BROOKLYN (CN) — A class of junior hockey players accuse the National Hockey League and others of running a scheme to restrict competition and exploit the young players.
Major junior hockey players, aged 16 to 20, claim the independent leagues colluded to limit competition among themselves for player recruitment, in violation of U.S. antitrust law. According to the players, the anticompetitive agreements span across six hockey leagues and more than 146 clubs, nearly the entire North American ice hockey industry.
The major junior leagues are a part of the Canadian Hockey League, which claims to operate differently from other sports leagues because the organizations it encompasses operate independently.
The class pointed to a statement by Canadian Hockey League president Dan MacKenzie, who explained the league’s unique role in comparison to other sports leagues.
“The CHL is not a typical ‘league.’ It has no teams or organized regular-season game schedules,” MacKenzie said. “Apart from a handful of special tournament and exhibition games, the CHL has no role in administering hockey games.”
While the leagues are independent, the players say the defendants colluded to limit competition which results in lower compensation and restricted freedom of movement for the players.
According to the class, the junior leagues agreed to allocate geographic territories in which each of the major junior leagues and clubs were allowed to recruit and source players.
“To this end, the major junior leagues have allocated exclusive, non-overlapping territories among themselves — including New York and every other state — with each league having the exclusive right to recruit and source players from within their allocated exclusive territories,” the junior players say in the class action.
The players also say the junior leagues each operate an involuntary entry draft for all players in North America who turn 16 during their first major junior hockey season.
“Major junior defendants have agreed, therefore, to conduct involuntary drafts within their exclusive territories, to draft players at the same age and to respect the rights of drafting clubs across all three leagues,” the players say in the complaint.
As a result, the junior players say they are contractually prohibited from playing for any other club other than the major junior club that involuntarily drafted them until they turn 20.
The players also say each major junior club has a “protected” list filled with unsigned and signed players. The clubs will then demand payment from any club interested in a player from its protected list which, the players claim, can be as much as $500,000.
“Once placed on the list of a member team, a player must play with that team if he wishes to play at the major junior level,” the Canadian Hockey League’s website reads.
According to the players, this system restricts their “freedom of movement” and is “designed to ensure that players cannot switch clubs or leagues unless they can be sold for cash.”
The players refer to the leagues as “horizontal competitors,” meaning they would normally have to compete against each other for the players’ services across all of North America by offering competitive compensation and creating an environment for these teenagers to develop their hockey skills.
“The purpose and effect of these horizontal agreements are to eliminate competition for players’ services and artificially suppress labor costs so as to make them unresponsive to traditional market forces,” the players say in their complaint. “Defendants’ cartel artificially suppresses and standardizes compensation by denying players their freedom of choice, freedom of movement and freedom to play for the club of their choice.”
Besides the NHL and CHL, other major defendants include the Western Hockey League, the Ontario Major Junior Hockey League, and the Québec Maritimes Junior Hockey League.
The class seeks class certification, a finding that the actions of the defendants violate U.S. antitrust laws and damages. They are represented by Jeffrey Shinder and others at Constantine Cannon in New York.
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