An idea I haven't heard mentioned anywhere

Discussion in 'Fugu's Business of Hockey Forum' started by mudcrutch79, Jan 3, 2005.

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  1. mudcrutch79

    mudcrutch79 Registered User

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    This is just something I'm throwing out off the top of my head, an idea that's crystallized because of some of the things that have been in the news recently.

    I suspect even the most ardent NHLPA "free market or death" type thinker would acknowledge that the business plans of the various owners are different, and that different realities exist in different marketplaces. To whit, the Phoenix team seems to be in some trouble in part because of things that haven't materialized around the area, such as planned real estate development etc. The business plan (liberal use of the word "plan", I know) there seemed to call for a successful hockey team in a brand new arena to somehow drive up the attractiveness of real estate in the area. You can contrast that with places like St. Louis and Washington, where the teams (to my eye anyway), have essentially been run as hobbies. You've also got places where the teams are run as businesses, with the revenues generated by the team expected to cover the costs of operating it.

    Surely, even the biggest NHLPA supporter could acknowledge that when arbitration surveys a marketplace that includes teams run as hobbies, teams where the team is intended to fuel a boom in real estate and teams run as stand-alone businesses, the results of contracts in the first two places may drive up contracts to prices that are harder to justify when the team is being run as a stand-alone business. This seems pretty evident to me.

    The flipside of that should be, that supporters of the owners understand that a cap set at the level of the lowest common denominator, with limited revenue sharing, like the owners are proposing isn't really fair to the players. It lets some teams rake in absurd profits and reduces the incentive for owners to spend on player recruitment development, leaving aside some of the more controversial arguments about competitive balance.

    The question I have for the board involves looking for a third way. What would be the effect of deleting reference to players on other teams, or limiting it to teams of similar payrolls, and focusing more on where the player falls within his team. In order to equalize between markets, players could be grouped somehow, and any money above that paid to the lowest player in the grouping could be pooled and split amongst those players. That would seem to me to remove the unfairness of a player being tied to a lower revenue/payroll club, while at the same time removing the unfairness of comparable contracts done by guys with pie in the sky business plans. The incentive is still there for each player to push for as much as he can get, although it's been lessened. You might reduce the UFA age by a year in exchange for agreeing to this, and proceed without a cap.

    Does this begin to address the problems? Would it interest you if you were Bettman or Goodenow?
     
  2. txpd

    txpd Registered User

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    you are going to have the league rating a team's business plan and deciding salaries based on that? you are kidding..right? they can't do that. won't do that.

    nice try though. by the way...why would you suggest that washington and st louis are run like hobbies? st louis has been run just like toronto with the same level of success the last 20 years or more. they spend big money and cant quite win. but they compete every year.

    the capitals have an owner just like most other nhl teams owned by individuals. he is no more a hobbyist that the owners of detroit and boston would have business successes that pay for their hockey habit. in the case of the capitals the day to day operations are run by dick patrick of the famous nhl patrick royal family. he has been the president of the team since 1982.
     
  3. mudcrutch79

    mudcrutch79 Registered User

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    It's not "rating" business plans. It's saying "OK, you're spending $50 million on payroll, so player X is worth Y in your payroll structure, while he's worth Z in a lower payroll environment."

    Toronto has revenues that support a huge payroll. St. Louis and Washington. Perhaps instead of hobbyists, I should have termed them "stupid"?

    So? Assuming that's true...how is it at all relevant? Leonsis has big time control-the Jagr move was all him. He's the guy with the ultimate power.
     
  4. nyr7andcounting

    nyr7andcounting Registered User

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    I don't think you could go market by market and determine a player's base salary. What happens when players get traded, does their salary change? What about the fact that bad players on bad teams would be grossly overpaid in some cases? Or vice versa.

    But this idea is something that could work with arbitration. This is a deadly salary trigger that needs to be changed. I've heard everything from totally abolishing it to using the system that MLB uses. How about splitting the league into markets for arbitration? The main problem now is that a player in a small market can have a good season and then relate his stats to a player in a big market, allowing the small market player to demand a salary that isn't possible for his team to pay him. Further, the amount of money and cost of living varies from market to market, so it isn't fair that a player in Edmonton can compare himself to a player in LA or NY or DET, because really Edmonton probably won't be able to pay that player what a big market pays him, nor should they have to. But, what if a 40 point player in Edmonton was only allowed to compare himself, and his hopeful salary, to a 40 point player in Calgary? What if a #3 defenseman in San Jose was only allowed to compare himself to a #3 dman in Phoenix? I think that this would eliminate arbitration as a huge problem for small market teams and prevent players from using arbitration as a way to get a big raise...it would allow it to be used as it was meant to be, to determine the market value of a player.
     
  5. mudcrutch79

    mudcrutch79 Registered User

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    Sure, if they're traded to a team with a greater payroll, let their salary change. It won't have much of an impact though-money above the base goes into the pool shared by comparable players. I suppose it would add money to that pool, but that's about it. I don't see how bad players on bad teams would be overpaid by this-they're being paid in accordance with their place on the team, and then receiving a share of the pool of comparable players.

    You've essentially repeated my exact point, except that I think that it's fair for the players to be paid the same as a comparable player in a large market, if they're going to be tied to the Edmonton's of the world through the age of 29 or 30.
     
  6. nyr7andcounting

    nyr7andcounting Registered User

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    Bad players, on a bad team, would essentially become "good" players...theoretically. If the Rangers traded Jagr and Holik, were horrible next season and their leading scorer ended up being Josef Balej with 40 points, does that mean Balej will be making a couple milliong a year? That's not right, he's not that good. Also, what happens when a team trades for a top player, do the salaries of some players on that team go down? I dunno, it just seems like there would be too much movement on yearly salaries.

    I didn't repeat your exact point because you said this is a way that players throughout the league can be compensated. I said that wouldn't work and than said, however, that this could be a way that arbitration could work. You said nothing about arbitration, I say that a system like this, if used at all, could be used for arbitration.
     
  7. me2

    me2 Calling out the crap

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    Bettman yes, Goodenow no.

    I've pondered it before kept coming back to the position I wouldn't accept it if I was player. Where you have a system with a draft and players are forced to go to a team having different arbitration it is unfair system. If it was voluntary, maybe, but not with a draft. I wouldn't accept it if my work sent me, with no notice and no right to object, to a department where the salary was 50% of what I was making and the work was identical. Would you?

    Players will tank to get off "cheap" teams.

    Clubs will trade players to cheap team who will use arbitration to force down their wages and then trade them back.

    Goodenow would be selling 1/2 his members out to feather the nest of the of 50% if he accepted this plan. He wouldn't do it.
     
  8. mudcrutch79

    mudcrutch79 Registered User

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    The key to the system though is pooling and dividing money amongst players. For the purposes of this example, let's say that Eric Brewer and Bryan McCabe were identifed for the purposes of this example as being comparable players, a pool of two if you will. (Actual skill and money aren't the point). If you look at the NHLPA proposal, you'll see that the comparables that teams and players come up with is pretty similar-this shouldn't be a problem.

    What I'm proposing is that when those two guys go to arbitration, instead of a dollar figure, they're awarded a salary range. Brewer is in Edmonton, a lower payroll team, so he earns the low end of the range. McCabe is in Toronto, a high payroll team, so he earns the high end of the range. McCabe's earnings above Brewers go into a pool divided amongst all of the comparables.

    This is a rough idea, but the idea is to allow players in all markets to benefit from the idiot owners, which is what the PA is really fighting to preserve, while preventing those idiots from screwing it up for other people. I'd leave UFA the same-I don't think that the ability to sign 31 year olds is that special. The NHL should be interested in this because it doesn't involve revenue sharing, protects teams from idiot decision by other teams and puts some systemic restraint on salaries.

    The NHLPA loses the ability of dumb owners to drive salaries higher for every team in the league, which no doubt hurts them. The NHL isn't going to get an idiot-proof system; you can still run a team into the ground. This just means that it's your decisions that will do it, and not a system driving up the price of good players.

    As I said, this is a rough idea, but I think there's some merit to it.
     
  9. PecaFan

    PecaFan Registered User

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    You've basically identified why arbitration fails to be fair. It only examines comparables on the player sides, it doesn't use comparables for markets.

    Rather than a complicated system, it seems far more simple and fair to just ditch arbitration. Let the true market wage be set by a player and a GM coming to an agreement. Players can withhold services if the GM lowballs, GM's can withhold pay if the player aims too high.

    Happens hundreds of times a year without arbitration.
     
  10. I think everyone sees that the arbitration system needs to be reworked if it remains. The league wants to get rid of it altogether and the players want to keep it (both sides this is obvious). And I like the idea of using comparable markets when comparing players in the arbitration process. I just don't know if it'll work right.

    The idea I came up with recently was this: players can only file for arbitration once after they're 2nd contract, extend the rookie contract to 4 yrs, reduce UFA age to 29, and using an arbitration system like baseball's (choose either player's or team's proposal). By reducing the UFA to 29, a player would at least be property of a team for 10 yrs approximately. The team wouldn't have to deal with arbitration for at least half that time (5 yrs) and only once in his career. This would make the players think twice about going to arbitration unless they're a superstar. It would reduce the inflationary style of arbitration but wouldn't eliminate it. And it seems fair to both sides to me.
     
  11. Tom_Benjamin

    Tom_Benjamin Registered User

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    For sure.

    It is not evident to me. I want some evidence. There is no doubt that Joe Quality Player is worth more in New York than in Edmonton. He can generate higher revenues there. Ceteris paribus, they are willing to pay more. That is logical.

    It is not, however, logical to pay more when they have no reason to pay more. If the CBA gives the Rangers the leverage to hold Joe to the same salary similar players would get in Edmonton, Nashville and Vancouver, why would they not do it? It is one thing to pay Bobby Holik a ridiculous amount when bidding against another team willing to pay him nearly as much.

    But why would the Rangers pay Joe more than what an arbitrator would give him? Signing Holik was stupid but paying more for a restricted free agent simply because they can afford to would be beyond stupid.

    Furthermore the big spending teams are all veteran teams. They have a disproportionate number of players at or near free agency and a shortage of arbitration eligible guys. The teams with the vast majority of arbitration eligible players are not the big spenders. They are the smaller market teams.

    Tom
     
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