Potential CBA negotiation issues (was: Is a lockout actually inevitable?)

rojac

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Yep, and I don't think I can deal with it anymore, it is basically a lockout every collective bargaining time now.

I don't see how the N.H.L is a strong enough league to keep doing this over and over, at some point the fans are gonna turn, I know I am.

What's the problem with going without NHL hockey for six months to a year? Why does it bother you and others like you so much? Why is NHL hockey so important in your life? I'm honestly trying to understand this.
 

Tawnos

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This is one of the most inane hot takes I've ever read, especially given the fact that there are plenty that would think that posting thousands of messages on an internet forum was a waste of time and therefore we as a whole are pathetic with few other interests.

Spoiler alert, if you like something, you have every right to be upset when business decisions that are completely out of your control prevent you from enjoying it, be that in sports lockouts or developers refusing to port a game you like to your console of choice or region or really just about anything. And as a consumer, if you fundamentally don't like the business decisions of the people behind that, your only really avenue to display your disdain is by withholding money.

There's a reason why Major League Baseball went from being the most unstable labor situation in major pro sports to going decades without even remotely sniffing a lockout, and that's because their fans had a backbone and told owners and players to **** off after the last strike, and both sides have been scared to their wits at attempting to do so again. Meanwhile, hockey fans just keep coming back and there's no reason to think that owners are remotely afraid of fan backlash.

I don’t think the entertainment landscape is the same as it was in 1994. Don’t think a lockout would affect MLB the same way today.

Although it’s worth noting that the 94-95 lockout did hurt the NHL.
 

lomiller1

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A lockout is inevitable IMO. A PA negotiating tactic in the last lockout was to not even begin to talk until zero hour for singing a new CBA which made it impossible to come to terms early enough to avoid a lockout.

I expect they will do it again because it was successful PR for them. The NHL is forced to lock the players out because many of it’s standard processes are only legal with a CBA in place. If the NHL goes ahead with the season the PA sues them and puts them at an extreme disadvantage in the negotiation.

As to what the dispute will be about, the PA will ask for an end to escrow. This is in effect an end to the agreed on 50:50 split of HRR, but the PA will phrase it as a fight over escrow to help maintain solidarity for an extended lockout.
I know the league has correctly predicted that the fans will continue to bend over. Doesn't change the fact that the 1st time fans stop handing over their money after a lockout, we won't have anymore lockouts.
It’s not a question of "expecting the fans to bend over". If the Players take too large a share of revenue, it doesn’t matter if the fans show up or not, teams can’t succeed from a business standpoint. If you are selling something at a loss you can’t make up for it on volume so the owners first priority is going to be to make sure the deal allows them to be profitable. It’s only after the teams are profitable that this sort of thing has any influence with them.
 

jj cale

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What's the problem with going without NHL hockey for six months to a year? Why does it bother you and others like you so much? Why is NHL hockey so important in your life? I'm honestly trying to understand this.
For the life of me I cant understand why this seems to bother you so much.

Please explain why me boycotting watching hockey due to constant lockouts rankles you, I'm honestly trying to understand this.

I mean, what do you care?

I'll answer your question here now though. I like hockey and have been watching it all my life and it's f***ing annoying when they have lockouts all the time, you don't understand why this would irk fans?

Now you can answer mine.
 

haveandare

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Jul 2, 2009
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What's the problem with going without NHL hockey for six months to a year? Why does it bother you and others like you so much? Why is NHL hockey so important in your life? I'm honestly trying to understand this.
What is there to not understand? People like their NHL team and compare the NHL to the other major leagues which aren't virtually guaranteed to miss a year repeatedly over this nonsense.
 

MNNumbers

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A lockout is inevitable IMO. A PA negotiating tactic in the last lockout was to not even begin to talk until zero hour for singing a new CBA which made it impossible to come to terms early enough to avoid a lockout.

I expect they will do it again because it was successful PR for them. The NHL is forced to lock the players out because many of it’s standard processes are only legal with a CBA in place. If the NHL goes ahead with the season the PA sues them and puts them at an extreme disadvantage in the negotiation.

As to what the dispute will be about, the PA will ask for an end to escrow. This is in effect an end to the agreed on 50:50 split of HRR, but the PA will phrase it as a fight over escrow to help maintain solidarity for an extended lockout.

It’s not a question of "expecting the fans to bend over". If the Players take too large a share of revenue, it doesn’t matter if the fans show up or not, teams can’t succeed from a business standpoint. If you are selling something at a loss you can’t make up for it on volume so the owners first priority is going to be to make sure the deal allows them to be profitable. It’s only after the teams are profitable that this sort of thing has any influence with them.

LOM1,

Your post seems to suggest that you favor the owners in this situation. I am sorry if my assumption is incorrect.

But, in the event I am correct, I would like to point out a few things:
1- In the last labor spat, the owners 'began' the negotiations by offering that they would keep 57% revenues. Such a suggestion was obviously NOT serious, yet it remained the only suggestion the owners made until it was very near time to cancel games. If the PA had replied immediately: "How about 53% for us?" the owners would have been happy, because they could then negotiate from the point of view that 1/2 way was 48% for the players. So, there was no way for the players to respond to the 'offer' without some leverage, or they would be negotiating with themselves. So, the long impasse in negotiations is the fault of both sides, really.

2- As to playing without a CBA, I believe that is legal, however, it puts the PA at a great advantage because a strike would now be legal. This is exactly the situation which cancelled the 1994 baseball playoffs. It's not 'PA sues BOG', it's "players go on strike in the middle and then the fans are REALLY mad, plus there is no playoff money to pad the owners' bank accounts."

3- If the players ask for an end to escrow entirely (which is the cancellation of the 50-50 agreement), then the owners can easily reply with something like this:OK. We can do that, but it will cost you another 2% of the pie, and the way we will do it is like this:
We'll use a 5-yr growth estimate to estimate HRR for next year. Then we'll use a 5-year running average of the %age of league cap space teams actually used for salaries. Using the first number, we'll multiply by 48% to get the players' share. Then we'll divide by 31 to get each team's share. Then, we'll multiply it by the 2nd number we obtained above. And, that number will be the cap. Floor will be 20% lower than that.

And, in doing so, the players will end up with LESS $$ than they currently get.
So, I don't think that will be the tactic on the PA part.

The escrow thing seems to be calming down in the last 2 years. PA may wish for guaranteed contracts. That would be a fight, I think.
 

ottawah

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The escrow thing seems to be calming down in the last 2 years. PA may wish for guaranteed contracts. That would be a fight, I think.

There is already guaranteed contracts.

Generally the owners are happy with the current deal, although there are obviously some things they would tweak if given the chance. Players seem to want to give them that chance. But overall the next deal will not be different on the money side, just non monetary components (as I do not see signing bonuses being a monetary component because it does not affect how much the players get).
 

MNNumbers

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There is already guaranteed contracts.

Generally the owners are happy with the current deal, although there are obviously some things they would tweak if given the chance. Players seem to want to give them that chance. But overall the next deal will not be different on the money side, just non monetary components (as I do not see signing bonuses being a monetary component because it does not affect how much the players get).

Pardon me, I had that backwards. The OWNERS may wish to curtail the amount of guarantee that is in the contracts.

Generally, however, I think the consensus is correct. There is no issue major enough that it should require a lockout.
 

lomiller1

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But, in the event I am correct, I would like to point out a few things:
1- In the last labor spat, the owners 'began' the negotiations by offering that they would keep 57% revenues. Such a suggestion was obviously NOT serious, yet it remained the only suggestion the owners made until it was very near time to cancel games. If the PA had replied immediately: "How about 53% for us?" the owners would have been happy, because they could then negotiate from the point of view that 1/2 way was 48% for the players. So, there was no way for the players to respond to the 'offer' without some leverage, or they would be negotiating with themselves. So, the long impasse in negotiations is the fault of both sides, really.

Yes I generally prefer the owners because I recognize that the NHL was not financially viable per-salary cap. 20-25 NHL teams were not viable long term under the old system and even teams that could seemingly be OK would be in trouble if they ever started to lose consistently, which they would as the teams bellow them dropped out. At 57% revenue for the players this was still true of 10-15 teams. At 50% you are barely at a point where hockey operations has any business value in most cities. If there is no value in hockey operations NHL teams won't get run as business and will continue to be charities or loss leaders for TV or real estate deals. This is bad for everyone long term.


As to playing without a CBA, I believe that is legal,
Standardized contracts, salary cap and the draft all violate labor laws in the absence of a CBA. Even a league structure with teams as separate business is questionable under US anti-trust laws so any type of agreement reached by the board of governors is potential law-suit as is any side deals reached between teams.
3- If the players ask for an end to escrow entirely (which is the cancellation of the 50-50 agreement), then the owners can easily reply with something like this:OK. We can do that, but it will cost you another 2% of the pie, and the way we will do it is like this:

Escrow is what enforces who gets what piece of the pie. The salary cap cannot and does not do this regardless of what formula you come up with. Current negotiated salaries are still 55% - 60% of league revenue. There is no plausible way to get that down to 50% let alone 48% without some way to scale down the value of contracts. If there were some way to bring this down to 48% you can bet the PA would not agree to it.
 

MNNumbers

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Yes I generally prefer the owners because I recognize that the NHL was not financially viable per-salary cap. 20-25 NHL teams were not viable long term under the old system and even teams that could seemingly be OK would be in trouble if they ever started to lose consistently, which they would as the teams bellow them dropped out. At 57% revenue for the players this was still true of 10-15 teams. At 50% you are barely at a point where hockey operations has any business value in most cities. If there is no value in hockey operations NHL teams won't get run as business and will continue to be charities or loss leaders for TV or real estate deals. This is bad for everyone long term.


Standardized contracts, salary cap and the draft all violate labor laws in the absence of a CBA. Even a league structure with teams as separate business is questionable under US anti-trust laws so any type of agreement reached by the board of governors is potential law-suit as is any side deals reached between teams.


Escrow is what enforces who gets what piece of the pie. The salary cap cannot and does not do this regardless of what formula you come up with. Current negotiated salaries are still 55% - 60% of league revenue. There is no plausible way to get that down to 50% let alone 48% without some way to scale down the value of contracts. If there were some way to bring this down to 48% you can bet the PA would not agree to it.

Please inform me with quotations from legal sources in regard to playing without a CBA. I agree that in the absence of ANY CBA then all contracts would be subject to anti-trust laws. However, standard practice for sport leagues MUST be that there are certain waivers of legal rights when under negotiations. Otherwise, the situation in MLB in 1994 could not have happened. The season was being played while the CBA was under negotiation, and that is what gave the players the right to strike, which they did in August, thus cancelling the playoffs. And, that is what has caused the owners to lock the players out when negotiations are ongoing ever since. With no lockout, the players have all the leverage.

As to negotiated salaries being about 55-60%....I have no issue with that. If the players want their paycheck to be the salary number on their contract, then they will have to take less $$, of course. There is clearly no other way to do it. Escrow is one way to have that happen. Effectively, since the negotiated salaries are too high, escrow forces them down. My idea is this:
If the players object to the idea of escrow, then some other means of reducing they paychecks must be found. The means I described is one such way. However, removal of escrow will be considered by the owners as removal of complete cost certainty, and they won't give that up without getting something in return.
 

mouser

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Please inform me with quotations from legal sources in regard to playing without a CBA. I agree that in the absence of ANY CBA then all contracts would be subject to anti-trust laws. However, standard practice for sport leagues MUST be that there are certain waivers of legal rights when under negotiations. Otherwise, the situation in MLB in 1994 could not have happened. The season was being played while the CBA was under negotiation, and that is what gave the players the right to strike, which they did in August, thus cancelling the playoffs. And, that is what has caused the owners to lock the players out when negotiations are ongoing ever since. With no lockout, the players have all the leverage.

As to negotiated salaries being about 55-60%....I have no issue with that. If the players want their paycheck to be the salary number on their contract, then they will have to take less $$, of course. There is clearly no other way to do it. Escrow is one way to have that happen. Effectively, since the negotiated salaries are too high, escrow forces them down. My idea is this:
If the players object to the idea of escrow, then some other means of reducing they paychecks must be found. The means I described is one such way. However, removal of escrow will be considered by the owners as removal of complete cost certainty, and they won't give that up without getting something in return.

Contracts are still contracts. The issues historically have been:

- Right to strike in the absence of a CBA.
- Legality of conducting a draft and draft rights in the absence of a CBA.

One potential wrinkle introduced during the contentious NBA CBA lockout the players union temporary dissolved and filed anti-trust lawsuits against the league and owners. The league/owners responded with an argument that all current contracts should then be voided since they only existed subject to he CBA.

Obviously both sides settled. But it was a very interesting argument that contracts aren’t valid in the absence of a CBA and player union. Some folks will probably think it’s great if all the players suddenly became UFA’s and could get new contracts. But there’s only so much money to go around. If that scenario happened many of the players with guaranteed contracts they’re not living up to would find themselves with the short stick.
 

MNNumbers

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Contracts are still contracts. The issues historically have been:

- Right to strike in the absence of a CBA.
- Legality of conducting a draft and draft rights in the absence of a CBA.

One potential wrinkle introduced during the contentious NBA CBA lockout the players union temporary dissolved and filed anti-trust lawsuits against the league and owners. The league/owners responded with an argument that all current contracts should then be voided since they only existed subject to he CBA.

Obviously both sides settled. But it was a very interesting argument that contracts aren’t valid in the absence of a CBA and player union. Some folks will probably think it’s great if all the players suddenly became UFA’s and could get new contracts. But there’s only so much money to go around. If that scenario happened many of the players with guaranteed contracts they’re not living up to would find themselves with the short stick.

Coupled with a 'negotiating in good faith' ideal which is also part of US labor law.
 

Melrose Munch

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A lockout is inevitable IMO. A PA negotiating tactic in the last lockout was to not even begin to talk until zero hour for singing a new CBA which made it impossible to come to terms early enough to avoid a lockout.

I expect they will do it again because it was successful PR for them. The NHL is forced to lock the players out because many of it’s standard processes are only legal with a CBA in place. If the NHL goes ahead with the season the PA sues them and puts them at an extreme disadvantage in the negotiation.

As to what the dispute will be about, the PA will ask for an end to escrow. This is in effect an end to the agreed on 50:50 split of HRR, but the PA will phrase it as a fight over escrow to help maintain solidarity for an extended lockout.

It’s not a question of "expecting the fans to bend over". If the Players take too large a share of revenue, it doesn’t matter if the fans show up or not, teams can’t succeed from a business standpoint. If you are selling something at a loss you can’t make up for it on volume so the owners first priority is going to be to make sure the deal allows them to be profitable. It’s only after the teams are profitable that this sort of thing has any influence with them.
Then they need new revenue, like that TV deal they have been promsing since god knows when.
 

ottawah

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Coupled with a 'negotiating in good faith' ideal which is also part of US labor law.

Everyone has always negotiated in good faith in the NHL. Perhaps the players did not in 2005 as they stated they would never play under a salary cap, then did. But all in all, negotiating in bad faith means you have no want to make a deal and are just in it for the show, trying to break the union, etc. Thats just not true for the league or players, they obviously want to play and the union is a required part of that. The simple fact is the players do not trust the owners, and the owners do not want to lose money. Hence lockouts/strikes.
 

MNNumbers

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Sure sounds like the players are going to opt out. Which is foolish, because they want a solution to escrow, seemingly. But, they don't really a want a solution as much as they want the extra 10% of money that's in their contracts.

Solving escrow is easy: Just don't hike the cap as much every year. But, that seems to leave less money for the players. so they don't want that.

Olympic participation is another thing. I don't care about the Olympics myself. Myself, I dislike the owners in general because I don't think they are very honest.

For that reason, I'm disappointed that the players don't understand escrow better. It's really NOT a problem. And, I'm especially disappointed because if the players get what they want, they will lose some % of HRR again.

For example, in Olympic years, watch this: The owners will claim that there are expenses to allowing the players to go. And, they will somehow calculate those expenses, and then have them removed from HRR for Olympic years. So, the players effectively will end up paying themselves to go.

It's sad that you can see the outcome already. The Owners are fine with the status quo. The players have a couple of things they want, but they don't have any bargaining chips. So, they end up negotiating with themselves, and losing.

Sad.....
 
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Grudy0

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As I'd pointed out earlier, a couple years ago there was an agent that said the players should used the maximum escalator each year. The reasoning was that it would force the owners and the players to try their best to increase revenues. But that is more foolhardy than aligning the cap so that escrow is minimal.

This year is one of the larger increases in cap percentage, year over year, outside the anomalies that kicked the cap from 54 to 57 percent and the one that decreased the cap from 57 to 50 percent.

IMHO, the players should have stood more firm and not used their escalator at all. I'd bet that instead of handing out all these massive contracts this year, that not using the escalator would have put the escrow throughout the year at between 6 and 7 percent, if the league's revenue projections have any merit.

After all, it's not that the escrow system is broken. It's the cap projection coupled with many teams getting to the cap ceiling that did cause large escrow withholds until this year. And I don't thing that financial advisors and agents are doing the players any favors telling them that escrow is a problem when the players generally agree to escalate the cap above projections.
 

MNNumbers

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As I'd pointed out earlier, a couple years ago there was an agent that said the players should used the maximum escalator each year. The reasoning was that it would force the owners and the players to try their best to increase revenues. But that is more foolhardy than aligning the cap so that escrow is minimal.

This year is one of the larger increases in cap percentage, year over year, outside the anomalies that kicked the cap from 54 to 57 percent and the one that decreased the cap from 57 to 50 percent.

IMHO, the players should have stood more firm and not used their escalator at all. I'd bet that instead of handing out all these massive contracts this year, that not using the escalator would have put the escrow throughout the year at between 6 and 7 percent, if the league's revenue projections have any merit.

After all, it's not that the escrow system is broken. It's the cap projection coupled with many teams getting to the cap ceiling that did cause large escrow withholds until this year. And I don't thing that financial advisors and agents are doing the players any favors telling them that escrow is a problem when the players generally agree to escalate the cap above projections.

Grudy,

It depends on what the PA really wants. I'm beginning to think that the negotiations went down like this:
BOG: Ok. 50%, but that is a hard 50% so we will need to have the escrow system in place, but that won't be a big deal.
PA: Sure, fine....(But not really thinking about what all that means. Only that at least they got 50%).

So, the players aren't really up to speed on what is happening. They just want as high of salaries as they can get, and they don't analyze it the way we do here, where we know that NOT using the escalator next year favors currently signed players, and it's the new free agent class who gets less, while USING it favors the new class of FAs. The players really are only looking at their paychecks.

That means that they think they are somehow losing something, and that's not fair.

Now, at the beginning, if the PA actually wanted very limited escrow withholdings, they could have simply not used the escalator, or they could have foreseen that, even with the escalator, most teams will spend closer to the ceiling than the floor, and they would have wanted the ceiling nearer the midpoint.

But I believe that, with the single-minded vision of workers everywhere, the players were and still are only looking at their own bottom line. So, they wanted high salaries, and that requires using the escalator (hence the comment we have discussed about forcing the owners to market heavily to raise HRR - which does NO such thing).

And, thus, they have brought this on themselves. They really only want high salaries. And, with that single vision, they can't see what they are doing to themselves.

And, much to my dismay, I'm sure the owners are secretly chuckling about that, because what is going to happen is that the players are going to negotiate against themselves. The owners don't care about escrow - it's not their baby. 50% of HRR is. The "Cost Certainty" that goes with that is. So, if the players argue against escrow, they will lose something else, because the owners will be happy to act as if escrow is important to them when it really isn't. This argument from the players is like giving the owners free leverage, and it's simply foolish.
 

cbcwpg

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We will know in 1 year...

The current collective bargaining agreement cannot be terminated until September 2020, but there is a key date looming 12 months from now: On Sept. 1, 2019, the league has the option and then, on Sept. 15, the Players’ Association has the option to terminate the labor pact.
 

powerstuck

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We will know in 1 year...

The current collective bargaining agreement cannot be terminated until September 2020, but there is a key date looming 12 months from now: On Sept. 1, 2019, the league has the option and then, on Sept. 15, the Players’ Association has the option to terminate the labor pact.

IMHO, I don't think any of the parties will exercice the ''1 year before'' option. Especially the PA, they will let the CBA run till end (end of 2019-20 season). But that doesn't mean the war won't start at 5 min to midnight.
 

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