Friday, December 7, 2012

Who Owns the Stanley Cup?

With the news that NHL lockout negotiations have broken down, there is an increasing chance the Stanley Cup finals won't take place this year, leaving hockey fans wondering how they will get their hockey fix.  It has also left some fans wondering why it is that the NHL controls the Stanley Cup at all.  If they aren't going to award the trophy, shouldn't someone else be able to play for the "Dominion Hockey Challenge Cup"?  Why does the NHL get to decide who plays for the hockey's holy grail anyway?  Or as one article put it "If the NHL won't use it, can Canada have the Stanley Cup back?".

While one commentator has referred to the legal status of the Stanley Cup as "unknowable" that is not entirely accurate.  There are some uncertainties around the legal status of the Cup.  However, it seems fairly clear that while the NHL holds trademarks over the name and image of the Stanley Cup, it doesn't actually own the Cup.  The Stanley Cup is held in trust.  A trust is a legal relationship in which one person (the donor or grantor) gives a piece of property to another person (the trustee) to hold that property for the use and benefit of a third person (the beneficiary) or for some charitable purpose. 

In the case of the Stanley Cup, it was gift from Lord Stanley of Preston, then Governor General of Canada in 1892, to be awarded to the top amateur hockey team in Canada.  Lord Stanley appointed two trustees of the Cup, and laid down some fairly general preliminary regulations governing how it was to be used and awarded, which gave broad discretion to the trustees.  The Cup was intended to be a challenge cup, and in the early years, the champion of any senior hockey league could challenge for it.

Around 1908, with the introduction of the Allan Cup for amateurs, the Stanley Cup became the trophy for the top professional hockey team in the country.  The Stanley Cup final became a competition between the Pacific Coast Hockey Association and the National Hockey Association (precursor of the NHL), and later the Western Canada Hockey League as well.  These leagues grew to include American teams, and in 1917 the Seattle Metropolitans were the first American team to win the Stanley Cup.  The PCHA and WCHL later merged to form the Western Hockey League.  In 1924-25 the WHL's Victoria Cougars became the last non-NHL team to win the Stanley Cup.  When the WHL folded in 1926, the NHL was left as the sole league playing for the Cup.

In 1947, the Trustees of the Stanley Cup reached a deal with the NHL that gave the league exclusive control over the Cup, sole discretion over how to determine the winner, and the ability to reject challenges from other leagues.  Although it does provide that if the league ceases to be the top professional league in the world, or that if the league dissolves or terminates, the Cup shall revert to the control of the trustees.  The current trustees are both former NHL Vice Presidents.

Many people have since questioned the validity of this agreement, and for good reason.  Trustees are required to honour the intentions of the donor of the trust.  Intentions can sometimes be difficult to interpret, and in this case, the few regulations that Lord Stanley did lay down in writing give fairly broad discretion to the trustees.  However, it seems fairly obvious that Lord Stanley intended the Cup to be a challenge tropphy, and not to become the exclusive property of one league.  There's a strong argument that it was simply not open to the trustees to enter into such a deal with the NHL, and the agreement is invalid.

During the 2004-2005 hockey lockout, a recreational team called the Wednesday Nighters decided to challenge for the Cup, and took the trustees to court to challenge the validity of the agreement.  The case dragged on and ultimately settled in 2006, by which time the lockout was over.  The settlement agreement provided that the trustees could award the Cup to a non-NHL team in the event that the NHL failed to hold a Stanley Cup competition that season.  However, when the 2012 lockout commenced, the Trustees made clear that even if the NHL doesn't have a season this year, they will not entertain any challenges from non-NHL teams. 

The Trustees are on shaky legal ground here.  Again, their actions don't seem consistent with the original intentions and purposes of the trust, and the agreement with the league is of questionable legal validity.

There is some question as to whether this is a purpose trusts, or a trust for persons.  If it is a trust for persons, it is always open to the beneficiaries of a trust to take the trustees to court and enforce the terms of the trust.  While it is not entirely clear in this case who the beneficiaries of the trust are, there is a fairly strong argument that the beneficiaries are the Canadian people themselves.  If that is the case, then literally any Canadian could go to court to enforce the Stanley Cup trust, and try to force the trustees to award the trophy.

Obviously, the NHL would fight this tooth and nail.  The Stanley Cup is their most valuable asset and they would not give it up without a fight.  Anybody seeking to challenge the league's control of the Cup would doubtless be met by an army of lawyers, and would probably get bogged down in endless procedural wrangling and appeals.  The case likely wouldn't be decided until long after the current lockout is over.

However, given the fact that the NHL is now potentially facing it's second lost season in just 8 years, fans might want to ask themselves whether the NHL is really the best custodian of the Cup, or whether it is time for hockey fans to take control of the cup back, and return it to the use for which Lord Stanley originally intended it: a challenge cup for the best teams in the Dominion of Canada.


  1. Wow, it's wonderful to see your blog and I find this subject particularly interesting! Thanks for the informative article. :)