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The NHL Lockout
  • Paper: The NHL Lockout
  • Date: Spring 2005
  • Authors: Benny Chan, Aleks Chechkin, David Waylonis and Nan Zhou
  • Institution: California Institute of Technology
  • Program: Business, Economics and Management

This paper was written during the 2004-05 NHL lockout as part of the entry-level Competitive Strategy (BEM-106) course of the Business, Economics and Management program at the California Institute of Technology. The course introduces major concepts of business strategy with a focus on the interaction of firms and strategies aimed at sustainable profits. The major goal of the course is to provide skills allowing students to perform a strategic analysis, write it up for consideration, and defend it in a meeting.

The authors selected to address the ongoing 2004-05 NHL lockout by designing a strategy that would help the league overcome the dispute with the NHLPA and return with a product that is both financially successful and exciting/entertaining for hockey fans.

As part of the paper, the authors lay out the two main issues of the lockout, cost certainty and salary cap and perform a cursory Six Forces Analysis, a model providing a framework of key forces to get a holistic assessment of any given industry and identify the structural underlining drivers of profitability and competition:

  • New Entrants
  • Buyer Bargaining Power
  • Supplier Bargaining Power
  • Competition / Rivalry
  • Substitutes
  • Complementary Products

The authors conclude that the NHL lockout was caused by the desire of owners to eliminate financial losses that had come about due to the declining popularity of hockey in America in recent years and proposed to main strategies, going forward:

  • Increase Fan Base Through Revenue Sharing
  • Increase League Involvement in the Community
  • Eliminate Clear Losers (contraction of NHL franchises which, clearly, never happened!)

Photo credit: Alan Levine