COLUMN: Ontario Hockey League compensation – is it really unfair?

Niagara This Week – St. Catharines   July 8, 2016

Matt Young

It was a tense evening for fans of the Canadian Hockey League on Wednesday night, as details of a report by Dr. Kevin Mongeon, a Brock University assistant professor of Sport Management, were released.

The report details how, based on his study, the teams of the Canadian Hockey League can afford to pay players minimum wage; all based on franchise values.

At the forefront of this study is a campaign by former CHL players that involved filing a lawsuit, in an attempt to get teams to share more of the revenue with the players.

Under the current agreement, players involved in CHL action received $50-125 per week, and are provided with an education package when their playing days are complete. The education packages include paid tuition and books for the former player, based on service time within the league. It should also be noted that the CHL’s franchises also pay for all equipment and billeting for the players involved with their respective organizations.

The details, provided in a report on tsn.ca, states that there are resources that exist to pay the players the minimum wage of $11.25 per hour in Ontario, where the OHL participates in games; averaging about $281,250 in salaries based on a 40 hour work week over 25 weeks.

This $281,250 value also assumes a player invests 40 hours per week into their hockey career while attending school, which isn’t always the case either. There are weeks where players only participate in one or two games per week, along with a daily practice. This would not equate to 40 hours of work per week, however it is not known whether travel to games and gym time is included in the 40 hours per week total.

The league on the other hand contends that these resources do not exist in many markets. The CHL and leagues under their banner, have maintained a position that these are amateur student athletes. The players are in a developmental league; with some aspiring to advance into a professional career while others capitalize on the education package while likely continuing on in the game by playing CIS hockey.

The courts will ultimately decide the matter; however, the report released by Dr. Mongeon likely won’t help the case as there are obvious issues with them.

The primary basis is that the franchise values in the league are vastly overstated. They are based on a population model from a 2011 population census and have computed values based on this population census.

As Alex Quevillon of the Ottawa 67’s report points out, it has merely extrapolated the values of the franchise based on population, meaning cities with higher populations should be able to pay easier based on population.

Of course, one only needs to review the attendance numbers of the Ontario Hockey League to understand this is just simply an incomplete examination.

Despite the fact that Ottawa and Mississauga have the two biggest population bases to draw from in the Ontario Hockey League, they sat 12th and 17th in attendance this past season.

The Ottawa 67’s averaged 3,484 fans per game, while the Mississauga Steelheads averaged 3,025 per game at the Hershey Centre.

These teams may have the largest population bases in which to draw from, but they are simply not generating the enough revenue to validate such franchise values; thus allowing others to question the accuracy of the report.

The attendance figures make it impossible to equate such franchise values to organization’s generating such a small attendance figure over the course of a season. The Ottawa 67’s and Mississauga Steelheads also iced competitive teams this past season as well. The lackluster attendance wasn’t due to poor play on the ice and the surplus of population in the area did not impact attendance when compared to other OHL markets.

The London Knights and Kitchener Rangers are fourth and fifth on the list respectively, yet were the top organizations attendance wise this past hockey season. The Knights averaged 9,013 per night at their Budweiser Gardens facility, while the Rangers filled the Kitchener Memorial Auditorium with 7,012 per night.

With the average ticket price of $19.00 in the Ontario Hockey League, London would stand to generate $5,822,398 in ticket revenue, yet Dr. Mongeon’s report states the Knights would only generate $1,100,000 in revenue while Kitchener would generate $646,410 in ticket sales as opposed to $4,529,752 based on the average ticket price in the league.

The fact that London are fourth and fifth in this report despite boasting the best ticket revenue figures illustrates that these franchise values are completely inconsequential in determining whether or not the league can afford to pay minimum wage.

Locally, the Niagara IceDogs would generate $2,943,822 based on the $19.00 ticket price and their average of 4,557 fans per night in the Meridian Centre this past season. The 4,557 fans has the team sitting in fifth place overall in average attendance in the Ontario Hockey League. The report by Dr. Mongeon reports that the team generates a mere $350,000 annually in ticket revenue.

I reached out to Bill and Denise Burke to speak to the validity of these claims, but they declined comment at this point in the lawsuit.

Although the disparity in ticket sales would appear to benefit the argument that these organizations are making significantly more revenue and should pay; it just further demonstrates the issues people have with the accuracy of Dr. Mongeon’s report.

The Rangers franchise is owned by a group of 4500 community-based owners and issued an annual report stating the team generated $3,400,000 in ticket sales this past season; further illustrating the report hasn’t been compiled in a thorough manner.

The overall issue at hand is overall player compensation and the treatment of the league’s athletes during their time in the league.

For their services, players are paid $50 to $125 per week for overage players. That equates to a small wage of $1,250 for players 16-19, or $5,000 over a four year Ontario Hockey League career.

After a player is no longer able to continue in the league (should they not play their overage season at age 20), they are eligible for four years of paid University education at an average of $8,000 per year. In the 2014-15 season the OHL paid $475,755 in education costs for rostered players and another $2,500,000 to 57 different academic institutes for OHL graduates that season. The league paid a total of $3,000,000 in tuition and educational costs in the 2014-15 season.

When looking at total compensation for a player that is in the league for four seasons, the equivalent value for their services is $9,250 per season; based on an annual average tuition of $8,000. Should a CHL player move onto the professional ranks, they stand to gain a much greater financial gain as a result of their participation in the world’s best developmental league.

Further to this point, when looking at total compensation per season, the potential is for a roster to be paid $222,000 per season; not far from the $281,250 above.

In essence, the league is already paying the fees Dr. Mongeon thinks they can afford to pay. Unfortunately though, the CHL and OHL are not able to pay those fees on top of their tuition packages.

Should the players want that money up front rather than in the form of an education package, one has to wonder how much will be left for their post-junior education. While not to suggest all teenagers would spend the money irresponsibly, it stands to reason that there would be a significant decline in post-junior educational enrollment should the funds be distributed during their time in the league.

Another factor that must be considered should players be paid on an hourly basis is how much will player agents stand to gain from this new hourly wage. As it stands today, most CHL/OHL players have representation in the form of an agent. How much of that $11.25 would have to go towards player representation given the players are now making an actual hourly wage rather than the small weekly fee currently paid? Despite the weekly increase, the players may not benefit at all from an hourly wage as much as it appears they would at first glance.

In addition to the costs above, the Ontario Hockey League franchises also subsidize player accommodation as well. These costs of living may not be something the team is fully responsible for should they be forced to pay a full hourly wage.

I also attempted to contact Dr. Kevin Mongeon to seek clarification on his study, but all inquiries went unanswered.

At the end of the day, the game of hockey is the biggest loser in this lawsuit. The Canadian Hockey League provides a great development system for those aspiring to become an NHL player, while paying for the education of those players who aren’t as fortunate to move onto the professional level.

The CHL and OHL was to be a developmental league where players are compensated once they leave the league. Unfortunately for the league, the players’ desire (or at least those no longer in the league) to have payment now seems to be outweighing the benefits of future payment.

The game off the ice has become bigger for the players than the game on the ice. This is the inadvertent result of success for the league; a development the league could not have expected when it formed with the intention of developing hockey players. They are no longer developing hockey players, they are now also developing businessmen.

Junior Hockey is now officially a business for all involved, and this development puts the game of junior hockey in a bad position. No matter what the result of this lawsuit is, it is a bad development for what is the best league for player development in the planet. This is not good for hockey, and it is not good for those associated with a team in any junior market.

Unfortunately for the fans, it is something that has become a focus in the media rather than the play on the ice. In an era of NHL labour lockouts, it appears the game at every level is vulnerable to being a business.

Source: COLUMN: OHL compensation – is it really unfair?

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