Eurolanche

Economic view of the lockout

NHL and NHLPA are like two monopoly companies which live in the ecosystem – they are interdependent. NHLPA - have players who need jobs, NHL - rules league and needs players. The better negotiator wins, what makes this situation similar to a ‘pat situation’ in the chess.

It is natural that everyone wants bigger part of the pie. But in spite of all, teams are in worse bargain position (at least in short term). Why? For example – Avs. Team earns on tickets, advertisements, shops with Avs related stuff, games broadcasting and a lots more. When the lockout is in the game, team’s earnings decrease, while outcome are in almost stable level (maintenance of arena, buildings, staff, etc.). Well, if the Avs owner does not want to go bankrupt, he must agree to NHLPA terms, because without games he will lose money. Oops sorry, this is how economy works.

Of course teams want to have the best players in the league. These players are expensive.
Team must earn for them, but when NHL takes also more money from the team, it’s hard to do it. The best way for the team to find this money is the increased of tickets prices. Sorry hockey fans, do not buy new car, because you will not watch live game. It causes the demand on tickets will be lower, what in future will bring old problem back (problem of team’s earnings). Oops number two – vicious circle.

How the situation looks for NHL? They also have outcomes, but there are tiny as against teams, that they won’t run out of money so fast. Of course, incomes are lower too – no TV games, lower sale on shop.nhl.com, lower teams and NHLPA profits. But whatever, doesn’t matter – one, they know that opposite side should give up earlier; two - they are economy vulnerable only in long term.

OK, I have gone too far. I forgot about real reasons of lockout, didn’t I? Well, for me it doesn’t matter. In fact I do not care what’s the real cause of this madness is, but it’s only mu subjective opinion. It’s all about Avs. Oops, sorry. It’s all about money. Virtually lockout is problem of NHL, NHLPA, teams and whole this –for some of you - weird structure.  As I wrote, better negotiator or better financier will win this game. Fans’ problem is an impossibility of watching their favorite teams and players. So we should care and – if you want - pray only for fast ending of that lockout story.  I can assure you that everybody wants get richer and richer and ‘thanks’ to these materialistic hockey-maniacs, sooner or later National Hockey League will be back. 

Take care fans.

I apologize in advance if you do not agree with me and for changing the truth about operational side of the NHL. I came up here with possibility of using ‘licentia poetica’. I do not know how exactly NHL structure works – from what source they get revenues and what costs are related to running this whole business. I made theoretical assumptions of my NHL model, for instance: one of NHL’s incomes is part of teams and NHLPA profit. So everything is a lot simpler than in real life.