NHLPA Director
Kelly was appointed as Executive Director of the NHLPA, replacing Ted Saskin who had been ousted for secretly monitoring player e-mail accounts.
Kelly was strongly in favour of adding an NHL team in Canada.
On August 31, 2009, Kelly was unexpectedly fired as head of the National Hockey league Players' Association following several hours of meetings in Chicago. Russ Conway, the former Lawrence Eagle Tribune NHL and Boston Bruins sportswriter who had helped to expose Alan Eagleson's corrupt practices, described Kelly as the first "true, clean" leader the NHLPA ever had, and said "this is a very sad day for hockey. Unfortunately, the union continues to drink the Kool-Aid.”
Some have speculated that Kelly was forced out in a power struggle. Ron Pink, advisory board head, who had also applied for Kelly's position in 2007, and an ombudsman, Buzz Hargrove were also instrumental in the decision to dismiss Kelly.
Buzz Hargrove, Ian Penny, Ron Pink, Ian Pulver and Eric Lindros were said to represent the "old guard of the NHLPA", one that was confrontational and focused on driving up player salaries, rather than the overall financial well-being of the league, and believed that the union conceded too much in negotiations during the 2004-05 lockout. Kelly was not involved with the NHLPA when the deal was negotiated, nonetheless he stated publicly that he did not want to see another work stoppage when the agreement expires on September 15, 2011. The other executives felt that he was heading in the wrong direction, and that his relationship with NHL commissioner Gary Bettman and Bill Daly had grown too close, as they believed that the NHLPA should use whatever means necessary, including a work stoppage, to get the best deal for the players.
Ian Penny was named the interim director later that day. Donald Fehr became the permanent Executive Director on August 26, 2010.
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