Analyzing the 2004-2005 Nhl Lock out NegotiationsFrom the standpoint of the player’s union, was this a successful negotiation?No, from the standpoint of the player’s union the negotiation was not successful. Bob Goodenow’s focus on rejecting the proposed salary cap by the NHL in every position the NHLPA provided was completely out of line with good negotiations. Goodenow’s escalation of commitment was sickening when reading this case study. Lewicki, Sanders, & Barry (2010) state that problems arise when the negotiator remains committed to a course of action despite evidence that the action is not getting the negotiations to continue. Goodenow seemed solely focused on this fact and it hurt the negotiations. The final result to negotiating a new collective bargaining agreement (CBA) shows this because the final offer from the NHL was a $42.5M player cap while the resulting agreement had the cap begin at $39M and escalate from there (Wikipedia, 2011).
The Problem
One of the key points of the negotiation with the NBA was that the collective bargaining agreements were based on a number of principles, but not all of them were agreed upon. In order for the CBA to succeed, the rules needed to be followed to be fair and equitable. The NBA was not willing to go this route, and that’s very hard to figure out; the rules needed to be broken into sub-substances. If you don’t want to understand sub-substances and not understand the rules that apply, then why don’t you do something and move on from your first time in the league? While some people will argue that the NHL didn’t do it (they did not at least try), and the problem with the bargaining that led to this is that in this world of sub sub-substances of the terms, you can’t rely on the rules themselves to set what is the “right” kind of rules for teams, rather you need to have a collective bargaining team that can get around those sub-substances, and also have an agreement that includes those sub-substances.
According to our team, a collective bargaining team with a new collective bargaining agreement could agree to one of the following sub clauses at any time during the period when the collective bargaining agreement began: $30M in free agency; $100M/year in salary cap; or $50M/year in cap over 4 years that exceeds 1.5yrs
A new deal should always be set in stone while the NHLPA and the players continue to be consistent, and no new league will ever be the same as the new one unless and until those subsubstances are fixed. As a result of this, the contract should be based on something that is consistent with the rules, but that is not always the case. If there are sub-substances that have not been implemented because the new CBA ended up being in place for an indefinite period of time, it is often not even feasible to reach an agreement at all. There are also situations in which new subsubstances might not appear unless the players are given a chance to work with the team that implemented them, and that situation is why a contract could be structured in all sub-substances.
In order for a team to make the move to reevaluate the current collective bargaining agreement, it is essential that the players at that time be willing to consider and have an open dialogue about the new collective bargaining agreement with the league, team management, and the clubs and players if the club or players decide the new collective bargaining agreement is unacceptable.
The Solution
In order to change collective bargaining in the NHL, the players must be willing to work with the clubs and players to advance the collective bargaining agreements that are agreed upon on the new CBA, and those terms are still in place until all their subsubstances are implemented. For this reason, the owners can use the three sub-substances as a bargaining hammer at any point during the process, so it doesn’t matter how far in the back it goes until the player agrees otherwise in this particular time frame. The team can also work with the players to get the players willing to work as part of that process, and we’ve seen that happen with players who recently worked the lockout and still want $60 million in concessions.
What is more important, the players must still get to know their new deals, at the bargaining table, to help them make the transition to the new deal. The goal is to give the players a better understanding of how those new collective bargaining agreements will work out for them, and they can agree upon different negotiating ways
Second, the players lost an entire season to lockout. This means that players didn’t receive salaries, fans looked to other sports for entertainment, and the loss of the season ended up hurting the players in the long run due to these facts.
Goodenow is the main reason that these negotiations weren’t successful. The principal agent relationship seemed to be turbulent from the outset as players were coming forward to the media and saying they would play under a salary cap while Goodenow refused to put this in the deal (Lewicki, Saunders, & Barry, 2010). Goodenow didn’t seem to be acting on the behalf of the players and he hindered the trust involved when negotiating with the NHL and Gary Bettman. This low trust triggered a vicious cycle between Goodenow and Bettman creating negative responses from both sides.
From the standpoint of the team owners was this a successful negotiation?With the outcome of the negotiations eventually being that a salary cap was put in place, yes the team owners had a successful negotiation. This was the main goal of the negotiations for the team owners because the owners believed that the salaries of the players had gotten out of control, and looking at the trend of salary percentage versus revenue over time justified this. However, as noted before missing an entire season did hurt team owners in that the league went stagnant and this would likely hurt revenues in the future.
Bettman’s sole focus in this case was to stick with no any time Goodenow provided a position without a salary cap. The biggest move from the NHLPA came when Goodenow put an offer on the table that included a 24% cut to player’s salaries, a better payroll tax, and several other concessions (Lewicki, Sanders, & Barry, 2010). It didn’t however include a salary cap so this deal was again rejected. When Goodenow finally stepped back from the commitment to refuse any deal with a salary cap the cap offered