The 2003-2004 season closed with a new champion crowned amidst the prospect of a possible lockout looming in the coming months. At the time, the NHLPA had submitted one new collective bargaining proposal, while the NHL had submitted multiple proposals that were perceived to be relatively similar.
Two conflicting financial reports fueled the fire for the sides. The first report came in Feburary of 2004 from Arthur Levitt, former head of the Securities and Exchange Commission. In his report, which was sponsored by the NHL, Levitt placed the operating losses for the NHL at 272.6 million dollars. The report also claimed that players' salaries encompassed 75 percent of the league's operating costs.
While the NHL's financial records are private, Forbes Magazine did an analysis that gave very different figures than the Levitt report. Forbes' numbers, based on known information and assumed numbers and analysis, claimed that the NHL only lost 123 million dollars the very same season, less than half the figure claimed by Levitt and the NHL.
Either way, the NHL is losing money. So how did it get to this position? Both sides point to over-zealous owners trying to stay competitive. The old Collective Bargaining Agreement (CBA), when signed, was believed to limit salaries by keeping a signed player from becoming an unrestricted free agent until the age of 31. Instead, the arbitration process, in which a mediator would work out a deal on contracts for restricted players, proved to overly inflate players' salaries to numbers not previously seen.
September 2004 came and went with no hockey. Despite last-minute attempts to hammer out a deal, the Sept. 15 deadline passed as NHL arenas around North America stayed dark. The sides had dug into their trenches - and the NHL lockout had just begun.