NHL's non-Impasse options?

[Tom_Benjamin]

And this will really help their earning potential how?

Kill the golden goose? Great plan!

It isn't their goose, is it? The players didn't ask for this fight, but it cost the players $1.3 billion. Now it is the owners turn to pay. The players now have the leverage. They have the power to turn the owners $3 billion investment in teams and billions more in rinks into zero. They can kill the golden goose. Will they? A bluff?

Maybe. So the NHLPA is going to start whacking on the golden goose, just to make their point. It's already started. No playoff revenue, and no Stanley Cup. That's a huge hit to the brand. A forever stain. Refusing to meet with the owners until next September makes it very difficult to sell TV rights, sponsorships, or season tickets. And teams certainly can't expect the players to sell tickets for them.

And if anyone asks a player, they can solemnly say, "I don't expect any deal until January at the earliest. We're going to have to find out whether the owners are willing to tank a second season. I'm probably going to play in the WHA. Or Europe. When will the league start again? I guess when the NHL wants to make a fair deal. Will we stick it out? We'll see, won't we? How many seasons do they have to miss before the league is dead?"

If you think the majority of players will sit by while Goodenow tries to sell them that particular flavour of kool-aid, you are in for a rude awakening.

The majority of players are not sitting around. The majority are busy in Europe. Another hundred or so are in the AHL or still with their Junior team.

They stuck it out to this point hoping the league would cave. There are already numerous reports from trusted sources confirming a healthy % would agree to abandon the fight right now. If you really think they'll be able to keep everyone in line by next January, then you've had one sip too many yourself.

I'll believe this when I hear a single player representative or a single member of the executive committee express a doubt. The players elected Trevor Linden and they will not unelect him.

And hey, we don't want to comb through these boards and count the number of times a player capitulation was predicted by January 2005, do we? If I had a dime for every time I was told the players would collapse when they realized the owners were serious, I'd be a rich man.

Tom

 

[mudcrutch79]

Too late, pal. When the WHA started up for the first time (or re-started) it HAD A SALRY CAP of less than 20 million. Go to the WHA website and tell them about your antitrust ********.

Hmm. Did they ever get to the point where they played a game? There's no point suing an entity that collapses before the first puck is dropped.

 

[Wetcoaster]

Under the current CBA unsigned juniors (ie Carter in a normal year) can opt to go back into draft if they want a new team. Its hard to see why a new CBA could not do the same but vary the age ie any unsigned player under 24 or what ever must reenter the draft and be reallocated.

The point is with a court declaration they do not have to go back into the draft.

 

[Crazy Lunatic]

Hmm. Did they ever get to the point where they played a game? There's no point suing an entity that collapses before the first puck is dropped.

You act as if salary caps are something alien to pro sports. Every league from the NFL to the NBA to Arena Football to the National Lacross League to Major League Soccer... and yes, to the WHA has a salary cap. With the NHL adopting a cap next year, only baseball will be left without one... and guess how long baseball owners go before getting a cap once every single major pro sport has one. Your puny law suits are useless against the power of a cap... buwahahaha!

 

[Bicycle Repairman]

You act as if salary caps are something alien to pro sports. Every league from the NFL to the NBA to Arena Football to the National Lacross League to Major League Soccer... and yes, to the WHA has a salary cap. With the NHL adopting a cap next year, only baseball will be left without one... and guess how long baseball owners go before getting a cap once every single major pro sport has one. Your puny law suits are useless against the power of a cap... buwahahaha!

You are wrong.

All the leagues you mention operate within a collective bargaining agreement with their respective players associations. The WHA does not have one. As such, their declaration of a salary cap is moot.

 

[mudcrutch79]

You are wrong.

All the leagues you mention operate within a collective bargaining agreement with their respective players associations. The WHA does not have one. As such, their declaration of a salary cap is moot.

With the exception of the WHA. The WHA never existed. They might as well as had a league policy of killing the losing goalie at mid ice-it would have had the same impact. It ain't illegal until you do it.

 

[Bicycle Repairman]

With the exception of the WHA. The WHA never existed. They might as well as had a league policy of killing the losing goalie at mid ice-it would have had the same impact. It ain't illegal until you do it.

Why, mudcrutch, you, Sir, have out-mooted me! :lol

 

[Tom_Benjamin]

May be difficult to win as there are all sorts of restrictive covenants which have been upheld as a matter of contract law. I would assume that most teams would have a right of approval to allow any other professional team to use the building.

Let's assume this. The Ottawa Senators have the right of approval. The Palladium Corporation gets a big piece of the hockey revenues in exchange for the right of approval. The Senators are not delivering on their part of the bargain. How long does the Palladium Corporation have to wait before they say, "Hey! I've got somebody over here that does want to generate revenues in my rink. I'll give you your exclusive control back when you start putting on games."

Obviously the Palladium Corporation would not say that because they are also owned by Melnyk. This leaves two questions in my mind:

1) If Melnyk did not own (or control) both, could the Palladium Corporation break the restrictive covenant based on non performance by the tenant?

2) If an independent Palladium Corporation could do that and would do that, isn't the Palladium Corporation open to anti-competition lawsuits because they do not do it?

Tom

 

[Crazy Lunatic]

You are wrong.

All the leagues you mention operate within a collective bargaining agreement with their respective players associations. The WHA does not have one. As such, their declaration of a salary cap is moot.

And so would the WHA, what exactly is your point? No salary cap, no WHA... simple as that. What in the blue hell would be the reason to form the WHAPA only to not accept the salary cap and watch the league fold? Oh wait... principle, right?

 

[me2]

The point is with a court declaration they do not have to go back into the draft.

1. Draft isn't held
2. players/prospects are declared UFA by court
3. no players are being signed due to no CBA
4. the new CBA is signed that has clause that all UFAs under the age of 26 must enter the draft to be selected
5. Draft is held
6. Signings commence
7. Season commences

And this wouldn't work? Why?

The old CBA was

8.4. Eligibility for Claim.

1. All players age 19 or older are eligible for claim in the Entry Draft, except:
1.1. a player on the Reserve List of a Club, other than as a Try-Out;

1.2. a player who has been claimed in two prior Entry Drafts;

1.3 a player who previously played in the League and became a free agent pursuant to this Agreement;

1.4. a player age 21 or older who played hockey for at least one season in North America when he was age 18, 19 or 20.

2. In addition to the players referred to in sub-paragraph (a), any player who (i) will be age 18 on or before September 15 in the year in which such Entry Draft is held, or (ii) reaches his 19th birthday between September 16 and December 31, both dates included, next following the Entry Draft and who in either case wishes to become eligible for selection in the Entry Draft, can attain eligibility by delivering to the League a written notice in the form of Exhibit 3 hereto prior to the later of (A) May 1, or (B) seven days following the date such player finishes competing on his team in the year in which such draft is to be held.



Its not hard to see that modified (ie drop 1.4) to suit the NHLs needs.

 

[Crazy Lunatic]

Don't try and bring logic into this debate. The NHL and all the team owners will explode immediately after the cancellation of the season. The WHA will then steal all their buildings and the new WHAPA will abolish the WHA salary cap due to its illigalities (it violates anti-trust laws, you know... tisk, tisk). The WHAPA will then go to the NFL, the NBA, Major League Soccer, the National Lacross League, and the Arena Football League and abolish all of their salary caps! The NHL owners will be forced to live on the streets, ruing the day they ever messed with Bob Goodenow. Well... this happens in Tommys dreams anyway.

 

[grego]

The only thing I can see any junior players getting is free agency as they refered to in the TSN article.

Other then that a Junior player couldn't make an anti trust claim against the NHL on the basis that they didn't get an offer. The NHL is in a lockout, it is normal for them to not be hiring people. What would make anyone think there is some kind of collusion between the owners making them not offer top stars any contract.

The players even say they are willing to go years without hockey, so that means the owners shouldn't be in a hurry to fill possible vacancies in their roster for a hockey season that we don't know when it will be played. Owners have every right to fill each roster spot the day before camp opens if they want to.

 

[grego]

You can't answer if a team has to let a WHA team play in their building without seeing the contract with the building they have signed. If the NHL team is cancelling games then the building could rent it out, but if an NHL owner decided to pay for the lease to keep a WHA team out there is little an arena could do.

That is the same as when huge companies with prime real estate refuse to sell a building to any other grocery store chain. Because they don't want to let a competitor in close to them, and that can legally happen. In that case many businesses can get around that by having another company they own try to buy the building first.

I am not sure how they would try to fool an NHL team though, maybe pretend like they are a professional broomball league and sign a lease to the building. Then show up and say couldn't find the equipment for broomball so you decided to play hockey that year instead. That would be funny if that could work, but it wouldn't of course

 

[Wetcoaster]

Let's assume this. The Ottawa Senators have the right of approval. The Palladium Corporation gets a big piece of the hockey revenues in exchange for the right of approval. The Senators are not delivering on their part of the bargain. How long does the Palladium Corporation have to wait before they say, "Hey! I've got somebody over here that does want to generate revenues in my rink. I'll give you your exclusive control back when you start putting on games."

Obviously the Palladium Corporation would not say that because they are also owned by Melnyk. This leaves two questions in my mind:

1) If Melnyk did not own (or control) both, could the Palladium Corporation break the restrictive covenant based on non performance by the tenant?

2) If an independent Palladium Corporation could do that and would do that, isn't the Palladium Corporation open to anti-competition lawsuits because they do not do it?

Tom

In cases of the teams that do not own their own venues as long as the teams fulfill the terms of their leases then there may not be grounds for renunciation. In civically owned arenas I believe those owners are still having to pay the lease as well as likely some portion of concessions, parking etc. even though the games are not be shared. Most leases would have some form of revenue sharing likely with a guaranteed minimum to the landlord.

If the arenas do try to void the contract then they had better be sure they are replacing one tenant with another who will be able to replace the lost revenues. I do not see the WHA as having thatability.

In most cases as a strategy, it would probably be best to simply sue for each payment as it becomes due if the team was not paying and count on the fact that sometime down the road the NHL will be back in operation. Many commercial leases have late payment provisions with fairly onerous penalty clauses and substantial accrued interest charges. I would be surprised if the arean leases did not have such clauses.

For several of the teams I understand that their arena deals are onerous (such as Anaheim) so the last thing a landlord would do would be to end the lease.

I do not think that anti-competition law would apply here.

 

[Wetcoaster]

1. Draft isn't held
2. players/prospects are declared UFA by court
3. no players are being signed due to no CBA
4. the new CBA is signed that has clause that all UFAs under the age of 26 must enter the draft to be selected
5. Draft is held
6. Signings commence
7. Season commences

And this wouldn't work? Why?

The old CBA was

8.4. Eligibility for Claim.

1. All players age 19 or older are eligible for claim in the Entry Draft, except:
1.1. a player on the Reserve List of a Club, other than as a Try-Out;

1.2. a player who has been claimed in two prior Entry Drafts;

1.3 a player who previously played in the League and became a free agent pursuant to this Agreement;

1.4. a player age 21 or older who played hockey for at least one season in North America when he was age 18, 19 or 20.

2. In addition to the players referred to in sub-paragraph (a), any player who (i) will be age 18 on or before September 15 in the year in which such Entry Draft is held, or (ii) reaches his 19th birthday between September 16 and December 31, both dates included, next following the Entry Draft and who in either case wishes to become eligible for selection in the Entry Draft, can attain eligibility by delivering to the League a written notice in the form of Exhibit 3 hereto prior to the later of (A) May 1, or (B) seven days following the date such player finishes competing on his team in the year in which such draft is to be held.



Its not hard to see that modified (ie drop 1.4) to suit the NHLs needs.

If you look at the various cases in the US dealing with the football and baseball drafts the pre-condition that the courts set out to uphold the ability to cover incoming players is that there is a valid and PRE-EXISTING CBA. The players would argue that the CBA expired while they were in a position to declare free agency and the new CBA cannot cover them ex post facto.

Would it work? I do not know because it is a new situation but it is certainly an arguable proposition based on past case law. If I am Jeff Carter. etc. who was not signed prior to the deadline and there is no CBA in place, then I would probably take a shot.

Also remember that the draft interlocks with transfer fee agreements with the NCAA, CHL and IIHF and they have all expired. That would come into the equation as well I would think.

It would certainly generate some interesting litigation.

 

[Kickabrat]

If you look at the various cases in the US dealing with the football and baseball drafts the pre-condition that the courts set out to uphold the ability to cover incoming players is that there is a valid and PRE-EXISTING CBA. The players would argue that the CBA expired while they were in a position to declare free agency and the new CBA cannot cover them ex post facto.....It would certainly generate some interesting litigation.

Thanks Westcoaster. I have been waiting for someone to explain how a potential draftee could sue to become a free agent and you are the first I have seen to come up with plausible reasoning.

What are your thoughts on this argument? If the players argue that the CBA expired, could the NHL not counter argue that as long as negotiations are taking place, nothing can happen until a new CBA is in place.

If the CBA expired Sept 15 04, what does it matter if it said July 1 05? If it is expired it is expired, all the clauses are now open to re-negotiation. Would not potential draftees have the right to sue to be free agents as of Sept 16 04 if that was when the old CBA expired?

If the answer is no because anti trust is not applicable if they are in the process of negotiating a new CBA, then does that reasoning still not hold on July 1 05 (as long as they there are still good faith negotiations going on? If the answer is yes because the old CBA said they only had until July 1, then that means that the old CBA is still in effect on July 1 05 and thus renders the initial claim of no CBA in place invalid. Like you said, interesting litigation can be expected.

 

[Greschner4]

If you look at the various cases in the US dealing with the football and baseball drafts the pre-condition that the courts set out to uphold the ability to cover incoming players is that there is a valid and PRE-EXISTING CBA. The players would argue that the CBA expired while they were in a position to declare free agency and the new CBA cannot cover them ex post facto.

Would it work? I do not know because it is a new situation but it is certainly an arguable proposition based on past case law. If I am Jeff Carter. etc. who was not signed prior to the deadline and there is no CBA in place, then I would probably take a shot.

Also remember that the draft interlocks with transfer fee agreements with the NCAA, CHL and IIHF and they have all expired. That would come into the equation as well I would think.

It would certainly generate some interesting litigation.

The only way they could get declared free agents is by a court and an antitrust case like that would take years to work its way through the courts. By the time it did there would be a new CBA that would have a draft in place that would almost certainly cover this year's draft class, so the case would be moot.

All of this also assumes that the NHL doesn't declare an impasse before the draft and implement a draft pursuant to its final offer to the players. So Crosby would have been drafted and would have to sit out years to become a free agent.

Very unlikely.

 

[LordHelmet]

Man, this thread got way off of the original intent..

Since it's highly unlikely that the league will attempt an impasse, do they have any other options to force the issue? Is economic pressure their only play?

 

[vanlady]

No, they can't.

Actually here in Canada they can. In all 4 provinces involved the NHL can petition all the LRB for a last and final vote. This would required however that the NHL make a complete proposal to the union. At this point they must make it the last and final as well

In the US the situation is a little merkier, under numerous case cites the board has ruled it bad faith against the union to not take a last and final offer to the membership. However, there are several factors, one of them being the lack of a complete proposal to date. Boulwarism is a term used to take it or leave it bargaining and the lack of a complete proposal to date would not bode well for the NHL. You can't after months of not countering a complete proposal with a complete proposal, then slam your first complete proposal on the table and call it last and final. This could be construed as Boulwarism. It also does not bode well for the NHL that the regional NLRB in NY is very Democratic, and will likely remain that way. For the NHL to get a reversal on a ALJ decision would likely take at least a year if not more from the federal board and then all it would take is the PA to file an appeal in NY for it to be overturned. The long and short of it is for the NHL to go to impasse would take YEARS. During this time you would see no european players in either league.

This all hinges on the NHL making a complete proposal, Goodenow knows at this point that he has Gary between a rock and a hard place. To not take it to the membership would substantialy weaken the union position at the board.

 

[AM]

bah

This is wishful thing. The players always knew the owners were serious. They are not fools. Goodenow has sounded the warning. So did Gretzky. So has everyone. Many hoped the owners would crack, but deep down none of them can be surprised. This point has been coming for five years.

What do you expect they could possibly vote on anyway? There is no offer. Until there is a comprehensive CBA to consider the only thing a vote can do is repudiate their leadership. Linden would resign. The players would have to find and elect a new negotiating committee. It isn't going to happen. The players believe the season is over. The worst is done for them until next season at training camp.

The owners will have to start fighting anti-trust suits from Juniors. They lose the playoff revenues. They have to try to keep their corporate sponsors on board and they have to sell TV rights to a league that doesn't exist, and they have to convince season ticket holders to buy seats when they have nothing to sell.

It sounds to me that you are surprised that the players haven't seen fit to give up on the fight simply because everyone in the media says they have to give up. I hope the owners didn't think the same thing. Surely not.

If nothing happens now, the owners will have let this season drift away without making an offer. I guess they expected that it would take at least a season and a half. Surely, you aren't surprised at the players stand, are you?

Tom

The players are surprised, I guarantee it... "What you actually want to make money????" Come on of course they are.

Also, the owners have made good offers, though I'm not sure they've made their best offer..... why should they make their best offer? Afterall, the players wont play under a cap even if its 110% of revenue!!!

Somebody is gonna have to kiss this princess's and wake them up(hopefully with their boot).

 

[Wetcoaster]

Thanks Westcoaster. I have been waiting for someone to explain how a potential draftee could sue to become a free agent and you are the first I have seen to come up with plausible reasoning.

What are your thoughts on this argument? If the players argue that the CBA expired, could the NHL not counter argue that as long as negotiations are taking place, nothing can happen until a new CBA is in place.

If the CBA expired Sept 15 04, what does it matter if it said July 1 05? If it is expired it is expired, all the clauses are now open to re-negotiation. Would not potential draftees have the right to sue to be free agents as of Sept 16 04 if that was when the old CBA expired?

If the answer is no because anti trust is not applicable if they are in the process of negotiating a new CBA, then does that reasoning still not hold on July 1 05 (as long as they there are still good faith negotiations going on? If the answer is yes because the old CBA said they only had until July 1, then that means that the old CBA is still in effect on July 1 05 and thus renders the initial claim of no CBA in place invalid. Like you said, interesting litigation can be expected.

The juniors are currently under contracts with their current clubs, so I would assume that a court would rule any action at this point in time premature.

There would also be a possible defence if the player moved too early that the case is too hypothetical since the CBA could be replaced prior to the previous cut-off date.

Thus far no pro sport has gone a full year without playing and with an expired CBA. A CBA although expired does continue for some purposes and I would assume that the NHL would argue it does continue for the purposes of incoming players. The problem with that argument is that the NHL has already said that without a new CBA, an Entry Draft is not possible. The players would point to that as support for their position.

 

[Wetcoaster]

The only way they could get declared free agents is by a court and an antitrust case like that would take years to work its way through the courts. By the time it did there would be a new CBA that would have a draft in place that would almost certainly cover this year's draft class, so the case would be moot.

All of this also assumes that the NHL doesn't declare an impasse before the draft and implement a draft pursuant to its final offer to the players. So Crosby would have been drafted and would have to sit out years to become a free agent.

Very unlikely.

More likely than the NHL getting an impasse declaration past the NLRB.

 

[mudcrutch79]

The juniors are currently under contracts with their current clubs, so I would assume that a court would rule any action at this point in time premature.

I don't know too much about the validity of contracts made by minors, but I seem to remember John Tonelli getting out of his contract to pay his junior team a cut of his NHL earnings in part because he was a minor when he signed it. Presumably, the guys under the age of 18 who have yet to be drafted are in a similar situation. Do you think their junior contracts are binding on them, or is Crosby free to jump to whatever AHL team will pay him the most money for next season?

 

[Tom_Benjamin]

The players are surprised, I guarantee it... "What you actually want to make money????" Come on of course they are.

Bunk. They are not surprised. They are disappointed, but they are not surprised. They are not fools. Anyone watching the NHL pageant unfold over the past five years could see this day coming. You could, couldn't you? What evidence to you have that allows you to make this guarantee?

Also, the owners have made good offers, though I'm not sure they've made their best offer..... why should they make their best offer? Afterall, the players wont play under a cap even if its 110% of revenue!!!

The player's refusal to even consider a cap is beside the point. Why haven't the owners made their best offer? Why haven't the owners made any offer that addresses all the issues.

The players offered the owners at least $600 million to drop the idea of linkage between salaries and revenues. The owners turned it down. Fine. Their perogative. But they have an obligation to present something to entice the players to accept linkage. Bettman has made no bones about a willingness to negotiate cost (but not certainty) free agency, revenue sharing, the entry level system and even arbitration.

The player's won't negotiate these issues if it includes linkage? Too bad. All that means is that at this point, Bettman should be negotiating with himself. He should put together a package that addresses each of these issues and presents what the owners would reluctantly accept if the NHLPA did accept linkage and negotiated hard on each one of them. The result would be the NHL's best offer. He knows what the NHL is prepared to give. There is no longer a point to having any wriggle room. Put up the best the NHL is going to deliver if the players capitulate.

If they really believe the players are wavering, then slam something on the table that makes them think even harder.

I want an owner apologist to explain why that has not happened. The season is about to go down the drain and the owners still have not made a specific offer. They can't even demand that it go to a player vote because there is no contract proposal to vote on. It's ridiculous.

Tom

 

[Wetcoaster]

I don't know too much about the validity of contracts made by minors, but I seem to remember John Tonelli getting out of his contract to pay his junior team a cut of his NHL earnings in part because he was a minor when he signed it. Presumably, the guys under the age of 18 who have yet to be drafted are in a similar situation. Do you think their junior contracts are binding on them, or is Crosby free to jump to whatever AHL team will pay him the most money for next season?

The law on contracts entered into by minors is quite complex and it does differ from jurisdiction to jurisdiction. In Canada it is under provincial law.

Generally the courts uphold contracts signed by minors for "necessaries" (food, shelter, clothing) and contracts of service and employment.

The CHL would argue that their contracts fall into the latter category and therefore are binding.

The player would argue that a contract for services where he receives a stipend of $100 per month are not the sort of contracts envisoned by the category of "contracts of service and employment" and therefore he has the right to repudiate.

You would also have to factor in the age at which the player attains his majority which differs depending upon the jurisdiction (18 to 21).

IIRC the CHL contracts have a choice of law and likely a binding arbitration clause in them as well. The CHL would argue this requires the player first to exhaust his remedies under the contract before trying to go to court.

The player would argue that the contracts are illegal and therefore void, so any provision on choice of law or binding arbitration are void leaving the field clear for the courts.

Also consider that the courts do not like to unduly interfere with the ability of a person to work so the courts might rule that a prohibitory injunction will not issue but rather monetary damges would be the appropriate remedy.

I have just brushed the surface of the potential arguments and issues in this area.