Why are cartels like NHL legal in the US?

Football

Registered User
Apr 5, 2015
6
7
It's hilariously rigged system: there's a salary cap, which is essentially an agreement between owners not to pay too much for workforce. This is extremely illegal probably almost everywhere except in the US. Funnily enough, there's no limit on how much you can charge for a ticket, for a beer, for a shirt and there's no limit on how much NHL can pay to Bettman or shareholders. But somehow there's still a limit of how much money you can use for building your team. Parity is an excuse, the real purpose the cap has is to draw as much money as possible away from the game to the pockets of owners.

But the biggest problem really is draft. Draft is essentially theft. Parity is again an excuse, the real purpose of the draft is to kill competition for players between clubs so they never have bidding wars and they can get best young players for peanuts. Jets paid only 300 000 dollars for Laine, which is laughable amount and just one example. It should have been three millions instead and probably would have been if there were no drafts and NHL teams would have to compete each other to get their players from other leagues. It is wrong for the other leagues which develop players through their most important years between 6-15 and then few years later these players are taken away with very little compensation. Draft is the reason for this, without it more money would flow to other leagues and teams would get an amount of $$$ you could call a real compensation. Again very little money goes for the game, most go to pockets of the owners. Money that should be used to develop the game, facilities, etc.

And I find it immoral that these megamoney (few are even even gigamoney) franchises take no part in developing young players. They just leave player development to other leagues, which have much less money and just pick finished product without having any part in developing them and total unwillingless to fund development, when they should be the biggest funders. The reason why hockey is so expensive is directly linked to the NHL, by far the richest hockey league, but still is a leech that just sucks and gives nothing back.

This is literally a corporated version of the Soviet Union. It is actually worse since this money doesn't even flow back and it is forever lost to the private bank accounts. But still somehow many people see Russian oligarchs funding a league from their own pockets a worse thing these NHL leeches sucking lot of money away from it with salary caps and drafts.
 
Last edited:

tarheelhockey

Offside Review Specialist
Feb 12, 2010
84,985
137,359
Bojangles Parking Lot
It's hilariously rigged system: there's a salary cap, which is essentially an agreement between owners not to pay too much for workforce. This is extremely illegal probably almost everywhere expect in the US.

Uh.

There’s a CBA. A Collective Bargaining Agreement.

“Collective” meaning it’s a negotiated agreement with the players.

What’s more, the CBA guarantees that salaries cannot go down arbitrarily. So it’s an agreement not to pay too much OR too little on salaries.

Having a contract with your employer which guarantees you to make a certain amount of money is the farthest thing from a “rigged” system and strongly resembles labor bargaining elsewhere in the world.
 

MasterD

Giggidy Giggidy Goo
Jul 1, 2004
5,590
4,950
Uh.

There’s a CBA. A Collective Bargaining Agreement.

“Collective” meaning it’s a negotiated agreement with the players.

What’s more, the CBA guarantees that salaries cannot go down arbitrarily. So it’s an agreement not to pay too much OR too little on salaries.

Having a contract with your employer which guarantees you to make a certain amount of money is the farthest thing from a “rigged” system and strongly resembles labor bargaining elsewhere in the world.
I agree with you, but I also agree with OP. The draft system can potentially prevent certain players from making the NHL... if you're drafted in Chicago or Pittsburgh, you might be seen as not good enough to make their 3rd line and stay in the AHL where another team would have played you in the NHL if you were part of their system.
 
  • Like
Reactions: Hidottin

tarheelhockey

Offside Review Specialist
Feb 12, 2010
84,985
137,359
Bojangles Parking Lot
I agree with you, but I also agree with OP. The draft system can potentially prevent certain players from making the NHL... if you're drafted in Chicago or Pittsburgh, you might be seen as not good enough to make their 3rd line and stay in the AHL where another team would have played you in the NHL if you were part of their system.

How is that different than any other business that has 31 franchises?

The OP seems to have an idea that businesses should be required to force their own franchises into bidding wars against each other for talent. That suggests a fundamental misunderstanding of what a franchise even IS.

Collusion happens when two unrelated businesses (e.g., McDonald's and Taco Bell) make an agreement to avoid bidding wars. That's not the case here, the NHL isn't going to bid against ITSELF for its own employees.
 

Ernie

Registered User
Aug 3, 2004
12,759
2,157
It's allowed because there's nobody with standing to challenge it in court.

Should a union decertify at some point, the whole thing could come tumbling down. But that would likely result in the respective leagues just reorganizing into a structure like MLS has.
 
  • Like
Reactions: Melrose Munch

tony d

Registered User
Jun 23, 2007
76,590
4,550
Behind A Tree
Interesting topic. In regards to the draft, if you are good enough you'll make a team even if it's not the one you're drafted to.
 

Legionnaire11

Registered User
Jul 12, 2007
14,102
8,151
Murfreesboro
atlantichockeyleague.com
The draft doesn't prevent many players from making the NHL, it also doesn't force players to sign with the team which drafts them. An open market system however would likely prevent more. Imagine if the Leafs could spend whatever they want on any players, there would be a bunch of talented players buried in the minors who couldn't crack the NHL roster.
 

Epsilon

#basta
Oct 26, 2002
48,464
369
South Cackalacky
It's hilariously rigged system: there's a salary cap, which is essentially an agreement between owners not to pay too much for workforce. This is extremely illegal probably almost everywhere except in the US. Funnily enough, there's no limit on how much you can charge for a ticket, for a beer, for a shirt and there's no limit on how much NHL can pay to Bettman or shareholders. But somehow there's still a limit of how much money you can use for building your team. Parity is an excuse, the real purpose the cap has is to draw as much money as possible away from the game to the pockets of owners.

But the biggest problem really is draft. Draft is essentially theft. Parity is again an excuse, the real purpose of the draft is to kill competition for players between clubs so they never have bidding wars and they can get best young players for peanuts. Jets paid only 300 000 dollars for Laine, which is laughable amount and just one example. It should have been three millions instead and probably would have been if there were no drafts and NHL teams would have to compete each other to get their players from other leagues. It is wrong for the other leagues which develop players through their most important years between 6-15 and then few years later these players are taken away with very little compensation. Draft is the reason for this, without it more money would flow to other leagues and teams would get an amount of $$$ you could call a real compensation. Again very little money goes for the game, most go to pockets of the owners. Money that should be used to develop the game, facilities, etc.

And I find it immoral that these megamoney (few are even even gigamoney) franchises take no part in developing young players. They just leave player development to other leagues, which have much less money and just pick finished product without having any part in developing them and total unwillingless to fund development, when they should be the biggest funders. The reason why hockey is so expensive is directly linked to the NHL, by far the richest hockey league, but still is a leech that just sucks and gives nothing back.

This is literally a corporated version of the Soviet Union. It is actually worse since this money doesn't even flow back and it is forever lost to the private bank accounts. But still somehow many people see Russian oligarchs funding a league from their own pockets a worse thing these NHL leeches sucking lot of money away from it with salary caps and drafts.

The simple answer here is that the existence of the NHL/NHLPA CBA prevents the Sherman Act and other antitrust law from coming into play, as it's superseded by labor law.
 
  • Like
Reactions: Avs44

LadyStanley

Registered User
Sep 22, 2004
105,742
18,871
Sin City
Putting on the history hat trying to remember the ins and outs of macro and micro economics and other business classes, many decades ago in college....

IANAL, nor do I play one on TV. I won't address the legalities of entities in Canada, but my belief is they are similar to US.

OK, first, some definitions from Merriam Webster.

Cartel: definition #2
"a combination of independent commercial or industrial enterprises designed to limit competition or fix price"

Monopoly:
#1: exclusive ownership through legal privilege, command of supply, or concerted action
#2: exclusive possession or control
#3: a commodity controlled by one party

Oligopoly: a market situation in which each of a few producers affects but does not control the market
(Think DeBeers and other producers/miners of diamonds. I'm thinking that major US health insurers might fall into this.)


The US historically has been a home to entrepreneurs and adventurers, generally abhorring monopolies. In 1890, the US passed the Sherman Act (anti trust). (And Clayton Act of 1914, etc.) In 1922, the MLB successfully sued to be ruled as not participating in interstate commerce, essentially an exemption.

Today, what monopolies there are (think utilities) are regulated. Economies of scale, etc. But that didn't stop the US from "breaking up" Standard Oil and AT&T monopolies. (Although in the latter case, they're almost all back together.)

And then there's labor law. Teams (in a league) have been allowed to provide limits (i.e., salary range min and max, length) as collectively bargained with union. (And the history of the creation of a player union is the topic of a number of books, so won't go into it.)


Now to the NHL.

I disagree with your characterizing the league as a cartel. They are not looking to limit competition (with other sports, or even other hockey teams/leagues), nor do they fix prices (in the way you're thinking): ticket prices are set at the local level, not the league level (excluding league events like Winter Classic or Stadium Series games); and while salaries are limited (by the CBA), there is a minimum as well as a maximum, and no "formula" based on experience and (offensive) production that equate what a player can/will earn.

I might characterize them as a monopoly, but with other leagues (KHL, European leagues), they don't have total control of all the hockey in the world, much less every level of hockey (i.e., AHL, ECHL, minor leagues like USHL, much less all the college leagues, leagues for kids to play in). The NHL did not "force" the WHA out of business, but did merge (similar to the merger of the AL and NL in MLB and the AFL and NFL into the NFL).

Regardless, their actions are watched by regulators to ensure they do what is needed.

Most of the OP's complaints deal with the (high) cost of attending a NHL game. As we saw with the 2004-05 lockout, there is no easy answer to ensure cost certainty. So many (if not most) teams try to keep the price high to help cover their costs as the majority of income (excluding a few mega TV deals) come from ticket revenue, unlike many other major sports where TV is a significant income source.

FTR, I moved from San Jose to Las Vegas recently. I had a decent (center ice, upper bowl) seat, ~$55 this season. A comparative seat in Las Vegas is $200. Huge difference. But when you compare that ticket cost to a 90 minute show on the Las Vegas Strip, it's comparable. Prices may change in the future (set by the owner Foley), but they are what they are today.


So, my suggestion to counter the high cost of attending games is to listen for ticket giveaways from the team, sponsors, if you want to get in for less. Or watch from your living room.
 
  • Like
Reactions: lazyboy and Killion

edog37

Registered User
Jan 21, 2007
6,055
1,602
Pittsburgh
It's hilariously rigged system: there's a salary cap, which is essentially an agreement between owners not to pay too much for workforce. This is extremely illegal probably almost everywhere except in the US. Funnily enough, there's no limit on how much you can charge for a ticket, for a beer, for a shirt and there's no limit on how much NHL can pay to Bettman or shareholders. But somehow there's still a limit of how much money you can use for building your team. Parity is an excuse, the real purpose the cap has is to draw as much money as possible away from the game to the pockets of owners.

But the biggest problem really is draft. Draft is essentially theft. Parity is again an excuse, the real purpose of the draft is to kill competition for players between clubs so they never have bidding wars and they can get best young players for peanuts. Jets paid only 300 000 dollars for Laine, which is laughable amount and just one example. It should have been three millions instead and probably would have been if there were no drafts and NHL teams would have to compete each other to get their players from other leagues. It is wrong for the other leagues which develop players through their most important years between 6-15 and then few years later these players are taken away with very little compensation. Draft is the reason for this, without it more money would flow to other leagues and teams would get an amount of $$$ you could call a real compensation. Again very little money goes for the game, most go to pockets of the owners. Money that should be used to develop the game, facilities, etc.

And I find it immoral that these megamoney (few are even even gigamoney) franchises take no part in developing young players. They just leave player development to other leagues, which have much less money and just pick finished product without having any part in developing them and total unwillingless to fund development, when they should be the biggest funders. The reason why hockey is so expensive is directly linked to the NHL, by far the richest hockey league, but still is a leech that just sucks and gives nothing back.

This is literally a corporated version of the Soviet Union. It is actually worse since this money doesn't even flow back and it is forever lost to the private bank accounts. But still somehow many people see Russian oligarchs funding a league from their own pockets a worse thing these NHL leeches sucking lot of money away from it with salary caps and drafts.

The salary cap is directly tied to league revenues, it's not just some random number the league throws out.

As others have already pointed, the players bargained with the owners to establish a cap. In exchange, the owners offered revenue sharing & guaranteed player contracts.

The draft is the same thing, it was negotiated & agreed upon by all parties. And truth be told, name me another industry that offers a ridiculous salary to an unproven commodity. Do recent college grads make more money by & large than someone who has been at it for 20 years and considered an expert in their field? The union exists to take care of its present membership, not its future membership.

Regarding development, you do understand most junior teams are licenses to print money for their respective ownership groups? See the attached link:
http://www.tsn.ca/talent/chl-franchises-worth-millions-can-afford-to-pay-players-study-1.522306

And even if we are talking about college hockey, places like Michigan, Ohio State, etc. are awash in money by their respective football programs. Using the corporate example again, does IBM or Google pay Stanford to crank out talent they then hire? Of course not, so why should the NHL?

What you are seeing is a growing trend of NHL teams owning & operating their AHL affiliates. So there is investment in development, but other than that, the league has no reason nor obligation to invest in player development.

This is far from the Soviet Union.....
 

lomiller1

Registered User
Jan 13, 2015
6,409
2,966
It’s legal because it’s within the confines of a CBA. This is why the NHL will always be forced to lock players out with no CBA in force, there is no practical way for it to operate without one.
If you are going to accept that the league needs to do stuff collectively in order to produce the most compelling product possible, as long as it’s done within a legal framework like the CBA why should this not include things like a draft and salary cap that start teams on an equal competitive footing? Consider that if teams truly operated independently of the league like some people want it to wrt players there would be:
    • No playoffs because playoff format and tournament structure is set by the league
    • No schedule, because the schedule is dictated by the league
    • No common rule book.
    • No league hired refs/linesmen
    • No national broadcast contract
    • No standardized ice sizes, markings, nets, etc
    • No league discipline. I guess things would just get taken to criminal court for assault charges
Sure you could do all this, but it would s*** and no one would bother watching. Similarly, if the NHL adopted player rules that disadvantaged some teams and areas the fans of those teams would stop paying for NHL products and everyone, players especially, would suffer.
 

KevFu

Registered User
May 22, 2009
9,007
3,239
Phoenix from Rochester via New Orleans
Anyone is free to start their own rival hockey league. The reason no one does is because you'd be crushed. The NHL has the Cup, and you don't. You need places to play games in and taxpayers aren't building a second set of arenas in the cities you'd need to compete. If they DID build arenas, the NHL would probably invite those teams rather than compete directly with them (which is how the Islanders got into the NHL).

MLB has an anti-trust exemption because back then, they were two leagues cooperating, which made it legally sticky. But there was the PCL and later the CBL started. The AL and NL moved into their territories and those leagues either remained minor league (PCL) or never got off the ground (CBL).

The NFL had the AFL, and then the USFL which was killed when Donald Trump insisted they move to the fall and compete head to head with the NFL.

The NBA had the ABA as rivals.
 

Acesolid

The Illusive Bettman
Sep 21, 2010
2,531
319
Québec
That's weird thing with sports, isn't it?

In more "right to work" America, Sports leagues are these hyper-unionized planned economies where CBAs rule, and parity-redistributioj of wealth is super important.

While in more "social-democrat" Europe, sports leagues are these hyper-capitalist, super unfair, screw parity, exploit and grow players since they are 15 years old. Libertarian utopias. Where any billionaire can buy a fourth division team in the middle of nowhere, and SPEND SPEND SPEND until they reach the top.


Weird!
 

patnyrnyg

Registered User
Sep 16, 2004
10,838
869
I agree with you, but I also agree with OP. The draft system can potentially prevent certain players from making the NHL... if you're drafted in Chicago or Pittsburgh, you might be seen as not good enough to make their 3rd line and stay in the AHL where another team would have played you in the NHL if you were part of their system.
Yes, but nobody has a right to play in the NHL. He is drafted by the team and the league rules indicate they can assign players to different affiliates. When the drafted player signs his contract, he is agreeing to be subject to these rules. Sidney Crosby was under NO obligation to sign with the Penguins in 2005. He was free to stay in the QMJHL or try to sign with a team in Europe.

Didn't Maurice Clarrett try to enter the draft early, using the argument that he did not agree to the CBA because he was not part of the NFLPA when it was ratified? Didn't work out for him.

On a side, a player who is good enough to play on most teams, but not good enough to play on a stacked team for which is he is drafted is likley to be traded. Chicago or Pittsburgh in your scenario could trade the player to another team to fill a hole, thus allowing the player a shot to play on the weaker team.
 

patnyrnyg

Registered User
Sep 16, 2004
10,838
869
It's hilariously rigged system: there's a salary cap, which is essentially an agreement between owners not to pay too much for workforce. This is extremely illegal probably almost everywhere except in the US. Funnily enough, there's no limit on how much you can charge for a ticket, for a beer, for a shirt and there's no limit on how much NHL can pay to Bettman or shareholders. But somehow there's still a limit of how much money you can use for building your team. Parity is an excuse, the real purpose the cap has is to draw as much money as possible away from the game to the pockets of owners.
They have a CBA with the players association. The Player's Association agreed to these conditions. Ticket prices, beer prices, t-shirt prices are not part of the CBA, and a completely different issue. Businesses in this country are free to charge whatever they want. It is up to the consumer to decide if they are willing to pay their prices. I am willing to pay the price the Rangers charge me for my season tickets. Nobody is forcing me to pay.
But the biggest problem really is draft. Draft is essentially theft. Parity is again an excuse, the real purpose of the draft is to kill competition for players between clubs so they never have bidding wars and they can get best young players for peanuts.
this system was developed for parity and yes to control cost of younger players. It was the older players who agreed to this. As I said in my other post, NONE of the drafted players are required to sign a contract with the NHL club. They are free to go to Europe if they choose, play in Jrs if they have eligibility or the NCAA, CIS, etc. However, if they want to sign with the NHL club that drafts them, they must abide by the CBA.
Jets paid only 300 000 dollars for Laine, which is laughable amount and just one example. It should have been three millions instead and probably would have been if there were no drafts and NHL teams would have to compete each other to get their players from other leagues.
That is an agreement between the NHL and the Finnish league (or possibly the IIHF, maybe someone more in the know can explain in further). Russia is not part of that deal. No idea who it has worked out for the Russian clubs. I do know there was a time when it did hurt the draft position of Russian players. Cherepanov and Tarasenko fell to where they did partly due to the lack of a transfer agreement.
It is wrong for the other leagues which develop players through their most important years between 6-15 and then few years later these players are taken away with very little compensation. Draft is the reason for this, without it more money would flow to other leagues and teams would get an amount of $$$ you could call a real compensation. Again very little money goes for the game, most go to pockets of the owners. Money that should be used to develop the game, facilities, etc.
Not in NA. There is a system that players move up as they get older. No player is signed at 15 by an NHL club. Here, the parents are paying for their kids to play. I don't understand this point at all. Sidney Crosby didn't play for Rimouski Oceanic from the time he was 6 til he was 15. Steven Stamkos did not play for the Sarnia Sting from the time he was 6 to 15.
And I find it immoral that these megamoney (few are even even gigamoney) franchises take no part in developing young players. They just leave player development to other leagues, which have much less money and just pick finished product without having any part in developing them and total unwillingless to fund development, when they should be the biggest funders. The reason why hockey is so expensive is directly linked to the NHL, by far the richest hockey league, but still is a leech that just sucks and gives nothing back.

This is literally a corporated version of the Soviet Union. It is actually worse since this money doesn't even flow back and it is forever lost to the private bank accounts. But still somehow many people see Russian oligarchs funding a league from their own pockets a worse thing these NHL leeches sucking lot of money away from it with salary caps and drafts.
Again, not sure the purpose of this point. The NHL is a private enterprise. It is not a government institution. They do not owe anything to the youth leagues across the US and Canada, at least financially they are not obligated. Those leagues are run through payments of the parents. When I was a kid, I played Little League Baseball and Midget football. My parents paid for me to play in those leagues and the money paid by the parents help run the leagues, along with donations from outside sponsors. When I got to Jr High, I played on school teams, my parents did not have to pay as it was covered by the school's budget generated from taxes my parents paid.

Are you saying you want to see the NHL be structured more like European soccer leagues? With the parent clubs having youth teams and academies? Where teams can spend whatever they want on players and smaller teams just have to deal with it? Yeah, would never work here. Having 7 or teams that are the top of the heap with the rest just happy to be there is not going to keep the fans interested. In the US, we have 4 major sports leagues for team sports. Some will say 5 with the MLS. Then there is huge interest in individual sports such as NASCAR, tennis, golf. In some parts of the country, the interest in college and High School sports is far bigger than pro sports. The point? It is not one sport that controls the sports landscape that everyone follows ala soccer in Europe. If an NHL team is unable to compete with the big boys year in and year out because they can't afford to pay players, then the fans lose interest in the team and follow other local teams in different sports.
 

tarheelhockey

Offside Review Specialist
Feb 12, 2010
84,985
137,359
Bojangles Parking Lot
That's weird thing with sports, isn't it?

In more "right to work" America, Sports leagues are these hyper-unionized planned economies where CBAs rule, and parity-redistributioj of wealth is super important.

While in more "social-democrat" Europe, sports leagues are these hyper-capitalist, super unfair, screw parity, exploit and grow players since they are 15 years old. Libertarian utopias. Where any billionaire can buy a fourth division team in the middle of nowhere, and SPEND SPEND SPEND until they reach the top.


Weird!

Well, they say sport fandom is all about escapism...
 

Ad

Upcoming events

Ad

Ad

-->