Earlier this week, Sportico broke the news that the Youngstown Phantoms, along with another team in the United States Hockey League (USHL), hired famed sports litigator Jeffrey Kessler of Winston & Strawn to help them leave the USHL for the Ontario Hockey League (OHL), which is part of the Canadian Hockey League (CHL).
Kessler’s hiring could foretell antitrust litigation that would rattle a hockey world already coming to terms with the NCAA allowing more junior players to join Division I college teams.
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Here are some answers to the key questions at stake in the evolving hockey landscape.
Why are USHL teams trying to join the OHL?
The NCAA recently eliminated a competitive advantage the USHL held over the OHL, as well as the Western Hockey League (WHL) and the Quebec Maritimes Junior Hockey League (QMJHL). Last November the NCAA Division I Council modified an eligibility bylaw regarding pre-enrollment activities to allow major junior hockey players to compete. This means OHL, WHL and QMJHL players are eligible to later play for D-I college hockey programs.
Given the change in NCAA rules, USHL teams may view joining a Canadian Hockey League (CHL, which includes the OHL, WHL and QMJHL) as advantageous. Although there is a healthy amount of debate, many hockey experts regard CHL leagues as superior to the USHL for attracting NHL prospects. There is a heavier emphasis on skill development in the CHL, where teams pay players stipends.
In contrast, the USHL provides a similar level of play while complying with NCAA eligibility requirements. They do so by denying players stipends or other pay, and by stressing the value of furthering education. With the NCAA dropping its ban on CHL players, the USHL might not prove as attractive to elite prospects. They now can play in the CHL, where they’re paid stipends and might better cultivate their skills than in the USHL, and can later play D-I hockey.
Why did the NCAA change its eligibility rule?
The NCAA changed its rule in the face of an antitrust lawsuit, Masterson v. NCAA, which remains on the docket and argues that the “CHL boycott” illegally restrained the labor market for elite hockey players who would otherwise attract interest from D-I colleges. The plaintiff underscores that stipends received by CHL players, who are between 16 and 20 years old, are modest, usually worth just hundreds of dollars. These stipends cover living expenses as opposed to reflecting a wage or an NIL deal. From that lens, CHL players are not really “professional athletes” that ought to run afoul of amateurism rules.
The NCAA’s refusal to allow CHL players seemed hypocritical given that it allows college athletes to sign NIL deals, some of which resemble play-for-play arrangements, and given that former European pro players can join D-I teams. The NCAA also saw member schools seemingly defy the NCAA’s CHL boycott. For example, Arizona State and WHL player Braxton Whitehead entered into a verbal commitment before the NCAA dropped the boycott.
Why does the OHL want USHL teams?
Jonathan Calla, a director at Goulston & Storrs in Boston and outside general counsel for Winners Alliance, a global athlete-centric commercial solution to group licensing, and the Professional Women’s Hockey League, said in an interview that the OHL has valuable business reasons to pursue USHL teams.
USHL teams, Calla said, “provide an avenue to new markets stateside, which do not currently exist in Ontario. There is an opportunity to grow the business, substantially.” He added that “from the perspective of attracting high-end U.S. based players, another U.S. market will only help secure more players to OHL teams.”
Calla said USHL team owners have reasons to view OHL interest favorably.
“From a USHL owner’s perspective,” Calla said, “the desire to gain OHL admission speaks to the motivation of staying relevant in the elite player services market. In other words, the league which ultimately will be the leading producer of NCAA players; the CHL.”
How could the Phantoms leave the USHL?
The USHL and its parent, USA Hockey, have thus far denied the Phantoms and another USHL team the chance to leave. Like other pro leagues and their member teams, the USHL and its teams have membership agreements that can block a team from leaving unless certain conditions are met.
The Phantoms are thought to have considerable resources. They’re owned by a group led by Bruce Zoldan, who owns Phantom Fireworks—a leading retailer of consumer fireworks in the U.S.—and Black Bear Sports Group. The Phantoms are in a position to hire an attorney of Kessler’s caliber (and billing rate).
The Phantoms could sue the USHL and USA Hockey and seek an injunction to be released from the USHL. The team could argue league rules prohibiting teams from paying players run afoul of antitrust law, especially since no-pay restrictions are no longer necessary for preserving NCAA eligibility. The team might also depict no-pay rules as benefiting USHL teams with fewer resources at the expense of allowing other USHL teams to do what the market commands: pay the players.
Does the hiring of Kessler mean litigation is certain?
No. Kessler has been retained to help the Phantoms and another team join the OHL. If the USHL voluntarily allows the departures, Kessler would no longer have a reason to initiate an antitrust lawsuit. Although Kessler is a high-profile litigator, including by leading high-profile antitrust lawsuits against the NCAA, NASCAR, U.S. Soccer, the NFL and other major sports defendants, litigators sometimes negotiate resolutions without having to go to court.
Why should hockey parents pay close attention?
For parents whose sons have realistic aspirations of playing D-I hockey and maybe even professionally, the changes taking place are metamorphic.
Teenagers who elect to play in CHL, where they might best develop as NHL prospects, no longer face the NCAA’s “CHL boycott” penalty. They can later play D-I hockey, where they’d obtain a college education, too. Some players might still elect to play in the USHL, where all 16 teams are based in the U.S. and where the quality of play is similar to the CHL. In contrast, only nine of the 60 CHL teams are in the U.S. Still, the decision-making calculus for teenagers and their parents has shifted.
The old system led to difficult choices for players and families. Calla, who tallied 103 points in the 1994-95 season for the Cowichan Valley Capitals in the British Columbia Hockey League—which was compliant with NCAA rules—and later played D-I hockey at Northeastern University, emphasized in an interview last year that “elite teenage hockey players and their families faced a decision resulting in, if the CHL is chosen, the forfeiture of the opportunity to earn a college scholarship and play D-I hockey at an NCAA school.”
How are college and NHL teams impacted?
The ability of CHL players to play D-I hockey will mean that the quality of play of D-I hockey should improve. The labor pool of prospective players will expand and feature many talented individuals. Not everyone will benefit, however. Players who might have landed D-I roster spots but who are pushed out in a more dynamic market could see their hockey dreams end.
NHL teams rely on junior hockey, college hockey, minor professional leagues like the AHL and ECHL, and foreign leagues to evaluate players. With college hockey likely to be infused with more talented players, expect NHL teams to invest more resources in scouting college hockey and perhaps urging drafted players to play in the NCAA.
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