Crawl Across the Ocean

Wednesday, December 15, 2004

The Trouble With Professional Hockey....

So what's the problem with the NHL these days? The owners and players are all idiots? Perhaps, but it wasn't that long since we were in the same mess with largely different owners, management and players. And not too long since we had similar problems with baseball, and certainly most pro sports have had their share of this type of trouble.

In fact, it seems like pro sports leagues head to a breakdown anytime the owners don't have the players under their thumb. So while it may be tempting to write off the current NHL lockout as Bettman's fault or Goodenow's fault, or collectively the fault of all involved, it seems more logical to look for a systematic explanation of why these problems keep recurring.

If the NHL is a professional league, with the price of everything involved (tickets, merchandise, franchises, etc.) set by market forces, why does the whole thing fall apart if player salaries are also set by market forces?

The problem as I see it, is that a franchise is a business, but whereas the goal of a business is to make money, sports franchises have a dual goal of making money and winning championships. Because teams are not just businesses but represent the 'pride' of a city or an owner, they are willing to pay overly high salaries and take on losses in an effort to win. And whereas in a normal industry, if some of the companies simply had too small a revenue base to compete, they would merge, be taken over or fold, that isn't allowed or considered acceptable in sports leagues.

A salary cap can prevent the problems of owner overspending but it brings with it its own questions. Why should owners of clubs with higher revenues basically be given a license to print money? Doesn't it seem a little artificial to force everyone to be equal? Why should ticket prices and other revenues be set by market forces if the costs (salaries) aren't?

If you're like me, there's a fundamental sense of confusion and conflicting priorities which underlies almost every aspect of the NHL that involves the commercial side of the game. We feel that an owner should make an effort to win and not just try to make as much money as possible. We feel that small market teams should have a fighting chance even though their economics don't justify it. We don't respect a player who leaves for another team because they can pay more money, at least not in comparison to the player who takes less money to stay with the team he likes. We feel that places where people care passionately about the game should have teams over places where people don't really care, even if the disinterested have more money to support a team. The same goes for ticket prices where the wealthy, leave-a-tie-game with-ten-minutes-left corporate seats in the front with the poor but enthusiastic fans in the back row just seems wrong.

All these questions come back to the same issue. On the one hand, hockey is a game which we all instinctively feel should have a certain moral code to it but at the same time hockey is a business and there are certain rules that govern how you run a sensible and ethical business. These two sets of ethics do not match.

Now, if you read my earlier post on corporate subsidies, you have probably already guessed where I am going with this (if so, you may want to skip the next three paragraphs). For those who didn't, here's a recap:

Back in 1992, Jane Jacobs wrote a book called, Systems of Survival in which she built on Plato's Republic to argue that humans have two ways of making a living: our traditional one based on control of territory and a somewhat newer one based on trading. Each of these ways of making a living has it's own set of ethics, with ethical trading relying on shunning the use of force, competing, honesty, openness to novelty, invention, collaboration with strangers and a bunch more.

In contrast, ethical territorial (or 'guardian' as Jacobs calls them) activities (such as government) rely on a different set of values including shunning trading, respect for hierarchy and tradition, loyalty and a bunch more.

In Jacobs' view, unethical behavior inevitably arises when values which are ethical in one way of making a living are used in the other way. i.e. When the two ethical systems are mixed together. An example she gives is organized crime, where the mixture of legitimate commercial activity with activities that normally only a government is allowed to perform (such as use of force) leads to a 'monstrous hybrid' of the two ethical systems.


Now suppose, for the sake of argument, that Jacobs' theory is true. That is, we have a system of ethics based on control of territory and a different, conflicting set of ethics for commercial enterprises. And that we inevitably run into problems when we mix the two.

This raises the question: Is hockey naturally a business which has been corrupted by introducing the ethics of guardian (government/military/territorial) activities or is it naturally a non-commercial enterprise which has been corrupted by the introduction of commercial values.

It seems like a no-brainer to me (but in case you need more info to make your decision I included the full list of ethics for each ethical system from Systems of Survival at the bottom of the post). I would say that from backyards, to minor hockey, to the junior leagues, to the college leagues, and even to the Olympics, hockey clearly shows itself to be naturally successful as a non-commercial enterprise.

And in fact, commentators often point to the purity of non-commercial leagues as a contrast to the impurity of the professional NHL (where people just care about the money).

So from my point of view, the true solution to the NHL's problems is to remove, as much as possible, the commercial aspect of the game. i.e. Make it an amateur league. Good modern examples of thriving amateur leagues would be the collegiate sports systems in North America (especially in the U.S.), the sports leagues for Hurling and Gaelic Football in Ireland (in which each county has a team made up of modestly paid players from that county, or the kids and adult recreational leagues in just about every sport in just about every country around the world.

Imagine for a moment, a league where if you lived in Winnipeg you would have a team made up of players from the Prairies (we'd probably give 'em Northern Ontario too), who would play for the team for their whole careers. If you had a bunch of good players in the same era from your region, you could build a dynasty; if you didn't you might face some lean years. The players would be paid enough not to need to take another job but that would be all. The team would be owned by a public body with any revenue beyond what was needed to run the team either folded into general government revenue, used to support minor sports leagues or just given to charity. The lure of big money would be reduced by keeping ticket prices as low as possible without creating big scalper markets, giving away TV rights in return for a promise to show the games with minimal commercials, and the removal of advertising from the rinks.

Sounds pretty good to me.

Even if we acknowledge that it is unrealistic to ever have that occur with the NHL, I still think it is worth knowing why it is we have the problems we do, and how, in an ideal world, they would be fixed.

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For the record, I tend to sympathize with the players in the current dispute and favour a gradually steepening luxury tax (reaching punitive levels and possibly even a hard cap up around the very highest payrolls) as the best solution (among our shortsighted options) for the current problems. I might have more sympathy with the owner's need for cost certainty if they were willing to adopt revenue certainty as well and give away any revenues beyond a certain amount.

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Commercial Moral Syndrome:

Shun Force
Come to Voluntary Agreements
Be Honest
Colllaborate easily with strangers and aliens
Compete
Respect Contracts
Use Initiative and Enterprise
Be Open to Inventiveness and Novelty
Be Efficient
Promote Comfort and Convenience
Dissent for the sake of the task
Invest for Productive Purposes
Be industrious
Be Thrifty
Be Optimistic

Guardian Moral Syndrome

Shun trading
Exert Prowess
Be Obedient and Disciplined
Adhere to Tradition
Respect Hierarchy
Be Loyal
Take Vengeance
Deceive for the sake of the task
Make rich use of leisure
Be Ostentatious
Dispense Largesse
Be exclusive
Show Fortitude
Be Fatalistic
Treasure Honour

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3 Comments:

  • I had a dream last night that Bob McKenzie referred to Crawl Across the Ocean on one of his segments on TSN. Bob was very impressed with Declan's work.

    Koodos!

    By Blogger Skeeter, at 3:51 PM  

  • Thanks Skeeter.

    I should mention that if you tell your doctor that Bob Mackenzie is appearing in your dreams, they will probably write you a prescription for that.

    By Blogger Declan, at 5:42 PM  

  • Declan: Excellent posting. I did one of my own on the exact same day last week!

    I had a slightly different take on the matter:

    The Unknown Ideal

    By Blogger A, at 7:07 AM  

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