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From the Rink to the Court: NHL On Trial

By A.J. Firstman | Last updated on

If you want to play for the National Hockey League (NHL) you have to start small. Literally. Some athletes hit the rink as soon as they can strap on skates and start playing when they’re as young as five years old – and they keep it up for season after season, year after year, their numbers dwindling all the while. Eventually a lucky, hard-working few make it to the Major Junior Leagues, where players aged 16 to 20 push themselves to the limit in hopes that they can earn their place in one of the 32 teams that make up the NHL.

That’s the dream. That’s what every last member of the Major Junior Leagues strives for. But according to a new lawsuit, the path to achieving that dream is an absolute nightmare.

A Cold-Weather Cabal

A class-action lawsuit was filed in a Manhattan federal court on Valentine’s day alleging that the biggest and most prominent hockey organizations in North America have violated the Sherman Antitrust Act.

The action is being brought by the World Association of Ice hockey Players Unions North America Division and the World Association of Ice hockey Players Unions USA Corporation.

The list of defendants is long: the NHL, the Canadian Hockey League (CHL), the Western Hockey League (WHL), each of the WHL member clubs, the Ontario Major Junior Hockey League (OHL) and each of its clubs, and the Quebec Maritimes Junior Hockey League (QMJHL) and all of its associated clubs are all named in the suit.

According to the suit, the defendants have colluded to make allegedly unlawful agreements that benefit the teams and the leagues at the expense of the players. It claims that the Major Junior defendants have maintained a systemic culture of maltreatment and economic, physical, psychological, and sexual abuse, what the suit calls "…the foreseeable consequence of a system that deprives these Players of freedom of choice, freedom of movement, and freedom to play for the club of their choice, i.e., the hallmarks of a competitive labor market."

Blowing the Whistle

The suit lays out an alarming number of allegations that, if true, strongly suggest that the defendants have engaged in anti-competitive conduct that may fall afoul of the Sherman Antitrust Act.

The Major Junior Leagues supposedly operate independently from one another. In theory, this means that they should be competing for views, players, and territory, but they allegedly do none of that. Instead, the Major Junior Leagues have allegedly agreed to split up North America and Canada into non-overlapping territories in which each of the leagues and their member clubs are allowed to recruit and source players. No club or league can ever recruit from anywhere outside their own territories – effectively creating a series of artificial geographic monopolies.

These agreements and artificial monopolies give the leagues and their clubs significant power over their players. Players are forced to join teams via an involuntary draft, and the teams that pick them are given exclusive rights to their players for the entirety of their major junior hockey careers.

It doesn’t matter if players would prefer to play elsewhere, they’re locked in for the duration. In fact, each club maintains a "protected" list of players that can include unsigned players and players who no longer figure into the club’s plans, effectively holding them hostage until another team pays as much as $500,000 to have them released from the list. These players are effectively the property of the club, even sometimes after their contracts have been terminated.

The teams also use this outsize power over their players to artificially depress their compensation, with many only receiving a weekly out-of-pocket stipend of just $50 - $100. Major Junior Players are also prohibited from receiving any compensation related to their names, images, and likenesses used in merchandise, video games, and other products. Their teams are free to exploit and license their players and their likenesses, but the players don’t get a cent.

Penalty Box

The players hope that the courts also see these anti-competitive practices as unlawful violations of the Sherman Antitrust Act, and are seeking damages commensurate to the compensation they feel they are owed for their labor, names, and likenesses.

If their allegations are true, the leagues have cooperated with one another to enact policies that artificially reduce competition, create geographic monopolies, reduce compensation, and restrict the ability for the players to negotiate or even move around as they please – all of which run afoul of the Sherman Antitrust Act, the players argue.

We’ll have to wait and see what happens. Only one thing is certain: Sports are about fair competition ... right?

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