The art of negotiations

Updated: September 15, 2004, 12:32 PM ET
By Darren Rovell | ESPN.com

When the clock strikes midnight as Wednesday becomes Thursday, the NHL's collective bargaining agreement will expire.

That's when the real countdown starts.

Bill Daly
Bill Daly
Ted Saskin
Ted Saskin
It begins when the arena ice should be carved up by players' skates during practice, but is still fresh. It continues to tick when spanking new jerseys are left hanging in the lockers, and when newspapers across North America are forced to figure out what takes the place of the NHL stats and standings they had counted on to fill a page every day.

Many employer-employee contract negotiations, whether they involve actors or pilots, postal workers or hockey players, follow a similar path. Sports leagues and their players' unions negotiate as the expiration of a collective bargaining agreement approaches, but deals that establish the economic landscape between teams and their players often don't come together until a last-minute deadline is set -- and even passed.

Usually, it takes the threat of a complete loss of a season before a compromise can be reached. In the NBA's case, the end of the 190-day lockout resulted in a 52-game slate during the 1998-99 season; the NHL ended a 103-day lockout in time to salvage a 48-game schedule in 1994-95.

It's fairly commonplace to try to get things done at the 11th hour. That's when paychecks will start to be lost and businesses will shut down and that's when people start to get religion.
Jeff Citron, who served as associate counsel for the NHLPA from 1995-2000
So it comes as no surprise that the NHL's CBA will expire at 12:01 a.m. ET on Thursday and a deal is nowhere in sight.

"It's fairly commonplace to try to get things done at the 11th hour," said Jeff Citron, associate counsel for the NHLPA from 1995-2000. "That's when paychecks will start to be lost and businesses will shut down and that's when people start to get religion."

For a year and a half, the NHL and the NHL Players' Association have discussed their differences over how a new CBA should be structured. Team owners feel that the players should help control the ballooning salary-to-revenues ratio, while the players' union believes that owners should be able to balance their own checkbook. Owners want a salary cap; the players counter with cost containment through a luxury tax.

Bill Daly, the NHL's executive vice president and chief legal officer, said Monday that at one point, a few months ago, he had faith that a deal could be worked out well before the deadline. But industry experts say that wasn't likely.

"It's very hard for either side to take a half-loaf solution back to their constituents until it comes to what they perceive is the 11th hour and the 59th minute," said Michael Wheeler, a professor at Harvard Business School who is the author of the upcoming book, "Wild Negotiation: Mastering Chaos and Winning Agreement." "If anyone in management or the union comes back with a deal before that point, they'll be criticized for not having courage."

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It took an artificial deadline in 2002 to break Major League Baseball's string of labor discord that produced eight work stoppages at the expiration of every collective bargaining agreement over a three-decade span. As the players' negotiating deadline neared with a month to go during the season, Boston Red Sox players remained in the clubhouse with the idling buses running outside of Fenway Park, waiting for the go-ahead to leave for a road trip. The strike was avoided with 90 minutes to spare.

"Labor agreements over the last several decades have often been resolved with the players' association coming out on top and the owners caving in at the 11th hour," said Stan Kasten, former president of the Atlanta Braves, Hawks and Thrashers. "But in this case, the owners can't afford to do that."

To that end, NHL team owners have armed themselves with a $300 million war chest -- something they didn't have the last time around -- and began stripping their organizations to conduct bare-bones operations as soon as the most recent season concluded.

But league executives argue that those were just contingencies, not part of a plan to lock out the players.

"I don't think it had to come down to this," Daly said. "This has to do with the union. They instruct their agents that the best deal is done at the last possible minute and it appears like they are following their own advice in this case."

Ted Saskin, NHLPA senior vice president of business affairs, contends that it was not the union, but the owners' strategy, to bring negotiations beyond the expiration point.

"We've tried to get an agreement, but unfortunately the league is waiting so that they can try to extract something that they can't negotiate (a salary cap)," Saskin said. "They know we've offered a lot and indicated willingness to discuss more."

Negotiation is not a competitive sport and if it's played like a competitive sport then both parties will end up losing.
Steve Cohen, president of The Negotiation Skills Company Inc.
Now it comes down to which side will buckle first.

"They've told their constituency to prepare for a work stoppage so that they can see if there is any softness on our part as games are missed," Daly said. "We'll wait until they find the next meaningful date to conduct serious negotiations."

Saskin said the league has "underestimated what the players will do in order to get a fair deal."

The season is scheduled to start on October 13. The more games that are missed, the greater the damage to the sport could be. It took three full seasons and the Mark McGwire-Sammy Sosa home run race in 1998 to bring back fans en masse after a 7½-month work stoppage cost baseball a month of the season and the 1994 World Series.

"Negotiation is not a competitive sport and if it's played like a competitive sport then both parties will end up losing," said Steve Cohen, president of The Negotiation Skills Company Inc., which trains corporate clients to negotiate business agreements.

Because the NHL is already in a niche position in the United States and cannot afford significant fan erosion, Wheeler suggests that the owners and the players should conduct a "virtual lockout." In this scenario, the games would go on, but all the revenues would be funneled into an escrow account. The public-relations damage to the sport will be avoided, he said, and the money accumulated would serve as an impetus to get an agreement done.

Daly said that can't be an option since the owners would lose less money by shutting down instead of continuing under the current economic system. If a whole season is missed, the league could try to declare an impasse, whereby it could attempt to unilaterally impose its own rules without the union. It would then be up to the individual players to decide whether they would want to return without representation and under the league-imposed system, which would likely include a cap.

"On any given day, one of the sides is going to have to go back to their membership and say, 'We've asked for the sun, the moon and the stars, and we got a half of a moon and we're not going to do much better than that,' " Wheeler said. "It's a very hard pitch to make after you've taken such a hard public stance."

Darren Rovell, who covers sports business for ESPN.com, can be reached at darren.rovell@espn3.com

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