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Three months ago, the Tampa Bay Lightning won the Stanley Cup. Now there might not be a season for the Lightning to defend that championship.
The National Hockey League owners and its players union lobbed insults and accusations Wednesday as the collective bargaining agreement expired. The league's 30 owners then unanimously voted to lock out the players just as training camps were set to open today.
There are no negotiations planned and, judging by the cantankerous tone, no end in sight to the second lockout in 10 years.
"I think it's probably fair to say we're at an impasse right now," commissioner Gary Bettman said. "This action is not taken lightly or eagerly. ... This is a bleak day."
There is little chance the regular season will start as scheduled on Oct. 13. Bettman said the owners are willing to sacrifice an entire season or more to get an agreement they find acceptable.
"If there's enough time to play some games, we'll do it," he said. "If not, we won't."
Bettman said the league is not considering using replacement players or installing a new system without the union's approval.
The owners, who say they have lost $497-million over the past two seasons and $1.8-billion over the past 10 years, said a new economic system is needed. They want players to agree to a "cost certainty" plan that ties player costs to revenues.
The players, who paint owners' claims of financial losses as "selected and distorted," say "cost certainty" is equal to a salary cap, something they will never accept.
"Until (Bettman) gets off the salary-cap issue, there's not a chance for us to get an agreement," said Bob Goodenow, the executive director of the players association.
The union favors a plan that involves a luxury tax and revenue sharing in which teams would pay a penalty if they went over a certain payroll level. Bettman said revenue sharing will not fix the league's steep economic problems. "We're out of gas," Bettman said. "We cannot continue this way."
Earlier this year, the NHL commissioned an audit, conducted by former U.S. Securities and Exchange Commission chairman Arthur Levitt Jr., that concluded the league produced about $2-billion in revenues during the 2002-03 season. The audit said players received about $1.49-billion of the revenue - nearly 75 percent and much greater than other professional sports. Bettman said that led to 20 of the league's 30 teams losing money last season. The Lightning turned a profit only because it made the Cup final.
"There is no shortcut or quick fix," Bettman said. "We need an enforceable, defined relationship between revenues and expenses. We need a system that will eliminate the disparities in payrolls, so that a team's ability to compete depends on its team-building skills, not on its ability to pay."
One team that could be most affected by a new agreement is the Lightning. President Ron Campbell said he expected the team's payroll to go from $33-million last season to $50-million just to keep the Cup-winning team intact.
In a statement released Wednesday, the Lightning apologized to its fans and said, "The league has our full support as we take this difficult but necessary step toward creating a new economic system that will help our club in the future."
However, Vinny Lecavalier, one of the Lightning's top players, said, "The players are unified on this matter. ... We will not accept a salary cap."
The union dismisses the audit's findings and attributes most of the league's financial woes to bad decisions and specific circumstances among a handful of teams. The players also argue they should not be responsible for the foolish spending of a few owners. The players believe payrolls should be determined by individual owners under a free-market system.
Wednesday's lockout comes after the sides exchanged offers over the past two months. The NHL gave the union six proposals, but the players said all used a salary cap. The players made an offer last week, but the owners said it was a watered down version of a proposal that was rejected nearly a year ago. Goodenow said the proposal offered more than $100-million in annual concessions.
Bettman said the union's strategy is based on confrontation and said the players wanted a lockout.
"The union is trying to win a fight, hoping that the owners will give up. That will turn out to be a terrible error in judgment," Bettman said.
Vancouver Canucks player Trevor Linden, the president of the union, said, "I can't imagine 700 players wanting to be locked out."
The recently expired agreement was reached in 1995 after a 103-day lockout wiped out half of the season. Since then, salaries have gone from an average of $570,000 per player to $1.79-million last season. The agreement was extended twice, mostly to keep labor peace so the NHL could participate in the Olympics. Bettman said Wednesday that extending the agreement was "in hindsight, a mistake."
"My pledge, at this difficult moment, is that we will correct this untenable situation the right way, not with Band-Aids and half-measures," Bettman said, "but in a way that will ensure the health and excitement of our game for years to come. This game's future depends upon getting the right economic system. In the absence of such a system, there is no future for our game."
Q&A: NHL LOCKOUTWhat happened?
The collective bargaining agreement between owners and players expired at midnight and the owners locked out the players.
Why?
The owners say they lost $273-million in 2002-2003 and another $224 million in the past season need a new economic system to ensure the long-term viability of the league.
What is the main stumbling block to a new agreement?
The owners want something called "cost certainty," which they define as direct connection between revenues and player costs. The players say that's another way of saying "salary cap," something they say they won't accept under any circumstances.
What is a salary cap?
A salary cap means teams cannot exceed a set payroll number. The league wants a cap of $31-million per team, about 24 percent less than the average team payroll last season.
What do the players want?
Players have said they'd be willing to extend the old agreement, which has a free-market system. But the owners say that will not work. The players are willing to accept an agreement that has at its core a luxury tax and revenue sharing, where teams that exceed a certain payroll number would pay a penalty (to be shared by teams that spend less on payroll).
What happens now?
Training camps scheduled to open over the next two days will not open, and won't until a new agreement is reached. No negotiations are scheduled. Both sides made proposals in the past two weeks, but all were rejected by the other side.
How long will the lockout last?
The last lockout in 1994-95 lasted 103 days and erased half the season. Many in the hockey world predict this lockout will last at least that long, and could erase the season. Most think an agreement must be reached by January to have any hopes of salvaging a season.
Who can withstand a work stoppage longer, the players or owners?
Some teams say they will lose less money if there is no season than they would if things continued as they were under the old CBA. Union leadership has been telling players for the past 18 months to prepare for a lockout. Both claim to have deep war chests, meaning both appear to be in it for the long haul, perhaps as long as two years.
Do the coaches get paid?
Yes. Coaches are a part of management. But they most likely won't receive full salaries. Instead, they will get anywhere from 60 to 90 percent, based on the team.
What about other front-office personnel?
Some teams already have or will lay off front-office people, such as those in advertising, ticket sales, marketing and so forth until hockey returns. Some teams are paying their employees only a percentage of their salaries. Lightning president Ron Campbell said, however, the Lightning has no plans for layoffs or cutbacks in salaries. The NHL office has laid off more than 100 people, but, according to commissioner Gary Bettman, the league is continuing to pay health insurance and severance.
What is the Lightning's stance on the lockout?
It is all for it. Being a small-market team, the Lightning is in favor of a salary cap so it can remain financially competitive with big-market teams in New York, Detroit and Philadelphia, to name a few.