Sharing the Wealth in the "New NHL": The Implications of Revenue Sharing for Competitive Balance, Payroll Spending, and Profits

  • Taylor F Brinkman Peabody College of Vanderbilt University

Abstract

The National Hockey League was in trouble at the end of the 2003-04 season. Not only were teams losing money, but many fans, especially in the non-traditional small-markets, were losing interest. In response, team owners and player representatives collaborated on a new collective bargaining agreement that included a brand new economic system for the League. In addition to instituting a salary cap to help small-market teams remain financially viable, the League sought to improve competitive balance by devising a complex revenue sharing system. After explaining the system in detail, this article identifies how revenue sharing will affect ownership behavior in the hockey players’ labor market, concluding that the system’s large negative effect on the marginal revenue product of small-market teams will render it ineffective at achieving its goal of a higher level of parity.

Author Biography

Taylor F Brinkman, Peabody College of Vanderbilt University
Taylor F. Brinkman is a fourth-year student majoring in Economics and Human & Organizational Development in the Peabody College of Education and Human Development. A native of Flower Mound, Texas, he is a member of the Peabody Scholars Program and is consistently honored on the Dean's List. Next year, Brinkman will begin his legal studies at Boston College Law School, with the goal of eventually pursuing a career in sports law, as either an arbitrator and outside counsel to a professional franchise.
Published
08-12-2006
How to Cite
BRINKMAN, Taylor F. Sharing the Wealth in the "New NHL": The Implications of Revenue Sharing for Competitive Balance, Payroll Spending, and Profits. Vanderbilt Undergraduate Research Journal, [S.l.], v. 2, aug. 2006. ISSN 1555-788X. Available at: <http://vurj.vanderbilt.edu/index.php/vurj/article/view/2736>. Date accessed: 22 oct. 2017. doi: https://doi.org/10.15695/vurj.v2i0.2736.
Section
Humanities and Social Sciences

Keywords

Economics of Professional Sports