Linkage at 55% offered by Owners ..What does it mean ??

Discussion in 'The Business of Hockey' started by Mess, Mar 10, 2005.

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  1. Mess

    Mess Global Moderator

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    The flaw is much much bigger ..

    How do the Players get THEIR 55% of the PIE ??


    If you and your best friend went into business together as partners and your arrangement was 55% returns for you .. That would make your partners 45% .. Correct ??

    So every dollar you earned in Business .. You would get .55 cents ..Correct ??

    This is what the NHL is offering 55% linkage to the players .. Correct??

    Now tell me if the league sets the Ceiling for the Hard Cap at 55% linkage to league Revenue . . (using last years numbers (because linkage will correct to actual each year)

    $2.1 Bil Rev /30 teams = 70 mil per team X 55% linkage = 38.5 mil Hard Cap.

    Or if you want to look at it the same way

    $2.1 Bil X 55% (players cut) = $ 1.155 bil to be spent on players salaries ..Correct ?? (based on last years numbers)

    If the NHL makes the Hard Cap Ceiling the 55% or 38.5 mil ..

    Question :
    How do the players get their 55% share ??

    Answer : The only way is if all 30 teams spent every penny up to the Hard Cap figure .. 38.5 m x 30 teams = 1.155 Bil ..


    Now what happens when Pittsburgh, and Atlanta, Nashville all spend less ??.. The players get cheated out of their 55% fair share is what happens ...

    **** How come people can't see this?? ****

    If Pittsburgh has a salary of 30 mil then they are only giving the players 30 cents of every dollar and so on .. Sure the Toronto, Philly, NYR, Detroit will spend up to the cap and give the players the .55 cents on the dollar what about all the other teams ?? .. If Pittsburgh spent only 30 mil then the league has to allow Detroit to spend 47 mil to compensate so together 47+30 = $77 mil / 2 teams = 38.5 Mil

    For the Players to get their 55% .. Team spending on salaries has to equal 55% of league revenues..

    To me that would mean the Average Spending per team = 55% not the TOP ..

    Please tell me how the players will get their fair share of the Pie if linkage is set to 55%??
     
  2. ti-vite

    ti-vite Registered User

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    Escrow account. That simple.
     
  3. bcrt2000

    bcrt2000 Registered User

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    the union hasn't even discussed what a fair linkage level would be because of their anti-negotiation tactics
     
  4. nyrmessier011

    nyrmessier011 Registered User

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    BRILLIANT!! EXACTLY WHAT I HAVE BEEN THINKING!!. The 55% is a bit of a scam, and not a true 55%.

    Bettman claimed that his 42.5 Million offer would act as a magnet. and that he couldnt go any highter. If he REALLY thought that, there's no way he would have offered 42.5 because he claims at the same time that league revenues might drop to 1.2 billion. If he really thought a salary cap would act as a magnet, theres no way he even would have offered 30 Million!!. Because 30 million times 30 teams=900 Million in salaries. 900M divided by 1.2 B is the 75% number that the players took in last year (the reason we have this lockout!)

    There's no way he can expect to stand in front of the labor board and say, our leagues revenues are screwed when we come back, but i think the 42.5 would have acted as a magnet!!!

    MAKES NO SENSE, GARY. SORRY GARY. You had no idea what you were saying in the heat of things while passing transcripts back and forth to the union online that Tuesday night before your Wednesday press conference. One of your posse members should have told you that the magnet claim was a big mistake to make up. Now, who can trust what your saying?? I dont think the NLRB will

    By the way, lets pretend that out of a 42.5M, every team spent up to it and the average salary was 40 M. 40 M times 30 teams =1.2 B in salaries. Bettman thinks that the leagues revenue could drop as low as 1 Billion. Hmm...So player salaries take up all your revenues according to your newest offer then, Gary? Because it acts like a "magnet" that is?? Contradiction of the year. Bettman must go
     
    Last edited: Mar 10, 2005
  5. Bauer83

    Bauer83 Registered User

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    How can everyone not see this? Simple you are reading into it without knowing all the facts. The league said the salary range would be between 31-37 million for ALL teams. That requires some revenue sharing of some sort, but the league continues to say that its their business (which is fair). Once the league said a floor of 31 and a high of 37, all teams are required to spend within that amount. This would cause the linkage to be roughly around 55%, or whatever percentage they decide on. And if I am not mistaken, extra money would be put into an escrow account to deal with revenues that are either higher or lower then forecasted. At the end of each season, the escrow account would be used to pay players more(if the league makes more then forecasted), or give back money to the owners(if the league makes less then forecated)
     
  6. Drury_Sakic

    Drury_Sakic Registered User

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    The Linkage is all about trust..


    55% of what?


    I think we have made it clear here on the board that we cannot come to an agreement about revenue. Some say the levit report is gold.. others point to forbes.. many say both are wonky...

    It takes TRUST to work on a linkage system... which the NHL and NHLPA have 0...

    Linkage, IMO also does not work because you have a constant flux of payrolls, so if you are one of those teams that spends upto whatever that 55% linkage, you cannot do much long term planing, as the cap can shift.... alot...


    Another thing, is that you cannot force all teams to spend up to the max cap number if it is anywhere around 35-40 million... UNLESS you have revenue sharing... which the NHL has done nothing about... No matter what.. Pit. cannot spend that much..Unless NY and Toronto pay for it..


    Thats how the PA should have aruged against linkage..

    ;)
     
  7. ArtG

    ArtG Registered User

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    first of all.. I'd like to remind you that the players had a chance to take a hard cap of $42.5 million

    moving on, the owners are not complete idiots. if you can recall they offered the players a salary range between 34.6-38.6 million meaning all teams would have to fall in this range thereby guaranteeing the players 54-55% of all league revenue. this creates a direct linkage -- if the league makes more money so do the players.

    furthermore, when there was no cap if all the teams decided to spend $20 mill then the players would only get roughly 35% of league revenues? this is a guarantee that works both ways meaning that the leauge and players would be partners.

    what the players proposed in late feb was that they would have a cap and linkage only on the upside. meaning if the league made more $$ then the cap would go up but if the league made less then the cap would stay the same.

    conclusion: it's pretty clear the players aren't interested in becoming partners and having any responsibility if the league fails financially.
     
  8. Bauer83

    Bauer83 Registered User

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    Support

    Just to support my previous comments. Look at the proposal of Feb 2.

    http://www.nhlcbanews.com/news/nhlproposal020205.html

    Point number 8 covers what I was trying to explain.

    Point number 9 covers how they came to the conclusion of the ranges, and how those will be adjusted(or as I said forecasted).

    And Point 11 ensures that the players recieve a lot of compensation if the league somehow turns profitable.
     
  9. Roughneck

    Roughneck Registered User

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    Yes and no. If by partners, you mean employer and employee, your cut of 55% of what the business makes is to be divided up amongst all of your fellow employees, not to you directly.

    The partnership is basically, "how much of a cut from this 55% pie are you worth to me?" and "I am allowed to spend UP TO 55% of the revenues on all my employees."
     
  10. kerrly

    kerrly Registered User

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    In the linked proposals that the NHL has offered, they have offered enough revenue sharing for all teams to spend within the cap range.
     
  11. ArtG

    ArtG Registered User

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    what really makes no sense is that the players didn't accept 42.5... espcially if the number 1.2 billion is accurate..
     
  12. Drury_Sakic

    Drury_Sakic Registered User

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    In the end.. it was about the owners puting some restrictions on the cap that they did not like..

    Arbitration would have been gone, as they put an option to lower UFA age to 28 and get rid of arbitration.

    All IR players contracts would have counted against the cap.. which really would make teams by default have to stick around 40 million incase they needed to replace a player..

    All buyouts are 100% against the cap.

    No upward movement in the cap, even to adjust for inflation.

    PA claimed the Revenue sharing would have been 0 by year 6..


    They claim none of that was an issue on Wed... but..

    :dunno:

    I don't really believe either side 100% at this point..
     
  13. mooseOAK*

    mooseOAK* Guest

    It's up to the NHLPA to do their due diligence and make sure that the league lives up to their end of the deal. We can't do everything for them.
     
  14. davemess

    davemess Registered User

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    The trust thing going forward shouldnt be an issue, the 2 sides simply agree on an Accounting Company to do private yearly audits on all 30 teams and have big fines for any team that trys to hide money.
     
  15. tantalum

    tantalum Registered User

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    Your faulty example here has already been pointed out


    The rest has been outlined explicitly by the NHL in their previous proposals and by several observors proposals. A range of payroll from say 53% to 57% with a guarantee that the players receive 55% through the use of an escrow fund. With linkage the payroll floor is back in play and indeed essential IMO. It is up to the league to get lowere revenue teams to the lower limit with revenue sharing. It is the union who has to get a guarantee on the number of jobs (i.e. teams) and forcing the NHL hand into the revenue sharing.
     
  16. Jaded-Fan

    Jaded-Fan Registered User

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    Am I missing something? It is 55% of revenues, right? If some teams spend less or more, what difference to bottom line revenue from what comes through the gates, parking, shirts, hats, food, and whatever? The players have to overall get 55% of what comes through the gates. They will negotiate how that gets divided, likely throuhg a slalry floor, but they will not end up with less than 55% total.
     
  17. Mess

    Mess Global Moderator

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    The 42.5 mil offer had no floor .. teams could spend 15 mil on Salaries and the players cheated out of their 55% cut ..
     
  18. ArtG

    ArtG Registered User

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    when the league offered 42.5 there was no linkage.. meaning 55% was off the table... which is what the players wanted...
     
  19. Drury_Sakic

    Drury_Sakic Registered User

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    55% of what?

    is the basic argument the PA and NHL owners have...

    Thats why linkage does/will not work..


    I DON't Trust the owners numbers... but I also don't trust the NHLPA's wild claims..
     
  20. ti-vite

    ti-vite Registered User

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    Read what people are writting.

    If its 55%, and the owners end up giving less than 55%, the players will be distributed the difference at years end. If the payers end up getting more than 55% by year end (because revenues were lower than projected), the players give back to the owners. This via an escrow account (10% retain).
     
  21. mooseOAK*

    mooseOAK* Guest

    Any attempt like that to cheat the players like that also cheats the fans and they will stop coming to games, the owner that tries something similar to that will merely be cutting his own throat.
     
  22. oil slick

    oil slick Registered User

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    Why was there anything beyond this in the thread?
     
  23. Munchausen

    Munchausen Guest

    The NBA and NFL somehow managed to agree on the "what", so is it so unrealistic to think the league and PA also can?
     
  24. Russian Fan

    Russian Fan Registered User

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    Are you serious with this ? The owners want the players to take all the cut here because they cannot trust each others because some are too competitives & others just want a franchise.

    Very ironic of you.
     
  25. SENSible1*

    SENSible1* Guest

    With this PA leadership group, yes it is unrealistic to expect any agreement.
     
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