Negotiating: 1

Running head: Negotiating on Thin Ice

Negotiating on Thin Ice

Tod Trippany

Grand Canyon University

LDR 610

Sept/ 29/ 2010

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“The 2004–2005 NHL lockout which resulted in the cancellation of the 88th season of the

National Hockey League. It was the first time the Stanley Cup was not awarded since 1919, and

the first time a major professional sports league in North America canceled a complete season

because of a labor dispute. The lockout lasted 310 days starting September 16, 2004, the day

after the collective bargaining agreement between the NHL and the NHL Players Association

that resolved the 1994–95 lockout expired. The negotiating teams reached an agreement on July

13, 2005, and the lockout officially ended nine days later on July 22, after both the NHL owners

and players ratified the CBA.”

Should these parties reach an agreement? Of course but the “repercussions of failing to

reach an agreement can be catastrophic, Although both sides typically lose in a lengthy work

stoppage, the hockey lockout is notable in that the owners achieved such a dominant outcome.

On nearly all issues in contention, the end result was solidly in the owners’ favor. The union

appears to have underestimated the need for economic restructuring, Batman’s determination to

prevail, and the commitment and financial resources of the owners. The players would have been

far better off if they had accepted the league’s offer in February 2005, just before the season was

cancelled. Probably for this reason, Goodenow resigned as head of the union with 3 years

remaining on his contract and was succeeded by Ted Saskin. Widespread trouble is created.”

The barriers to reaching a negotiated agreement are the” NHL’s team owners argue that

the salaries earned by its players are too high for the revenues that the league is receiving. There

were differences in perspective, differences in interests, differences in priorities, and differences

of opinion. But what made this negotiation more difficult was not what made Bettman and

Goodenow different, but what made them similar. Both of these men had come into their
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positions in the early 1990's. Both had performed incredibly well in their assigned roles. Both

were seen as capable/ competent and caring by their constituents. And both had the same

problem: they were negotiating in the dark shadows of their shared past. Another common

problem that is faced in labor negotiations is “position entrenchment.” The NHL made it clear to

the NHLPA, and the public at large, that no deal would be reach unless it contained cost

certainty.32 Keeping with traditional negotiating tactics, the NHLPA stated that no deal would

be reached if it did contain cost certainty.33 Both sides refused to deviate from those stated

position, and the result was the cancellation of the season.”

Bettman and Goodenow should be the ones be the ones to anticipate and overcome any

barriers because they are the ones leading the negations. “The union rejected the notion that

players needed to help team owners avoid bidding up their salaries, arguing that the free market

should determine players' salaries and that the owners should be their own salary controllers.

Goodenow also rejected Bettman's argument that salaries needed to be tied explicitly to revenue:

They say they want a relationship between revenues and player costs. It already exists, the

union's reluctance to accept a system that tied player salaries to revenues was not only a matter

of principle; the union mistrusted the financial and accounting numbers presented by the league.

The union believed that teams had under-reported their revenues and over-reported their losses.

Saskin called the teams accounting garbage, how could players link their salaries to revenue

numbers they did not trust?”

The power moves used by each party are that “ Bettman was successful in reaching out to

broadcasters, he was less successful in establishing a positive rapport with the union. Some of his

critics charged that Bettman was not a hockey guy and in some obvious ways he was not. He was
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a New York lawyer and a former senior executive in the National Basketball Association (NBA).

As a result, Bettman was perceived by many as motivated by money and no by the love of

hockey. In some ways Bettman and Goodenow were entering the 2004-2005 negotiations as they

had entered so many other negotiations. There were differences in perspective, differences in

interests, differences in priorities, and differences of opinion. But what made this negotiation

more difficult was not what made Bettman and Goodenow are different, but what made them

similar are both of these men had come into their positions in the early 1990's. Both had

performed incredibly well in their assigned roles. Both were seen as capable/ competent and

caring by their constituents. And both had the same problem: they were negotiating in the dark

shadows of their shared past.”

Each party's power had a limit to their power and position, “a common problem that is

faced in labor negotiations is “position entrenchment.” The NHL made it clear to the NHLPA,

and the public at large, that no deal would be reach unless it contained cost certainty.32 Keeping

with traditional negotiating tactics, the NHLPA stated that no deal would be reached if it did

contain cost certainty. Both sides refused to deviate from those stated position, and the result was

the cancellation of the season. Some professional sports leagues and player associations have

used strategic techniques to force the party from its position, or facilitate last minute

negotiations. However, these tactics and the position entrenchment they represent keep the

parties from addressing the root problems that led to the labor dispute in the first place, in favor

of a new deal that is unlikely to solve any long-term issues. Mistrust may also play a role in

negotiations. The NHL hired former SEC Chairman Arthur Levitt to perform an examination of

the League’s finances. When the report was issued in February of 2004, the NHLPA dismissed

the findings as incomplete and self-serving. The NHL and NHLPA have not been able to agree
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on the financial status of the League, even in the face of the Levitt Report. The NHLPA has also

declined to examine the NHL’s financial statements itself, citing a belief that the NHL would not

truthful report revenues.36 Practical experience also shows that, even in cases where a players’

association may examine a league’s financial information, the information may not be believed.”

“The BATNA is often seen by negotiators not as a safety net, but rather as a point of

leverage in negotiations. Although a negotiator's alternative options should, in theory, be

straightforward to evaluate, the effort to understand which alternative represents a party's

BATNA is often not invested .negotiating parties are often reluctant to reveal their BATNA to

the opposing party.”

For the players the agreement was worse than the final offer, “the players forfeited a

combined $1.133 billion in salary before a resolution to the impasse was reached, although both

sides typically lose in a lengthy work stoppage, the hockey lockout is notable in that the owners

achieved such a dominant outcome. On nearly all issues in contention, the end result was solidly

in the owners’ favor. The union appears to have underestimated the need for economic

restructuring, Bettman’s determination to prevail, and the commitment and financial resources of

the owners. The players would have been far better off if they had accepted the league’s offer in

February 2005, just before the season was cancelled. Probably for this reason, Goodenow

resigned as head of the union with 3 years remaining on his contract and was succeeded by Ted

Saskin.”

Distributive bargaining was apparent in this case, the agent representing an athlete

playing for the NHL will more likely be limited to distributive. “Although Integrative bargaining

is important because it usually produces more satisfactory outcomes for the parties involved.
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Integrative solutions are generally more gratifying for all involved in negotiation, as the true

needs and concerns of both sides will be met to some degree. It is a collaborative process and

therefore the parties actually end up helping each other. This prevents ongoing ill will after the

negotiation concludes. Instead, interest-based bargaining facilitates constructive, positive

relationships between previous adversaries Integrative bargaining is a good way to make the pie

as large as it possibly can be, but ultimately the parties must distribute the value that was created

through negotiation. They must agree on who gets what. The idea behind integrative bargaining

is that this last step will not be difficult once the parties reach that stage. This is because the

interest-based approach is supposed to help create a cooperative working relationship.

Theoretically, the parties should know who wants what by the time they split the pie. The

negotiations between the NHL and the NHLPA from 2004 through 2005 appeared to have

typified a distributive, positional approach to collective bargaining. From the outset, both the

Players’ Association, led by NHLPA Executive Director Bob Goodenow, and the NHL, led by

Commissioner Gary Bettman, openly established their incompatible positions and publicly

committed to them. By doing so, they sought to tie their hands and bind themselves to their

respective positions. The NHLPA committed itself to the principle that a deal which included a

salary cap would never be accepted. By contrast, the NHL positioned itself to accept nothing less

than a defined linkage between player salaries and league revenues.

The final agreement could have been reached earlier, thus avoiding the cancellation of

the season. “In the fall of 2004 the owners of the teams in the National Hockey League locked

the players out. This was a chapter in the NHL hockey history all fans sure could have been

without. For the first time in ice hockey history an entire NHL season was canceled. Part of an

NHL season has been canceled before due to disputes with the collective bargain agreement, but
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this time we didn't even get to watch the Stanley Cup finals. And this hasn't happened since

1919, when the Stanley Cup Final was canceled due to a worldwide influenza. That time the final

would have been played between the Montreal Canadians and the Seattle Metropolitans. When

the 2004-2005 season got canceled for the first time in NHL hockey history, many people

thought that this would be the end for hockey in North America. Especially in the important and

wealthy US market. And I am sure this is something that must have troubled the owners of the

clubs and the National Hockey League. You sure lose a lot of fans if you don't show up for an

entire season and with that comes loss of revenue. But the owners and the NHLPA kept

negotiating and finally the owners came out on top. All the time they had known that they must

win the fans back. So they did some serious thinking. And what they came up with was A whole

new game, or at least that was the slogan. The NHL is currently in the peak of their desired

structure. Salary restrictions keep teams from loading up on talent year after year, and while

there are some standout teams in the league, the fight for the playoffs have never been closer.

Games in November have much more meaning, and the competitive balance of the NHL is the

model for any sporting conglomerate. This means smaller cities like Hartford could have been

spared, it means Buffalo will continue to keep its team and Toronto might even gain one, or

possibly Hamilton, Ontario. This means that teams like Columbus and Nashville can build from

the ground up, and this year we're starting to see their scouting investments pay off in terms of

on-ice talent. Some may say that the NHL is doomed because of the lockout, but there really

can't be a better system. Did they lose some fans? Of course, but those fans are missing out

because the sport is better now, and if this trend of parity continues, new fans will emerge and

old ones will return. Let’s not confuse a poor world-wide economy with poor NHL performance,

and let’s not expect the NHL to bounce in to the forefront as our nation's top sport when it was
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never headed in that direction to begin with. Hockey is back.  It's not going backwards

anymore.” It's time for you the diehard fan to come back.
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http://bleacherreport.com/articles

http://en.wikipedia.org

Negotiating on Thin Ice: The 2004-2005 NHL Dispute (A)

Negotiating on Thin Ice: The 2004-2005 NHL Dispute (B)