- Lester Munson, Legal Analyst
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As Paul Kelly takes the helm of the NHL Players' Association, he inherits an organization that has suffered more than three years of agony and defeat, a period of turmoil unmatched in the history of sports unions.
It has been a period marked by a lockout that caused the loss of an entire season; by the firing of Bob Goodenow, the executive director who led the players into remarkable prosperity and out of the frauds and collusions of the disgraced and jailed union founder Alan Eagleson; by the hiring and firing of another executive director, Ted Saskin, who tried and failed to replace Goodenow; and by the grudging acceptance of a contract with NHL owners that imposed a salary cap and a drastic reduction in player salaries.
If Kelly, who was officially named executive director on Wednesday, wants to study the painful details of all that came before, he need only read through the investigative report written by Sheila Block, a Toronto lawyer hired by players desperate to repair the damage to their union. Her report, obtained recently by ESPN.com, is 66 pages long, with another 12 pages of exhibits and details. It's a painful story of blunders, mismanagement, personal greed and incredible pressure from owners.
Although Block's investigation was extensive, she did not inquire about Saskin's interception of player e-mails, a move that led to his dismissal. Chris Paliare, another Toronto lawyer, is investigating the e-mail scandal for the union.
The report indicates the pressures that fragmented the NHL union began with the owners' decision to shut down the league on Sept. 15, 2004, and keep it shut until they were able to force the players to agree to a salary cap. Goodenow, the report states, was not surprised by the lockout. Block writes that he "had spent the last several years getting the [players] ready for this fight."
Relying on union files, interviews with players and union staff members and hundreds of hours of taped telephone conversations, Block reports that Goodenow had told the players the lockout "could last for more than one season" and that the "players were ready for this fight."
But as the lockout continued, Block further reports, the players' resolve faltered. They found it difficult to face the loss of a second season. One young player, not named in the report, told Block, "As a young guy sitting out two years, maybe I won't be the same player two years from now I don't know if I'm prepared for two years. Maybe the price is too large. I want to play come September."
Goodenow remained "convinced that the only way to go was to resist a cap, even if it took two seasons," Block writes. She describes Goodenow as "intransigent" on the cap issue, refusing to permit mention of a cap or any consideration of how a cap might work.
But even Goodenow began to be impressed with the owners' determination to install a salary cap. When the players made an offer to reduce all salaries by an incredible 24 percent, a melodramatic move the players felt would provide the basis for a new contract, the owners ignored it.
Goodenow has never discussed the situation publicly, but he admitted to Block, "[NHL commissioner Gary] Bettman's threats of million-dollar fines and his gag orders worked. I must tell you that the difference at those critical days, at those times, put us at a real disadvantage in terms of the league's perception of us or our resolve, the media's perception and the confidence of some players."
By February 2005, as players began to realize that the 2004-05 season would be lost entirely, cracks began to show in their resistance to a salary cap. Although Goodenow continued to insist that the "players must be more ready to pull the plug on Season 2 than the owners," he was losing support.
Veteran player Bob Boughner, a member of the union's executive committee who was heavily involved in the decision-making process, said, "If that's the decision point, that's not going to happen. Guys aren't going to pull the plug on Season 2."
As the players moved toward consideration of a cap and how it might work, Goodenow became increasingly isolated, Block writes. It was the end of what Block calls Goodenow's years of "strong, dynamic and trusted leadership." He had built the players into a "well organized labor force," according to the report, which quotes an internal union memorandum that asserted that Goodenow had "delivered to our membership value superior to that of the other union heads."
As Goodenow faded from any major role, Saskin, who had been the union's marketing director, stepped in and convinced the players to consider a salary cap. That ultimately led to acceptance of a complex contract with NHL owners that is 239 pages long with hundreds of additional pages of side letters.
Saskin's work on the contract with the owners pushed him into a leadership position for the union as it began to try to work within the framework of the new salary cap. But, Block reports, when Saskin moved to obtain a contract as the union's official leader, he was guilty of a series of errors that ultimately led to his ouster.
In the report, Block accuses Saskin of attacking anyone who disagreed with him and of spinning public statements for his personal benefit. When the players finally approved Saskin's contract, for example, Saskin insisted on a public statement that 86 percent of NHL players had voted in favor of his deal. Block, however, reviewed the balloting and discovered that only 55 percent of the players approved it.
The union's constitution establishes an executive board that includes representatives from each team and is responsible for making all major decisions. The hiring of an executive director is to be done, the rules state, by secret ballot. That procedure is a legacy of the Eagleson era, during which Eagleson centralized control in his office. The executive board was subsequently put in place to ensure players a strong voice in the management of their union.
According to Block's report, Saskin and an executive committee of seven veteran players ignored the union's constitution and the executive board when they told Goodenow he was being replaced and tried to hire Saskin. That was the beginning of a division among players that led to litigation, the dismissal of Saskin and, ultimately, the Block report.
Saskin began the process of obtaining a contract for himself by sending a 20-page e-mail to the seven players on the executive committee, describing his demands for salary and benefits.
Block notes that a group of hockey players would need professional help in putting together a compensation package for a chief executive of their own organization.
"Lengthy commercial negotiation, dealing with intricate legal issues, sorting through complex organizational human resource matters are not part of the daily fare of elite athletes in the NHL," she explains. No kidding.
Instead of suggesting that the players hire an independent compensation consultant (something they had done when they executed Goodenow's contracts), Saskin pushed things through quickly. Pressuring the players into a deal that paid Saskin $2.1 million, Block writes, was "in appearance unfair and could well be unfair in substance."
Block's report notes numerous violations of the union's constitution and observes that none of the four union lawyers involved (including Saskin) made any attempt to follow the required procedures.
"They were not 'thinking about legalities,'" she says, and they "no doubt regret rushing headlong into [hiring Saskin]."
When Saskin tried to obtain the required executive board approval, he ignored the secret ballot provision and sought approval in a conference call. When he finally agreed to a secret ballot, the board was missing representatives from at least seven teams -- apparently, no one was sure about the exact number -- and he ran the balloting from his office instead of hiring an independent accounting firm to manage the election.
As part of her report, Block recommends a number of reforms. The most significant is her suggestion that the players redefine the job of executive director. Instead of allowing the executive director to also serve as the union's general counsel, the union should hire another individual to serve as its top lawyer, she writes.
As Kelly, a lawyer with a remarkable record of success, takes over, his first step might be to hire a lawyer to help him revive a union that can again become a powerful voice for hockey players.
Lester Munson, a Chicago lawyer and journalist who has been reporting on investigative and legal issues in the sports industry for 18 years, is a senior writer for ESPN.com.
The NHLPA's investigation into its past failings will provide a sobering history lesson for Paul Kelly, who took over as the union's new executive director on Wednesday, writes Lester Munson.