission chairman Arthur Levitt, prior to 2004–05, NHL clubs spent about 76 percent of their gross revenues on players' salaries – a figure far higher than those in other North American sports – and collectively lost US$273 million during the 2002–03 season.
On July 20, 2004, the league presented the NHLPA with six concepts to achieve cost certainty. These concepts are believed to have included a hard, or inflexible, salary cap similar to the one used in the National Football League, a soft salary cap with some capped exceptions similar to the one used in the National Basketball Association, and a centralized salary negotiation system similar to that used in the Arena Football League and Major League Soccer: Bettman had earlier concluded that a luxury tax similar to the one used in Major League Baseball would not have satisfied the league's cost certainty objectives. While most sports commentators saw Bettman's plan as reasonable, some critics pointed out that a hard salary cap without any revenue sharing was an attempt to gain the support of the big market teams (such as Toronto, Montreal, Detroit, the New York Rangers, Vancouver, and Philadelphia) that did not support Bettman during the 1994–95 lockout.
The NHLPA, under executive director Bob Goodenow, disputed the league's financial claims. According to the union, "cost certainty" is little more than a euphemism for a salary cap, which it had vowed never to accept. The union rejected each of the six concepts presented by the NHL, claiming they all contained some form of salary cap. The NHLPA preferred to retain the existing "marketplace" system where players individually negotiate contracts with teams, and teams have complete control of how much they want to spend on players. Goodenow's mistrust of the league was supported by a November 2004 Forbes report that estimated the NHL's losses were less than half the amounts claimed by the league.
Several players also criticized the contracts that overpaid unproven players: one example was the 2002 Bobby Holik contract, in which the New York Rangers signed him to five years for $45 million. After two years, his contract was bought out by the Rangers: according to Glen Sather, the Rangers' president, "In the new world we live in, Bobby was just paid too much".
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2004–05 NHL lockout
The 2004–05 NHL lockout was a labor lockout that resulted in the cancellation of the National Hockey League (NHL) season, which would have been its 88th season of play.
The main dispute was the league's desire to implement a salary cap to limit expenditure on player salaries, which was opposed by the NHL Players Association (NHLPA), the players' labor union, who proposed an alternative system of revenue sharing.
Attempts at collective bargaining before the season began were unsuccessful. The lockout was initiated on September 16, 2004, one day after the expiration of the existing collective bargaining agreement (CBA), which itself had been the result of the 1994–95 lockout. During the lockout, further attempts to negotiate a new CBA floundered; with neither side willing to back down, the entire season was canceled on February 16, 2005. The NHL and NHLPA negotiating teams finally reached an agreement on July 13, 2005, with the lockout officially ending nine days later on July 22, after ratification by the NHL team owners and NHLPA members. The resulting CBA included both a salary cap and revenue sharing.
The lockout had lasted 10 months and 6 days, covering 1,230 unplayed games. As a result, the Stanley Cup was not awarded for the first time since 1919. Among the major professional sports leagues in North America, this was the first (and so far only) time a whole season was canceled because of a labor dispute, and the second time a postseason was canceled (after the 1994–95 MLB strike). Large numbers of NHL players elected to play in European leagues during the lockout.
The NHL, led by Commissioner Gary Bettman, attempted to convince the players to accept a salary structure linking player salaries to league revenues, guaranteeing the clubs what the league called cost certainty. According to an NHL-commissioned report prepared by former U.S. Securities and Exchange Commission chairman Arthur Levitt, prior to 2004–05, NHL clubs spent about 76 percent of their gross revenues on players' salaries – a figure far higher than those in other North American sports – and collectively lost US$273 million during the 2002–03 season.
On July 20, 2004, the league presented the NHLPA with six concepts to achieve cost certainty. These concepts are believed to have included a hard, or inflexible, salary cap similar to the one used in the National Football League, a soft salary cap with some capped exceptions similar to the one used in the National Basketball Association, and a centralized salary negotiation system similar to that used in the Arena Football League and Major League Soccer: Bettman had earlier concluded that a luxury tax similar to the one used in Major League Baseball would not have satisfied the league's cost certainty objectives. While most sports commentators saw Bettman's plan as reasonable, some critics pointed out that a hard salary cap without any revenue sharing was an attempt to gain the support of the big market teams (such as Toronto, Montreal, Detroit, the New York Rangers, Vancouver, and Philadelphia) that did not support Bettman during the 1994–95 lockout.
The NHLPA, under executive director Bob Goodenow, disputed the league's financial claims. According to the union, "cost certainty" is little more than a euphemism for a salary cap, which it had vowed never to accept. The union rejected each of the six concepts presented by the NHL, claiming they all contained some form of salary cap. The NHLPA preferred to retain the existing "marketplace" system where players individually negotiate contracts with teams, and teams have complete control of how much they want to spend on players. Goodenow's mistrust of the league was supported by a November 2004 Forbes report that estimated the NHL's losses were less than half the amounts claimed by the league.
Several players also criticized the contracts that overpaid unproven players: one example was the 2002 Bobby Holik contract, in which the New York Rangers signed him to five years for $45 million. After two years, his contract was bought out by the Rangers: according to Glen Sather, the Rangers' president, "In the new world we live in, Bobby was just paid too much".