NHL Armageddon 2012: The NHLPA in search of fool’s gold

The National Hockey League Players Association (NHLPA) is in the midst of voting to essentially end their union. When the voting ends Thursday, more than 66 percent of the voting membership (the 700 hockey players with NHL contracts) are expected to authorize their union’s executive committee to disband the players’ association through a ‘disclaimer of interest’ filing, and if the board acts on that authority by Jan. 2, it could open the league’s 30 owners to individual player anti-trust lawsuits and punitive damages amounting to triple their salaries. The strategy is doomed to fail, the end result, NHL owners will be positioned to crush the NHLPA as they did in July 2005.

The NHLPA are following the same path their National Football League Players Association and National Basketball Association Players Association union brothers tried last year during their respective ownership lockouts. The NFLPA won the first round of their court battle in federal district court in Minnesota, but lost in the Eighth Circuit Court of Appeals, which reversed the district court judge by a vote of 2-1. The Eight Circuit Court of Appeals ruled the two sides the NFL and the NFLPA were attempting to negotiate a new collective bargaining agreement (CBA).

Sportnet.ca’s legal expert Rod Becker pointed out “the appellate court stated that under the Norris-La Guardia Act, federal courts are forbidden from enjoining lockouts in the middle of labor disputes.”

In November 2011 the National Basketball Association Players Association filed a disclaimer of interest in their labor battle with the NBA. Twelve days after the filing the NBA and the NBPA reach an agreement on a new CBA, before the courts have ruled.

New York Federal Judge Paul Engelmayer who will decide the NHL and the NHLPA’s legal fate has the legal precedent he needs to toss the NHLPA claim out of his court and suggest to the NHLPA it is in the unions’ best interest to continue doing what they have been doing, try to reach an agreement with the NHL. Judge Engelmayer will likely point out to the NHLPA while the negotiations have not been successful, there have in fact been negotiations with the NHL, and they haven’t been successful, as was the case with the NFL and the NFLPA.

“That's because the players have gone about this process in such a transparent way. What the NHL players are doing (as I'm writing this) is two steps closer to an obvious charade than what the NFL players did in 2011. First of all, since a disclaimer of interest is a quick process, it will be easier for Judge Engelmayer to conclude that it doesn't represent a real breakup between the union and the players. But second, the players are actually in the process of voting to have the union disclaim interest. “Becker offered in a Sportsnet.ca report

“Disclaimers of interest normally happen when a union has grown disenchanted with its membership and essentially fires the members and says we refuse to represent you anymore -- kind of like a contentious divorce. But when the players actually vote to have the union disclaim interest, which is like asking someone to fire you, it's pretty obvious that they aren't disenchanted with their union at all. And just to make the sham clear, it was the NHLPA's executive board that voted to authorize the players to vote to authorize the union to disclaim interest in further representing the players.”

The threat of triple damages could motivate the NHL according to what one insider told The New York Daily News.

“The league will be responsible for three times all the salaries it owes to the players – that will be billions of dollars,” said Jeffrey L. Kessler, a Winston & Strawn partner who represented both the NFL players and NBA players during their respective 2011 labor disputes. “If you were faced with a billion-dollar liability, what impact would that have on your desire to settle?”

Before the NHL panics at Kessler’s suggestion, the league would have to believe the NHLPA has a case has merit.

“I don’t think litigation (on either side) will have the effect of making it more likely that a deal will be done,” NHL deputy commissioner Bill Daly told the Daily News in an email Monday, when asked if there were scenarios outside of regular bargaining that could save the season. “Given late timing, I’m not sure it plays a role this season at all. It may play a roll down the road if the season is cancelled, but it is our belief that would play out in a favorable way for the Clubs.”

The legal process is slow and far from certain. Both sides believe they will prevail in court and while the legal precedent may favor the NHL, the NHLPA believe the ‘threat’ of damages could lead to a settlement?

“Just before disclaimer in the NBA, the league not only did not advance its proposal to the players, it gave an ultimatum that withdrew its proposal and said that it was going to reduce all of its offers because the players had not accepted,” Kessler told the Daily News, describing conditions eerily similar to that of the NHL in this lockout. “So the league was literally going backwards at the moment the players disclaimed. The players then disclaimed. The first thing that the league did was immediately say: ‘Nevermind the going backwards.’ The next thing it did is … reach a litigation settlement which made dramatically different and more favorable offers to the players that it had said it would never even have considered before.

“Draw your own conclusions. The players in the NBA believe that disclaiming is what got them to a litigation settlement and ended the lockout.”

The National Football League generates $9.4 billion in revenue annually. Regardless of which side won the NFL legal battles, Roger Goodell was never going to allow their to be a work stoppage that might impact the NFL regular season, there was far too much money at stake. NBA players knew when they reached their settlement with David Stern on November 26 playing a game of chicken with David Stern is a game you can’t win. NBA players and their leader Billy Smith made the best deal they could.

The level of animosity between the NHL and the NHLPA seems to be at an all-time high. Much of the anger is coming from the NHLPA and a handful of NHL agents.

NHL player agent Ian Pulver, who was a high-ranking NHLPA official in the last lockout, told Hockey Night In Canada radio on Monday that this dispute is getting far nastier than 2004-05 or the lockout-shortened 1994-95 season.

“Last time it was philosophical, cap or no cap, and it stayed at that level,” Pulver believes. “This time, I sense with the owners going to court that we’re in a new realm. Owners are treating players like they did in football and basketball. To me, it’s unfortunate and sad we’re at that point. I didn’t think we’d have another lockout because of everything that went on in 2004-05. And I was wrong.

“You hear the league is ready to die on a hill (on a couple of sticking points). If only one side wants to be flexible, a deal won’t get done.”

Ignore the rhetoric. National Hockey League commissioner Gary Bettman has led the NHL for 20 years is a professional. Bettman is doing what the owners want him to do. Don Fehr the NHLPA’s executive director is just as professional as Bettman. There have been far too many media reports that suggest the NHL isn’t interested in negotiating a new CBA with Don Fehr. Nothing could be further from the truth. Bettman and Fehr respect each other as professionals. They will in the not too distant future reach an agreement on a new NHL CBA.

Expect Gary Bettman to announce a drop-dead deadline in the coming weeks were an agreement has to be reached in order for there to be an NHL season. Expect that deadline to be on January 10 or 11. Once Bettman announces that date, expect Bettman and Fehr to sit down and hammer out the best agreement they can for their respective sides. Failure to do so will be catastrophic for the National Hockey League. There will be a truncated NHL season that starts around January 20, a 48 game schedule, and a complete Stanley Cup playoff that ends in late June.

For Sports Business News this is Howard Bloom