Who Needs Linkage Anyway?

Discussion in 'The Business of Hockey' started by Sam I Am, Feb 10, 2005.

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  1. Sam I Am

    Sam I Am Registered User

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    Let's face it. The players trust the owners about as far as they can throw them and, frankly, who blames them. Deep suspicion has been cast over the owners' allegedly independant audit. The players don't even trust their own auditor to decipher all the owners' book-keeping shenanigans.

    Why, then, is it absolutely neccessary for the NHL to complicate things by asking the players to be a partner in a business over wich they have no real control or supervision? Instead, the owners should propose a hard cap without linkage. Why oblige the players to keep a running calculation of what percentage of revenues the maximun payroll represents? Let the players accept a payroll ceiling, and a floor, that is a fixed amount--period. Those numbers remain in effect for the duration of the CBA., subject to fluctuation triggered if certain positive conditions are met (e.g. increase in attendance...).

    This fluctuation clause cannot, under any circumstances, be used to lower the amount of the ceiling or the floor beyong the original negotiated numbers. It is the owners sole responsibility to run their businesses in such a way as to keep sales high. It follows that the owner should bear the sole risk of a downturn.

    With this plan, the owners get their cost certainty. No longer will payrolls spiral out of control. And the players will not be required to become auditors. God knows how difficult it will be to calculate "profit". To do it, one must scrutinize not only both sides of the balance sheet and the issue of what are reasonable costs is daunting, to see the least.

    With the cap/no linkage plan the players know what their minumum payroll will be and will share in any future windfall of revenue during the course of the CBC. And they won't have to bring their calculators to the rink.
     
    Last edited: Feb 10, 2005
  2. Alfie#11

    Alfie#11 Registered User

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    The owners can have linkage easily. The players can't do anything to stop them.

    Team owner says to his GM "Here's an estimate of 55% of team revenue. Spend more than this and you are fired."

    Problem solved.

    But then the owners don't seem to want to do this. Somehow, the employees are going to be made responsible for running the business.
     
  3. PecaFan

    PecaFan Registered User

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    Yup. Just say to your fans, management, and players "We won't try to win the Cup, because it costs too much money."

    I love how folks try and paint the Chicago model as a viable solution. The goal is to *eliminate* the Chicago model, so that all teams can try and win the Cup without losing millions of dollars.
     
  4. dawgbone

    dawgbone Registered User

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    Then the PA needs to erase their blackberry and fill it with numbers of competant people. Deep suspicion based on what? That Goodenow read the Levitt report and said no, we don't beleive it? Or maybe it was Ken Klee, who seems to have his finger on the pulse, who apparantly has some auditing knowledge and can say the owners are lying.

    Fact of the matter is, the players do have lots of control. They are the product. They are the ones who the fans pay to see. And as it turns out, they are the ones who people aren't paying to go see play, so they are very much the core of the product.

    Yeah, because the players will do that... :shakehead. I'd be suprised if Bryan McCabe has figured out sales tax, let alone something as complicated as this. It would be up to Goodenow and his group to work on that... not the players.

    Oh okay... so you don't want linkage, but you want the ability for the cap to go up if the league does well... what if it gets worse?

    That is just stupid. So it's the owners fault and risk if the league does poorly, but the players can cash in if the league does better? That's a load of crap.

    Players become auditors? Are you kidding? Do you have any concept of how this would work? The players would not be doing a damn thing... they wouldn't audit the books.

    FYI, costs can spiral out of control in a cap environment. The average payroll is about $43 mil now... in a $2.3 bil industry. If revenus drop to $1.5 bil, and the average payroll is $36 mil, those salaries are out of control. Likewise, $43 mil in average payrolls is not out of control in a $3.0 bil. Industry.

    Sorry, if they aren't sharing in the risks, they shouldn't be sharing in the rewards. It's just common sense. If they don't want linkage, they can sit with the deal for the length of it... no rewards for increased revenues if there is no penalties for a decrease.
     
  5. Weary

    Weary Registered User

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    The owners could gather all their revenue together into one big pile and then split it thirty ways. Then no owner would have to lose millions of dollars.
     
  6. PecaFan

    PecaFan Registered User

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    Um, no. That's the whole problem.

    The league loses around $150 million dollars a year collectively. Splitting it 30 ways makes every owner lose $5 million.

    Spreading out the losses equally doesn't solve anything. It simply puts each owner in the same position, and unites them.

    And they're already united.
     
  7. Weary

    Weary Registered User

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    With the 24% rollback allows the league to be profitable as a whole. The players did their part.

    Now the owners should ensure that every team is profitable. That's the owners part.
     
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