Analyzing the 2004-2005 Nhl Lock out Negotiations

From the standpoint of the player’s union, was this a successful negotiation?

No, from the standpoint of the player’s union the negotiation was not successful. Bob Goodenow’s focus on rejecting the proposed salary cap by the NHL in every position the NHLPA provided was completely out of line with good negotiations. Goodenow’s escalation of commitment was sickening when reading this case study. Lewicki, Sanders, & Barry (2010) state that problems arise when the negotiator remains committed to a course of action despite evidence that the action is not getting the negotiations to continue. Goodenow seemed solely focused on this fact and it hurt the negotiations. The final result to negotiating a new collective bargaining agreement (CBA) shows this because the final offer from the NHL was a $42.5M player cap while the resulting agreement had the cap begin at $39M and escalate from there (Wikipedia, 2011).

Second, the players lost an entire season to lockout. This means that players didn’t receive salaries, fans looked to other sports for entertainment, and the loss of the season ended up hurting the players in the long run due to these facts.

Goodenow is the main reason that these negotiations weren’t successful. The principal agent relationship seemed to be turbulent from the outset as players were coming forward to the media and saying they would play under a salary cap while Goodenow refused to put this in the deal (Lewicki, Saunders, & Barry, 2010). Goodenow didn’t seem to be acting on the behalf of the players and he hindered the trust involved when negotiating with the NHL and Gary Bettman. This low trust triggered a vicious cycle between Goodenow and Bettman creating negative responses from both sides.

From the standpoint of the team owners was this a successful negotiation?

With the outcome of the negotiations eventually being that a salary cap was put in place, yes the team owners had a successful negotiation. This was the main goal of the negotiations for the team owners because the owners believed that the salaries of the players had gotten out of control, and looking at the trend of salary percentage versus revenue over time justified this. However, as noted before missing an entire season did hurt team owners in that the league went stagnant and this would likely hurt revenues in the future.

Bettman’s sole focus in this case was to stick with no any time Goodenow provided a position without a salary cap. The biggest move from the NHLPA came when Goodenow put an offer on the table that included a 24% cut to player’s salaries, a better payroll tax, and several other concessions (Lewicki, Sanders, & Barry, 2010). It didn’t however include a salary cap so this deal was again rejected. When Goodenow finally stepped back from the commitment to refuse any deal with a salary cap the cap offered