salary discrimination in the national hockey league: the effects of team location

Canadian Public Policy

Salary Discrimination in the National Hockey League: The Effects of Team LocationAuthor(s): Neil LongleySource: Canadian Public Policy / Analyse de Politiques, Vol. 21, No. 4 (Dec., 1995), pp. 413-422Published by: University of Toronto Press on behalf of Canadian Public PolicyStable URL: http://www.jstor.org/stable/3551339 .

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Salary Discrimination in the National Hockey League: The

Effects of Team Location NEIL LONGLEY* Department of Economics Augustana University College Camrose, Alberta

Contrairement aux r6sultats d'6tudes pr6c6dentes, ce texte montre que les joueurs canadiens- frangais qui jouent dans la LNH sont victimes d'une discrimination salariale significative. Cette discrimination, cependant, ne touche pas l'ensemble de la ligue. Il s'agit plut6t d'un ph6nomene isol6 affectant les canadiens-frangais jouant pour des 6quipes du Canada-anglais. L'article examine comment le fait que le ph6nombne soit isol6 remet en question certaines theories populaires expliquant pourquoi les joueurs francophones sont victimes de discrimination salariale. Il montre 6galement que les sources ultimes de la discrimination ne peuvent btre comprises qu'en 6tudiant les diff6rences fondamentales entre les 6quipes americaines et celles du Canada-anglais. Deux de ces diff6rences, liees aux tensions historiques entre canadiens-anglais et canadiens-frangais, sont examinees. L'article montre aussi qu'il y a peu d'6vidence empirique concernant l'existence d'une discrimination r6ciproque; c'est-a-dire qu'il ne semble pas y avoir de traitement discriminatoire a l'6gard des canadiens-anglais jouant pour des 6quipes du Quebec.

Contrary to the results of most previous research on the issue, this paper does find evidence that French Canadians playing in the NHL do suffer from significant salary discrimination. This discrimination, however, is not league-wide, but isolated only to French Canadians playing for teams based in English Canada. The paper examines how the isolated nature of the discrimination allows one to dismiss a number of popular theories as to why French Canadians may suffer from discrimination. It shows that the ultimate sources of the discrimination can only be found by examining fundamental differences between teams based in English Canada and teams based in the US. Two such differences, both conjectured to relate to the historic tensions between English Canadians and French Canadians, are examined in the paper. As an ancillary issue, the paper finds little or no statistical support for the possibility that reciprocal discrimination exists; that is, there appears to be no discriminatory treatment of English Canadians playing for teams based in Quebec.

I Introduction

Prior to January, 1990, salaries of

National Hockey League (NHL) players were never officially released. While the

sports media would often be able to obtain, or at least make educated guesses about, the salaries of star players, no comprehen- sive listing of the salaries of all players in

the League was ever available. With the public release of salary infor-

mation, numerous studies have been per- formed in recent years to determine whether salary discrimination exists in the League. Most studies have focused on possible discrimination against French Canadians, and have only incidentally examined possible discrimination against the

Canadian Public Policy - Analyse de Politiques, XXI:4:413-422 1995 Printed in Canada/Imprimb au Canada



NHL's other two minority groups, Ameri- cans and Europeans. The general finding has been that French Canadians do not suffer from any sort of salary discrimination.

However, this paper will show that the models used in previous studies have been deficient in one important respect: none have considered the effects of team location on any possible discriminatory behaviour.1 Previous studies have tended to ask, for example, whether French Canadians, as a whole, suffer from discrimination in the League. However, posing this question may not provide much insight into the situation. To explain, one might have reason to suspect that French Canadians playing for one of the two Quebec-based teams would not be prone to discriminatory treatment. Since these two teams employ a dispropor- tionate number of French Canadians, a lack of discrimination in this situation may statistically obscure any possible discriminatory treatment against French Canadi- ans playing elsewhere in the League.

There is some a priori reason to believe that team location may be an important variable in influencing whether salary discrimination will occur. All but two NHL franchises are based in either the US or in English-speaking Canada.2 Thus, significant cultural and language barriers may exist for players of both French Canadian and European origin. These barriers may limit the player's popularity with the local media and fans, and thus lessen the value of that player to the team. French Canadi- ans playing for teams based in English Canada may face an additional barrier. Be- cause of the historic tensions between Eng- lish Canadians and French Canadians, media and fans of English Canadian-based teams may hold particular systemic biases or personal prejudices against French Canadians; biases or prejudices that they do not necessarily hold against European players.

These issues raise an ancillary question. If one sees the potential for discrimination to occur against French Canadians playing

for teams based outside Quebec, why would it not be possible for non-French Canadians playing for Quebec-based teams to also be the victims of discrimination? All of the same factors discussed above still apply. For non-French Canadians playing in Que- bec, many cultural and language barriers exist; barriers that may make non-French Canadians less attractive to the team's fans and media, and, hence, less valuable to the team. Furthermore, for English Canadians, the historic French-English tensions discussed above may pose additional problems not encountered by Americans or Europeans playing in Quebec. Examining this question is a substantial deviation from most work on discrimination in that it considers the possibility that members of a majority group may also suffer discrimination, at least within certain geographic segments of the market.

Thus, it is imperative that any model testing for the presence of salary discrimination include the effects of team location. Previous empirical studies have not considered these effects. Their conclusions, for the most part, have been that salary discrimination is not a problem in the NHL.3 Jones and Walsh (1988) provide the first rigorous analysis of the issue. They found weak evidence of salary discrimination against French Canadian defensemen, but found no evidence of salary discrimination against French Canadian forwards or goaltenders. However, their study pertained to the years 1975-1978, a period in which the NHL was facing intense competition from the rival World Hockey Association.4 Thus, any inherent tendency towards discrimination within the NHL during this era may have been mitigated by the presence of a highly competitive bidding process for players' services.

Lavoie and Grenier (1992) use salary data from the 1989-90 season, the same data set that this paper uses. Lavoie and Grenier find no (statistically significant) evidence that French Canadian players, whether they be forwards, defensemen, or goaltenders, suffer from salary discrimina-

414 Neil Longley



tion. McLean and Veall (1992) use salary data

from both the 1989-90 and 1990-91 sea- sons. Their findings, like those of Lavoie and Grenier, show no evidence of salary discrimination against French Canadian forwards, defensemen, or goaltenders.

II The Model

The deficiency of these earlier works is that they examine French Canadians as a group; including in their empirical models only a single dummy variable set equal to one if the player is of French Canadian descent. When this variable has been found to be statistically insignificant, conclusions that French Canadians do not suffer from salary discrimination have generally been ac- cepted.

The salary model used in this paper de- viates in one important aspect from these earlier studies. Specifically, it includes a series of dummy variables designed to capture the interaction between a player's origin and the location of the team for which he is playing. This specification of the model allows one to determine whether the presence of discriminatory behaviour varies by team location.

The empirical approach of this paper uses a two-step process. First, a base model is developed. This base model is then extended to include the interaction effects of team location with player origin.

The base model makes the standard as- sumption that a player's salary is positively related to his marginal revenue product (MRP). The model includes variables that capture the two basic factors which affect an NHL player's MRP: his own individual performance, and the revenue generating potential of the team for which he plays.

All else being equal, higher performing players will have higher MRPs because they make a greater contribution to the success of their team, and thus make a greater contribution to team revenues.5 If there were no impediments to player mobility within the NHL, competitive bidding by

teams would ensure that the MRPs for all players of a given performance level would be equalized across the league. In other words, players with equal performance levels would have equal MRPs, regardless of which team they played for." However, because player mobility in the NHL is actu- ally very restricted, a player's MRP will be influenced by the revenue generating potential of the team for which he plays.

The econometric model regresses the 1989-90 salaries of 250 NHL forwards on a set of independent variables used to proxy player MRPs. The salary figures are in US dollars, and do not include bonuses or deferred payments. They were obtained from the official release of the NHL Play- ers' Association, as reported in the Febru- ary 12, 1990 edition of The Sporting News.

Only forwards are considered, since their contributions to a team are easier to measure than those of defensemen. The latter are generally much more concerned with preventing the opposition from scoring, rather than scoring themselves. Since few readily available, objective measures of defensive performance exist, all defensemen were excluded from the study.7 While it is true that there are also some forwards whose greatest asset is their defensive ability, the performance of forwards is more generall measured by their offensive production. Measures of offensive production are objective and easily obtained, and are the only performance facet, other than the player's NHL experience, considered in this study.

Thus, the following two independent variables were selected to measure a player's individual performance: (1) Career (Regular Season) Games Played (RGP), and (2) Career (Regular Season) Points/ Game (RPPG).9

The careful selection of a limited number of independent variables reflects the approach of authors like Scully (1974). The variables selected above are thought to measure most precisely and efficiently the key aspects of a player's performance. Authors such as Jones and Walsh (1988)

Salary Discrimination in the NHL 415



and Lavoie and Grenier (1992) take a 'kitchen sink' approach to the selection of independent variables, whereby any variable that has any chance of influencing salaries is included in the regression.

The games-played variable (RGP) measures a player's experience. Players who are very experienced may contribute some- thing to their team independent of their measurable performance statistics. They add stability to their clubs, and are also players that fans can easily identify with.

The points per game variable (RPPG) is the most direct measure of a player's offensive ability. It captures the effects of both a player's goals and assists. Career points per game is a more appropriate variable than simply career points, since the latter is much more correlated with career games- played (i.e. the first variable), than is the former.

To these two variables measuring individual performance, a variable (REV) was added to capture the effects of team revenues on salaries. Since the revenues of NHL clubs are not publicly released, it was necessary to estimate REV. Details on the exact derivation of REV are provided in Ap- pendix A. Thus, the final specification, before taking into account the discrimination issue, was as follows: In SALARY = Bo + B1 (RGP) + B2 (RPPG)

+ B3 (REV) Since SALARY is always non-negative, it

is more likely to be a lognormal random variable than a normal random variable. This implies an exponential relationship between the salary variable and the independent variables, and means that the coefficient estimates measure the rate of change of salary with respect to unit changes in the independent variables.

This basic model was then extended to include the effects of player origin. Dummy variables for the NHL's three minority groups - French Canadians (FRE), Euro- peans (EUR), and Americans (AMER) - were established.10 These dummy variables were than added to the above specification. The results of the regression are as follows:

Regression 1

Independent Variable Coefficient t-statistic

Constant 11.1381 130.71* RGP .0006 6.54* RPPG .8410 12.12* REV .0120 3.28* FRE -.0943 -1.54 AMER -.0008 -.02 EUR -.0229 -.34

Rk2 =.71 DF = 243 F statistic = 101

*Indicates significance at the 1% level. **Indicates significance at the 5% level. ***Indicates significance at the 10% level.

The R. of .71 is comparable to other salary determination studies. The control variables (RGP, RPPG, and REV) are all of the expected sign, and all are significant at the 1 per cent level.

All three player origin variables, FRE, AMER, and EUR have negative coefficients. However, for two of these variables, AMER and EUR, the coefficients are both statistically insignificant (at the 80% and 60% level, respectively), and of very small magnitude. These results would seem to strongly indicate that neither Americans nor Europeans suffer from any salary discrimination.

The results pertaining to possible discrimination against French Canadians are not quite so conclusive. The coefficient on FRE is substantially larger in magnitude than the coefficients on either AMER or EUR. The coefficient on FRE would indicate that French Canadians are paid about 9.4 per cent less than their English Cana- dian counterparts. The t-statistic on FRE is also much larger than that on either AMER or EUR. However, this must be tempered with the fact that the statistical significance of FRE is still quite low, as it is insignificant at even the 10 per cent level (al- though it does approach significance at this level).

These results are generally consistent with the results of other studies in that they find only weak (at most) evidence of dis-

416 Neil Longley



crimination against French Canadians. However, the above model specification, which is the general form used by previous studies, has a major deficiency. Its deficiency is that it examines the discrimination issue from a league-wide perspective only, and does not consider whether discrimination may be occurring within certain sub-components of the League. This deficiency may cause one to incorrectly reject the hypothesis that French Canadians do not suffer from salary discrimination.

Where discrimination against French Canadians is more likely to occur is on teams not based in Quebec. However, the traditional models are never able to detect such a possibility because they simply aggregate French Canadians into a single group.In these models, the large number of French Canadians playing for the Quebec- based teams may statistically obscure any possible discrimination against French Canadians playing for other teams.

To overcome this weakness, the above model is extended to measure the effects of team location on any potential discrimination. The NHL's 21 teams were divided into three groups and assigned dummy variables: QUE for Quebec-based teams, CAN for English Canada-based teams, and US for US-based teams. A series of interaction variables were then created. These interaction variables allow one to examine the effects on salary of every possible combina- tion of player origin and team location. For example, FRE*CAN represents French Canadians playing for teams based in Eng- lish Canada; ENG*US represents English Canadians playing for teams based in the US; AMER*QUE represents Americans playing for teams based in Quebec, etc. A summary of the number of players that fit into each of the 12 categories is provided in Appendix B.

This series of 11 dummy variables (ENG*CAN being the base case) was then added to the previously developed base salary model. The resulting regression equation was estimated using ordinary least squares. The results are reported

Regression 2

Independent Variable Coefficient t-statistic Constant 11.085772 131.55* RGP .000695 8.03* RPPG .895181 14.52* REV .013782 3.62* FRE*QUE -.042927 -.42 FRE*CAN -.371448 -2.67* FRE*US -.048671 -.51 AMER*QUE .063306 .24 AMER*CAN -.027558 -.26 AMER*US -.014423 -.23 EUR*QUE -.123048 -.64 EUR*CAN -.110619 -.89 EUR*US .022825 .25 ENG*QUE -.138381 -1.82*** ENG*US .007643 .16

R2 = .72 DF = 235 F statistic = 43

*Indicates significance at the 1% level. ***Indicates significance at the 10% level.

above. All the control variables were significant

at the 1 per cent level. The R2 continues to compare favourably with other studies of this nature. Of the 11 interaction variables, nine are highly insignificant. Of the re- maining two variables, one, FRE*CAN, is significant at the 1 per cent level. The other, ENG*QUE, is significant at the 10 per cent level.

The coefficients indicate that, when compared to the base case of English Canadians playing for English Canada- based teams (ENG*CAN), French Canadi- ans playing for English Canada-based teams (FRE*CAN) earn 37 per cent less, while English Canadians playing for Que- bec-based teams (ENG*QUE) earn 14 per cent less. Since none of the other interaction variables have coefficients that are significant, any possible instances of salary discrimination appear to be limited to these two cases.

These results provide quite strong evidence that teams based in English Canada discriminate against French Canadian players.11 However, care must exercised in interpreting the coefficient on ENG*QUE.




The negative coefficient on ENG*QUE says only that English Canadians playing for Quebec-based teams earn less than English Canadians playing for English Canada- based teams. To show that Quebec-based teams discriminate against English Cana- dian players, one must show that English Canadians playing for Quebec-based teams are paid less than French Canadians playing for these teams. The coefficient on ENG*QUE does not directly provide this information.

Indirectly, however, the results of Re- gression 2 do cause one to question whether discrimination may be a problem for Eng- lish Canadians playing in Quebec. To explain, if, for some reason not captured by the model, Quebec-based teams were simply low-paying compared to other teams in the league, one would suspect that Amer- icans, French Canadians, and Europeans would also be paid less than the base-case players. However, none of coefficients on AMER*QUE, FRE*QUE, or EUR*QUE are significant.

To further investigate the possibility that English Canadians playing for Que- bec-based teams also suffer discrimination, a third regression was run. In this regression, the base case was changed from ENG*CAN to FRE*QUE. The results are reported below.

The key variable in the regression is ENG*QUE. The coefficient on ENG*QUE is insignificant at even the 30 per cent level. This result allows one to reject the notion that Quebec-based teams may be discrimi- nating against English Canadian players. Salary discrimination in the NHL does not appear to be reciprocal; while there is strong evidence that teams based in Eng- lish Canada discriminate against French Canadian players, there is no statistically significant evidence that teams based in Quebec discriminate against English Canadian players.

III Discussion

This section seeks to offer some explana-

Regression 3

Independent Variable Coefficient t-statistic Constant 11.042198 94.06* RGP .000695 8.04* RPPG .896438 14.50* REV .013776 3.62* ENG*CAN .043967 .45 FRE*CAN -.328375 -2.03** FRE*US -.010693 -.09 AMER*QUE .106424 .38 AMER*CAN .015498 .12 AMER*US .028664 .28 EUR*QUE -.080640 -.39 EUR*CAN -.067922 -.46 EUR*US .065762 .55 ENG*QUE -.095251 -.86 ENG*US .050350 .55

R-2 = .72 DF = 235 F statistic = 43

*Indicates significance at the 1% level. **Indicates significance at the 5% level. ***Indicates significance at the 10% level.

tions for the primary empirical finding of the previous section: that French Canadi- ans do suffer from very significant salary discrimination in the NHL. Because this discrimination was isolated to certain French Canadians, and not all French Canadians, many traditional explanations as to why French Canadians may suffer from discriminatory treatment must be rejected. That is, any reasonable explanation of the results must adequately address why French Canadians playing in English Canada suffer from discrimination, while those playing in the US do not.

This requirement invalidates, for example, the argument that the results are at- tributable to the fact that the salary model only measures a player's on-ice contribution to his team, and does not consider his off-ice contributions. If, for example, because of language and cultural barriers, French Canadians are less effective than their English-speaking counterparts in such off-ice activities as media relations and public relations, one would expect the salaries of French Canadians to reflect this fact (assuming these activities were posi-

418 Neil Longley



tively related to a team's revenues). However, if this argument were valid, not only should French Canadians on English Canada-based teams experience lower salaries, but French Canadians on US-based teams and all Europeans in the league should also experience the same fate. Since neither of these latter two groups have salaries significantly different from the base case, this argument must be rejected.

Another explanation of the results could be that the discrimination is player-based. If non-French Canadian players, particularly English Canadian players, preferred not to have French Canadians as team- mates, the value of French Canadian players is lessened. However, this does not seem to be a reasonable explanation of the results, since English Canadian players comprise an almost identical percentage (ap- proximately 70%) of the total players on US-based teams as they do of the total players on English Canada-based teams. Thus, if English Canadian players were the ultimate source of the discrimination, one would expect discrimination to be at least as great a problem for French Canadians playing in the US as it is for French Canadi- ans playing in English Canada. The empirical results show, however, that this is not the case.12

Thus, to explain the results, one must uncover basic underlying differences between the US-based teams and the English Canada-based teams. There are two readily apparent differences between these two groups of teams. The most obvious difference between the groups is in the composition of their fans and media. Clearly, the fans and media of US-based teams will be primarily Americans, while the fans and media of English Canada-based teams will be primarily English Canadians. If, because of the deep-rooted and long-standing tensions between English Canadians and French Canadians, fans and media in Eng- lish Canada prefer not to have French Canadians on their favourite team, general manager's of these teams may be forced to pay French Canadians lower salaries to

compensate for this effect. Conversely, general managers of US-based teams, feel- ing no such pressure, are not forced to ad- just downward the salaries of French Canadian players.

A second difference between English Canada-based teams and US-based teams, at least during the season for which this study pertains, was in the composition of their coaching and management personnel.

Of the 14 teams based in the US, ten had English Canadian general managers, two had French Canadian general managers, and two had American general managers. With respect to head coaches, US teams employed ten English Canadians, two Ameri- cans, and two French Canadians. Combin- ing the general manager and coaching data, only seven US-based teams had both a general manager and a coach who were English Canadian. Perhaps more impor- tantly, of the 14 teams, four had a French Canadian as either a coach or a general manager.

Contrast this with the five teams based in English Canada. None of these teams employed a French Canadian as either a coach or general manager. All five had Eng- lish Canadian coaches, while four of the five had English Canadian general managers. The fifth team had an American general manager.

Since NHL general managers negotiate player contracts, and since voluntary player mobility is very restricted, general managers have a large and direct influence on the salaries paid to their team's players. Team coaches, because of their close relationship to the team's general manager, may also have considerable influence on player salaries. If English Canadian coaches and general managers, as a group, have greater degrees of personal prejudices and/or systemic biases against French Canadians players than do their American or French Canadian counterparts, these in- fluences would be greater on teams based in English Canada than on teams based in the US.




IV Conclusion

The empirical results of the paper show a serious weakness of previous NHL salary discrimination studies. Specifically, unless one controls for team location, the hypothesis that French Canadians do not suffer from salary discrimination may be incorrectly rejected.

In this paper, when including in the empirical model dummy variables measuring only player origin, as previous researchers have done, no evidence of discrimination was found. However, when the effects of team location were added to the model, strong evidence of discrimination against French Canadians was found. This discrimination occurred, however, only against French Canadians playing for teams based in English Canada, and not against French Canadians playing for teams based in the US.

These results provided some insight into the possible sources of this discrimination. The sources of the discrimination can only be found by examining fundamental differences between teams based in English Canada and teams based in the US. Two key differences were discussed: differences in the composition of the fans and media, and overall differences in the origins of the coaches and general managers. In each case, it was conjectured that the historic tensions between English Canadians and French Canadians may be at the root of the problem.

The presence of these historic tensions, combined with some of the empirical results of the paper, also raised the possibility that reciprocal discrimination was occurring; that English Canadians playing for Quebec-based teams were discriminated against. However, upon a more intensive examination of the issue, there was no statistically significant evidence to support this possibility.

Notes

* The author would like to thank Rod Fort and Stu-

art Thiel for their helpful comments on earlier drafts of this paper. The insights of the Editor and anonymous referees of this journal have also been valuable. Any errors are mine.

1 Some research on entry discrimination has at- tempted to incorporate the effects of team location. However, such research has focused on only Quebec-based teams. See Lavoie (1989), and Lavoie and Grenier (1992).

2 The province of Quebec has now been left with only one NHL franchise. In May, 1995, the Que- bec Nordiques were sold. The new owners an- nounced they would re-locate the team to Denver, Colorado in time for the 1995-96 season.

3 The evidence has not been as conclusive as to whether entry discrimination exists. Lavoie, Grenier, and Coulombe (1987; 1989; 1992) contend that French Canadians do suffer from overt and unjustified discrimination. These findings are challenged by both Krashinsky (1989) and Walsh (1992). Krashinsky argues that such discrimination is cost-based: language barriers mean French Canadians impose additional communication costs on a team. Walsh contends that French Canadians are underrepresented because they are lacking in key attributes valued by the NHL: physical size and defensive ability.

4 Jones and Walsh were also forced to use salary figures that were unofficial (official salary figures were not released until the 1989-90 season). However, there is no indication that these unofficial salary figures were inaccurate.

5 It is implicitly assumed that there is a positive relationship between a team's revenues and its on- ice success.

6 See Quirk and Fort (1992) for a further discussion. 7 Lavoie and Grenier (1992) have shown that a

statistic such as on-ice appearances in short- handed situations does appear to be a reasonable estimate of defensive ability. However, such a statistic is generally difficult to obtain.

8 Previous empirical works on salary discrimination in the NHL have generally found variables measuring defensive ability, particularly amongst forwards (which are the only group considered in this paper) to be of minimal significance in ex- plaining NHL salaries.

9 The variables RGP and RPPG are based on a player's NHL career, up to and including the 1988-89 season. Since a player's base salary is set prior to the start of a season, player statistics from the 1989-90 season, the year for which salary data are used, are not included in either RGP or RPPG.

10 Player origin was determined primarily from the player's birthplace (as given in the National Hockey League's Official Guide and Record Book, 1989-90), and from the origin of the player's name. In the data set used in this paper, all those players with names of French origin were born in

420 Neil Longley



Quebec. All of these players were considered to be French Canadian. Where a player's name was of English origin, but he was born in Quebec, the player was considered to be an English Canadian.

11 Since English Canadians playing for US-based teams comprise the largest group of player origin/team location combinations, a regression was also run with a base case of ENG*US. Of the interaction variables, only two were significant. FRE*CAN had a coefficient of -.38 and t-statistic of -2.81, while ENG*QUE had a coefficient of -.15 and a t-statistic of -2.08.

12 The absence of discrimination against French Canadians playing for US-based teams would seem to invalidate the hypothesis of Krashinsky (1989). Also, the results bring into question Walsh's (1992) thesis that French Canadians lack an important attribute valued by NHL teams: defensive ability. The model used in this paper does not measure defensive performance, but if Walsh's thesis were correct, there would have to be systematic differences between the level of defensive ability of French Canadians playing for teams based in English Canada and the level of defensive ability of French Canadians playing for teams based in Quebec or the US. Such a possibility would seem unlikely.

References

Jones, J.C.H. and W.D. Walsh (1988) 'Salary De- termination in the National Hockey League: The Effects of Skills, Franchise Characteris- tics, and Discrimination,' Industrial and Labour Relations Review, 44:592-604.

Krashinsky, Michael (1989) 'Do Hockey Teams Discriminate Against French Canadians?: A Comment on "Discrimination and Perform- ance Differentials in the National Hockey League".' Canadian Public Policy - Analyse de Politiques, XV:1:94-97.

Lavoie, Marc (1989) 'Stacking, Performance Differentials, and Salary Discrimination in Professional Ice Hockey: A Survey of the Evi- dence,' Sociology of Sport Journal, 6:1:17-35.

and Gilles Grenier (1992) 'Discrimination and Salary Determination in the National Hockey League: 1977 and 1988 Compared.' In G. Scully (ed.), Advances in the Economics of Sport Volume I (Greenwich, CT: JAI Press).

- , Gilles Grenier and Serge Coulombe (1987) 'Discrimination and Performance Differen- tials in the National Hockey League,' Canadian Public Policy - Analyse de Poli- tiques, XIII:4:407-22.

, Gilles Grenier and Serge Coulombe (1989)

'Discrimination versus English Proficiency in the National Hockey League: A Reply.' Canadian Public Policy - Analyse de Poli- tiques, XV:1:98-101.

- , Gilles Grenier and Serge Coulombe (1992) 'Performance Differentials in the National Hockey League: Discrimination Versus Style-of-Play Thesis,' Canadian Public Policy - Analyse de Politiques, XVIII:4:461- 9.

McLean, Robert C. and Michael R. Veall (1992) 'Performance and Salary Differentials in the National Hockey League,' Canadian Public Policy - Analyse de Politiques, XVIII:4:470- 5.

National Hockey League (The) (1989) The National Hockey League Official Guide and Record Book 1989-90 (Toronto: The National Hockey League).

Quirk, James and Rodney D. Fort (1992) Pay Dirt: The Business of Professional Team Sports (Princeton, NJ: Princeton University Press).

Scully, Gerald (1974) 'Pay and Performance in Major League Baseball,' The American Economic Review, December:915-30.

Walsh, William D. (1992) 'The Entry Problem of Francophones in the National Hockey League: A Systemic Interpretation,' Cana- dian Public Policy - Analyse de Politiques, XVIII:4:443-60.

Appendix A

It was assumed that team revenues were comprised of three primary components: gate receipts, local television and radio broadcasting rights revenues, and national television broadcasting rights revenues. The latter component was directly obtain- able, while the former two were estimated.

1. Gate Receipts Gate receipts were estimated by multiply- ing each team's 1988-89 average ticket price by their home attendance during the season. Attendance figures were obtained from Quirk and Fort (1992) and from various issues of The Hockey News. Aver- age ticket prices were obtained from various issues of the Hockey News. The prices are as follows:




$16.00 Chicago $17.50 St. Louis $18.00 Winnipeg, Minnesota, Calgary $18.50 Los Angeles, Detroit $19.00 Washington, Buffalo $19.50 Toronto, Pittsburgh, Quebec $20.00 Philadelphia, Edmonton $20.50 New York Rangers, New Jersey $21.50 Vancouver $22.50 Hartford, Boston $23.50 Montreal $24.00 New York Islanders

2. National television broadcasting rights revenues Canadian-based teams (except Quebec) were in the midst of a six-year, $140 million contract with Molsons. Each team shared equally in this contract.

US-based teams were in the midst of a three-year, $17 million contract with Sports Channel. Each team shared equally in this contract.

3. Local television and radio broadcasting rights revenues Estimates of the revenues from this source were less precise than estimates from the above two sources. Estimates were com- piled from a variety of anecdotal sources, including various issues of The Hockey News, and from local newspaper, radio, and TV reports. Where data were incomplete, educated guesses were necessary.

The summing of these three primary revenue sources yielded values for REV as follows: (figures in millions of dollars)

28 Montreal, New York Rangers 25 Los Angeles, Toronto 22 Calgary, Chicago, Detroit,

Philadelphia, Edmonton 20 Boston, New Jersey, New York

Islanders, Washington 19 Buffalo, Pittsburgh 18 Hartford 16 Minnesota 15 St. Louis 14 Vancouver 13 Winnipeg 11 Quebec

Appendix B

The following table provides information on the number of players that fit into each of the twelve player origin/team location categories. Team locations are provided horizontally, and player origins are provided vertically.

US CAN QUE TOTAL

FRE 9 5 8 22 EUR 11 5 2 18 ENG 113 43 16 172 AMER 30 7 1 38 TOTAL 163 60 27 250

422 Neil Longley



salary discrimination in the national hockey league: the effects of team location

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