The National Hockey League has settled its year-long labor dispute. The owners finally achieved their dream of a salary cap – otherwise known as wage controls.
Sports Illustrated.com noted, “Under the new (NHL Collective Bargaining Agreement), players are guaranteed to receive 54 percent of league-wide revenues – projected to be between $1.7 billion and $1.8 billion next season.”
That means that each team will average salaries totaling about $58 million per year. Guaranteed! Who’d have thunk it? Isn’t the free market great?
But the truth is that salary caps are designed to help maintain the existence of small-market teams that have trouble competing against the New York and Los Angeles markets. There is nothing “free market” about the NHL, and that’s just the way the owners like it.
That’s why there are tight entry and exit requirements. Just try to start an NHL team in your local community. Even if you have an unlimited supply of cash and can attract the best players in the world, you won’t have anyone to play.
To be admitted to this league of extraordinary owners requires almost unanimous owners’ approval, and the incumbents aren’t about to further dilute the talent or the market without significant guarantees of how your entry will contribute to their bottom line.
When the NHL has expanded, it has extracted very large entry fees from the prospective franchises. What other business requires that you compensate the profession in order to be allowed to participate?
But the owners don’t stop with socialist economic policy; they have also turned to socialist politics: robbing from the poor to give to the rich. Most NHL franchises now play in palaces whose construction was heavily subsidized by the taxpayers. And in most cases the owners reap not only the benefits of the amenities and gate, but some also have extracted development rights to surrounding properties.
Wage controls, restricted entry and fleecing the taxpayers. And we waited 18 months for this?!