Authors libby rittenberg 734

Chapter 14
Imperfectly Competitive Markets for
Factors of Production

Start Up: Hockey Players Frozen Out
On October 30, 2004, Columbus Blue Jackets’ center Todd Marchant would
ordinarily have been getting ready to open the 2004–2005 National
Hockey League (NHL) season before a packed house in a game against the
Dallas Stars in Dallas. Instead, he was home and devoting his season to
coaching his six-year-old daughter’s hockey team.
Mr. Marchant was home because the Commissioner of the NHL, Gary
Bettman, had ordered players locked out on September 15, when training
camp was scheduled to begin and when the contract between the NHL and
the Players Association expired. Mr. Bettman had warned for five years
that he would take the drastic action of shutting down the hockey season
unless owners and players could agree on a system to limit player salaries.
In the NHL, player salaries amounted to 75% of team revenues. By
contrast, player salaries represented 64% of team revenues in the National
Football League and 59% of revenues in the American Basketball
Association. Mr. Bettman contended that the league’s 30 franchises had
lost a combined $500 million in the previous two years.
Players and owners alike had a great deal of money at stake. The NHL was
selling 90% of its seats available during the regular season and generating
$2.1 billion per year in revenues. “No one likes losing money, but this year
everyone involved in hockey may be losing something,” Mr. Marchant
Attributed to Libby Rittenberg and Timothy Tregarthen
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