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

[MNNumbers]

Completely unbelievable. The players actually think the owners promised to grow revenue to make up for escrow losses?

How in the world did they get that idea?

But, being that is what they think...I know another lockout is coming....

Think of how foolish that is. It is in the owners' interest to grow HRR. Do the players think the owners are intentionally losing money on order to spite the players?

 

[LeHab]

Completely unbelievable. The players actually think the owners promised to grow revenue to make up for escrow losses?

How in the world did they get that idea?

But, being that is what they think...I know another lockout is coming....

Think of how foolish that is. It is in the owners' interest to grow HRR. Do the players think the owners are intentionally losing money on order to spite the players?

I hope these are PR tactics to gain public sympathy. In particular, Toews claim sending players to Olympics would have been a way to grow the game. If players are really this delusional, we are in for a long one.

 

[Bookie21]

Oh boy, Fehr is at it again.......blowing smoke up the players assses. Guaranteed that is where Toews got this asinine idea

 

[mouser]

I recall in another thread discussing what players think about escrow. I think Toews sums up the players feelings.

 

[Tom ServoMST3K]

I recall in another thread discussing what players think about escrow. I think Toews sums up the players feelings.

What can they propose as an alternative?

 

[MNNumbers]

If that is actually what the players believe about escrow - that it's somehow an underhanded way the owners have of stealing their money - then I don't know what to say. Somehow, the PA leadership was completely neglectful of their responsibilities. Escrow is the very foundation of the system. The #1 most important thing the owners want is cost certainty. That is the reason the possibility of escrow exists - to make sure of cost certainty.

Now, it's possible that what the players don't understand is not escrow, but rather the calculation of the salary floor/midpoint/ceiling. That's possible.

As to what they could offer in return.....Well, whatever it is, it needs to give the owners cost certainty. We know the owners won't give that up. So, the first option would be a reduction in the salary cap ceiling. Make it 8% above midpoint rather that 15%. That would more or less solve the problem. But, that will require a cut in either everyone's paycheck, or else a bigger cut in new crop FA contracts, because the cap will reduce. Maybe they could negotiate something like: Cap ceiling stays as is until revenue growth renders it 8% above midpoint, and from there, we use 8% above the midpoint as the ceiling. But, from what the players are saying, I don't think they would like that.

The only other way to do it is, as I have mentioned many times...
Rather than the current calculation, we first form our best estimate of league wide HRR. I know the league does that now, but I'm not sure how they do it. One simple way would be a 7-year running average of growth of HRR, and assume next year to have the same %age.
Then, we take a 5-year or 7-year (whatever, it doesn't really matter) of the percentage of cap ceiling space actually used.
Now, we have 2 numbers: The best guess of the next year's league wide HRR, and the usual % of cap space used. From the first number, we take 50% (of HRR) and divide by 31 teams, which gives us the amount of HRR available for salaries. Then we divide that by the %age of cap space normally used (which raises the number - dividing by 94% is similar to multiplying by 106%, remember), and that is the cap ceiling. Form your floor from there however you want it.
And, there is NO escrow. Whatever the contract says, that's the salary.
The drawback of this is that the owners have to give up complete cost certainty. The estimates might be off a percent or 2 either way.
But, the players won't like this either, because it will also mean less money available for new FAs, or an across the board salary reduction.

In short, someone needs to quiet the players' brains down and explain just why their current contracts promise them too much, and it's NOT a conspiracy by the owners.

Since it is highly unlikely that anyone with real common sense will be listened to, the players will fight escrow needlessly, and, as others have said, they will lose one way or another. They can't win. How can you win when you are fighting an imaginary enemy? Figure out the real problem....then negotiate.

It's just so bizarre....

 

[Tom ServoMST3K]

If that is actually what the players believe about escrow - that it's somehow an underhanded way the owners have of stealing their money - then I don't know what to say. Somehow, the PA leadership was completely neglectful of their responsibilities. Escrow is the very foundation of the system. The #1 most important thing the owners want is cost certainty. That is the reason the possibility of escrow exists - to make sure of cost certainty.

Now, it's possible that what the players don't understand is not escrow, but rather the calculation of the salary floor/midpoint/ceiling. That's possible.

As to what they could offer in return.....Well, whatever it is, it needs to give the owners cost certainty. We know the owners won't give that up. So, the first option would be a reduction in the salary cap ceiling. Make it 8% above midpoint rather that 15%. That would more or less solve the problem. But, that will require a cut in either everyone's paycheck, or else a bigger cut in new crop FA contracts, because the cap will reduce. Maybe they could negotiate something like: Cap ceiling stays as is until revenue growth renders it 8% above midpoint, and from there, we use 8% above the midpoint as the ceiling. But, from what the players are saying, I don't think they would like that.

The only other way to do it is, as I have mentioned many times...
Rather than the current calculation, we first form our best estimate of league wide HRR. I know the league does that now, but I'm not sure how they do it. One simple way would be a 7-year running average of growth of HRR, and assume next year to have the same %age.
Then, we take a 5-year or 7-year (whatever, it doesn't really matter) of the percentage of cap ceiling space actually used.
Now, we have 2 numbers: The best guess of the next year's league wide HRR, and the usual % of cap space used. From the first number, we take 50% (of HRR) and divide by 31 teams, which gives us the amount of HRR available for salaries. Then we divide that by the %age of cap space normally used (which raises the number - dividing by 94% is similar to multiplying by 106%, remember), and that is the cap ceiling. Form your floor from there however you want it.
And, there is NO escrow. Whatever the contract says, that's the salary.
The drawback of this is that the owners have to give up complete cost certainty. The estimates might be off a percent or 2 either way.
But, the players won't like this either, because it will also mean less money available for new FAs, or an across the board salary reduction.

In short, someone needs to quiet the players' brains down and explain just why their current contracts promise them too much, and it's NOT a conspiracy by the owners.

Since it is highly unlikely that anyone with real common sense will be listened to, the players will fight escrow needlessly, and, as others have said, they will lose one way or another. They can't win. How can you win when you are fighting an imaginary enemy? Figure out the real problem....then negotiate.

It's just so bizarre....

I'd love to get a news organization that talks to 10 players and asks them to explain escrow.

 

[Bookie21]

I'd love to get a news organization that talks to 10 players and asks them to explain escrow.

That would be comical. You would get 10 different answers. Fehr should do his job and explain it to them, but he doesn't really care, he's just looking for another fight with the owners

 

[LeHab]

Oh boy, Fehr is at it again.......blowing smoke up the players assses. Guaranteed that is where Toews got this asinine idea

We heard a similar position from a players agent. Invoke escalator clause to the max as "motivation" for teams to generate revenues. Ah if only business was so simple.

Once again I hope players are not really drinking this kool-aid and simply use it as PR tactics. Aww poor us, getting dinged at the end of each season looks good in the media.

 

[Grudy0]

Repeat after me...
If escrow is a problem, the cap is too high
the cap is too high
the cap is too high

 

[cbcwpg]

NHL one year away from potential lock-out scenario

Toews blaming owners for not growing revenues fast enough.

If this is the standard thinking then there will be a lockout for sure.

 

[justafan22]

NHL won't opt out of the CBA obviously, so septmber 19th 2019 is the deadline, which I think will happen by the PA

 

[Fourier]

NHL one year away from potential lock-out scenario

Toews blaming owners for not growing revenues fast enough.

Toews clearly does not understand the NHL's salary system. This is a failure on the part of his representation to actually explain to him what his contract actually means. The other irony in this is that it is contracts such as his with substantial front loading that are exaggerating the escrow situation.

 

[MNNumbers]

Toews clearly does not understand the NHL's salary system. This is a failure on the part of his representation to actually explain to him what his contract actually means. The other irony in this is that it is contracts such as his with substantial front loading that are exaggerating the escrow situation.

Potentially exaggerating....Since the cap it goes like the average of the salary, then the cap hit is less than the actual salary, and that leaves more cap room for more contracts. Conversely, his contract will do the reverse later on....

The real problem is that......IN ANY SALARY CAP LEAGUE....most teams are going to spend near the cap. The fans will almost demand that. And, thus, the cap ceiling needs to be nearer to the midpoint than the floor, or teams will overspend HRR. It's that simple.

But, rectifying it now requires the players to accept either:
1- Across the board salary cuts in their contracts, or
2- Less money available for new crop FAs for a few years.

The players are unlikely to want either of those, and...worse, if the players have been misinformed about how escrow works so far (which they obviously have been), then they are not in a position to understand the possible solutions.

Therefore, we are headed for a work stoppage.

 

[Em etah Eh]

If the owners were okay extending the current agreement + Olympics, I don't see why they wouldn't extend it without Olympics. Although, nothing would surprise me.

That by itself could be enough to cause the NHLPA to not extend though. They had the chance to extend the current agreement with Olympics so why would they extend without Olympics? I can see problems stemming from this alone.

Could they renegotiate with a clause that says, we'll extend if the Olympics are put back in, or is it basically just an all or nothing on extending the same CBA with no tweaks allowed?

 

[LadyStanley]

31 Thoughts: Team owners played key role in Erik Karlsson trade - Sportsnet.ca

Friedman reports that a number of NCAA schools (read colleges, universities) are frustrated by some of the attention undrafted players have been getting. A few have had to limit contact (before NCAA season, around Thanksgiving and after Christmas). Some prospects have had a dozen teams expressing interest.

Friedman speculates that the NCAA may try to get language into the next CBA limiting teams' access to players.

 

[LadyStanley]

And Friedman on the possibility of skipping preseason games for suspensions.

Last week, when Max Domi punched Aaron Ekblad, one GM said before the hearing he knew this wasn’t going to end well.

“Count how many exhibition games Montreal has left,” he said. The number was five, which meant sitting him out for a regular-season game meant an in-person hearing and the eventual possibility of an arbitrator appeal. Player Safety and the NHL don’t like that route without precedent, and Domi’s action resulting in a six-game punishment (at least) probably wouldn’t stand.

I do think there were some who wanted Player Safety to push it, because they knew five games would look bad. But that sentiment didn’t carry the day. It will be interesting to see if this becomes a negotiating point in the next CBA talks, with the league asking for the option to suspend for regular-season games instead of a pre-season vacation. But, if you were the players, would you really want that? Right now, there’s zero real punishment.

Yep, preseason suspension - more rest for player. No financial loss.

 

[MaskedSonja]

Watching the large number of 1 and 2 year contracts handed out past season or so i think at very least team management expecting a strong possibility. I do question that toews comment now instead of years ago is suspect. At very least this tells me escrow will be a very big issue in talks. Im awaiting the management in teams to start talking about how theyre losing money....seems to happen every time cba is near. Its a tradition

 

[cbcwpg]

If the players want to get rid of escrow and get paid their full contracts as they signed... how about then we get rid of guaranteed contracts??

 

[Kimi]

I wonder how a proposed pay cut would go over to fix the escrow "issue".

Cut the cap down to 40% of revenue, and cut salary down to match. Players are paid the face value of their contracts, and at the end of the season they all get bonus that takes them up to 50%.

The amount of money being paid remains the same as the current system, but it would 'feel' better from the side of the players.

 

[Tom ServoMST3K]

I wonder how a proposed pay cut would go over to fix the escrow "issue".

Cut the cap down to 40% of revenue, and cut salary down to match. Players are paid the face value of their contracts, and at the end of the season they all get bonus that takes them up to 50%.

The amount of money being paid remains the same as the current system, but it would 'feel' better from the side of the players.

I doubt the players would allow that. If they don't understand the current escrow system, why would they understand this one?

 

[ottawah]

It isn't the age of the player when he retires that matters, it's the age when he signed the contract. Absent cap recapture, if Hossa or Zetterberg retired as healthy players, their cap hits wouldn't be on the books at all. Both signed their deals before they were 35.

Yes but in combination with the new lengths on contracts it highly unlikely. Zetterbergs contract would have been up in 2016 with new rules, Hossa in 2017. So under the new rules the situation wityh them never would have happened.

 

[Tawnos]

Yes but in combination with the new lengths on contracts it highly unlikely. Zetterbergs contract would have been up in 2016 with new rules, Hossa in 2017. So under the new rules the situation wityh them never would have happened.

Well, sure. The cap recapture is the new rule. That’s been around since 2013. The 35+ rule, which doesn’t apply here, has existed since the cap was implemented in 2005.

 

[mouser]

I wonder how a proposed pay cut would go over to fix the escrow "issue".

Cut the cap down to 40% of revenue, and cut salary down to match. Players are paid the face value of their contracts, and at the end of the season they all get bonus that takes them up to 50%.

The amount of money being paid remains the same as the current system, but it would 'feel' better from the side of the players.

Poorly I would expect. It's the same fundamental issue where the PA leadership pushed for using the escalator every year.

Players on existing contracts vs. players on new future contracts.

 

[MNNumbers]

Poorly I would expect. It's the same fundamental issue where the PA leadership pushed for using the escalator every year.

Players on existing contracts vs. players on new future contracts.

And, to bring this back around....
The real issue issue is that the PA, apparently, doesn't understand the relationship between 'expected revenues', '50% of HRR', 'escrow', and 'player contracted salaries'.

Apparently, the players are upset because they THINK they had this deal:
The players would allow the owners to keep 50% of HRR. In return, the owners would magically turn over every leaf every year to try to increase that year's HRR so that there would be no escrow.

When, the actual deal is:
The owners will make their best guess about the new year's HRR, using every kind of projection possible including that of the CAD.
From that projection, the players have the right to increase the cap even more IF THEY WANT, but that actually doesn't increase the number of dollars in the players' pool.
The player contract doesn't actually define the players' salary.

The result of all of which is that:
Sum of league wide player contracts always exceeds available HRR.
Thus, players always have escrow losses.

And, the fight is:
Players want the actual number on their contracts and 'feel' cheated if they get less.
Owners don't really care about that, they just want the 50% of HRR, which the players have already given them.
To rectify the salaries to nearer the 50% of HRR means changing the definition of the cap ceiling, because the real problem is that teams will spend to the cap, and thus exceed HRR. However, that requires decreasing all salaries OR leaving less money in the pool for several years of FAs. Neither of these appeals to the players.

Thus, since the players can't have what they want, but they have already given the owners what the owners want, the players have nothing to negotiate with. And, we will have a work stoppage, because the players will complain this time (I have previously been far more neutral in the matter - but misunderstanding escrow is completely on the players, and if they blame the owners, it's their own fault). And, in the end, since the owners already have the 50% they want, they have nothing to give up, and the players will end up losing more.

It's pitiful. The players are going to lose more money negotiating among themselves, and they will cancel games also. Just foolish.

PLUS: If the players actually want to negotiate the Olympics, then they will lose even more. Imagine this:
In Olympic years, NO All Star game. League shuts down for 3 weeks. That's 10 games lost. Owners offer to change the schedules to accommodate that, but it's 10 games pro-rated from player salaries.

All fans would be fine with that: 72 game season in Olympic years. And, we get to watch the Olympics. But, it costs the players because HRR is not as high in those years.

Can you imagine the complaining then?