Whenever we read about the current NHL lockout, we hear about the stances taken by the league and by the players. For those people who have invested in education related to conflict resolution, you will recognize this as “positional bargaining.” This type of bargaining tends to follow a predictable pattern – one party states a high opening position, the other party responds with a correspondingly low position, a series of concessions are made by both sides, and eventually an agreement is reached (or not).
So far, this seems to be going well from a league point of view. They stated their opening position which included 43%/57% revenue sharing, a revised definition of Hockey-Related Revenue and reduced player contract and negotiating rights, among other things. The players, surprisingly, came back with a position that more-or-less kept their current financial and contracting terms, but introduced a revised vision of league revenue sharing. Of course there are smaller items in the mix, such as single-player hotel rooms, revised arbitration rights, changes to player discipline etc., but more or less the NHLPA’s financial position started with the same terms as were negotiated in the last CBA.
The end result of this has been that many hockey personalities have assumed that the negotiations would end with a 50/50 revenue split. Makes sense, as the league offered 43% while the players were initially still ok with 57%, and 50% is a nice round number in the middle. It also helps that the NFL and NBA both recently negotiated agreements with their players which include splits right around 50/50. And, of course, here we are a few months later, talking about 50/50 as though it’s a done deal, with just a few details to hammer out. Sounds pretty good for the league, as they go from 57% to 50% and they’re still looking for more givebacks in the contracting terms.
But what if the league were using a different conflict resolution technique, known as “interest-based negotiation”? Interest-based negotiation begins with a mutual understanding of the two parties’ underlying needs and wants. Positions aren’t discussed until after this mutual interchange of information, and a brain-storming session of potential solutions which would ideally address each party’s interests. A classic example of this is two neighbours negotiating to build a new fence between their properties – one of them wants a 4 foot fence while the other wants an 8 foot fence. They end up compromising on a 6-foot fence with which neither party is completely satisfied (ironically, many consider that an indication of a fair bargain). Had they understood each other’s underlying interests, they would have found that one party wanted the 4 foot fence to let light into the yard, while the other wanted the 8-foot fence to keep the neighbour’s dogs out. Rather than a 6-foot fence which serves neither interest properly, they might have decided on an 8-foot chain link fence which keeps the dog out but still allows light through.
In my opinion, the NHLPA were actually using this sort of technique when they offered up their view of revised revenue-sharing. According to their statements at the time, they were attempting to address the league’s primary stated concern, which was the inability of some teams to be profitable under the current CBA terms. Revised (and increased) revenue sharing would theoretically allow some transfer of profits from richer teams to poorer ones, without requiring the players to pay for it themselves. In order to appease the richer owners, they also proposed to detach player revenue from league revenue, by moving to fixed dollar numbers rather than percentages. In theory, the owners would eventually come out ahead if league revenues continued to increase at a rate higher than the player increases prescribed. This was the “very reasonable” offer made by the players in mid-October, which was summarily dismissed by the league.
If I were a mediator in this dispute, I’d want to take a look at what the league’s underlying goals are, in order to understand why they’ve taken the positions they have. In my next post, I’ll explore what some of those goals might be.