By now, the narrative is loud and clear. The NHL does not make any money off the Winter Olympics, and it wants out.
That’s the narrative, anyway.
Earlier this week, NHL Commission Gary Bettman held court next to International Ice Hockey Federation leader Rene Fasel in a presser at the Sochi Winter Games. The two have been at the heads of their respective organizations for a number of years and have done battle more than once. This week, they fielded questions on a number of topics, not the least of which was the matter of the NHL’s participation in the 2018 Pyeongchang Winter Games.
“No relationship is ever one-sided, and I think we’ve been very clear that the decision ultimately that has to get made is a balancing act,” Bettman said at the presser. “It’s not all good, it’s not all bad. It has to be balanced.
“Nobody has really focused on the scales of what comes next at this point in time.”
In other words: we’ll make a move on 2018 when we absolutely have to.
Such a maneuver would have a perfect precedent in the NHL Lockouts we’ve seen in 2005 and again in 2012. In order to greater leverage revenue streams towards their bottom lines, NHL owners will flex their muscle until the deal tips in their favor.
That muscle exists in that the current collective bargaining agreement between the NHL and NHL Player’s Union does not expressly grant permission for NHL players to attend the Winter Olympics. The decision to send players to the Sochi Games was made rather late in the planning process, and insuring the players who attend is an increasingly expensive prospect.
Without guarantees in the CBA, NHL owners can effectively lock their players out of Olympic participation.
One can argue how effective that business model is when it shuts down your core business for months on end. In the case of the Olympics, the NHL would only slow the businesses of the International Olympic Committee and the IIHF — perhaps enough to extract further benefits out of sending its players to the tournament. It might take a few years of posturing and fence-sitting to convince the IOC and IIHF to sweeten the Olympic pot, but if the NHL can place the burden of participation on the concessions of those parties, it’s likely the NHL will get more of what it wants.
If that sounds like a strong-armed method of extraction, it’s because it is. And no one does it quite like the NHL.
Even as the current tournament is underway in Sochi, the NHL has begun laying the foundation for its participation (or lack thereof) in the next Games. The NHL seems to be quietly whistling its way out of the Olympic door, if what Bettman and deputy commissioner Bill Daly have to say has any merit. The talk could be genuine. It could also be a bargaining tactic. Bettman has been breadcrumbing the NHL’s Olympic exit strategy for some time now, and that exit strategy could work to lean on the IOC for more concessions — or, to serve as a real way to bow out of the next games.
It’s a leverage play, and anyone who followed the last lockout knows the NHL has this bargaining thing down to a science.
The idea was floated by Elliotte Friedman in his 30 Thoughts column at CBC. The piece featured an overall Olympic theme, but items 22 and 23 were of particular interest for anyone following the NHL-IIHF dance:
22. [Flyers owner] Ed Snider is nothing if not consistent. After the 2006 event, we did a piece for HNIC on the future of the Olympic hockey competition. He agreed to be interviewed on-camera and was quite clear he didn’t want it to continue after Vancouver. Steve Yzerman passionately argued in defence of participation earlier this week. The players want to be here. I’m not as convinced as others there will be no NHL involvement in South Korea.
23. Why? It benefits the NHL to create doubt in the IOC’s and IIHF’s mind. When negotiations were ongoing for Sochi, several sources said there was no way those two entities would pick up travel and/or insurance costs. “They don’t do it for basketball, why would they do it for hockey?” was the common statement. Well, it happened. If you get someone to bend once, you’re convinced you can do it again. NHLPA executive director Donald Fehr (assuming he is still around then) will wait, wait, wait as is his regular strategy to see what the other side is willing to give up when decisions must be made. Let’s see where this goes.
The NHL may not want its players to participate in the games. Everyone else does. That goes for the players as much as anyone, for whom the chance to represent their country on a world stage may mean as much as a Stanley Cup victory, if not more.
Bettman’s NHL has shown itself willing to absorb a nasty PR blow as long as its good for business. Bowing out of the Olympics may be the best business move for NHL owners, but they are going to be met with opposition at all sides in that quest.
If so, why not let their players continue participating — as long as they’ve made the arrangement as good for their business as possible first?
Getting all that they can out of the IOC and IIHF is a negotiation like any other, although it would never reach the levels of bitterness or mistrust of lockout negotiations in the past. In fact, Bettman and NHLPA chair Donald Fehr would be at work for the same team, as it were. Whatever stands to benefit the NHL in the Olympics benefits the players and, by extension, the player’s union.
Bettman has proven he’ll fall on the knife for his bosses time and time again. Fehr drove him to the point of insanity with his quiet detachment in the last CBA battle, once famously taking 30 minutes out of a meeting to get a water break. The waiting drove the NHL mad. Who knew if Fehr was even thirsty? They’re both masters of the negotiating, and would be on the same side of any negotiation with the IIHF.
Now imagine yourself on the side of the table opposite that lawyerin’ dream team as you make a pitch for the best players in hockey to attend your tournament, free of charge, while those men put their business on hold for two weeks at the peak of their season.
The NHL may not have the popular stance here, but they do seem to hold all the cards. Look at all they have going for them already:
- The last CBA (which expired after the Vancouver games) guaranteed Olympic participation. This version of the CBA does not.
- The NHL is dangling the idea of the World Cup of Hockey as an alternative. Or maybe just another event. But the threat is there.
- The league’s rhetoric concerning Pyeongchang has been vague at best, unimpressed at worst. Sound familiar?
- This is not 1998. Men’s Hockey is the Winter Games’ tentpole event. The IOC now needs the NHL more than the NHL needs them.
The biggest key here may be the possibility of a reborn World Cup of Hockey. Bettman and others have spoken highly of such a tournament. At this point, the NHL would have the financial muscle and marketing channels to make the event legitimate. NBC, broadcast partner to both the Olympics and the NHL, would have an international tournament that could be broadcast at a time when North American audiences aren’t fast asleep. Above all, the NHL would stand to profit from the tournament in ways the IIHF currently profits from the Olympics.
As far as the IIHF is concerned, the World Cup represents a bargaining tactic at best and a real Olympic alternative at worst. If the NHL can lean on the World Cup as a real exit strategy for the Olympics, Fasel and his crew would have to be more accommodating to the NHL’s wishes.
So it’s a sure bet there will be a formal announcement on the return of the World Cup before any commitment to the 2018 Olympics is made.
Like the CBA and hockey-related revenue and every lawyerly talking point that accompanied the NHL lockout, the meat of the Olympic debate comes down to money. Bettman and the NHL owners who employ him have been less than impressed when it comes to the use of their players in an international tournament, and who can blame them? The league shuts down once every four years and puts billions of dollars of its most prized assets on loan to a governing body no one should trust in a country half a world away so that the NHL’s fans can temporarily embrace a product that is perceived as superior to their own.
These owners have earned the ill will often directed toward them. In the case of Olympic participation, though, its hard not to see their point.
“We see international competition on the horizon. It’s really just a question of what the format will be.”
Gary Bettman, 18 Feb 2014. USA Today
NHL owners risk a great deal of guaranteed money in these tournaments. The IIHF and IOC see to it that the NHL does not make penny one off the games — unless you count the vagaries of television exposure and the like (the NHL does not). It’s a deal that the league struggled with ahead of the Vancouver Games and again prior to Sochi. Bettman spelled out the league’s stance clearly enough last fall when he described NHL participation in the Sochi Games as a measure of “goodwill” towards its players.
The NHL has authored three work stoppages in two decades. If sending their players to the Olympics is a goodwill gesture, it’s got a shelf life.
So what is it exactly about the deal that has the NHL so unhappy? Again, money. The NHL doesn’t get to share in the proceeds of the tournament. The IIHF is the governing body when it comes to Olympic hockey. Every piece of Olympic-themed merchandise sold goes into their coffer. The NHL has no claim to merchandising or television rights and has to rely on the IIHF to make sure its players are accommodated properly. Individual owners looking to profit from Stanley Cup playoff runs are asked to hold their breath while their best players put it all on the line in a tournament that is nothing to them if not a tremendous liability.
This year, the NHL had to twist the IOC’s arm to insure its players in the Sochi games to the tune of $8 million dollars. NHL payrolls are rising every year — the salary cap increased by $6 million in the first season after the 2012 Lockout. There’s no telling where the value of player salaries will be in 2018. How much will it cost to insure players then?
Unless money starts coming their way, it seems NHL owners just aren’t going to bend on 2018.
Much ink has been spilled on the topic, even as the tournament in Sochi enters its Semifinals round. As much as NHL owners and executives have forged their image as profit-seekers, it’s hard to argue patriotism in lieu of the money they are putting on the line.
It’s a business deal heavily weighted against the NHL. Those tend not to last.
“It should not take all that long [to decide on 2018], but I would have said the same thing coming out of 2010,” Daly said before the men’s hockey tournament got under way in Sochi. “We will have a broader discussion with the players’ association on international competition and what we are doing internationally. That discussion is under way so I would anticipate a quick resolution in respect to the Olympics, maybe six months.”
If there’s a resolution to this whole thing within six months, color us surprised. The nature of bargaining sessions is to wait until the last possible second before ceding ground to help reach a deal. Obviously, the city of Pyeongchang will need an answer in due time to accommodate their preparations for the games. That shouldn’t stop the NHL from pushing Fasel and the IIHF to the brink of a deadline to help soften the blow of shutting down their season for two weeks.
Like the lockouts, the Olympic question is a matter of business. The NHL business has been hitting on all cylinders over the last decade, and Bettman is as much to thank for that as he is to blame for his work stoppages.
In other words, don’t expect a quick resolution on 2018.
“I love to bargain with these people after every Olympics,” Fasel said at the joint press conference. “It would be boring if we decided the next 10 or 20 years with the NHL. It’s so nice to be with Gary and fight in New York and have some discussions.”
“We have fun,” said Fasel.
Oh, yeah. This is going to be fun.
I’m on twitter.