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What is a Lockout in Hockey?

May 7, 2011 | By Jeremi Davidson

NHL lockouts stop the league from functioning, which creates difficulties for fans, players and owners. All parties wish to avoid these work stoppages, but they become necessary when the players and owners cannot agree on how to split up the league's revenue. Fans hope that the two sides have learned from their mistakes and will avoid another lockout in the future.

Definition

NHL lockouts occur when the owners and the players' association cannot come to consensus on a new collective bargaining agreement. Because of the presence of unions, such as the NHLPA, the owners must have this agreement in place with the players in order to have a season. Without such an agreement in place, the owners must prohibit the season from starting until the two sides can agree on terms.

1994-1995 Lockout

The owners locked the players out in 1994, leading to the cancellation of 468 games that season. The NHL and NHLPA finally came to an agreement in January 2005, so they did not lose the entire season because of the work stoppage. The two sides discussed issues like the implementation of a salary cap, salary rollbacks, free agency and roster sizes, although some issues were not permanently resolved.

In the 1994-1995 lockout, the owners managed to implement a rookie salary cap, which limited the amount that a player could earn during his first contract. They could also keep these players as restricted free agents until they reached the age of 31, which prevented other teams from signing their players without compensation until they had reached that age. They believed that this would help curb the growth of player salaries, since teams would not end up in bidding wars.

2004-2005 Lockout

The NHL lost its entire 2004-2005 season because the players and owners could not reach a new collective bargaining agreement in time. The league wanted to implement a salary cap for players, since owners believed that the increase in player wages had reached a critical stage. They also called for a rollback on salaries, as this would provide immediate relief for cash-strapped owners.

The owners received much of what it asked for in 2005, as they got a salary cap with a range of between $21.5 and 39 million, effective immediately. The owners got the players to agree to a 24-percent rollback in salary, so each player would take a pay cut. The league also started a revenue sharing program, in which the teams with the highest revenue would send money to the lower-revenue teams to help them break even.

Controversy

During the 2004-2005 lockout, different reports came out regarding the owner's losses. The NHL reported that its franchises lost $500 million during the two seasons prior to the lockout, while independent researchers at "Forbes" magazine believe the league lost closer to $200 million in that time. "Forbes" also reported that the players took 60 percent of league revenues, making it difficult for the owners to make money.

References

Article reviewed by Bryn Bellamy Last updated on: May 7, 2011

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