Update: NHL and Union Report to Mediation

To follow-up on my October post, “Could the NHL Lockout Benefit from a Mediator?,” as of Monday, November 26th, the parties reported an agreement to mediate.  Three neutrals from Federal Mediation and Conciliation Service have been assigned.  The sides met separately with the mediators on Wednesday, November 28th.

“Hockey players and management have not negotiated since last Wednesday [November 21, 2012]. The NHL has canceled more than one-third of its regular season, including all games through Dec. 14, the New Year’s Day outdoor Winter Classic and the All-Star weekend scheduled for Jan. 26-27 at Columbus, Ohio.”  NHL Lockout 2012: Federal Mediators Set To Join Stalled Labor Talks, The Huffington Post, http://www.huffingtonpost.com/2012/11/26/nhl-lockout-2012-federal-mediators_n_2194463.html#slide=1663482 (Nov. 26, 2012).

Although many may be satisfied with what seems like progress between the parties in agreeing to mediate in the first instance, others note that the mediation may not guarantee a successful end to the lockout.

Gary R. Roberts, dean and professor of law at Indiana University, and sports labor law specialist (and also my former Sports Law professor at Tulane), provides this take:

My guess is just based on past history and the tone of the way things are going right now is that this is probably not going to produce a settlement . . . . This isn’t like a hysterical couple doing divorces or a commercial dispute where one side or the other is just being totally unrealistic. These are two very sophisticated and experienced groups. I just don’t see how much a mediator can bring to the table other than to remind them of what’s at stake periodically. . . . Who knows how many seeds the mediator might plant that could eventually bear fruit . . . . It’s hard to predict. . . . Mediation tends to me a mechanism whereby tempers can be cooled, and people who are operating from unrealistic perspectives can be brought to see what reality is . . . . It sounds like they’re pretty much at an impasse . . . . Both sides have their perspectives and their objectives and neither side can accept a set of proposals that the other side insists is necessary. We really are at sort of a standstill.

Stephen Whyno, NHL lockout 2012: Reality is, mediation might not solve anything, The Washington Times, http://www.washingtontimes.com/news/2012/nov/27/nhl-lockout-2012-reality-mediation-might-not-solve/#ixzz2Dg1aKVWO  (Nov. 27, 2012).

“About $182 million apart on core economic issues, there’s further disagreement on matters such as contract length (players want none while owners want to institute a five-year limit) and arbitration rights.”

-Whyno (article link above).

Can a mediator bring them together?  What’s your take?

Could the NHL Lockout Benefit from a Mediator?

On September 16, 2012, National Hockey League Commissioner, Gary Bettman, locked out players.  Since then, negotiations between the league and players’ association have stalled.  Reportedly, Bettman and players’ association counsel have discussed the option of an outside mediator, but it is uncertain whether that is a viable option.  NHL deputy commissioner, Bill Daly, intimated that mediation is unlikely, reportedly stating, “We certainly understand what their position is . . . We just wish it was different.”  The NHL benefited from a mediator in its 2004 lockout, during which it lost an entire season because of the labor dispute.

Mediation has also crossed over into the realm of sports team/franchise, bankruptcy-related disputes.  When the Los Angeles Dodgers filed a Chapter 11 bankruptcy in June 2011, the bankruptcy court approved the appointment of a mediator in short order.  In October 2011, Judge Kevin Gross entered an order formally appointing Joseph Farnan Jr., a retired federal district judge in Delaware as a mediator, with the Dodgers and Commissioner Bud Selig to split his fees.  Nearly one year later, in April 2012, the judge approved the sale of the Dodgers to a group of investors headed by Magic Johnson, despite the league’s objections.  However, provisions regarding the mediator’s authority sparked contentious debate lasting 8 hours, prior to approval of the settlement.   At the center of  the dispute was the authority of the court-appointed mediator responsible for enforcing the settlement between the Dodgers’ former owner, Frank McCourt and the MLB.  The mediator had the power to mediate disputes regarding the settlement terms even after the Dodgers exited bankruptcy.  The league’s position was that the mediator’s provision of authority would be unfair to other teams without recourse to challenge the decisions of Commissioner Bud Selig.  Although the terms of the mediation were confidential, after the mediation sessions, McCourt agreed to sell the team, ending his battle with MLB.  McCourt also ceased his effort to sell the television rights separately from the team.  At the end of the day, the mediator also played a significant role in the final terms of the sale before its closing.

Similarly, mediation was ordered in the Texas Rangers’ 2010 Chapter 11 bankruptcy.  U.S. Bankruptcy Judge D. Michael Lynn ordered mediation for the parties to hammer out issues related to the team’s Chapter 11 plan confirmation, including the repayment of creditors, sale of the team and whether the bankruptcy was filed in bad faith.  At one point, the judge delayed confirmation for more mediation time, although that delay was reversed to avoid hindering the team’s trades before a non-waiver trading deadline.  Eventually a group of investors led by hall of fame pitcher and Texas Rangers president, Nolan Ryan won the team through a court-approved auction.

Although the NHL and players’ association are not negotiating through the bankruptcy process, a mediator could be a win-win for all involved.

Sources:

Quotation from Pat Leonard, NHL lockout resolution? Don’t hold your breath as league and players still far apart on core economic issues, New York Daily Times, http://www.nydailynews.com/sports/hockey/leonard-nhl-lockout-breeding-optimism-article-1.1173314 (Oct. 2, 2012).

Steven Church, Dodgers Win Approval for Team’s Sale and Bankruptcy Exit, http://www.businessweek.com/news/2012-04-13/dodgers-win-court-approval-to-sell-team-exit-bankruptcy, Bloomberg Businessweek (Apr. 14, 2012).

Bill Shaikin, Bankruptcy judge approves sale of Dodgers despite MLB objection, The Los Angeles Times, http://articles.latimes.com/2012/apr/13/sports/la-sp-0414-dodgers-sale-20120414 (Apr. 13, 2012).

Nolan Ryan group wins Rangers auction, ESPN Dallas, http://sports.espn.go.com/dallas/mlb/news/story?id=5436579 (Aug. 5, 2010).

Texas Rangers, creditors need more time in mediation, ESPN Dallas, sports.espn.go.com/dallas/mlb/news/story?id=5347193 (July 1, 2010).

Sides will have to ratify new CBA, ESPN.com, http://sports.espn.go.com/nhl/news/story?id=2106776 (July 13, 2005).