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.Copyright for articles published in this journal is retained by the authors, with first publication rights granted to Vanderbilt Undergraduate Research Journal under a Creative Commons Attribution-Noncommercial-ShareAlike 4.0 International License (linked here). By virtue of their appearance in this open access journal, articles are available for wide dissemination at no cost to readers, with proper attribution (acknowledgment of the work's authorship and initial publication in this journal), in educational and other non-commercial settings. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process.
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