Contract Negotiation Headline Hockey

The Lockout Provision

Milan Lucic

Finding a professional athlete work during a lockout might amount to getting him on teams in other countries or minor leagues in North America. This strategy was widely used during the last NHL lockout in the 2003-2004 season. Players like Chris Chelios played with fringe minor league teams close to home and family while others like Joe Thornton, who went to the Swiss Nationalliga, gave a boost to European leagues across the pond.

Agents and advisors learned from the 2004 lockout and came up with strategies to maintain cashflow to their client in the event of a future lockout. With the current NHL-NHLPA Collective Bargaining Agreement expiring after the 2011-2012 season (unless the players use their option to extend it), agents are negotiating a very practical provision into newly signed contracts. The Lockout Provision calls for a player to receive his signing bonus in the year in which a lockout could occur.

Milan Lucic is the beneficiary of this new provision. Lucic recently signed a three-year, $12.25 million contract extension. Most of the buzz about this extension centered around the fact that Lucic will be paid over $4 million in each year of his contract, yet he only tallied 69 points in his two NHL seasons. Obviously, Lucic got a great deal and should be very happy with his agent’s work here. But Lucic can also play the next couple seasons without the insecurity of possibly not getting paid after the 2011-2012 season; that’s because the Boston Bruins agreed to pay Lucic a $1 million signing bonus in 2012.

Not only does the Lockout Provision provide players with financial security in a time of job insecurity, it may also enhance the NHLPA’s bargaining position during CBA negotiations. If the Lockout Provision becomes more common in contracts, the NHLPA can use the fact that some players will be paid regardless of whether they play as leverage.

2 replies on “The Lockout Provision”

Great read Ryan! Glad agents are finding ways in the NHL to work around or with a potential lockout. I hope this continues in the NFL and other leagues where the CBA is about to expire.

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