As many as a dozen franchises could go

TORONTO, February 17, 2005 -- Want to know the real reason the NHL season’s over?  More than a decade of lavish spending by NHL owners on players’ salaries has forced the league to consider shedding its unprofitable franchises, according to York University researcher Julian Ammirante.

“The NHL owners are engaging in a bit of creative destruction,” says Ammirante, “By being resolute in their negotiations with the NHLPA, they have forced an impasse that will ultimately have the effect of shrinking the NHL by perhaps as many as a dozen teams.”

 

Ammirante claims this has been the intention of the NHL owners all along to correct their own overly-ambitious expansion scheme that artificially inflated all of the league’s commodities (franchises and players’ salaries alike) over the past 10 years

 

He notes that the league’s current woes stem back to the loss of the ‘reserve clause’ in players’ contracts. “The clause effectively bound players to the specific team that held their contract for as long as the team desired their services," says Ammirante, adding that this allowed owners to control salaries.  While major league baseball players used a court challenge to remove the reserve clause, its removal was imposed on NHL owners by market forces – a rival WHA league in the 1970’s anti-trust suits, and, eventually, Wayne Gretzky’s landmark eight-year $20 million contract with the L.A. Kings. Other owners soon followed suit in offering inflated contracts to the game’s superstars.

 

“The money offered in the early 1990’s may seem paltry by current standards, says Ammirante, “but for a league that was essentially surviving mainly on gate revenues, this kind of salary volatility was unheard of. This wild spending spree has continued and could really be characterized as the NHL equivalent of the dot.com boom. But the bottom has fallen out of the market and the owners are now allowing contraction in the game of hockey.”

 

Ammirante, a Ph.D. candidate in the Political Science Department at York is uniquely qualified to comment on the lockout and its surrounding issues. He conducts research exclusively into the political economy and business of major league sports in the age of globalization. He has written and lectured extensively in this field, including its direct impact on Canada.

 

York University is the leading interdisciplinary teaching and research university in Canada. York offers a modern, academic experience at the undergraduate and graduate level in Toronto, Canada’s most international city.  The third largest university in the country, York is host to a dynamic academic community of 50,000 students and 7,000 faculty and staff, as well as 180,000 alumni worldwide. York’s 10 faculties and 21 research centres conduct ambitious, groundbreaking research that is interdisciplinary, cutting across traditional academic boundaries.  This distinctive and collaborative approach is preparing students for the future and bringing fresh insights and solutions to real-world challenges.

 

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For more information or to set up an interview, please contact: George McNeillie, Assistant Director, York U. Media Relations, 416-736-2100, x22091 / gmcneil@yorku.ca