July 19, 2005
Supply, Demand And The NHL
Tom Benjamin thinks I'm wrong when it comes to the future of NHL player salaries. Not a shocker to be sure, but I ought to add some more context. I wasn't making that claim all on my own, I was quoting Marvin Miller, founder of the Major League Baseball Players Association and arguably the union leader who made more progress for his membership than any other in professional sports:
Miller made himself unpopular with fans as well as owners by leading two strikes, at the beginning of 1972 and in the middle of 1981. But he always compromised with the owners in some way; the great progress he made came over the course of five contract negotiations and 18 seasons. Retiring in 1984, he had achieved more than could have been imagined when he took office: an end to the reserve clause, with free movement from team to team through free agency . . . He may be reviled for having made baseball a business, but it had been since 1876; he made the business pay off for the 600-odd players active each year instead of just their 26 bosses.
Now folks, I don't believe we should automatically take anything Miller says like it was carted down from the top of Mount Zion, but he deserves a hearing. It's also important to note the larger point that Miller was making: that a totally free market where players are all on year-to-year contracts was a better deal for the owners, though they didn't realize it at the time (guess they didn't think they could cope with the chaos of a market with more choices than ever before).
There's one mistake I did make -- I didn't specify that I believed that the extra deflationary pressure on salaries may well be a one-time event given the extraordinary circumstances we're now looking at in the wake of the lockout.
Finally, one actual economist who looked at Miller's claim said that he might be right, or he might be wrong. I guess we'll see. For a more detailed set of arguments, read Colby Cosh and a response from Tom Benjamin.
In a related post, Mike McCann deconstructed the possibility that the NHL might raise the age for draft eligibility from 18 to 19:
It is curious as to why this new NHL age floor does not appear to be in effect for the upcoming 2005 NHL Draft, whereas most of the new CBA's other provisions are immediately in effect. I suspect the one-or-two year delay might be to thwart off a lawsuit from Sidney Crosby, the presumptive number one overall pick in the upcoming 2005 NHL Draft and the supposed "next great one," and perhaps other top amateur players who would otherwise seek an injunction against the new age floor. Indeed, after an embarrassing 301-day labor impasse, the last thing the NHL would want is a high-profile lawsuit that might jeopardize the new CBA.
As I've said earlier, I don't believe the typical North American kid weighing the pros and cons will leave a junior squad at 18 in order to make a quick payday in Europe before getting to the NHL. For many, the culture shift will make the opportunity cost too high.
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As an aside, Charlie Finley, the owner of the A's, agreed with Miller, and lobbied the other owners to accept it, arguing that it would keep salaries low.
Finley was the black sheep of Major League Baseball, and wasn't taken seriously. And it wouldn't have been beyond the owners at that time (who were more concerned with finally screwing Miller over than helping their team) to just ignore Finley.
Posted by:
at July 19, 2005 03:41 PM
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