NHL Owners Now Risk Getting a Criminal Record and Going to Prison if they Conspire to Reduce Players Compensation


Introduction

As I have noted in my previous blogs, and in particular my blog dated Feb 21, 2022, the NHL's collective bargaining system is unfair because it is rigged against the Players.  There is no equality of bargaining power......since 05/06 when the Owners 'broke the union' the NHLPA has not been able to exert any leverage over the NHL whatsoever.  

Players' Compensation as a percentage of HRR (now 50%) has actually reduced since 05/06, and there is no reasonable chance that it will be increased in the future.  

It simply does not make any financial sense for Players to strike, or to try and endure another lockout, in order to make even a small increase in Player Compensation.  The math is set out in my blog of Feb 21, 2022.  

Link to my blog dated Feb 21, 2022:  https://richardrodier.blogspot.com/2022/02/the-current-collective-bargaining.html

Players, and their agents, can complain all they want about Gary's triple hard salary cap system, but unless the Players are willing to strike for at least two seasons they are just 'whistling in the wind'.  They are stuck with the triple hard salary cap unless, and until, the NHLPA is decertified so that the Owners, as a matter of law, automatically lose the protection from Antitrust law that the collective bargaining system currently gives them.

What if the Owner's React to Decertification  with a Lockout of the Players?

Let's suppose the Owners react to decertification by claiming (falsely, but they can make the claim anyway) that decertification constitutes an illegal strike and they proceed to shut down the League and 'lock out' the Players.  That means the owners would risk being found liable to the Players for the triple damages provided for under antitrust law. In our example, a one year lockout puts the Owners at risk of having to pay the Players triple their annual salary.  The Owners may think it smart to take that risk, after all it's only money, which they have alot of.

Owners Now Also Risk Criminal Prosecution and Prison: A Change in Antitrust Law

On November 29, 2021, a US Federal Court held for the very first time that a conspiracy to fix or suppress wages can constitute a per se criminal violation of the Sherman Act (which governs antitrust law).  Now the Owners would be risking more than money.......if they lockout the Players following decertification, they also risk being charged criminally and going to prison.

This marked the first time that a wage-suppressing agreement between horizontal competitors (which the 32 NHL Teams are) has been held to be grounds for a criminal antitrust violation. Wage-suppression cases have historically been prosecuted in the civil context, meaning fines for violators. The expansion of Sherman Act criminal violations changes the ball game when it comes to how companies engage with their workers— NHL Owners ,Team and League executives could face prison time for proven horizontal wage-suppression conspiracies.....and a wage suppression conspiracy is exactly what a lockout is.

Owners' Criminal Conspiracy to Suppress Player Compensation Would be Easy to Prove!!

Sometimes the existence of a criminal conspiracy can be difficult to prove beyond a reasonable doubt.  Fortunately, ever since the 05/06 Owners lockout,  Gary Bettman has continually insisted on the necessity of a triple hard salary cap in order to meet his objective of suppressing Players' Compensation.  Logic then dictates that decertification, which would automatically terminate the CBA and therefore Gary's salary cap, would necessarily result in a dramatic increase in Players' Compensation........as long as the Owners don't secretly conspire with one another to suppress Players' wages.  If the Owners do conspire, they risk the Justice Department Antitrust Division prosecuting them criminally.  That is in addition to sustaining triple damages.

Summary

The US Justice Department, by prosecuting wage suppression conspiracies criminally, has made it much easier for Players to rid themselves of the triple hard salary cap through decertification of the NHLPA as the Players' sole bargaining agent.  The terms and conditions of a Players employment  would be negotiated by the Player and/or his authorized agent on a one to one basis with the team of the Player's choice.

Whether or not Players should choose to decertify the NHLPA is not a choice to be made lightly.  There are pros and cons.  There are risks and rewards. Players must educate themselves on the issues and make an informed choice.


 


  

Comments

  1. AnonymousApril 24, 2024 at 3:58 PM

    Richard, first off, thank you to you and Jim for your efforts to bring Hamilton its well deserved and long overdue hockey team! Your both Canadian heros in my book.

    A few questions looking for your insight. Do you the HUPEG group along with Mr. Leiweke have quiet intensions to try and accomplish this (Hamilton NHL)?

    Could a negotiated split of Bell and Rogers of MLSE ownership result with one (likely Bell) obtaining a Hamilton franchise?

    Hamilton had a NHL franchise from 1919-1925, the Tigers. The franchise was revoked due to a players strike over a pay dispute. The league added more games to the schedule but did not offer more pay. One would think such an occurrence would not fly today, or at the least, would require negotiation with the NHLPA to reach an agreement. It certainly would not result in a franchise revocation and relocation. I'm not a lawyer, but the whole thing sounds shady to me.

    Would there be a case to be made today, that the 1925 revocation of the Tigers franchise was illegal? And if successful, could that result in the Tigers franchise being reinstated in Hamilton?

    Thanks in advance for your thoughts.

    ReplyDelete

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