A Misconception About CBA "Loopholes"

Discussion in 'Fugu's Business of Hockey Forum' started by GSC2k2*, Jul 16, 2005.

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  1. GSC2k2*

    GSC2k2* Guest

    I have read repeatedly about the "fact" that the players ran roughshod over the owners during the last CBA because of the players having drafted the language after the fact with built-in "loopholes".

    This is a gross misconception IMO, and is typical of the typical approach in hockey where stuff gets repeated often enough such that it becomes part of the canon (i.e., "Bettman is a basketball guy", after him working in the NBA for 3 years) and is never subjected to critical thinking.

    IMO, there was only one "loophole" drafted into the old CBA - the rookie bonus structure.

    The rest of league salary escalation has been primarily due to the tactics of the players as a whole, rather than the CBA itself. The agents and the PA orchestrated signings to provide maximum benefit to the arbitration period, thus providing beneficial comparables for the process. They also orchestrated signings so as to allow each one to biuld on the other.

    Of course, the occasional serious errors in judgment (i.e., Chris Gratton, Martin Lapointe) assisted greatly as well. They hurt all the more, however, by virtue of the way in which they were subsequently used in other signings and arbitrations.

    That is my take on it. I would defer to anyone else who is aware of any "loopholes", but as i said it was not so much loopholes as tactics that screwed the owners.
     
  2. Brent Burns Beard

    Brent Burns Beard DontTouchMyDonskoi!

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    i agree with your assesment.

    i would like to add, that if you were paying someone (your agent) and an organization (the NHLPA) to represent your interests, would you not expect them to be working on systems to increase your pay. I fail to see why the players should be ashamed of this nor why they shouldnt be allowed to exploit their opportunities to the fullest. Just as you and I are entitled to.

    dr
     
  3. HockeyCritter

    HockeyCritter Registered User

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    Personally I think the antiquated arbitration system was the primary contributor to the exponential growth in salaries. The new baseball style arbitration should remedy that situation.
     
  4. GSC2k2*

    GSC2k2* Guest

    Quite the opposite, actually. Baseball arbitration is unquestionably more inflationary than hockey-style arbitration.

    I posted at length on this before, but the main point is that in baseball style arbitration, offers and asks are driven higher by the fact that the player DOES NOT HAVE TO PROVE THAT HE IS WORTH WHAT HE IS REQUESTING. He only has to prove that he is worth one dollar over the midpoint between what he has asked and the team has offered.
     
  5. GSC2k2*

    GSC2k2* Guest

    What that is a fair point on the surface, any experienced negotiator and dealmaker knows that it is not always appropriate to "exploit ... opportunities to the fullest". While I know that may seem crazy to people who don't do deals for a living, it is the truth. Sometimes it is in your better interest to "leave some money on the table" and there are many reasons why that can be so. This is particularly true when you are negotiating a partnership-type deal, where you have to live with the other side after the execution of the deal. This is the type of situation that you often find in collective bargaining.

    Sophisticated unions know that allowing the employer to make money is never anything but good for the members, and sophisticated employers know that it is often not a good idea to squash and humiliate its employees. Clearly the NHL, having gotten itself into a position of complete domination in the course of the negotiation, took exactly that tack. It is hardly surprising, as they took the approach frlom the beginning 5 years ago and never publicly wavered from the approach that they wanted to craft a win-win document.

    To summarize, it is not a question of whether players should be "ashamed" or "allowed to exploit ... oppportunities". My point has always been that they have taken a very poor tactical approach to making the deal. They took far too combative an approach grounded in old-style union tactics that have for the most part gone by the wayside in collective bargaining (except such as are still found in public sector unions). This is primarily due to Goodenow's lack of a complete game, to put it in hockey terms.

    On a side note, I find it amusing that the players, and posters on this board, give Goodenow slack because he "won" the previous negotiation. While that proposition is in my view demonstrably false, if you even assume that it is true, in business you are not regarded as a good businessman if you obtain an excellent victory and follow it up with a thorough display of incompetence. One of the following happens:

    1. Your boss considers you to have been lucky the first time;

    2. Your boss considers you to be inconsistent and unreliable at best;

    3. Your boss considers you to be not capable of adapting to different situations.

    While it is a truism that you cannot win every time in dealmaking, you can do a good job every time. Goodenow had a chance to secure a draw. Bettman and the NHL gave him every opportunity to do so. Can you imiagine the reaction of the posters here if, after dominating the owners for ten years, goodenow had had the judgment and business acument to know what was coming and negotiate that draw at the appropriate time a coulpe of years ago. To put it in sports terms, a win and a tie will beat a win and a loss every time in the standings.
     
  6. Tawnos

    Tawnos A guy with a bass

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    There was another loophole that had no relation to salaries. That was the fact that teams would trade players on the day of the draft who were set to become free agents a week or so later. They would get a pick in the trade, then the team they traded him to would get a compensatory pick when that player signed elsewhere (Glen Sather did this often). I hope they closed that one up.
     
  7. GSC2k2*

    GSC2k2* Guest

    Yep, although I am referring more to financial loopholes.
     
  8. blitzkriegs

    blitzkriegs Registered User

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    I give you a lot of credit, but attempting to explain what a loophole is on this board and wondering where the 'critical thinking' is a hopeless cause...

    You already got a prime example with the 3rd post. The arbitration system is NOT a loophole, rather it's the design of the system. However, to most people they THINK it is. :shakehead

    And the countless threads by people who have NOT read one lick of this CBA claiming 'possible loophole.' Laypeople in a world they don't understand.
     
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