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Economics of NHL lockout

The hockey league's labor deal expires at midnight tonight, and a work stoppage threatens the entire season.

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Brian Smyth is already bracing for a winter of misery.

"It's going to be a long, cold, lonely season," he says, sitting in a downtown Toronto sports bar festooned with hockey posters, banners, and jerseys. "Hockey is our lifeblood. Without it, there will be no joy. Nothing to celebrate or talk about."

It's the same lament being uttered across Canada on the eve of a National Hockey League lockout. After all, in Canada hockey isn't just a game - it's part of the national fabric, a passion that borders on obsession.

The NHL's collective-bargaining agreement expires at the stroke of midnight tonight, and owners are expected to deadbolt their arena doors across Canada and the US, shutting down the season that's scheduled to begin Oct. 13. Owners and players are in a pitched battle over the basic economics of the system.

A study commissioned by the NHL estimated that the league lost $273 million on revenues of $2 billion during the 2002-03 season. Television ad revenues haven't kept pace with player salaries.

Owners want to cap payrolls, while players want to maintain the current market-based system. Observers say the entire season could be lost, delivering a cross-check to the Canadian economy.

"It will hit like a wallop. A loss of millions and millions," explains Richard Powers, who teaches sports marketing at the University of Toronto. "The trickle-down effect is huge."

While no one tracks hockey's overall impact on Canada's economy, many industries are already feeling the pinch. Last month, the country's largest manufacturer of hockey sticks announced it would trim its workforce, citing a slump in orders from the NHL. Pink slips have already begun to fly in the head offices of teams like the Toronto Maple Leafs and the Ottawa Senators. The list of causalities is expected to swell in the event of a prolonged work stoppage.

Media watchers say the CBC, Canada's public broadcaster, will feel the loss of ad revenues from its top show, "Hockey Night in Canada," a Saturday night ritual in bars and living rooms across the country. "'Hockey Night in Canada' is their biggest drawing property in terms of audience," says Helena Shelton of Media Buying Services in Toronto. "They're planning alternative programming, but no one is going to go there to watch reruns of old movies."


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