Revenue Sharing

[Tom_Benjamin]

Don't worry. Tom knows this basic fact, but will continue to pretend otherwise.

It is not a fact. It is a fiction that only a chump could believe. Find one specific reference from the NHL that says individual teams will be audited or have ever been audited by anyone outside the team. One. Explain why Bob Goodenow keeps complaining about a lack of real documentation.

Tom

 

[CarlRacki]

It is not a fact. It is a fiction that only a chump could believe. Find one specific reference from the NHL that says individual teams will be audited or have ever been audited by anyone outside the team. One. Explain why Bob Goodenow keeps complaining about a lack of real documentation.

Tom

Calling people "chump" does nothing but make you seem like a .... well, you know.

Gotta question for you, though. The league's latest offer gives the players 54 percent of audited league revenues. Agreed? And every account I've read regarding that offer places current ('03-'04) league revenues as $2.1 billion and the cap at between $34 and $38 million. Agreed?
As such, to believe what you said here:
"League revenues involve the national TV contract, and the league sponsorship arrangements. Otherwise the league has no revenues."
http://www.hfboards.com/showpost.php?p=2349557&postcount=68

One would have to believe that the league's television contract and sponsorship revenues totaled $2.1 billion last year.
Now, you don't really believe that do you?
Of course not. It's prepostorous to think that the NHL would come up with $2.1 billion from TV and sponsorships. Where does all that money come from then? Ticket sales from individual teams, local TV and radio rights and local sponsorships, perhaps?

Again, this isn't rocket science for most of us.

 

[CarlRacki]

It is not a fact. It is a fiction that only a chump could believe. Find one specific reference from the NHL that says individual teams will be audited or have ever been audited by anyone outside the team. One. Explain why Bob Goodenow keeps complaining about a lack of real documentation.

Tom

One more point ... some hockey teams are owned by publicly held corporations (i.e. Comcast in Philly, Cablevision in New York, Disney in Anaheim, Time Warner in Atlanta). Therefore, contrary to your claim, they have indeed been audited by someone outside the team.

 

[Tom_Benjamin]

Calling people "chump" does nothing but make you seem like a .... well, you know.

That's okay. I could care less what the chumps think. Why would I? I don't imagine you care that I think you are a chump, either.

Gotta question for you, though.

How about finding a reference I requested first or explain why Goodenow consistently complains about the fact that the NHL does not provide documentation for their claims?

The league's latest offer gives the players 54 percent of audited league revenues. Agreed?

No. The word audit is a con. The NHL is offering to let the NHLPA audit the league UROs, which isn't really an audit. If you believe that Arthur Levitt audited the NHL books, then you swallow it. In other words, they get to hire an accountant to make sure the arithmetic is correct. They do not get to audit the individual teams. Levitt got paid $1 million to add up a bunch of numbers he did not - could not - check.

The NHLPA would get exactly the same opportunity.

Tom

 

[Tom_Benjamin]

One more point ... some hockey teams are owned by publicly held corporations (i.e. Comcast in Philly, Cablevision in New York, Disney in Anaheim, Time Warner in Atlanta). Therefore, contrary to your claim, they have indeed been audited by someone outside the team.

They have not been independently audited unless the SEC has stepped in. Otherwise the books have been audited by the team or a firm hired by the team. If publicly held corporations are audited to assure the numbers are accurate, why have so many of them restated earnings in the past few years? The answer is the guy who hire the auditor gets the numbers legally (or illegally in many cases) skewed his way.

If five years from now the NHL restates earnings, does the salary cap get changed retroactively?

Tom

 

[CarlRacki]

That's okay. I could care less what the chumps think. Why would I? I don't imagine you care that I think you are a chump, either.

Tom

Well, I guess when you don't have facts or logic on your side, one can always resort to name calling. You're a class act.
Given that I've proven you wrong, there's really no need to continue this discussion.

 

[nyr7andcounting]

One more point ... some hockey teams are owned by publicly held corporations (i.e. Comcast in Philly, Cablevision in New York, Disney in Anaheim, Time Warner in Atlanta). Therefore, contrary to your claim, they have indeed been audited by someone outside the team.

Yes the companies might have been but the hockey team itself isn't audited by anyone. If you were to audit Cablevision, for example, you would not find anything wrong with their company as a whole. But auditing Cablevision and auditing the New York Rangers are two completely seperate procedures.

Nothing would stop Cablevision from moving revenues in between entities that are related to each other in order to minimize profits in a certain entity. Nothing. Now I can't say for sure if they are or aren't, but common sense tells me that the Rangers didn't lose around $40 million last year, as the reports put forth by the NHL were trying to tell me. But the biggest problem is that the PA can't say for sure if they are or aren't because the NHL won't allow them to look at the books of all the teams, or anyone else for that matter. Therefore, the PA has a hard time completely believing the NHL numbers, and you can't blame them.

One other thing, as related to the NFL. People keep saying, 'oh no NHL owners are hiding revenues, how can they? Look at the NFL too how can an owner hide revenues? Well I will tell you that the biggest difference between the NHL and the NFL is that the NFL doesn't allow corporate ownerships. NFL owners own their team and their team only. Their teams are not a part of a larger entity such as Cablevision or Comcast, which makes it much much harder for NFL teams to mislead with their revenues, and in some cases it is impossible because the owner of the team only owns one thing, the team. In most cases with the NFL there isn't anywhere else for them to hide the revenues. But in the NHL corporations do own some teams, and those are the teams that have a very easy time as far as hiding revenues.

And don't doubt that they are doing it either. Just because you think it isn't right doesn't mean they won't do it. A guy like Jim Dolan isn't in this to be nice or maybe not even to win, he's in it to make money, and if hiding revenues in order to help the NHL's cause in the battle for a hard cap which would greatly improve the value of his franchise is what he needs to do, he is going to do it.

My main point is that if the NHL could, they would open team books to any accounting firm or the PA itself. If the losses they claim they have were really there, than it would help them and solidify their position with the hard cap. But they haven't, because they can't, because doing so wouldn't help them or solidify their position it would prove that they easily could be lying to everyone about the losses the league has sustained, and likely are.

 

[SENSible1*]

That's okay. I could care less what the chumps think. Why would I? I don't imagine you care that I think you are a chump, either.



How about finding a reference I requested first or explain why Goodenow consistently complains about the fact that the NHL does not provide documentation for their claims?



No. The word audit is a con. The NHL is offering to let the NHLPA audit the league UROs, which isn't really an audit. If you believe that Arthur Levitt audited the NHL books, then you swallow it. In other words, they get to hire an accountant to make sure the arithmetic is correct. They do not get to audit the individual teams. Levitt got paid $1 million to add up a bunch of numbers he did not - could not - check.

The NHLPA would get exactly the same opportunity.

Tom

Dearest Tom.

Your reference to Levitt is a red herring.

If the PA agrees to a linkage they will get a say in what is included in the definition of "hockey revenues". If they don't and the league simply implements their own definition, they will be getting exactly what they deserve.

Once the definition is agreed upon, the NHL is offering an independent audit of the team’s declaration of revenues. The statements in the proposal are clear. Perhaps you should go back and read the information.

You laughably pretend that all business partnerships occur between parties who have no conflicting interests and a high degree of trust. There is a reason that partnership agreements can take teams of lawyers’ months to negotiate and run hundreds of pages with numerous punishment clauses for any attempt to cheat your partner. I know you are smart enough to know that this (like most of the propaganda you spew on this and other forums) is patently false, yet you blithely continue to do spout it in support of your agenda.

The trust issue is a smokescreen. The PA could come to the table at any time and demand access to the books to help determine a definition of hockey revenue. This would immediately accomplish two things. 1) It would severely damage any plans the NHL has for declaration of impasse. 2) It would swing public opinion to the PA if the owners refused access.

And yet, the PA has refused to do so and instead choose to hide behind the "trust" smokescreen and pretend that business partners must be between best buddies who have 100% confidence in the honesty of their counterpart. Why?

You're a bright guy Tom, but some of us "chumps" are smart enough to see through your BS.

 

[Tom_Benjamin]

Once the definition is agreed upon, the NHL is offering an independent audit of the team’s declaration of revenues. The statements in the proposal are clear. Perhaps you should go back and read the information.

They are not clear. You will not find "independent audit of the team's declaration of revenues" anywhere in their proposal. Unless you can, it isn't there, and it isn't going to be there. Bill Wirtz has never shown anyone his books and he isn't going to start now.

The PA could come to the table at any time and demand access to the books to help determine a definition of hockey revenue. This would immediately accomplish two things. 1) It would severely damage any plans the NHL has for declaration of impasse. 2) It would swing public opinion to the PA if the owners refused access.

They have asked and the teams have refused. NBA players don't have the right to those books of NBA teams. The CBA allows a limited audit of five teams. There isn't going to be an attempt at impasse. One reason is teams would not be able to table a URO before the NLRB. It is my understanding that if they are trying to claim economic necessity for their demands they have to provide the real books of the teams.

Why doesn't the NHL preempt the NHLPA by tabling them themselves? They are private businesses with no obligation to do so, but the only reason not to is to prevent competitors from seeing the data. Surely that is out the window in a "partnership".

At the very least, they should publish the individual team data that goes into the URO's. Why isn't that information public? Why did the NHLPA have to sign a non-disclosure agreement to see unaudited data presented by the individual teams?

Tom

 

[mudcrutch79]

They have asked and the teams have refused. NBA players don't have the right to those books of NBA teams. The CBA allows a limited audit of five teams. There isn't going to be an attempt at impasse. One reason is teams would not be able to table a URO before the NLRB. It is my understanding that if they are trying to claim economic necessity for their demands they have to provide the real books of the teams.

Why doesn't the NHL preempt the NHLPA by tabling them themselves? They are private businesses with no obligation to do so, but the only reason not to is to prevent competitors from seeing the data. Surely that is out the window in a "partnership".

At the very least, they should publish the individual team data that goes into the URO's. Why isn't that information public? Why did the NHLPA have to sign a non-disclosure agreement to see unaudited data presented by the individual teams?

The law governing information requests in the collective bargaining context is also well settled. An employer's duty to bargain collectively in good faith includes, in the absence of a valid reason that supports non-disclosure, an obligation to produce information "relevant to the union's collective bargaining duties." NLRB v. Realty Maintenance,Inc., 723 F.2d 746, 747 (9th Cir. 1984). Relevancy for thispurpose is assessed based on a "liberal, `discovery-type standard.' " Id. (citation omitted). Specifically, the employermust "supply the union, upon request, with sufficient information to enable the [union] to understand and intelligently discuss the issues raised in bargaining permitted by the collective bargaining contract." San DiegoNewspaper Guild, Local No. 95 v. NLRB, 548 F.2d 863, 866(9th Cir. 1977).

I'm not siding with the owners mouthpiece du jour, but I don't know why you keep pushing this audit issue Tom. It's a non-issue. The above excerpt is from Duke law lecture on the content of the American duty to bargain in good faith. If Bob Goodenow really wanted to see the owner's audited books, I don't see how they could refuse him. File a complaint with the NLRB and it's done. The NHL is the one pushing the cap; how are they going to refuse to open audited books in light of a complaint to the NLRB, particularly given their history? To push this line about how the owners won't open them is misleading. The NHLPA doesn't care to see them if they aren't allowed to crow about them in the media afterwards. They just don't care what the situation is. That's fine, it's their right to push for the system that they prefer, but it's BS to blame the owners for this, as I see it. If I'm misinterpreting the content of the duty, by all means, enlighten me, but if I'm not...this is a nothing issue.

 

[Tom_Benjamin]

If Bob Goodenow really wanted to see the owner's audited books, I don't see how they could refuse him. File a complaint with the NLRB and it's done. The NHL is the one pushing the cap; how are they going to refuse to open audited books in light of a complaint to the NLRB, particularly given their history?

Thanks for the link. It does clarify things.

All hockey owners have to do is reject the idea they are doing this because they can't afford to pay. That's what baseball did the last time around. They explicitly stated they were not claiming an inability to pay and Fehr made a big deal about it. That's why baseball attempted to get impasse with the idea that a salary cap was not a mandatory subject for bargaining. They did not deny bargaining in bad faith. They attempted to make the case they didn't have to bargain the subject at all.

Daly has been quite explicit about this and the NHL proposal also signals clearly that the owners are prepared to negotiate the cost side of the equation. They are not willing to negotiate the certainty side of the deal. Even if they did open the books it is very difficult to argue that they cannot afford to pay because:

1) Some employers can clearly afford to pay,

2) The union is not negotiating specific wage levels because the teams do that, and

3) Every single contract was voluntarily entered by one team or another.

Edit for clarity: In other words, the owners have almost nothing to gain at the NLRB by claiming an inability to pay. So they won't and as a result won't be forced to open the books. That makes impasse more difficult, but I don't think it is impossible. I think the impasse route is a loser anyway. It's a bad strategy and far too risky.

If the union tried to claim an unfair labour practice, the owner's response is, "Can't afford to pay what? We haven't claimed we want this system because we can't afford to pay.

"We did not ask them to take pay cuts. We asked them to agree to a new system that ties revenues to salaries. It is certainty we need. They refuse to negotiate that. Until we agree on that issue, nothing is being negotiated at all. Good faith or bad. We've started at 54% and signalled we would go higher. Who knows? We might even be willing to give them all a raise to get cost certainty. How high can we afford to go? That's for us to know and the union to find out."

Tom

 

[Sp5618]

Calling a Bluff?

My understanding on some of this- and I'm just a casual observer - is that Goodenow has to sign away some rights in order to see individual teams' books. He can force them to show him their books, however can't they force him not to disclose (and thus use publicly) anything he might learn? Before we even get to that point, wouldn't Goodenow be signalling that if he does see the books, he in principle may be ready to accept a cap, since the only reasons he would have to see the books are to (a) gauge whether or not the loss figures are accurate and hence a 54% of revenues (or any % for that matter is acceptable), or (b) debunk the NHL figures...which he would not be allowed to do if he did see the books?

I also interpreted things as Tom has here- that what the league has offered thus far is an audit of league totals. The NHL gets the numbers from the individual teams, adds them up, gets their $1.2 billion, and says to the NHLPA....audit that. I never did see anything that led me to believe individual teams' (and their owners') finances could be opened up to determine what could/should go where? Maybe I missed something?

 

[mudcrutch79]

Before we even get to that point, wouldn't Goodenow be signalling that if he does see the books, he in principle may be ready to accept a cap, since the only reasons he would have to see the books are to (a) gauge whether or not the loss figures are accurate and hence a 54% of revenues (or any % for that matter is acceptable), or (b) debunk the NHL figures...which he would not be allowed to do if he did see the books?

Exactly correct as I see it snafu. There's nothing for Goodenow to gain in doing this, with the possibility of getting a better understanding of any potential fault lines in ownership that he could open up with the right offer. My thinking is that he figures he has enough information to do so with the information that the NHL has given them. If he looks at the books, it's a negative PR move, with little to no tactical gain.

 

[mudcrutch79]

All hockey owners have to do is reject the idea they are doing this because they can't afford to pay. That's what baseball did the last time around. They explicitly stated they were not claiming an inability to pay and Fehr made a big deal about it. That's why baseball attempted to get impasse with the idea that a salary cap was not a mandatory subject for bargaining. They did not deny bargaining in bad faith. They attempted to make the case they didn't have to bargain the subject at all.

Do you have a link for this decision? I'd like to read it.

If the union tried to claim an unfair labour practice, the owner's response is, "Can't afford to pay what? We haven't claimed we want this system because we can't afford to pay.

"We did not ask them to take pay cuts. We asked them to agree to a new system that ties revenues to salaries. It is certainty we need. They refuse to negotiate that. Until we agree on that issue, nothing is being negotiated at all. Good faith or bad. We've started at 54% and signalled we would go higher. Who knows? We might even be willing to give them all a raise to get cost certainty. How high can we afford to go? That's for us to know and the union to find out."

I was somewhat with you until this point. They are asking the players to tie their salaries to revenues on the grounds that any other system will result in salaries that the system can't maintain.

It is important to note that the 24% rollback is a recognition by the Players' Union that our player costs simply were too high and that a $1.8-million average annual salary was not appropriate or sustainable at our current level of revenue.

He's flat out saying that they can't afford current salaries. Even if you leave this aside, the players are being asked to accept a proposal where they receive 54% of revenue. How can they accurately assess that proposal without a real understanding of what revenues are? There's no way around this-if Goodenow wanted to look at the audited books for every team, he'd be allowed to. The part about the owners not claiming that they can't pay the current salaries if they sought an impasse-fine, I accept that, you and I both know that they have a ton to lose if they seek it.

It seems to me that it's two different scenarios that could play out. 1) The owners seek an impasse, but don't claim an inability to pay. Fine, we can argue about that. 2) The players ask to see audited books to evaluate the current proposal. The NHL has to open them up.

You and I both know that this doesn't seem like the type of thing that will be resolved by going to impasse. We've agreed that the NHL has too much to lose by pushing it that far. The season starts...mid-February?

 

[Tom_Benjamin]

Before we even get to that point, wouldn't Goodenow be signalling that if he does see the books, he in principle may be ready to accept a cap, since the only reasons he would have to see the books are to (a) gauge whether or not the loss figures are accurate and hence a 54% of revenues (or any % for that matter is acceptable), or (b) debunk the NHL figures...which he would not be allowed to do if he did see the books?

Saskin has signalled the players will accept a cap if revenue sharing on the NFL scale was implemented. That's an empty signal because these owners don't want any revenue sharing at all and he knows it. At the same time, it leaves him open to "We can't manage the NFL level but how about if we split the gates at every game. Is that enough revenue sharing for you?"

Once you start talking about revenue, then you've got your foot in the door. Right now the players don't want anything to do with defining revenues. They are the owner's problem, and no matter what the biggest part of that problem is the revenue gap. You simply can't peg salaries to a level all teams in the bottom third of the revenue can afford. Not when the gap between the top team and the bottom team is at least $76 million. The players can't accept that.

I think the NHLPA should say "Fine. We will tag salaries to revenues, but not without team by team forensic audits. The definition of hockey revenue will change from team to team depending on the dynamics of each business. None of this defining Nashville and Toronto revenues on the same formula garbage. That's ridiculous. We pick and pay the auditors; NHL teams will reimburse us after the fact. The numbers they produce is the data we will use to negotiate cost certainty and a salary cap around."

It's completely impractical and the owners will turn them down flat. At least it would clarify the issue in the public mind and give the NHLPA a talking point. "We agreed to cost certainty in principle. They refuse to open the books."

Tom

 

[Tom_Benjamin]

Do you have a link for this decision? I'd like to read it.

Here's the Court of Appeal ruling.

I was somewhat with you until this point. They are asking the players to tie their salaries to revenues on the grounds that any other system will result in salaries that the system can't maintain.

It indeed appears that they are asking for this, but the language is always very careful. They want to maintain 30 healthy franchises. They want to improve competitive balance. They want to stop salary inflation they claim is inherent in the old system. But where is any claim that they cannot afford the salaries? How can they possibly sustain that claim when they do pay them?

Small market teams unload players when they salaries become unaffordable and someone else always takes the player. The grounds the league advances is not that the system results in unaffordable salaries. It is that the system creates a salary structure wherein small market teams can't compete on the ice and as a result can't grow their revenues. That's a different claim, one that does not require profit and loss statements.

He's flat out saying that they can't afford current salaries.

I don't think so. He is saying they are inappropriate and unsustainable. He's not saying teams can't afford to pay.

Even if you leave this aside, the players are being asked to accept a proposal where they receive 54% of revenue. How can they accurately assess that proposal without a real understanding of what revenues are?

The union has been provided with the information required to negotiate a designated hockey revenue. The owners are not proposing to share revenues with the players. They are proposing to share designated hockey revenues.

The union has been told exactly how each team was instructed to divide revenue between affiliated entities. They provided an appropriate number. If the union wants to challenge a particular number, the league would be happy to document it. The players have two ways to increase their share of the pie. They can negotiate a different definition of hockey revenues, thus driving designated hockey revenues up or they can negotiate a higher percentage of the designated hockey revenues.

What other information do they need to understand and intelligently discuss the revenue issue?

You and I both know that this doesn't seem like the type of thing that will be resolved by going to impasse. We've agreed that the NHL has too much to lose by pushing it that far. The season starts...mid-February?

Maybe, but I think the owners intend to stay exactly where they are until the players buckle or decertify. More and more I think that will eventually be the choice for the players.

The reasons I think impasse and implementation is a loser is it is too risky. The strategy fails if they don't win at impasse. Even if they win at impasse all they gain is the conversion of a lockout to a strike. Then, they have to skinny the implemented CBA past Canadian anti-competition law. Next, they have to find replacement players who can provide a reasonable product, something I don't think is as easy as some think. Then they have to get the use of replacements past the four provincial labour boards. Even if they do all that, they have to be able to sell tickets and finally the players have to crack and cross. If they fail at any point, it's really bad for their position.

I don't think they risk it. A tipoff to me is all the whispers about it. I'm contrarian enough to believe that that kind of talk is cheap and it is out there for a reason. This way they have the threat (whisper, whisper), misdirection (the union is confident replacements won't work), and delays the decertification decision (why when they can break an attempt to use replacements?)

Either they take their gains at the last minute and live to fight another day, or they plan to wait forever.

Tom