All's Fehr in Love and War (CBA & Lockout Discussion) - Part VII

[mossey3535]

You certainly are missing something here. Owners are spending to the cap, when the team doesn't have the money. They want their team competitive at any cost. In their minds, if they become a solid playoff team, maybe even win the cup, they'll start becoming profitable! If they don't make the playoffs, or the fans still don't come to games, then it's, "oh well, let's cry how poor we are and hammer the players in the next CBA negotiations".

In my mind, you can't just mismanage a team and then blame it on the player's salaries. I think the player's do need to give back a little, but the revenue sharing model makes sense. How is it fair that if the player's gave in, that the remaining 20 teams become profitable (despite poor management/location/performance), and the 10 already immensely profitable teams start raking in even more profit. There needs to be compromise.

But it isn't mismanagement when a team currently HAS to make the playoffs to make a small profit or break even.

Let's say you own a team and you have a mid-tier market. You are doing ok under the system, losing only in the single-digit millions (let's say $5 million a year). You spend like 85% of the cap. In the first years of the cap, the floor was like 41% of the cap. Now, at $54M floor and $70M ceiling it is more like 77% of the cap. The difference as we all know is around $16M.

So at 85% your salary cost is $59.5M. The floor is $53.9M. So you are only spending an extra $6M a year over the cap and you are actually at a pretty high %. There is only another $10.5M to actually spend.

If you were at the cap, you might be making a small $1M profit, or just breaking even. But your team would probably not be that good and you are looking at just trying to maintain your current revenues while working against fan disinterest. Meanwhile, the cap will go up every year if the league revenues grow, but your revenues might now. So the floor will force you to lose money in a year or two anyways.

So by incurring a debt of $5M a year you are probably doing just enough to make the team look ok. If you look at those financial post numbers again, this is pretty consistent with the situations of: DAL (83%, +$18M), COL (78%, +$11.8M), STL (81%, -$11.6M), CAR (86%, -$16.3M), TBL (87%, -$18.7M), NSH (82%, -$18.7M), FLA+CLB+PHX (~85%, >-$30M).

Now, your GM comes to you and says look, give me an extra $5M. We can get player X and he will help us get to the playoffs. All we have to do is frontload his contract and circumvent the CBA, for which there is no penalty to us.

What would you do? You're losing money now. If you spend less, your team is less competitive and you will inevitably lose money later as the floor continues to rise. Another $5M doesn't sound like that much of a gamble to get at least three home playoff dates in the first round if you don't get swept. At $2M a pop, that would recoup your investment right there. You're already losing money, so why not?

Heck, the ceiling is only another $5M on top of that. Why not spend to >95% of the ceiling, and swing for the fences. It's only another $10M, and you could possibly stabilize your team, make the playoffs regularly - which would hopefully increase your regular season revenues too.

Of course it's a gamble. But so is giving away freebies or launching a big marketing campaign or expanding to another location would be in a non-sports business. When so much hinges on whether the club makes the playoffs and when you are constrained to already pay a large amount in player salaries, I could see myself gambling if I owned a team.

I'm sure there are 30 NHL GM's convinced they can turn their teams around with just X more dollars or just by getting Y player. Of course, they can't guarantee that will happen, because those new players could be dogs, or the coach isn't that good, etc. These things are unpredictable, so more often than not the team fails and loses money.

Look, I'm just saying 'well don't give out these big contracts' isn't as simple as it seems because of where the floor is in relation to the ceiling and given the competitive nature of the businessmen and GMs who run the teams. Not to mention that it completely ignores how much the actual cap hits and up-front bonuses are, and the fact that the players are expected to retire far before the contracts are up.

 

[TheKingPin]

This post mirrors my thoughts.

If the owners don't change their approach this could be long and scary

I think we can all agree that a more capitalist and less socialist approach should be naked by the NHL. And that should still happen. But it should happen AFTER the players things are set right. Ie leaving them at 47% sharing. A standard in pro sports. Then off of that ply the survival of the fitest game.

 

[mossey3535]

Hmmm, then how about changing it so that no player can get more than 10% of the cap instead of 20%?

Right now I am pro-owner in the way the lockout is being negotiated, but I strongly disagree.

Stars are arguably the only players worth actually paying. Sid and Ovie are underpaid in relation to what they bring to the league. 20% of the cap is the bare minimum they should be able to get.

In fact if anything the stars should get paid more and the pluggers much less. But of course as they get paid more they drag everyone else up along with them, a la Tiger Woods in golf.

But seriously, right now you could get rid of the bottom six forwards and bottom 2 defencemen on every team and replace them with AHLers and I nobody would notice.

That's also why these monster contracts are ok in my books. Stars get paid, no matter what. It doesn't matter what market you are, if you want a star, you overpay.

 

[RedWingsNow*]

What entitles the players to the extra 14% they are getting over the owners?

If one cannot exist without the other, why is it not 50/50?

The contract they agreed to last time.

At one point, players were receiving 74 percent of the revenue.

All this talk about 50/50 being the magic number is BS. People just like it because it's a nice round number,


The fact is that we're at 57 now. You want to go lower? Then give up something in another area.

These full takeback CBA negotiations are troublesome for the league

 

[Cmoneyflyguy]

Shelly Anderson ‏@pgshelly

More #Penguins Sidney Crosby on lockout: "There’s their deal, and then there’s our deal. There’s no real meeting anywhere [in the middle]."

Season's ****ED

 

[GoJetsGo55]

The contract they agreed to last time.

At one point, players were receiving 74 percent of the revenue.

All this talk about 50/50 being the magic number is BS. People just like it because it's a nice round number,


The fact is that we're at 57 now. You want to go lower? Then give up something in another area.

These full takeback CBA negotiations are troublesome for the league

The 50/50 numbers isn't some BS that was pulled out of my ass because it's a nice round number. It's there because it's fair. If the owners were making more then the players then there would be an issue the other way. Once again, one cannot live without the other. Each takes different risks. I see no reason why one side should make more than the other.

 

[EdAVSfan]

The contract they agreed to last time. At one point, players were receiving 74 percent of the revenue.

All this talk about 50/50 being the magic number is BS. People just like it because it's a nice round number,

Actually, its probably based around the fact that the other major north american sports function at or around 50/50. Its not some random made up number.

The fact is that we're at 57 now. You want to go lower? Then give up something in another area.

Again, actually, theyre at 0/0. The previous contract or CBA, entitles you to very little once it expires. This is a new negotiation where new terms are being proposed (or not being proposed in the NHLPA's situation).

I also have no doubt that if the PA were willing to drop down to 50/50, the league would undoubtedly approach the PA's number of 240M in revenue sharing.

These full takeback CBA negotiations are troublesome for the league

There is really one simple way of solving this negotiation. Increased RS, and a reduction to 50/50. It would solve a majority of teams in the red, and in this scenario, both groups would be unhappy, the NHL and the PA.

In the end, the only deal that will work is where both groups are unhappy with the outcome.

 

[pucka lucka]

Look, I'm just saying 'well don't give out these big contracts' isn't as simple as it seems because of where the floor is in relation to the ceiling and given the competitive nature of the businessmen and GMs who run the teams. Not to mention that it completely ignores how much the actual cap hits and up-front bonuses are, and the fact that the players are expected to retire far before the contracts are up.

Why are we even talking about these big contracts? The teams had to spend 57% of revenue on players. Who cares which players got a bigger piece of it. If anything the veteran fringe players should be angry at their fellow union membership for stealing so much of their pie.

 

[Phil Parent]

Well, they seem to have decided to actually stay in the same room for a while now. I certainly wish they had done that before October 10, but there you go.

Tonight, actual games are being lost, it's no longer just theorethical postponings. Everybody, EVERYBODY starts losing tonight, whether it is money, or return on your investment for the teams who may not make money yet but have done moves to improve their team in hopes of doing better and making some. Players who are in their last contract year have one less game to prove themselves worthy of a better contract or of a new contract at all. Players in their prime may have contracts, but they're losing on becoming bigger stars in game history. Players like Crosby and Markov are losing on a fresh new injury-free season. The Habs have a whole new management staff to debut. Old guys are losing on their last hurrahs and rookies are holding their first breath in.

That's of course, not considering the real victims of this: the team & arena workers, businesses around the arenas, workers in the media and I'm not referring to the well-paid talking heads but rather about the technical staff, and the fans who use hockey as an exhaust for their daily frustrations or boredom.

It's not coincidence that talks are heating up now, because NOW is when the losing starts.

 

[Bubba Thudd]

"When seeking revenge, remember to dig two graves"

 

[mossey3535]

Why are we even talking about these big contracts? The teams had to spend 57% of revenue on players. Who cares which players got a bigger piece of it. If anything the veteran fringe players should be angry at their fellow union membership for stealing so much of their pie.

Because some people think that these massive contracts invalidate the need for the players to take a smaller share of the pie. Which I happen to disagree with.

 

[Nalens Oga]

The 50/50 numbers isn't some BS that was pulled out of my ass because it's a nice round number. It's there because it's fair. If the owners were making more then the players then there would be an issue the other way. Once again, one cannot live without the other. Each takes different risks. I see no reason why one side should make more than the other.

I think 50/50 is fair too if that's where you're beginning with. But if you've already agreed to contracts under 57% and 50/50 would imply a cut in those contracts then it becomes unfair. I think this is what proponents of 50/50 fail to see. They shouldn't have to take a pay cut on a contract unless the business really is losing $ (and I think there's enough there to split it up) or they aren't salaried employees on a contract already agreed to (meaning that if any player who's out of a contract right now receives it based on 50/50 while other contracts are grandfathered then that's also acceptable).

If you're agreeing to a gradual 50/50 drop with revenue growth taken into consideration so that original contract does not need to be cut unless revenues drop off to below whatever amount was being honoured from the original 57% then that's also acceptable (and accounted for via escrow).

Saying that it's a new CBA therefore anything is fair isn't gonna be a starting point to someone who you just agreed to a contract to regardless of whether or not they knew that it might be cut (or they might get extra if revenue increases by a large amt).

Cutting salaries right away is a non-starter for the players and not cutting salaries is a non-starter for Bettman and the owners (I'd only say a minority of owners but we'll never know). So one of those sides needs to flinch off that to get the other to compromise. And unlike the last time where the players flinched, the Bettman is gonna find himself frustrated here because Fehr is as stubborn as he is. Once Bettman makes that no immediate roll-back concession, I think he'll find players are pretty eager to negotiate.

Again, actually, theyre at 0/0. The previous contract or CBA, entitles you to very little once it expires. This is a new negotiation where new terms are being proposed (or not being proposed in the NHLPA's situation).

To a lawyer they're at 0/0 and old salaries are fair game. To a player, they're at 57 and cutting an existant contract isn't fair game. The PA does not see the world from the eyes of this hypothetical starting point just as the NHL doesn't (regarding the salary cap). So it's as frustrating for them I'd guess if someone says that those contracts are fair game for cuts as it is to the NHL when someone brings up the cap.

 

[Chubros]

...

It's not coincidence that talks are heating up now, because NOW is when the losing starts.

Let's hope that the players' refusal to negotiate has been part of a plan that aimed to settle at the last moment. It makes sense: posture, posture, posture, without giving up anything at all until the 11th hour. Then make a deal at the last moment. That way they hope to cede as little as possible and make the NHL wary of pushing for further concessions once the next deal expires.

Unfortunately this could mean that the PA will wait for another block of games to be cancelled and get close the season being scuttled before they look to make a deal.

 

[Tyler Biggs*]

'Fehr has floated the idea that the longer the lockout goes on, the players might seek to make an offer that doesn't include a salary cap' - If Fehr does this we all know that he is purposely sabotaging this NHL season.

 

[SCP Guy]

'Fehr has floated the idea that the longer the lockout goes on, the players might seek to make an offer that doesn't include a salary cap' - If Fehr does this we all know that he is purposely sabotaging this NHL season.

Next step the owners take those nice cushy guaranteed contracts off the table and boom goes the dynamite on the season

 

[Durrr]

'Fehr has floated the idea that the longer the lockout goes on, the players might seek to make an offer that doesn't include a salary cap' - If Fehr does this we all know that he is purposely sabotaging this NHL season.

I think if that were to happen we would see the next season cancelled as well and possibly the end of the league. Do you really think any sponsors will stick around with a league that has missed 3/9 seasons? Its more probable that the owners fold and cut a deal once there is legitimate fear itl be brought up. Right now its smoke and mirrors.

 

[EdAVSfan]

To a lawyer they're at 0/0 and old salaries are fair game. To a player, they're at 57 and cutting an existant contract isn't fair game. The PA does not see the world from the eyes of this hypothetical starting point just as the NHL doesn't (regarding the salary cap). So it's as frustrating for them I'd guess if someone says that those contracts are fair game for cuts as it is to the NHL when someone brings up the cap.

And I agree that players see it as 57/43 and that theyre being dropped is unfair.
But I've also seen that Bettman did take off a portion of rollbacks in the 2nd offer. Yes, the effect was negated in part by the escrow, but it seems the league is willing to work and negotiate on cutbacks.

Unfortunately, with the NHLPA not tabling another offer, the NHL doesnt really have a chance to show whether or not it is willing to remove cutbacks from the table. Even if the NHLPA would put in a proposal which is still along the lines of their first proposal, (delinkage) but with a bit more concesstions towards the owners, it can create an option for the NHL to adopt some of the NHLPA's strategies into its own proposal.

Like ive said before, in either case, they will both need to be unhappy on the agreed-upon future CBA.

If the NHLPA isnt interested in instant cutbacks, then they should be prepared in having quicker drops in the HRR split. If the NHLPA is willing to sacrifice in part into cutbacks, they could probably negotiate a much slower drop off in HRR splits, and increased RS. The problem is, the PA doesnt really seem to be moving in any direction, and their orginal proposal is just sitting there when they were full aware that it would not be accepted.

Everyone knows that the first couple of proposals arent going to liked or appreciated by either side, but if they continue to come with one, eventually you reach a middle ground. Even if the PA's second proposal (which seems ready) is only minor in terms of movement towards the middle, its still baby steps towards a new CBA rather than no steps.

 

[MaskedSonja]

Next step the owners take those nice cushy guaranteed contracts off the table and boom goes the dynamite on the season

Something like that happens we might be talking season(s) plural

 

[TheTakedown]

'Fehr has floated the idea that the longer the lockout goes on, the players might seek to make an offer that doesn't include a salary cap' - If Fehr does this we all know that he is purposely sabotaging this NHL season.

I think this is PR bullcrap...

Are players really dumb enough to go after a salary cap? It's been in place for 7 seasons and they have made more money with it.. They are trying to scare the owners.... and hell, it might work

Smoke and Mirrors, I'm calling it.

 

[alcanalz]

Imagine Gary Bettman and Donald Fehr were not the heads of their respective organizations, ahhhh just some lockout dreaming.

Fire them both, hire Paul Kelly and some other guy who's not poison to negotiations to run the league and boom, no more lockout.

I think this is PR bullcrap...

Are players really dumb enough to go after a salary cap? It's been in place for 7 seasons and they have made more money with it..

Smoke and Mirrors, I'm calling it.

They've made more money with it because revenues have been so high. It's not a stretch to imagine much higher salaries without a cap. That said, they'll never get it and probably won't even go for it.

 

[GoSensGo6172]

Season's ****ED

Yeah, but that is very contradicting. He also said that he believes there will be hockey this season and neither side is prepared to lose an entire season again.

http://www.tsn.ca/nhl/story/?id=407206

 

[Edgar Halliwax]

I think the nuclear option lies elsewhere.

IE, with the fans.

Because I'm realizing this morning that I no longer really give a **** about the league or how this all plays out.

Dado - this may be the first time I agreed 100% with one of your posts.

The longer this goes on - there will be more apathetic NHL fans than ever before - even in Canada ... And that will NOT be good for business.

I'm just sick of this crap. Owners and Players can both go **** themselves for all I care.

 

[TheTakedown]

Dado - this may be the first time I agreed 100% with one of your posts.

The longer this goes on - there will be more apathetic NHL fans than ever before - even in Canada ... And that will NOT be good for business.

I'm just sick of this crap. Owners and Players can both go **** themselves for all I care.

agreed..

When it comes bak, I;'ll be excited... but for now I don't really care to even follow this any more... I just want it to start back up so I can spend time with my Dad and Little brother for some hockey games...

In the mean time, we'll be taking our money elsewhere to the AHL and seeing the Connecticut Whale play in Hartford, CT.

 

[TheTakedown]

Imagine Gary Bettman and Donald Fehr were not the heads of their respective organizations, ahhhh just some lockout dreaming.

Fire them both, hire Paul Kelly and some other guy who's not poison to negotiations to run the league and boom, no more lockout.


They've made more money with it because revenues have been so high. It's not a stretch to imagine much higher salaries without a cap. That said, they'll never get it and probably won't even go for it.

WHich is why I think this is PR garbage.

 

[albator71]

Dado - this may be the first time I agreed 100% with one of your posts.

The longer this goes on - there will be more apathetic NHL fans than ever before - even in Canada ... And that will NOT be good for business.

I'm just sick of this crap. Owners and Players can both go **** themselves for all I care.

I agree, the 04-05 lockout was a necessity, this lockout wasn't necessary, the NHL and NHLPA are playing a very dangerous game imo, both of them are sure that once the lockout is over the fans are going to come back just like in 04-05 but the longer it goes the more "clients" they will lose this time around, fans are feed up with all this ********!!!!