What The NHL Can Learn From A Twinkie

You may have seen in the news this week that one of North America's classic packaged goods companies, Hostess Brands, officially filed for bankruptcy. Company CEO Gregory Rayburn made it official on November 16^th that Hostess was closing down its operations for good. He cited an antiquated business model that was no longer sustainable in today’s economic climate.

Hostess produces a number of products you’re likely familiar with including Wonder Bread and Ding Dongs; however, they are perhaps best known for their addictive golden sponge cake with the white creamy filling – the Twinkie.

Now the connection between a Twinkie and an NHL player is admittedly not obvious and most players are likely banned from consuming the classic pastry unless they sneak one in the offseason or they're Dustin Byfuglien and they don't give a $%@#.

The Hostess management team has had a trying few years, as they have been unable to develop a positive working relationship with their unionized employees, represented by Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM). The union represents a significant portion of the company’s 18,500 employees.

On November 9^th the union voted to go on strike, unhappy with management’s frequent calls for lower wages and smaller pensions, which were cited as major issues in Hostess’ business model. This sent the 33 bakeries and 553 distribution centers into disarray and crippled the company’s ability to produce and deliver products.

What really struck me about the story and what scares me as a hockey fan is how the BCTGM union responded to the initial bankruptcy claim by management – they balked at it. Union leaders felt that the corporate leaders were simply using the threat of closure to force workers to cross the picket line or risk losing their jobs.

The union never expected the company to actually follow through on their threat and shut down operations for good – but they did.

When looking at the financials is where the story gets really eerie. The 2008 revenue for Hostess Brands was $2,800,000,000 - close to $3-billion dollars. The 2011-12 hockey related revenue for the NHL was just over $3 billion dollars. How many times have we heard on the radio over the past 60 days that the NHL and NHLPA should be able to come to some sort of agreement based in large part on the size of the financial pie in play?


We all believe that the NHL will eventually return, whether the league returns in early January for a 48 game season, or starts anew in 2013 for a full 82, no one thinks the league is over. Maybe we need to rethink the state of the game and understand the gravity of the current labour strike. More importantly, maybe the NHLPA needs to reconsider where they stand today.

I’m not pro-player or pro-owner. I think, like most fans, that the on ice product has never been better. Players are faster, stronger, and more talented than they have ever been. However, the league has suffered from over-expansion, moving into a number of non-traditional southern markets in hopes of generating a bountiful US national TV deal that never really materialized. The cap system, with a hard floor, has forced smaller market teams to spend outside their means without having a strong revenue sharing system to recoup the costs. The result is a league of defined haves and have nots where only 10-12 teams are truly profitable. The system needs to be fixed, both the NHL and NHLPA need to look at leagues like the NFL and MLB and incorporate best practices where they can.

The Twinkie has never tasted better (evidence). That gooey, creamy filling mixes so perfectly with the golden pastry that I almost forget how many calories I’m ingesting. But, ultimately, it wasn’t the taste of the Twinkie that mattered, it was the flawed financial model on which it was based.