Interesting Cancellation Clause re Winter Classic at Michigan Stadium

Submitted by Wave83 on August 13th, 2012 at 9:40 AM

I just read an interesting article about the cancellation clause in Michigan's contract with the NHL re the Winter Classic.  Apparently, the NHL can get out of the contract up to the last minute for only $100K (plus UM's actual expenses).   This gives the NHL flexibility to go forward with the event even if a collective bargaining agreement with the players is not reached until December.

At first I thought UM might have gotten screwed by only getting $100,000 even if they spend the bucks necessary to prepare, but it will also be reimbursed for it's expenses (if the contract is cancelled after November 3).

http://www.nytimes.com/2012/08/13/sports/hockey/in-case-of-lockout-nhl-…

I don't follow hockey much and was not even aware that the season might be interrupted by a strike.  I am still trying to get my head around having a hockey game in Michigan Stadium on New Years' Day when (traditionalist as I am), I think the entire focus should be on Michigan playing football somewhere. 

Comments

BiSB

August 13th, 2012 at 10:14 AM ^

It sounds like a liquidated damages clause, which is a fairly safe way for both sides to handle something like this. Worst case scenario, Michigan covers its costs and pockets 100k for its trouble. Not sure what they were expecting in total profit (a couple million?), but this way they avoid most of their litigation costs in the event that shit hits the fan.

Wave83

August 13th, 2012 at 10:35 AM ^

Yes, it is a pretty standard type of provision in a contract like this.  I think, however, that the amount of liquidated damages would ordinarily be higher if the cancellation were close to the event -- e.g. 30 days prior.

However, this may benefit both sides because it does not force them to cancel the event until it becomes physically and legally impossible.  I think they are trying to get the event in.

BiSB

August 13th, 2012 at 10:49 AM ^

I would have imagined the damages would have increased as the date approached, but I suppose from the NHL's point of view the damages do escalate: the closer to the event, the higher the actual expenses. I'm guessing they figure that if the event is gonna be cancelled, it'll be cancelled earlier rather than later.

Wolverinesaxman

August 13th, 2012 at 12:59 PM ^

Does anyone know how I can get my hands on tickets to the game? I've had in-laws pestering me to get them tickets for the last 6months with my extensive connections as an alumnus.