The 1992 NHL Players' Stike: A Relevant Story

JP Nikota
August 09 2012 01:46PM

I was only six years old when the NHL saw its first significant labour disruption in 1992, and to be honest, I had forgotten that it had happened at all. Having read Bruce Dowbiggin's Money Players, however, the story seems suddenly relevant.

Full disclosure: I've taken nearly all my information from Dowbiggin's book, so much credit goes to him for this article.

The NHL's then-president John Ziegler was at the helm of a very prosperous league, and he was often seen publicly trumpeting the impressive financial gains achieved under his tenure. (Note: Sound like someone you've heard of?) The league was the beneficiary of franchise relocation and expansion fees, and a national broadcasting contract had been signed with SportsChannel in the U.S. Young stars Mario Lemieux in Pittsburgh and Wayne Gretzky in Los Angeles were growing the game south of the border in a big way. Disney's The Mighty Ducks had just been released, and hockey was cool in the U.S.

The league was 50 games into what was then an 80-game season (it was later extended to 84 games) when recently-hired NHLPA boss Bob Goodenow called for job action. The players voted 560-4 in favour of a strike, and the league shut down for a mere 10 days. The players achieved increases in playoff bonuses, rights to their appearances on trading cards, and a few other issues.

Why did the NHL fold like Superman on laundry day? The answer is, in part, that there existed a disparity between smaller and larger-market teams. Minnesota North Stars GM Bobby Clarke said "It won't be the poor owners who decide to give up, it'll be the rich owners who want to get back to playing. They can still make money. The poor owners can stay out forever, because they have nothing to lose."

The Leafs, the Rangers, and the Habs and all the usual wealthy suspects were making money hand over fist and, since it was already April, many of the teams were hungry for playoff revenue. Many others, such as the Blues and the Sharks, were struggling to pay for brand new arenas, and attendance problems reared their heads in cities like Winnipeg and Hartford.

Even twenty years ago, smaller-market teams were having increasing difficulty signing high-profile players, as the era of multi-million dollar salaries had just begun (see: The Gretzky Trade). Players had recently started disclosing their salaries to each other so that they could compare their earnings to other players they perceived to be similarly talented. Moreover, with Alan Eagleson gone, players' value was no longer being undercut.

Later, Eric Lindros' long holdout for a contract lead to a massive contract (relative to the era) of over $3M a year, and set a benchmark for other young stars. If a man who hadn't played a single NHL game could get this much money, what were all these other emerging stars worth?

The gap between the NHL's poor and rich was already growing, but in the end, the wealthy teams and desperate new-arena teams forced the poorer ones to settle.

From Money Players:

Never underestimate how tough it was for Goodenow to sell the players on a strike," says former Calgary GM Craig Button. "He did a great job of getting the players that the owners couldn't afford to stay out. But had management simply shut down the game for the rest of the year, we'd have destroyed his credibility. Once players saw what happened when Ziegler settled, the league guaranteed his credibility and made the 1994-95 lockout possible.

This was the NHL's first big opportunity to address the disparity of riches amongst NHL teams, and they did nothing of the sort. No discussion of a hard cap. No mention of a luxury tax. No revenue sharing at all, actually.

So let's recap

The NHL was, as a 22-team entity, a very healthy business, reaping record profits. Then, owners began to cry poor when players started demanding more money. Those teams that were struggling financially had their heads pushed back underwater so that the game could keep going, and no help was offered.

The current state of CBA negotiations between Donald Fehr and the NHLPA and Gary Bettman and the NHL is perhaps less different a problem than we realize: the league has been refusing to help out its poorer teams for decades, and has always tried instead to take the cash out of the players' pockets.

Here is a good summary of today's situation from Robert Boland the Tisch Institute at NYU via the CBC:

The functionality of this dispute really is about owner-to-owner [revenue sharing]. It's that the big market teams are earning revenue at very, very high levels, the Original Six plus Philadelphia and maybe a couple of other very good franchises are doing really, almost record numbers, and some of the other franchises that are in more marginal markets are struggling more just to break even. So the fact that there is revenue growth, that drives the salary cap up, the salary floor up on all the teams, making it tighter on the smaller market teams. So one of the ways we would solve that problem is to share revenue between teams and manage that disparity, but that is very unpopular among owners, generally.

The circumstances around the issue have changed, but disparity between teams has been an issue for at least two decades now, and I'm willing to bet my hat that the wealthier teams get the season going again before the Winter Classic gets cancelled.

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#1 Spydyr
August 09 2012, 02:02PM
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Fist to say it is all about the mighty dollar.Not making the game better.

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#2 Danny Gray
August 09 2012, 02:16PM
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This is why I think they should just have a luxury tax. Smaller market teams are still at a disadvantage. Let the Leafs spend like mad and then pay an insane luxury tax that goes to the poorer teams.

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#3 Michael
August 09 2012, 02:25PM
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NHL to lock out players if no contract reached by Sept 15th - CBC

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#4 J21 (@Jyrki21)
August 09 2012, 02:35PM
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I think you have some of your timelines mixed up. At the time of the 1992 strike, the Leafs were not about to make the playoffs and the Lightning weren't in the league yet, and as such were not losing revenue. For the record, also, Lindros' holdout was not for a contract, he simply refused to play for Quebec.

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#5 druds
August 09 2012, 02:59PM
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This article needs a a fact and spell checker

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#8 AutoOiler
August 09 2012, 04:07PM
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The players should have been prepared to strike this time.

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#9 Mark-LW
August 09 2012, 04:34PM
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Danny Gray wrote:

This is why I think they should just have a luxury tax. Smaller market teams are still at a disadvantage. Let the Leafs spend like mad and then pay an insane luxury tax that goes to the poorer teams.

That doesn't help smaller teams be competitive and ends up hurting attendance even more because of the disparity in teams.

See Baseball.

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#10 Cervantes
August 09 2012, 05:15PM
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When revenues go up, the league needs to start funneling that money to weaker teams and players, not increasing the cap. What's happening is the stronger teams are ensuring they report awesome profits, which pushes the cap up and ensures the weaker teams are struggling even more to perform. Instead of being able to make a balanced team of low cost players, they now have to pick up failures on overpriced contracts just to be able to play. When the cap floor now is higher than the cap ceiling was at the start of this contract, something is very very wrong, and the answer is not pushing down salary for players, it's achieving better balance for teams and their budgets. The issue with contracts is not so much about greedy players taking money, it's greedy owners trying to find ways around the rules. That's why you have lifetime contracts that have five cheap years tacked on the end. Owners and GMs, not players, are the thing that needs fixing.

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#11 Reality Check to the head
August 09 2012, 06:41PM
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IMO, the owners are to fault for this issue. They are moving towards a lockout, but at the same time are offering incredible, ever-increasing contracts to players (insert: Weber, Sutter and Skinner's name). As a fan, I have to wonder to what the H-E-double hockey sticks they are thinking?

Basically, the owners are trying to create a system in which they are protected from themselves. Players value is always going to be high because there is a finite number of excellent players. Teams are going to always push to be a winner, and thus, will offer whatever needs to be done to complete the transaction and create a contender.

I think there should be a salary cap connected to league revenues. There should also be exemptions to the cap so that teams could offer a percentage more then the max contract in order to entice their draft picks that have completed their first contract and restricted FA terms, to stay on with the club. These clubs have made a valuable investment of time and money into their development. Lastly, there should be an extension of the time it takes for players to be Free agents.

Looks like I wont be going to the game on OCt 16 vs. the Kings. Boo-urns, Boo-urns indeed.

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#12 vetinari
August 09 2012, 08:51PM
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Of course the NHL would rather lockout the players now than risk them walking off the job in mid season... By mid season, the negotiating power shifts to the players... There would be at least 16 teams in a playoff position, and with parity, likely another 4 to 6 teams with possible asperations of a playoff spot. Thus, the owners would start to divide.

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#13 Kevin R
August 09 2012, 10:02PM
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The Cap system the Owners fought hard for in 2004 actually does work. The NHL has one of the best parity in the world of professional leagues. The Cap is getting circumvented because the haves are tired of parity & want to win & will spend stupidly to do so. Perhaps the negotiations should start with the Owners. Structure the Cap differently. Find a consensus on a mandatory floor that works for the have not teams(so probably lower than what it currently is) Then, create a bonus structure to contracts where the rich Owner can pay a covetted player a bonus up front that isnt part of the salary cap calculation and create a very high tax and ceiling for bonus components in the contracts that can act as the revenue sharing component for the havenots (a luxury tax so to speak). Tighten the RFA rules so that we dont see the Weber scenarios, like offer sheets cant have a bonus component to RFA, only to their players & UFA's. And maybe these very rich individuals and corporations can find it in them to split the riches from this incredible sport 50/50. Surely there are some creative ways to make everyone happy.

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#14 Reality Check to the head
August 09 2012, 11:02PM
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Kevin R:

The one thing that is stupid about the current cap system is the cap floor. It is not based on percentage but an actual real number. What I mean is that the fact that the floor is always 16 million $ under the cap is stupid and a serious mistake. Maybe, the floor should have been set at 66.3% of the cap. Then the bottom teams would not always have to play catch up (66.3% is just a figure in my head not a something I have researched).

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#15 Kevin R
August 09 2012, 11:15PM
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Reality Check to the head wrote:

Kevin R:

The one thing that is stupid about the current cap system is the cap floor. It is not based on percentage but an actual real number. What I mean is that the fact that the floor is always 16 million $ under the cap is stupid and a serious mistake. Maybe, the floor should have been set at 66.3% of the cap. Then the bottom teams would not always have to play catch up (66.3% is just a figure in my head not a something I have researched).

Well I think there does have to be a floor & maybe something along the line of what you suggested can create a bridge. You know, at some point you have to let the leash out a bit on some of these deep pocket owners & let them spend. Find a way to keep as much parity as possible. Bottom line, these owners need to agree on a Cap structure that has all the teams excited about & then I dont think it would be as hard to sell to the players. What was offered to the players so far was a joke.

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#16 Reality Check to the head
August 09 2012, 11:22PM
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Kevin R:

Agreed a joke and the owners know it.

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#17 KleptoKlown
August 10 2012, 04:23AM
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Just wish us fan could get organized enough to actually make a difference.

WE pay the money in order to enjoy this product, yet most of us have our heads so far up our asses that we can watch our hearts beat.

I admit I'm guilty. I have bought jerseys, tickets, paid online subscriptions and am typically watching HNIC.

I have been a loyal fan for as long as I can remember. This loyalty is rewarded with crybaby millionaire vs crybaby billionaires a couple times per decade.

At the end of the day I dont care about the money...but I expect my seasons to start on time, and end on time every single year. If these current suit wearing D-bags can't figure out how to get this done, then the need to be replaced by people who can.

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#18 VMR
August 10 2012, 08:40AM
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The league already has revenue sharing they just call it the Pheonix Coyotes!!!!

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#19 howard stewart
August 10 2012, 08:51AM
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I heard a comment recently about salary caps in sport that seems to make sense. If the salary cap is too high then a few (more affluent)franchises succeed and the bulk of the franchises struggle. That would represent the current situation in the NHL. If the salary cap is low enough that most of the franchises can be profitable the players dislike it. This may be an opportunity to make more than 7-8 teams in a 30 team league profitable. There has to be a sustainable business model for the league.

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#20 puck-bandit
August 10 2012, 09:25PM
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Hockey is an emotional game, no different for us fans, and both sides are playing on that right now. When I played in the Ont. Hockey League I knew how close I was to getting drafted, but chose another path. I played for the love of the game, as I did with soccer, or any other sport. My brief point; listening to young players just getting drafted, or their first signing. It is for the luv of the game never listening to the luv of money. I know we all need to make a living, but I ask; what has happened to our game? My buddies and I are so fed up with all the bickering over money, terms, and etc... what about Hockey? We should be at the negotiation table as well, who pays their million salaries, we do! Last summer was filled with sadness, this one is filled with greed.

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