Like many fans locally and across North America, I was thrilled to learn we’d have an NHL season following a four-month lockout of the players by the owners. (Certainly, the season couldn’t have started better for Penguins fans.)
As fans, let’s enjoy the games. From a business-to-business consulting standpoint, let’s conduct a quick postmortem on what might have been done to win more sympathy for both sides in the court of public opinion.
Under the terms of the previous collective bargaining agreement (CBA), the players received 57 percent of the nearly $3.3 billion in hockey-related revenue (HRR). When the CBA expired in September, the owners were pushing for dramatic concessions from the players.
Yet after the owners and players agreed to a 50-50 split of revenues just one month into the negotiations, most observers couldn’t figure out why exactly the lockout continued.
Both sides would claim that they couldn’t agree on what constituted “revenue.” Recent reports, however, indicate the most important issue was a defined benefit (DB) plan the players were hoping to gain and ultimately garnered.
In fact, Winnipeg Jets player Ron Hainsey said guaranteed pensions were the centerpiece of the deal. Several of our clients at WordWrite deal extensively with corporate and consumer retirement planning, which shifted our focus on this issue from a fan’s perspective to a strategic communications consulting angle.
Flying in the face of recent business trends, the NHL and its players have gone back to a time when defined benefits were the norm in order to find future labor peace. Interestingly enough, the NHL was a trailblazer of sorts when it shifted from a DB plan to a defined contribution (DC) plan like a 401(k) for players in 1986. Now, the league has rejoined other major professional sports teams in returning to a pension model.
“It’s definitely very surprising, because in the general marketplace we’re seeing movement away from the defined benefit pension plan due to the future liabilities it imposes on owners or employers,” Peter Landers, a director at Global Governance Advisors compensation consulting firm, told Toronto’s Globe & Mail newspaper.
But workers of the world shouldn’t unite in anticipation of more employers returning to the defined benefit model. The NHL is simply realigning itself with all the other major professional sports leagues that never shifted from a DB to a DC model. 
And why, you might ask, should pro athletes – many of whom earn millions of dollars annually – be entitled to benefits the rest of us can’t expect?
According to an article in The Christian Science Monitor, the median NHL salary is $2.5 million. However, the median NHL career lasts just four years. If someone enters the league in his early 20s and retires in his mid-20s, then he’ll likely need to make his total median earnings of $10 million last for another 50 or 60 years.
(One would hope – barring debilitating injury – that a retired player in his 20s or 30s would find other work upon retirement.)
Juxtapose that with the rest of us who will work until our 60s and aspire to save seven figures for retirement. We’ll only need our funds to last about 20 or perhaps 25 years, at best.
This was a legitimate issue in the protracted negotiations and – from a media relations standpoint – one that was very poorly communicated to the public from both sides. Instead of allowing fans, sponsors and other stakeholders to fume over the notion that billionaire owners and millionaire players couldn’t agree on how to divvy up their shares of the money, why not tell us player retirement solvency was what they were fighting about all along?
With a recent study estimating all of us need 11 times our final salary to meet our retirement needs, pension and 401(k) savings issues are critical components of our daily lives. It would have been helpful to the national conversation on retirement planning to view a major sports lockout through that prism, instead of as a battle between the rich and super rich.
Unfortunately, like the 42 percent of the season that was lost, this was another missed opportunity for the owners and players they’ll never get back.
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Jeremy Church is an account supervisor for WordWrite Communications. He can be reached at jeremy.church@wordwritepr.com and on Twitter @churchjeremy.
