The spread of global capitalism has driven the irreversible internationalization of (soccer) football. Does the future hold a similar fate for the National Hockey League?
As globalization spreads (after all, how many truly closed economies remain?), it affects every inch of every market — sports included. Effectively, when one stands to gain from internationalization, there will most likely be a forced globalizing effect elsewhere. Nowhere is this more obvious than in the world of football. By way of illustration, before the fall of the Soviet Union one would be hard-pressed to find a Russian football club with international players on its payroll. Today FC Anzhi Makhachkala of the Russian Premier League, recently purchased by billionaire oil mogul Suleyman Kerimov, has an 18-man roster consisting of three Brazilians, two Moroccans, one French, one Congolese, one Ivorian, one Cameroonian and one Uzbek. Such internationally diverse squads are not merely exceptions, they have become the norm. Football clubs have eclipsed the title of TNCs (transnational corporations) to become what many analysts now label TTNCs (truly transnational corporations). The latter differ from the former in several important respects.
While TNCs do indeed cater to a global audience (think of people anywhere in the world being able to purchase Coca Cola) they tend to be regionally defined in the sense that we still think of Coca Cola being an American company (albeit a very multinational one). H.J. Chang, in his book Transnational Corporations and the Global Economy, argues that while TNCs are indeed ‘international’, they still bear a ‘national imprint’, whether that imprint be production processes or key employees. But TTNCs (i.e. the football clubs) operate in a slightly different fashion. Although you will still spot consumers in Canada, Italy, China (anywhere, really) purchasing Manchester United apparel in the same way that you see people anywhere consuming Coca Cola, and while you will likewise see Manchester United investing (whether it be directly or indirectly) at a global level, TNCs differ from TTNCs in that the latter initiate research and development on a truly global scale to remain competitive, while scouring the four corners of the earth for the most elite employees (talented footballers) that money can find. They do this on a scale that NHL clubs simply do not — yet. Granted, a significantly larger percentage of the world’s 7,000,000,000 people indulge in football than hockey, due to geographical limitations and the two games’ relative popularity. For example, it would be appropriate for the Los Angeles Kings to send scouts to youth hockey games in Sudbury, Ontario, but to send scouts to Belo Horizonte, Brazil, would be of questionable benefit. That being said, there are thousands of hockey players around the world just waiting to be spotted by a wealthier club in the hopes of receiving a better contract.
Now let us envision a hypothetical (but common) situation for a moment. Imagine that FC Liverpool is recruiting players in the Brazilian Serie A League. FC Liverpool’s scouts attend a Cruzeiro match, where they are delighted to find a magnificent young player (whom we shall christen ‘Thiago’ for the purposes of our story). FC Liverpool must now pay Cruzeiro for the contract rights to this phenom. In addition to this transfer fee (which may total millions of pounds), FC Liverpool must subsequently pay Thiago’s actual salary. Let’s suppose FC Liverpool offers Cruzeiro £2,000,000 for the young star. The next day, a slightly wealthier club, Tottenham Hotspur, comes and offers him £3,000,000. The third day, not surprising in the least, Thiago goes to play football for Tottenham. When he arrives in London, Britons (often infuriated when Latin American migrants come and ‘steal their jobs’) are not in the least bit upset; instead, they wholeheartedly welcome the fact that Tottenham’s championship chances may have improved after purchasing the rights to this particular migrant worker’s services. After floating their club’s shares, making them available for purchase on the stock market, clubs such as Tottenham (which went public in 1983) have been able to outbid each other for the world’s best players.
I now ask the same question of all of you: why couldn’t the NHL do the same? As the NHL owes its existence to the large number of people who are willing — perhaps naïvely — to pay upwards of $200 per game in the hopes of seeing the Maple Leafs win at the Air Canada Centre, one can likewise assume that there must be willing investors (from around the world, not just from the Greater Toronto Area) who would be willing to buy Maple Leafs stock for a few dollars per share. In the 1990s the Edmonton Oilers tried to go public, but their efforts were blocked by the NHL. Two decades later, this structure could be a crucial step in moving beyond the existing salary-cap structure while extinguishing the explosive issue of contract bargaining. Let the planet’s highest bidder get the player, even if that bidder is Dynamo Moscow.
The NHL is currently experiencing its third lockout in the last 18 years — more than any other major North American sport. If, as the owners say, they cannot afford to honour players’ contracts as they stand, then perhaps they require a new method of raising revenue. Hockey clubs are companies, and companies are conveniently afforded the opportunity to turn to the stock market in search of capital. When Abu Dhabi billionaire oil tycoon Mansour bin Zayed Al Nahyan purchased a controlling stake in Manchester City in 2008 for £200,000,000, he bought up all the top-class footballers that Middle Eastern oil money could buy. Unfortunately lacking sufficient interest among Middle Eastern oil barons, the NHL would need to try different avenues. One of those avenues is Wall Street.
If teams from Russia’s Kontinental Hockey League can afford to pay Alexander Ovechkin a higher salary than the Washington Capitals can, they will. This season, in signing locked-out NHLers, KHL teams are not allowed to pay more than 65% of what players’ NHL contracts are worth. In the long run, however, there is no reason to believe that there will be — in perpetuity — restrictions barring billionaire KHL club owners from outbidding NHL owners for players’ services. The logical end point of this is a competitive, global structure resembling that of football today.
If the NHL cannot address its labour woes for once and for all, hockey players will begin going to the highest bidder, while NHL teams may have to go public to afford competitive rosters. Footballer Didier Drogba currently plays for Shanghai Shenhua of the Chinese Super League; and similar to how the best Brazilian players are filtered out of their traditionally cash-strapped domestic football leagues, the best NHLers may very well leave North America in search of higher wages from TTNCs.