Economics and the mid-life crisis have much in common: Both dwell on foregone opportunities

C'est la vie; c'est la guerre; c'est la pomme de terre . . . . . . . . . . . . . email: jpalmer at uwo dot ca

. . . . . . . . . . .Richard Posner should be awarded the next Nobel Prize in Economics . . . . . . . . . . . .

Wednesday, November 10, 2004

When will the NHL lockout end?

First, let me make clear that I don't miss hockey at all. This despite the fact that I grew up in Michigan, listening to the Red Wings during those halcyon days of yesteryear (Gordie Howe, Ted Lindsay, Terry Sawchuk, Red Kelly). I even went out for the freshman hockey team at Carleton College, and later played goalie in Carleton's famous Imperial Hockey League (no lifting the puck, and try not to skate on your ankles too much). But in the past 15 years or so, I've pretty much lost interest. I wonder if that's what happens as guys age....

Anyway, last week I suggested to my students that I thought the lockout would end before January 1st (probably to their credit, not one of them agreed with me). I argued that the NHL players would probably cave in pretty soon.

Several of them pointed out that many of the players don't need the money because they're playing in Europe or in the AHL. I didn't realize how important this alternative was until I read this in The Sports Economist blog (one of the best sources there is on the Economics of Sports -- it's almost required reading for my students). A very thorough analysis of this situation is provided by Phil Miller at his website, "Market Power".

It appears that the owners have few, if any, substitute options for players of NHL quality; but many of the players can do quite well, thank you, without the NHL owners. Will this be the death knell of the NHL? Of some of the teams (e.g. Phoenix) in the NHL?

Of course, if only 30-40 NHL players can make high salaries in Europe, while the rest are left to fend for themselves, we might see a big crack develop in union solidarity sooner than many people expect.

Update: here and here are some further thoughts on the lockout and hockey.

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