As reported in our blog, small businesses have suffered mightily due to the NHL strike. The Sports Business Journal now reports that the Small Business Administration is now offering counseling to those businesses hurt by the NHL strike.
By Jeffrey S. Kravitz
As featured in the Toronto Globe and Mail a Canadian company that sells 95% hockey chatchkes is suffering mightily by virtue of the hockey lockout. Does the NHL owe that person anything...no, because it is a commercial relationship and not a fiduciary one. What is a fiduciary? It is a person or institution that owes another the highest duty of good faith. Think a trustee or dare I say it, a lawyer. The law imposes superior obligations on such folks by virtue of the trust imposed in them. The NHL....likely nada. How could the vendor have protected himself? He could have tried to put a clause in his license contract with the NHL that required them to pay him in the event of a strike or lockout (good luck). Perhaps he could have obtained business insurance that did the same thing. Or he could have diversified as stated in the article to Major League Baseball or the NBA. The lesson? As presidential advisor Bernard Baruch once remarked, "if you are going to put all of your eggs in one basket, watch the hell out of the basket."
As featured in BusinessWeek.com on December 30, 2010, the question looming over the NFL playoffs is the possibility of a strike next season. The players' union has estimated the cost of such a strike at $160 million and has written the nation's governors and mayors regarding this potential loss.
What goes unstated is whether either side has strike insurance to "share the wealth" with carriers, foreign or domestic. This writer worked on the baseball strike of '88, which was insured in part. The insurers in turned reinsured the risk through other carriers. Reinsurance is basically a side bet by the insurer with another company so that the entire risk does not fall on one carrier or underwriting group. Insurance law and reinsurance law is basically the law of contracts with a heavy dose of public policy thrown in.
So when the figure of $160 million is used, the question becomes, who will bear the ultimate risk?
In "NFLPA Files Complaint Against NFL Over Television Deals", SI.com deals with the issue of the NFL players vs owners in the event of a lockout or strike. Seems the owners have more protection than the players and players are crying foul. A longtime agreement requires the owners to try to maximize revenue to the players and the players feel that the covenant of good faith and fair dealing has been broken. Every contract has an implied covenant of good faith and fair dealing in California, which is basically the Golden Rule. Much commentary from the players on this one and none from the owners. Will be interesting to see their reply and we will be following.
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