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Why NHL owners hate capitalism

NHL owners grew rich in a free market, but capitalism is the last thing they want to see in the NHL.

Capitalism? In my NHL? I don't think so, Mr. Daly.
Capitalism? In my NHL? I don't think so, Mr. Daly.
Bruce Bennett

If you’re one of the people who are supporting the owners in this lockout, a lot of your reasoning likely comes back to the economic system we live in – namely, capitalism. The owners, you may think, put their money up to pay for the team (and any losses that may be incurred). In capitalism, they should be making the decisions for their business, right? There is just one problem with this line of thinking.

The NHL doesn't operate under the rules of capitalism, and would be hard pressed to succeed as it does now should the rules change to reflect as such.

You see, capitalism doesn't just work for owners. It can benefit the workers, too. Here are a few ways that the NHL is not operating under the ideals of capitalism, and why moving to a pure free-market is against the best interests of the league.

To begin with, the draft? It’s gone. In a free market, workers can determine where they want to work. No longer will the workers be assigned to a franchise. Rather, the players will choose which team best suits them – and in many cases, it will be the one with the biggest numbers on the paycheque.

And holding on to players via restricted free agency? No way. How dare you try and restrain a man’s ability to earn the best possible living he can!? The free market alone will determine a players worth. Not some arbitrary rule about age limits and years of service. In short, this means that every eligible player is an unrestricted free agent from the moment they are 18.

Which brings us to the biggest issue with capitalism encroaching on the NHL:

Player salaries. Think about the economic imbalance that is already in play throughout the NHL. Now imagine the league with no cap. And no draft. Suddenly, a perennial laughingstock like the Toronto Maple Leafs are able to offer Sidney Crosby $20 million a year to don the blue and white. The New York Rangers can pony up similar money for Evgeni Malkin while the Detroit Red Wings back up the money truck to Steven Stamkos’ front door.

Now, the massive contracts the players would be signing would not be guaranteed in this new free market utopia, but that would cut both ways – players would be free to walk out on situations they don’t like – remember, in a free-market, workers can come and go as they please and pursue other opportunities.

In very short order, you'd have a small number of teams who can outspend the rest of the league to get themselves the best players. Much like European soccer, you will soon find yourself with a small selection of teams that will play for the championship, and the rest that are there merely to fill out the league. The moment a player of note appears anywhere but the Big 6 (possibly 8), the chequebooks would come out. The have-not teams would be offered some financial incentive to transfer the player to one of the big money teams.

The remaining 22-24 teams? They get the leftovers. The top 120-160 players get scooped up by the Big 6-8, and everyone else gets to hope they can pull off a miracle akin to the MLB's Tampa Bay Rays winning the World Series. Unfortunately, it is more likely to turn out like European soccer, where you have very few top teams who can (and do) outspend the remaining teams. Have a look at how European soccer ends up divided between a few haves and a whole bunch of have-nots. With 5-7 teams in a similar range, the EPL is actually one of the more competitive leagues (based on team salaries).

There is no draft in soccer. There is no restricted free agency. There is just money and contracts, which are bought and sold by clubs on a regular basis.

Based on those charts, it becomes pretty easy to start readjusting the numbers for the NHL. Toronto, NYR, Detroit, Chicago, Boston, Montreal – they’d be at the far left of the graph. Teams like the Columbus Blue Jackets, Phoenix Coyotes, New York Islanders, Anaheim Ducks – all the big money losers – they go to the far right and have salaries that are a sliver of the monied teams. Players like the aforementioned Stamkos, John Tavares and Corey Perry end up having their contracts bought by one of ‘have’ teams.

Is this really what we, the fans, want for the NHL? It certainly isn't what the owners want. It is why owners will fight tooth and nail to avoid the decertification or dissolution of the NHLPA. If the NHLPA disappears, the league turns into a free market. Top prospect Seth Jones can choose to skip a trip to the Islanders or Blue Jackets or Edmonton Oilers and go wherever he feels like. Maybe he stays on the west coast and signs with the Vancouver Canucks instead. Those bottom feeders? They end up staying there. Teams in financial trouble have the problem magnified as stars are bought out from underneath them, or worse, they have to sell the contracts just to keep the team afloat.

This is why the NHL filed their lawsuit to declare the lockout legal. It’s why the NHLPA is having their vote about whether dissolving the union is an option. If there is no union, there is no CBA. If there is no CBA, things like a draft, free-agency, and salary caps become anti-competitive measures. That’s how it works in the real world. IBM doesn't get to lay claim to you as you finish university. And once you put some time in with IBM, they can’t demand compensation from EDS for hiring you at a better rate, right? That’s the sort of measure in place right now in the NHL. It is the absolute antithesis of competition. In this case, though, it works. The league is stronger with 30 competitive teams. People are more engaged, and feel like their team may have a legitimate shot at the cup now and again.

A purely free-market system in the NHL, though? That is a hill the owners will die on before allowing.