Friedman: NHL and NHLPA "quietly renegotiating CBA" (upd: neither party opts out for 2020)

[MNNumbers]

Too bad I can't 'like' this post more than once. It's pretty easy to not go on strike when you're getting a 57% share. Fehr shouldn't be praised for that.

I thought it was brilliant when the owners started out with a 57% share offer. Funny how it's belligerent and insulting for the owners to ask for that but not the players.

History:
In the days with no cap, the players at max were receiving near 70% of HRR
2005 CBA this diminished to 57%
Now it's 50%

I'm sure I'm misunderstanding the language here, but suggesting the players were somehow selfish and 'asking' for 57% doesn't seem quite right to me. What actually happened was market forces in play in a time with no cap at all ran salaries very high. Teams wanted the best players, fans demanded ownership try to win, so teams paid more than was fiscally responsible because to not do so would be to lose your fan base. And, for that cause, the cap was born. The 70% never was a negotiated number, it simply was the way things turned out in a completely free market.

I'm not defending the players here. I simply believe that the reality is that, as long as the CBA negotiations are framed as a fight for money, both sides are responsible for impasses, and nothing will ever happen early because of leverage.

This time, however, something could happen early because the issue isn't really cold, hard cash. It's math.

However, there are a few comments in that Fehr interview which concern me.

 

[gstommylee]

History:
In the days with no cap, the players at max were receiving near 70% of HRR
2005 CBA this diminished to 57%
Now it's 50%

I'm sure I'm misunderstanding the language here, but suggesting the players were somehow selfish and 'asking' for 57% doesn't seem quite right to me. What actually happened was market forces in play in a time with no cap at all ran salaries very high. Teams wanted the best players, fans demanded ownership try to win, so teams paid more than was fiscally responsible because to not do so would be to lose your fan base. And, for that cause, the cap was born. The 70% never was a negotiated number, it simply was the way things turned out in a completely free market.

I'm not defending the players here. I simply believe that the reality is that, as long as the CBA negotiations are framed as a fight for money, both sides are responsible for impasses, and nothing will ever happen early because of leverage.

This time, however, something could happen early because the issue isn't really cold, hard cash. It's math.

However, there are a few comments in that Fehr interview which concern me.

Its fehr. He'll spin anything to to show that the league is the cause of all issues CBA related. He'll find the tiniest issue and cause a lockout out of it.

 

[MNNumbers]

Its fehr. He'll spin anything to to show that the league is the cause of all issues CBA related. He'll find the tiniest issue and cause a lockout out of it.

This being the Business forum, I prefer to draw my conclusions from what actually happens, rather than pre-conceived notions.

So far, there isn't anything in Fehr's time at the NHLPA which indicates surely that he is a bigger problem than Bettman or any of the other players.

Let's look from the players' view:
Would you want a leader who simply accepted a 43/57 split because the owners suggested it? No.
Would you want a leader who didn't stand firm for some provisions of working conditions for more than a week of lost games? No.
Would you want a leader who might suggest that the owners share more revenue among themselves, as a way to encourage markets like Arizona to spend more money? Yes.
So, from their view, one cannot say that Fehr is doing a bad job.

From the owners' view:
Would you want a commissioner whose term has led to a several fold increase in media contracts, HRR, and franchise values? Yes
Would you want a commissioner whose term has led to a limit on ever-escalating salaries? Yes.
So, from their view, Bettman is doing well.

The only ones upset by either, for the most part, are the fans. And, that's because, largely, our paycheck is not at risk here.

To comment further, I am not sure that the matter of the 50/50 split has really sunk in for Fehr. That is a problem. Here's why....
Even suggesting revenue re-distribution doesn't affect that. If Arizona spends 10M more a year on salaries, that's really 10M less than is available to other players.

The problem for the players really comes down to this:
If the cost certainty remains in the CBA, then any rules that are made with respect to RFAs, UFAs, etc.... really just amount to different rules for how the players split their piece of pie. They won't give any means for actual salaries to rise. That's just math.
So, what is the incentive for owners? Well, less player movement means that each individual owner keeps his home-grown stars at a smaller cost, and seems to have more available to pursue 1 or 2 deals to improve his team. Obviously, since every team is doing this, it's a zero sum game. But, I think that is the owners' motive for things like RFA rules.
For the players that means the question works like this: If I get RFA status, and the rules for player movement are different, I might actually make a little more. But, someone else will make less. Do I want that?
And, this is basically how it goes for EVERY piece of the puzzle when player costs are fixed.

This is the reason that the union is basically up against it. They may care about certain work-place rules like days off, or pre-season camps, or RFA rules, but these are really minor things. The big one, $$$, isn't really even up for negotiation unless the union decides to go nuclear, and that would have HUGE repercussions....

Once the players allowed the %HRR into the CBA they gave away the farm. Everything else is crumbs.

 

[Filthy Dangles]

Was the lower Cap Escalator that NHLPA agreed to this year due to the dreaded Escrow payments? I really don't understand the finer points of the Salary Cap, but in my limited understanding, it seems there would be a compromise.

Lower Cap probably means lower Escrow payments as Teams are spending less money so less would have to be taken out to reach that 50% HRR projection. On the other hand, higher escalator would let teams spend more and allow current FA to get higher salaries but then escrow payments would probably be higher.

 

[MNNumbers]

Was the lower Cap Escalator that NHLPA agreed to this year due to the dreaded Escrow payments? I really don't understand the finer points of the Salary Cap, but in my limited understanding, it seems there would be a compromise.

Lower Cap probably means lower Escrow payments as Teams are spending less money so less would have to be taken out to reach that 50% HRR projection. On the other hand, higher escalator would let teams spend more and allow current FA to get higher salaries but then escrow payments would probably be higher.

You've got it exactly....

Let's say, for sake of argument, that the salary number associated with league wide HRR next year is 75M (this may be reasonably close). Let's also say that all the teams spend to the cap ceiling.

Now, compare:
With a small escalator, the cap is 80.5M, so the players will lose 5.5M per team in escrow. This is somewhere near 7% of their contracts. Since prior contracts have most GMs up against the cap, new free agent signings will be for smaller salaries because teams don't have room.

Now, increase the escalator so that the cap is 85M. The extra 4.5M per team goes largely into the pockets of new free agents, but.....players will lose 10M per team in escrow - 15% of contracted salaries. These 10M come from everyone, including the players who were on existing contracts.

Comparatively, what this means is that, effectively, the higher the cap goes, the more players with existing contracts are paying directly to the new free agents. Think about that.....

If I am a free agent right now, and I sign, my salary this year is, effectively, paid for by the team up to a certain point, and after that, the last little bit doesn't come from my owner. It comes from my teammates because of escrow. Again, think about that....

And, you probably realize another reason the players want to decrease escrow.

 

[Ted Hoffman]

Let's look from the players' view:
Would you want a leader who simply accepted a 43/57 split because the owners suggested it? No.
Would you want a leader who didn't stand firm for some provisions of working conditions for more than a week of lost games? No.
Would you want a leader who might suggest that the owners share more revenue among themselves, as a way to encourage markets like Arizona to spend more money? Yes.
So, from their view, one cannot say that Fehr is doing a bad job.

Plus, he got them high quality bath towels. You can never discount the value of that. [And yes, I'm going to mock him endlessly for this.]

However, as a player I would have wanted my leader to:
-- Fight for more reasonable terms on restricting contract lengths
-- Have the vision to address escrow issues [which at the time were starting to be a concern] instead of commenting mindlessly about getting "full dollar" on contracts without a solution as to how that was supposed to happen
-- Fight to hold the owners at least partially accountable if [when] they overspent the prescribed percentage of revenues
-- Fix the hole in RFA qualification where a player can end his entry-level contract and not qualify to be a RFA
-- Fight for improved qualifying offers to RFAs
-- Push for lower compensation on offer sheets to RFAs [including allowing teams to use picks other than their own for compensation purposes]
-- Push for better [read: more even across the calendar] scheduling, including [but not limited to]: prohibiting playing 5 games in 7 days, very strict limits on 4 games in 6 days, and a maximum number of instances of playing 3 games in 4 days. [No, instead Fehr later got them 5 mandatory off-days during the season ... which then compressed the rest of the schedule more and increased the number of instances of 3-in-4s, 4-in-6s and 5-in-7s]

I might have also wanted my leader to fight back against the provision in the cap that says "if a player on a 1-way contract is outside the NHL, the excess of his cap hit over $925,000 counts against the cap" because that ultimately reduces the amount of cap dollars available for teams and consequently reduces the number of dollars available to players actually playing in the NHL. [The solution here is simple; I'll let you all figure it out - but I'll give you a massive hint: at the end of the contract, "cap dollars incurred" should equal "dollars earned while in the NHL."]

I can probably go on and on for a while on things the players should have fought for in the last CBA. But again, ........ high quality bath towels. And, a fat paycheck for himself and a fat paycheck for his brother. Nice work, Don.

The only ones upset by either, for the most part, are the fans. And, that's because, largely, our paycheck is not at risk here.

100,000% this. The fans don't run the league: the owners do. The players can [should] fight for better conditions, but the totally half-assed approach that got used the last time hurt them even more. But what the fans want is largely irrelevant - and based on what I've seen for "solutions" to "problems" over the years around this site, I'm convinced if you let the fans in general decide things they would have the league wrecked within 5 years, if it took that long.

 

[TheWhiskeyThief]

This being the Business forum, I prefer to draw my conclusions from what actually happens, rather than pre-conceived notions.

So far, there isn't anything in Fehr's time at the NHLPA which indicates surely that he is a bigger problem than Bettman or any of the other players.

Let's look from the players' view:
Would you want a leader who simply accepted a 43/57 split because the owners suggested it? No.
Would you want a leader who didn't stand firm for some provisions of working conditions for more than a week of lost games? No.
Would you want a leader who might suggest that the owners share more revenue among themselves, as a way to encourage markets like Arizona to spend more money? Yes.
So, from their view, one cannot say that Fehr is doing a bad job.

From the owners' view:
Would you want a commissioner whose term has led to a several fold increase in media contracts, HRR, and franchise values? Yes
Would you want a commissioner whose term has led to a limit on ever-escalating salaries? Yes.
So, from their view, Bettman is doing well.

The only ones upset by either, for the most part, are the fans. And, that's because, largely, our paycheck is not at risk here.

To comment further, I am not sure that the matter of the 50/50 split has really sunk in for Fehr. That is a problem. Here's why....
Even suggesting revenue re-distribution doesn't affect that. If Arizona spends 10M more a year on salaries, that's really 10M less than is available to other players.

The problem for the players really comes down to this:
If the cost certainty remains in the CBA, then any rules that are made with respect to RFAs, UFAs, etc.... really just amount to different rules for how the players split their piece of pie. They won't give any means for actual salaries to rise. That's just math.
So, what is the incentive for owners? Well, less player movement means that each individual owner keeps his home-grown stars at a smaller cost, and seems to have more available to pursue 1 or 2 deals to improve his team. Obviously, since every team is doing this, it's a zero sum game. But, I think that is the owners' motive for things like RFA rules.
For the players that means the question works like this: If I get RFA status, and the rules for player movement are different, I might actually make a little more. But, someone else will make less. Do I want that?
And, this is basically how it goes for EVERY piece of the puzzle when player costs are fixed.

This is the reason that the union is basically up against it. They may care about certain work-place rules like days off, or pre-season camps, or RFA rules, but these are really minor things. The big one, $$$, isn't really even up for negotiation unless the union decides to go nuclear, and that would have HUGE repercussions....

Once the players allowed the %HRR into the CBA they gave away the farm. Everything else is crumbs.

The problem was that maybe a third of the league teams were having problems staying in business with the cost structure at the time.

Now they (mostly)don’t. Arizona is still a mess, but turning the corner.

The lockouts were the players being sucked into a civil war amongst the owners.

Now the civil war is in the NHLPA regarding escrow.

The areas of expanding/defining HRR are looking at how teams like Winnipeg are using their AHL club to split overhead costs on the physical plant, eGaming, future gambling/fantasy splits and whatnot are relatively straightforward.

Assigning blame is a fools errand.

 

[gstommylee]

Here's the issue Fehr always likes to wait till the last second when its basically already too late to try to get as much leverage as he can. I don't see that changing with him. I see another lockout happening.

 

[MNNumbers]

Plus, he got them high quality bath towels. You can never discount the value of that. [And yes, I'm going to mock him endlessly for this.]

However, as a player I would have wanted my leader to:
-- Fight for more reasonable terms on restricting contract lengths
-- Have the vision to address escrow issues [which at the time were starting to be a concern] instead of commenting mindlessly about getting "full dollar" on contracts without a solution as to how that was supposed to happen
-- Fight to hold the owners at least partially accountable if [when] they overspent the prescribed percentage of revenues
-- Fix the hole in RFA qualification where a player can end his entry-level contract and not qualify to be a RFA
-- Fight for improved qualifying offers to RFAs
-- Push for lower compensation on offer sheets to RFAs [including allowing teams to use picks other than their own for compensation purposes]
-- Push for better [read: more even across the calendar] scheduling, including [but not limited to]: prohibiting playing 5 games in 7 days, very strict limits on 4 games in 6 days, and a maximum number of instances of playing 3 games in 4 days. [No, instead Fehr later got them 5 mandatory off-days during the season ... which then compressed the rest of the schedule more and increased the number of instances of 3-in-4s, 4-in-6s and 5-in-7s]

I might have also wanted my leader to fight back against the provision in the cap that says "if a player on a 1-way contract is outside the NHL, the excess of his cap hit over $925,000 counts against the cap" because that ultimately reduces the amount of cap dollars available for teams and consequently reduces the number of dollars available to players actually playing in the NHL. [The solution here is simple; I'll let you all figure it out - but I'll give you a massive hint: at the end of the contract, "cap dollars incurred" should equal "dollars earned while in the NHL."

Thanks for the comments MudACAS.... Here's the thing, though.
--The 2nd and 3rd of your points have to do with escrow. There is no way the owners will allow themselves to be responsible for escrow over-salaries. So, that's really the current discussion, imo.
--The RFA points (4 through 6) all SHOULD be more important to the players. To me, having them all the way they are really makes things easy for GMs. In the big picture, the owners shouldn't care. Change all of them you want, and it isn't going to change much of anything in their bottom line.
--Scheduling (point 7): The foolish PA actually wanted the reverse: A week long vacation in the middle of the season. I think that the league wants more games in Feb and March if they can get it because there is no football interference. But that would be easily done. There are roughly 9 weeks available from Super Bowl to season's end for NHL. Make all teams play 4 games in all of those weeks (roughly). That's a single back to back each week, and shouldn't require 4 in 5's or 5 in 7s. (At worst you might have....Mon off, Tues game, Wed game, Thurs off, Fri game, Sat game, Sun off, Mon Game....). And, that leaves lots of time for the other 47 games. LOTS of time. It should be easy. It's what I would want as well.
--As far as the last thing.....In my world, I think having a rule against contract values varying very much from year to year is good (that's the other 50% rule). Since that rule is in place, it should be easy to do: Salary paid is the same as cap hit as long as you average the signing bonus. The situation you describe is not one with which I am familiar. But all the loopholes are crazy.

I can probably go on and on for a while on things the players should have fought for in the last CBA. But again, ........ high quality bath towels. And, a fat paycheck for himself and a fat paycheck for his brother. Nice work, Don.

Agree.

100,000% this. The fans don't run the league: the owners do. The players can [should] fight for better conditions, but the totally half-assed approach that got used the last time hurt them even more. But what the fans want is largely irrelevant - and based on what I've seen for "solutions" to "problems" over the years around this site, I'm convinced if you let the fans in general decide things they would have the league wrecked within 5 years, if it took that long.

Also, agree.

 

[LeHab]

I might have also wanted my leader to fight back against the provision in the cap that says "if a player on a 1-way contract is outside the NHL, the excess of his cap hit over $925,000 counts against the cap" because that ultimately reduces the amount of cap dollars available for teams and consequently reduces the number of dollars available to players actually playing in the NHL. [The solution here is simple; I'll let you all figure it out - but I'll give you a massive hint: at the end of the contract, "cap dollars incurred" should equal "dollars earned while in the NHL."]

Then you have GMs burring contracts in AHL like we saw under previous CBA. The so called "Wade Redden Rule"

 

[Ted Hoffman]

Then you have GMs burring contracts in AHL like we saw under previous CBA. The so called "Wade Redden Rule"

Redden's contract was front-loaded, and it gave the Rangers a $3 million cap benefit after the first two years. The two years where his salary was the same as his cap hit, the team was not realizing any savings on the cap. [I'm thinking of "savings" as the difference between salary and cap hit, not "none of the dollars would count against the cap."] If he had just played out the rest of his contract in the minors, putting him in the minors should have resulted in that cap benefit coming on the books at some point. The buyout of his contract happened to ensure that the amount of salary he collected while in the NHL [including his buy-out amount] equaled the number of cap dollars incurred against the cap.

However, that isn't always going to be the case. If the Rangers had stuck him back in the minors for '12-13 and then bought him out at season's end, Redden would have collected about $19.3 million in salary while in the NHL + the buyout dollars, while the Rangers would have only incurred about $17.8 million in cap dollars. That's a $1.5 million difference that should have been reflected somewhere. How that should be done is open to debate, but I think it needs to be accounted for somehow.

Which then reminds me, as the head of the NHLPA I probably would have pushed for some provision for a player on a 1-way contract to terminate his contract once in his career if he's assigned outside the NHL. [The new Group 5 free agency, since the current definition can never happen.]

 

[Ted Hoffman]

--The 2nd and 3rd of your points have to do with escrow. There is no way the owners will allow themselves to be responsible for escrow over-salaries. So, that's really the current discussion, imo.

That gate would flip both ways, though. If the owners didn't end up contracting the players to get 50%, they'd have no obligation to cut a check to the players.

Would they have bitten on it? I don't know, but I would have thrown it out and pressed on it. Even if they're half-responsible, that's better than zero responsibility and shoving it all on the players to deal with.

--As far as the last thing.....In my world, I think having a rule against contract values varying very much from year to year is good (that's the other 50% rule). Since that rule is in place, it should be easy to do: Salary paid is the same as cap hit as long as you average the signing bonus. The situation you describe is not one with which I am familiar. But all the loopholes are crazy.

I agree, there does need to be a limit on variation in salary by year. What was in the 2005 CBA was probably too permissive; what's in the 2013 CBA is probably too restrictive. Signing bonus is part of salary, it's just a question of timing in payments. I think its importance is going to be grossly blown out of proportion by everyone. I don't care if some team wants to pay all its players a minimum salary and everything else in signing bonus; if they're stupid enough to shell out some $60 million at the start of a league year before the first dollar in revenue has come in the door, let them deal with the repercussions of it.

That said, I would make signing bonuses subject to potential escrow, and signing bonuses contracted but not yet paid subject to buyouts at the same rate as "normal" salary. The owners are probably going to claw that one back, and I don't see the players winning that battle. [I won't be surprised to see a limit on signing bonuses, because ... it doesn't really change anything in the cap system, it's a feel-good "save us from ourselves" measure and we're all about feel-good measures instead of substantive, meaningful changes and exercising self-discipline.] That's why the players need to focus on grabbing meaningful gains elsewhere.

 

[LeHab]

Which then reminds me, as the head of the NHLPA I probably would have pushed for some provision for a player on a 1-way contract to terminate his contract once in his career if he's assigned outside the NHL. [The new Group 5 free agency, since the current definition can never happen.]

NMC is there to protect veterans from being assigned elsewhere. Up to individual players to negotiate that clause in contracts.

If the player were to terminate a contract, how do you handle outstanding cap? How many would be willing to give up guaranteed money?

 

[TheWhiskeyThief]

Signing bonus is part of salary, it's just a question of timing in payments. I think its importance is going to be grossly blown out of proportion by everyone. I don't care if some team wants to pay all its players a minimum salary and everything else in signing bonus; if they're stupid enough to shell out some $60 million at the start of a league year before the first dollar in revenue has come in the door, let them deal with the repercussions of it.

That said, I would make signing bonuses subject to potential escrow, and signing bonuses contracted but not yet paid subject to buyouts at the same rate as "normal" salary.

Signing bonuses are not salary for tax purposes and it’s a trade off for the teams with money to manipulate the cap. The bonuses are setup so they vary from year to year so tax authorities don’t see it as a dodge.

Escrow for bonus heavy players just comes heavier out of a player’s paragraph 1 salary to the point that a minimum paragraph 1 player beyond taxes and escrow they’re just goosing their per diems

 

[LadyStanley]

--Scheduling (point 7): The foolish PA actually wanted the reverse: A week long vacation in the middle of the season. I think that the league wants more games in Feb and March if they can get it because there is no football interference. But that would be easily done. There are roughly 9 weeks available from Super Bowl to season's end for NHL. Make all teams play 4 games in all of those weeks (roughly). That's a single back to back each week, and shouldn't require 4 in 5's or 5 in 7s. (At worst you might have....Mon off, Tues game, Wed game, Thurs off, Fri game, Sat game, Sun off, Mon Game....). And, that leaves lots of time for the other 47 games. LOTS of time. It should be easy. It's what I would want as well.

That's a really rough schedule. Tu-Th-Sa/Su then day off Monday? And with traveling, really brutal. (Day off = no travel) Teams probably would cancel morning skate for those months to allow the guys more rest (with media availability 2 hours before game only). Or would you prefer Tu-We and Fr-Sa, two back-to-backs each week?

It's a hard enough schedule down the stretch now, and guys get hurt from all that playing (and run down from the travel, especially the west).

(The schedule maker usually allows two days of travel for cross country, each way. That allows the western teams, especially the 5 PT teams, a chance to acclimate to ET, and vis versa.)

And you're proposing an even more brutal schedule? At what cost (personnel-wise)? How many injury call ups? Or serious enough injuries that a guy is lost for the season?

 

[Ted Hoffman]

NMC is there to protect veterans from being assigned elsewhere. Up to individual players to negotiate that clause in contracts.

If the player were to terminate a contract, how do you handle outstanding cap? How many would be willing to give up guaranteed money?

On NMCs: yes, they're there for individual negotiation - and there's also no obligation for the team to offer them.

On contract termination, the outstanding cap dollars - as in "total cap dollars remaining on the contract" - isn't the item to focus on. The outstanding cap savings/charge - the difference between cap dollars incurred and salary expended while the player was in the NHL - is. Spread that amount over the remaining life of the now-terminated contract.

How many players would be willing to give up guaranteed money? Even if it's just a few, at least give them that option when they get put in a situation they didn't expect from either their own drop in ability to play or the team's self-imposed cap hell issues. [The first time. They end up there a 2nd time, ... sorry, you had your chance to get out of the AHL, you should have been a little smarter the 2nd time around.]

Signing bonuses are not salary for tax purposes and it’s a trade off for the teams with money to manipulate the cap. The bonuses are setup so they vary from year to year so tax authorities don’t see it as a dodge.

Escrow for bonus heavy players just comes heavier out of a player’s paragraph 1 salary to the point that a minimum paragraph 1 player beyond taxes and escrow they’re just goosing their per diems

The NHL is not in the business of correcting taxation issues. [See: every discussion on why the salary cap should supposedly be adjusted for tax differences in all the locations where teams play. To put it bluntly: it would be a nightmare to administer.] Escrow for bonus-heavy players shouldn't act any differently from escrow for salary-heavy players - but as you point out, in the current situation it does increase the escrow burden on everyone else. That's why I fully expect the next CBA to make all bonus payments - signing, performance, or otherwise - subject to escrow. I also expect signing bonuses to be treated just like normal salary and factored back in for buyout purposes.

Further, I'm pretty sure that signing bonuses don't actually manipulate the cap. I feel like I proved this out a while back: all it does is ensure a much more severe cap hit in the event of a buyout, but the formula still ensures that $ paid = $ incurred.

 

[MNNumbers]

That's a really rough schedule. Tu-Th-Sa/Su then day off Monday? And with traveling, really brutal. (Day off = no travel) Teams probably would cancel morning skate for those months to allow the guys more rest (with media availability 2 hours before game only). Or would you prefer Tu-We and Fr-Sa, two back-to-backs each week?

It's a hard enough schedule down the stretch now, and guys get hurt from all that playing (and run down from the travel, especially the west).

(The schedule maker usually allows two days of travel for cross country, each way. That allows the western teams, especially the 5 PT teams, a chance to acclimate to ET, and vis versa.)

And you're proposing an even more brutal schedule? At what cost (personnel-wise)? How many injury call ups? Or serious enough injuries that a guy is lost for the season?

Sorry, LS. You missed the point. Or, I did a poor job of explaining my meaning. My meaning was simply to agree with Mud the ACAS that there is too much compaction. A 5 in 7 should never have to happen. And, only rarely would you get a 4 in 6. From my limited memory, the Wild have average just around 4 in 7 in Feb and March. I am sure the reason is that the league wants the games when there isn't football.

But in no way am I assigning such a schedule. I'm just saying.....the negotiated week off mid-season serves to make a couple of other weeks later much harder.

And, to further explain what wasn't explained very well......

If a schedule goes with 4 in 7s for a few weeks, then the worst that can happen to the players is that each team ends up with one week, the likes of which I described above.

Also, note that we are talking about the end of the season, in which the vast majority of games are not non-conference, so that diminishes the cross country travel.

Again, sorry for the misunderstanding.

 

[jonathan613]

One issue that i think is absolutely critical is that the next cba have NO opt outs. From a business standpoint, if i am a network thinking about making a firm investment in televising games, i want certainty that the NHL is committed to at least 10 years. To me, considering when that the next tv contract with nbc is up after the 2020-2021 season and considering the overall health of the game, i am not accepting a bandaid solution where the 2 sides simply agree to not opt out in 2019 and wait till 2022 to renegotiate a long term CBA. TV bids will not be as generous if only 1 year (2021-2022) is guaranteed in a deal.

Regarding escrow, i would suggest a different way of thinking: Though, escrow seems complicated to understand, I would propose that instead of thinking about things as a 50/50 split between players and owners, I would propose that we should consider applying a 40/40/20 model. Salary caps would be lower-calculated at 40% of revenue, but it would all be guaranteed. Owners would be paid the same amount throughout the year as players are from the actual revenue that year. The balance of the revenue that is left at the end of the year would be split equally between NHL owners and the NHLPA. Then it would be up to the NHLPA internally to decide what to do with the end of year "bonus payment". Same thing for the NHL owners who would not need to consult with the NHLPA as far as what to do with their portion.

I imagine that the NHLPA would likely simply divide their bonus share proportionally among the players according to what they are supposed to make that year. In the real world, maybe 45/45/10 would work. This would eliminate the need for escalators as we would no longer need to be "projecting" growth. I know there would be a question of how such a system could be applied to handle long term contracts being signed now that are already on the books that were negotiated based on an old 50-50 model. I would think that if we used a 40/40/20 model that if had a player who is signed for the next 4 years at 5 million per year, that their salary would be treated as if they signed a 4 year 4 million dollar contract. Then they would be hopefully paid out the remaining million at the end of the year as a bonus.

OK I am done rambling and apologize if none of this makes sense.

 

[Ted Hoffman]

I don't get what happens with the 20% after you set the salary cap. Owners don't get "paid" anything. They collect all the money. If the players are getting 40%, the owners are keeping the other 60%. [I'll let you figure out if the players want to have to wait for more money to flow in, or if they'd rather have that sooner.] They're certainly not going to let a 4x5 contract be treated as a 4x4 and hope that the other $1 million shows up... though, they're arguably doing that when they have to escrow - but your description of this is more punitive to the players and they'll fight it tooth and nail.

Growth always has to be projected. The cap is set on projected revenues for the upcoming year; that means taking the past year's numbers and making an adjustment of some sort. If the cap were merely set on the past year's revenues, the players' share could be under-estimated. [As long as teams keep overspending the midpoint, it's less likely to happen.] The players' share is based on actual contract dollars paid [while in the NHL] for the current year divided by actual revenues in the current year. You're certainly not setting 2018-19's cap number off 2017-18 revenues. That's missing the growth in '18-19 revenues and the projected growth for '19-20. That mismatches revenues and expenses.

The key is setting that growth factor as accurately as possible. Using a fixed number is easy, but can miss reality. Using the past year's growth rate as the starting proxy is more reasonable, but still requires some judgment.

 

[jonathan613]

I was not saying the owners would be keeping 60%. The owners would have to agree in this scenario to have a portion of their take held in escrow as well.

The other option to all of this is to not hold anything in escrow, but that the potential losses owners would have to absorb would then be applied negatively against projected revenue when setting the following years cap.

I disagree that growth always has to be projected. It may be better to be more fiscally conservative as projected growth that fails to materialize leads to deficits and in my scenario above the NHLPA could use some of this money that they would get at the end of the season if need be to provide players some protection against a future lockout.

 

[MNNumbers]

jonathan -
Points for thinking outside the box....
But I don't think there is any motivation in the owners to do it.

I really think that the matter comes down to this:
The players think escrow is a problem. The owners have no reason to think so.
In order to rectify the 'problem', the players are going to have to accept a slow growth in salaries (or a freeze, or a rollback) until the growth of HRR catches up with amount of escrow losses which they seek to eliminate....

Again..... If escrow losses are 10% now, how much are the players willing to accept? 3%? Even 0 would be possible, if the players are willing for 10-15% to be held until the end of the year. Whatever the number, the math goes like this:

Escrow: 10%. Cap ceiling = 80M. Actual spending = ~77M. HRR dictated salary available = ~69M.
If the players want:
5% escrow....Then spending can be 69M *1.05 = 72.5M. And, the cap ceiling for such would be about 75M.
3% escrow...Then spending can be 69M*1.03 = 71M. And, the cap ceiling would be about 73.5M
0% escrow...Then spending can be 69M. Cap ceiling would be about 71.5M

All of that works, provided 2 things:
1- The BOG and the PA agree to a redefinition of the cap ceiling like this: Take the projected HRR for next season and multiply by 1.03 and that's the 0% escrow number. Increase according to what the players want for escrow. (5%, 3%, whatever). The result is the cap ceiling, and the floor is 30% of that.
2- That the players are willing to allow the cap ceiling to freeze or grow very slowly until league wide HRR grows to equal the number produced by the new way of calculating the cap ceiling.
We are probably talking about a 3-4 year freeze or extremely slow growth in cap ceiling here.

That's all. Really, it's simple.

 

[Ted Hoffman]

I was not saying the owners would be keeping 60%. The owners would have to agree in this scenario to have a portion of their take held in escrow as well.

Yeah. ... no, the owners aren't giving that even a moment of thought. They aren't escrowing anything unless it's money to each other, and that might still be questionable. They're sure as hell not putting money somewhere to help the NHLPA protect itself in the event of a future lockout.

And yes, growth has to be projected as long as there is linkage between revenues and player salaries. Want to remove that? Come up with some other way to ensure the players' share doesn't go over some percent and the players are guaranteed a certain percent, without significant variance in either. Your idea? Far too much potential variance, and with the owners having linkage in place they're not giving it up unless they can get something that gives them even more control over player salaries without putting them in a potentially worse situation.

 

[MNNumbers]

Yeah. ... no, the owners aren't giving that even a moment of thought. They aren't escrowing anything unless it's money to each other, and that might still be questionable. They're sure as hell not putting money somewhere to help the NHLPA protect itself in the event of a future lockout.

And yes, growth has to be projected as long as there is linkage between revenues and player salaries. Want to remove that? Come up with some other way to ensure the players' share doesn't go over some percent and the players are guaranteed a certain percent, without significant variance in either. Your idea? Far too much potential variance, and with the owners having linkage in place they're not giving it up unless they can get something that gives them even more control over player salaries without putting them in a potentially worse situation.

For what it's worth, I concur completely with this. The only non-escrow method I have seen works like this:

1- Take your absolute best prediction of the next year's HRR (and, I mean make it good, because you are going to be stuck with it).
2- Take the players' share of that, and divide it by 31 teams. This is the target for the amount to be spent.
3- Multiply that by 103%, which is amount by which teams have traditionally underspent the ceiling.
4- That your cap.
5- Floor is 25% less than that.
No escrow. That's just the way it is.

Effects: Well, #1, the players have to take a nominal cut, because now their salaries have to match the HRR, not be 10% above it. How the PA agrees to that, I have no idea.
#2 - Since the owners no longer have 'certainty', they will require an extra % of HRR to make this change, so the players get even less.

And, that's about the best I have seen. Again, because the current system is fine by the owners, and it isn't really the owners' fault. They aren't getting anything right now at the players' expense. The issue is all players, math, and impressions. Don't ask the owners to give up something to fix that.

 

[My3Sons]

The millionaires have historically lost to the billionaires in these situations. Every NHL lockout has worked in favor of the owners to my eyes. I don't see the next one as changing that outcome.

One thing for all the Fehr bashers to note is that as someone who worked in Bettman's world as a lawyer at a big firm in NY, I've seen the ethic is that your client will spend as much as necessary, and set themselves on fire, if it will potentially result in the opposition being reduced to ash. The NHL probably wanted this ethic or they likely would not have hired Bettman who came from that environment as I recall.

I'm no fan of Fehr, but Bettman is not someone I'd think of as reasonable, in my opinion, unless he has no choice.

 

[jonathan613]

Mud and MN,

Thank you both for the feedback. Last time for now that i will try to think outside the box here:

Players would agree to leave things as in return for allowing players the right to sign contracts longer than i believe 8 years if it is the team you are currently on and 7 years if it is another team. I know this does not solve close to everything here. My washington capitals signed Ovechkin for a 13 year contract valued at 125 million.

I forget why this was shortened when the current CBA was negotiated.