Co-Authored by Courtney Szto and Brett Pardy
You want to keep salaries low? Don’t let employees talk about them. For decades, owners of NHL teams knew this. In Gordie: A Hockey Legend, author Roy MacSkimming writes about how Gordie Howe discovered at the age of 40, in the 1967-68 season, just how underpaid he was. Howe was wary about pushing for a higher salary after his star linemate, Ted Lindsay, had been traded for trying to form a NHL players’ union in 1957. This made it very clear that there would be consequences for discussing salaries with teammates (much less other teams’ players). There were no player agents at this time and Howe believed the Red Wings management when they told him he was the league’s highest paid player (p. 187). Howe finally learned the truth when Bobby Baun was traded to the Red Wings in 1967. Baun had friends in the Toronto Maple Leafs’ business operations and knew how much profit the NHL was really making off its players (p. 187). Baun worked to revitalize the union and, through this work, tried to learn as many of the players’ salaries as he could. Baun had negotiated a $60,000 salary when he signed with the expansion Oakland Seals, leveraging the public knowledge that the Seals were paid a $2 million expansion to join the NHL in 1967.
Baun, in his quest to find out salaries, was excited be to teammates with one of the NHL’s best players. He recalled “‘Finally I’m going to get to know the Big Fellow.’ I thought maybe we could get some things going in Detroit, see if we could make some money” (p. 189). After earning Howe’s trust, Baun found out Howe was making $45,000. Howe was stunned to learn that Baun, who was never considered a top player, was making substantially more than him. Howe and Baun subsequently learned their teammate, Carl Brewer (the first player to have an agent), made even more than them! Howe renegotiated his contract to $100,000, which finally made him the highest paid player in the league (p.190).
Salary sharing became more common internally with the launch of the NHLPA in 1967 by Alan Eagleson, who had become the first player agent in 1966. However, salary sharing was not promoted as a negotiation tactic because Eagleson was preoccupied with using his position to embezzle money from the players. To keep this position, Eagleson colluded with NHL president, John Ziegler, and NHL owner’s board chair, Bill Wirtz, to keep NHL salaries low. Unsurprisingly, it was not difficult for Eagleson to convince NHL players to focus on hockey and leave the negotiations to him, given how NHL culture discourages external focus and…speaking aloud. Eagleson would tell the players that salary disclosure was a good idea, but also threaten that disclosure would also lead to more negative press and fan attention.
In 1992, the first real union leader of the NHLPA, Bob Goodenow, implemented salary transparency for all NHL players. Over his tenure from 1992-2005, the average salary of NHL players rose from $275,000 to $1.83 million. Going back to at least 1996, the NHLPA website has been used to publicly disclose all salaries, in an effort to combat the NHL’s standard “terms of the contract were not disclosed.” Salary disclosure was also a way for the NHL to try to keep up with the NFL’s and MLB’s rapidly increasing salaries during the 1980s (Flynn, 2022).
Many industries have started to embrace salary transparency because it gets results. The Internet and social media have made it even easier to share and learn salary information. Websites such as Glassdoor, Payscale, and Salary Expert make it accessible to find out what salaries ranges someone should expect in their given field. Glassdoor explains what they do as “radical transparency” with the goal of “breaking down barriers that lead to discrimination, pay gaps, and toxic work environments.” Millennials, in particular, are rejecting the “don’t ask/don’t tell etiquette” (Trotter et al, 2017, p. 534). Further, “research in the compensation field has demonstrated that both engagement and productivity increase when employees understand their company’s system of compensation, its relation to the labor market, and their own place in the system” (p. 534). In U.S. states where pay secrecy has been banned there is “a smaller wage gap and higher overall wages for women and men compared to states without these bans” (Scheller & Harrison, 2018, p.66).
It is also important to note that pay transparency exists on a spectrum. Pay secrecy, the opposite of pay transparency, is “a restriction of the amount of information employees are provided about what others are paid” (Colella et al., 2007, p. 56). Pay confidentiality is a rule put in place that “forbids employees from discussing wages with each other” (O’Neill, 2010, p.1219). These rules can be illegal depending on the jurisdiction and conditions.
In 2019, journalists started an anonymous spreadsheet called “The Real Media Salaries,” posting their title, race, gender, years of experience, location, previous duties, and compensation. Those who benefit most from this kind of transparency tend to be (1) younger employees who have less experience negotiating contracts, (2) women, and (3) racialized people. In order to collectively bargain for an industry standard, you have to know what the industry is currently paying.
Studies have shown that women nationally earn about 82 percent of what men make; Black and Latino men earn 73 percent and 69 percent of what white men make, respectively. Black and Latino women make 65 and 58 percent of what white men make, respectively. When we look within gender groups, Black men “working full time earn 72% of what white men earn” and all racialized women earn less than men within the same racial group (Trotter et al., 2017, p. 530). The pay discrepancies between men and women are not necessarily only based on discrimination but it has also been observed that the gender pay gap tends to increase over time. For example, Wallace (2014) found that for employees one year after graduating university, the gender gap was about 7%. But for employees ten years after graduation, Dey and Hill (2007) found the gap increased to 12%.
Scheller and Harrison (2018) argue that pay transparency represents a form of informational justice, which then leads to higher worker satisfaction because employees feel included in salary communications. Pay transparency shifts power away from employers at the negotiating table towards the employees.
This year, the Professional Hockey Federation (PHF) announced a salary disclosure policy, where previously players were contractually not allowed to disclose their salaries publicly. The new policy “gives players the option to allow for their salary to be disclosed publicly by their team and the PHF when signing their standard player agreements.” Further, “salary disclosure is activated by a mutual agreement between the player and their team.” At the time of release (July 21, 2022), only 18 players out of 71 players had announced their salary information.
Mike Murphy unpacked the policy really well for The Ice Garden, explaining that the mutual agreement part means that disclosures have to be agreed upon by team general managers with respect to the “when” of disclosures, but general managers “cannot completely prevent a player from disclosing.” Murphy has an ongoing spreadsheet of PHF salaries with 31 disclosures to date. Currently, some players feel that disclosing their hockey salary may cause problems with their day job or they simply don’t want fans and media discussing their compensation — the same talking point Alan Eagleson used for years to suppress NHL salaries. However, it seems reasonable to assume that these issues will become less significant as salaries and team expectations increase overall.
What is perhaps most odd was when the Montreal Force decided as a team to keep player salaries confidential. When the CWHL was around everyone assumed that players were paid because…well, people should be compensated for their labour. As Karell Emard explained about the CWHL days, “We want to be taken seriously as professionals so we can’t look too poor or unprofessional, but we need a lot of help. How do you manage that?” Now that there is money on the table, women’s hockey continues to be vague at best and secretive at worst about that money — both from the organizational side and the players. When Discover was announced with the biggest sponsorship for the then NWHL in 2021, all we knew was that it was in the same range as the $1 million sponsorship that the PWHPA received from Secret. Most of the sponsorships in women’s hockey tend to lack definitive numbers. If budgets are understood as values statements, then we need to know who and what is valued. With the recent announcement that the PHF will increase its team salary cap to $1.5 million next season, it becomes arguably more important to create a culture where players want to disclose their salaries and understand why it’s important to do so.
Now, not all leagues disclose player salaries. Neither the Canadian Premier League (soccer) nor the Canadian Football League (CFL) have league wide disclosure policies. The CPL’s players association has been fighting for more transparency in the pay structure with a labour and human rights lawyer stating “It’s a deeply unfair field right now for players.” In the case of the CFL, they have started to release some of the higher end salaries because they feel like the casual fan “assumes every player makes $500 a game or $20,000 a year, that it’s rec ball.” Hence, the CFL started throwing around some numbers in 2019. The fear around disclosure in the CFL’s case is around exposing the gap between overall compensation:
Showing salaries, some would say, legitimizes the league. It doesn’t seem to hurt the other leagues. But some would be hesitant to show the league’s minimum salary. I think that’s it, the drastic difference between the minimum salary and a proven players’ compensation.
Barnes, 2019
That gap in compensation is exactly why there needs to be a culture of pay transparency. (FYI, in 2018, the CFL’s minimum salary was $54,000.) At this time, the CFL is happy to share the salaries of its marquee players because “it helps [the CFL’s] cause. It sends a statement that there are real dollars being invested in the game that we love.” But the problem with only disclosing the highest salaries is that the foundation of leagues are built on the labour of non-marquee players.
Dr. Ashley Mears’ book, “Pricing Beauty: The making of a fashion model,” provides a great example of how the winner-takes-all system of pay works to the detriment of the average worker. In fashion, as in sports, there can only be a few at the top of the pyramid. Yet, those at the top of the pyramid are the ones who everyone recognizes. We know that Gisele Bündchen, Bella Hadid, and Adriana Lima are all making bank, just like we know that Crosby, MacKinnon, and Matthews make more than most of us could ever spend in a lifetime. But the modelling industry is made possible not by the few supermodels who are household names, rather it functions off the no-name models who very often go into debt trying to become “super.” Modelling agencies have figured out a wonderful way to charge the models for every cost incurred. Look books, travel, head shots, and rent all come out of any pay cheques earned. This means that many models actually leave the industry in debt even though they were working models. You can only have a Gisele because thousands of other models go into debt trying to live the dream. Thus, when the public only really knows about the highest salaries in an industry it makes exploitation within an industry easier because people assume that the high-end is the average. Obviously, modelling and hockey do not operate in the exact same ways but when we only disclose the highest salaries, we are reproducing a false sense of what compensation looks like (think of the AHL and other minor league salaries in comparison to NHL money). For an equitable pay structure, the more players know the better. And, the more the media and fans know, the easier it is to hold leagues/teams accountable.
If we look to women’s basketball as another example, we learn that the pandemic, the war in Ukraine, and Brittney Griner’s unlawful detainment have had a negative impact on players’ overseas salaries. Russia’s deep pockets previously enabled the top WNBA players to secure seven figure contracts. In 2015, UMMC Ekaterinberg paid Diana Taurasi $1.5 million to sit out the WNBA season. However, with Russia now off the table and China closing its doors to international players because of strict Covid-19 protocols, the entire compensation level for women’s basketball players has been depressed because it is no longer as competitive to attract top talent. Prior to the pandemic, a WNBA player could earn around $800,000 playing in Turkey but with less competition for players that figure has dropped to around $350,000-$400,000. Knowing what Russia was offering players has kept the fire to the feet of the WNBA to increase salary levels, and knowing that everyone’s pay opportunities have dropped across the board is also information that players need to know when they decide where to take their labour.
Pay transparency is far from perfect. Scheller and Harrison (2018) found that with pay transparency, “managers tend to inflate performance ratings of their subordinates. However, when pay is not transparent, managers tend to be more accurate in their performance ratings, resulting in high performers earning more pay than low performers” (p.67). Compensating athletes for bodily capital is an even more imperfect system. Still, considering that women’s hockey has touted gender and racial equity as important pillars for how they want to contribute to hockey culture, pay transparency is one way to demonstrate those values. Research has found that racialized women tend to choose companies that are more transparent about their pay structures (Scheller & Harrison, 2018). Choice is limited in the world of professional sports, but for the few racialized women playing at the highest levels, this is one way to ensure that they walk into every negotiation with the best chance of being compensated fairly with their white counterparts.
Bringing this back to NHL hockey, Flynn (2022) found that pay transparency was also beneficial to NHL teams as:
in the season leading up to salary disclosure, overall team payroll had no correlation with team performance. In the season following disclosure, however, team payroll and performance became immediately and permanently linked, with higher-paying teams consistently outperforming lower-paying ones.
As Mike Gartner recalled, when the NHL started disclosing salaries, many players still didn’t agree with the policy. Gartner explained: “Believe it or not, we still had a lot of players that didn’t want to disclose their salaries. They didn’t think it was a good idea, they didn’t see the bigger picture that if everybody knows what everybody is making, we’re all going to make more.” Similar to feelings held by some in women’s hockey, Bob Goodenow shared that one NHL’er was adamant that he “did not want to back out of his driveway to go to practice and have his neighbours look at him and have them know what his salary was. [But] about a year later he sure liked salary disclosure as he was preparing for his salary arbitration case.”
Ultimately, there is more incentive for low-paying and exploitative organizations to keep salary information confidential. Women’s hockey has been saying that it’s all about the bigger picture and ensuring a more secure future for the next generation. Creating more transparency around player compensation is one way to secure that future. Unfortunately, keeping fans and media in the dark inadvertently keeps the next generation in the dark too when it comes to knowing their (potential) value.
Works Cited
Collela, A., Paetzold, R., Zardkoohi, A. & Wesson, M. (2007). Exposing pay secrecy. Academy of Management Review, 32(1), 55-71.
Dey, J.G. & Hill, C. (2007). Behind the pay gap: Washington DC: American Association of University Women Educational Foundation.
Flynn, J. (2022). Salary disclosure and individual effort: Evidence from the National Hockey League. Journal of Economic Behaviour & Organization, 202, 471-497.
O’Neill, B. (2010). Pay confidentiality: A remaining obstacle to equal pay after Ledbetter. Seton Hall Law Review, 40(3), 1217-1256.
Scheller, E.M. & Harrison, W. (2018). Ignorance is bliss, or is it? The effects of pay transparency, informational justice and distributive justice on pay satisfaction and affective commitment. Compensation & Benefits Review, 50(2), 65-81.
MacSkilling, R. (2003). Gordie: A hockey legend. Greystone Books.
Trotter, R. G., Zacur, S.R., & Stickney, L.T. (2017). The new age of pay transparency. Business Horizons, 60, 529-539.
Wallace, R. (2014, September 18). By the numbers: A look at the gender pay gap. AAUW Career and Workplace. http://www.aauw.org/2014/09/18/gender-pay-gap/
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