Developments in class action lawsuit against the CHL

Photo: CHL Images

There is a potential showdown looming in the Canadian court system over Canadian Hockey League players and the money they receive—or don’t—for playing in the league.

On one side are the plaintiffs, who are trying to show that the CHL is big business and that its players are actually employees and deserve to be recognized as such under Canadian labour laws. On the other is the CHL (the WHL, OHL and QMJHL as well as individual franchises themselves), which has to date successfully lobbied the courts to obtain an exemption that states, “the Employment Standards Act does not apply to major junior ice hockey players.”

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This battle and others like it have been going on for a number of years, and it seems both sides make valid points. On the one: CHL players play, practice, travel and appear at events for their teams for dozens of hours a week, receiving little remuneration in return; on the other, the assertion that CHL players are playing a game they love with a chance to make it their profession and receive room and board, equipment and supplies, medical coverage, cash stipends and post-secondary scholarship money for each season they play in the league.

At the heart of it all is whether or not owning and operating CHL franchises constitutes big business—i.e. millions in revenues from ticket sales and merchandise as well as partnerships with Hockey Canada, the NHL and broadcasters (Sportsnet is in the midst of a 12-year contract with the league) and the like—or is a perennial money loser that acts as a developmental league whose players are independent contractors and student athletes.

While the most successful CHL franchises do make millions, there are questions as to how much. And there is no doubt that many of the teams are annually in the red. Numbers have recently been thrown around that value the top tier of teams at as much as $68.95 million with the low end less than a million. But those values are disputed by many around the CHL and until teams are ordered to open their books can not be substantiated.

In 2014, a yet-to-be certified $180-million class action lawsuit was launched arguing that CHL players should be considered business employees and are deserving of minimum wage. It is asking for outstanding wages as well as overtime, holiday and vacation pay for current and former CHL players.

Class action lawyer Ted Charney is leading the suit. In an interview with CBC’s B.C. Almanac Friday, he stated: “I think [CHL franchises are] in the business of making money, and that’s why these players are entitled to be paid… even the smallest team has revenues in the range of $2 million a year.”

Charney estimates that paying CHL players would cost franchises somewhere in the range of $300,000 annually. If that’s the case, and if estimated franchise values are to be believed, that would seem doable for the wealthiest of teams, but could be upwards of 25 percent of total value for those at the low end.

In a CBC article Friday, WHL commissioner Ron Robison said: “These franchises are not profitable. The industry is not profitable. I think it’s a distorted message to send.”

The case’s certification hearings are set to be heard in early 2017.

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