The NHL-CHL Player Transfer Agreement (“Agreement”) is an arrangement between the National Hockey League (“NHL”) and Canadian Hockey League (“CHL”). It stipulates that an NHL club must return any CHL player drafted and signed to an NHL entry-level contract (“ELC”) to his CHL club if the NHL club does not retain that player on its active roster at the start of the season. The Agreement applies solely to CHL players ages 18 and 19. Its language limits the ability of these players to play in alternative leagues around the world and thus capture adequate compensation pursuant to their market value. With this restriction on the major junior hockey labor market, the Agreement violates Section 79 of the Canadian Competition Act (“Act”), which prohibits market-dominating entities in Canada from engaging in practices that lessen or prevent substantial competition in a market. This Comment will explore the CHL’s background, the Agreement itself, as well as the Act, which is Canada’s equivalent to the Sherman Antitrust Act. This Comment will primarily focus on Section 79 of the Act, which provides civil redress against entities engaging in “abuse of dominant position.”
This Comment will also compare various “abuse of dominant position” cases brought before the Competition Tribunal (“Tribunal”), and examine how the Tribunal’s reasoning in cases where it found abuse applies to the CHL’s stranglehold on major junior hockey in Canada. Essentially, by maintaining total market control over major junior hockey and engaging in contractual terms that create an exclusionary effect on the class of player it targets, the Agreement has prevented or lessened competition substantially in both Canadian/North American hockey markets and markets abroad. This Comment will conclude by offering recommendations as to how the League or the Tribunal can alleviate the restrictive conditions placed upon these players.