Ken Dryden on the Lockout

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Wetcoaster

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CarlRacki said:
Read the law, counselor. Nothing in labor law (U.S., anyways) says one side must come off its position for it to be found to have been bargaining in bad faith.
I have. The law is not that black and white.

Tell that to the 95% of the employers who fail before the NLRB to have declarations of impasse upheld. MLB did not get too far.

The NFLPA simply decertified to get the concessions they sought.
 

Son of Steinbrenner

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Greschner4 said:
The NBA has a soft cap and a luxury tax and the New York Knicks have a payroll of double the tax threshold.

MLB has a luxury tax and the New York Yankees' 2005 payroll is going to be 50-70% above the tax threshold. With their massive spending spree this offseason, including on a guy who, were MLB the NFL, would be continuing his brilliant career in small-market Kansas City, the New York Mets may join the Yankees over the threshold.

The NFL has a hard cap and the New York Giants and New York Jets spend no more on players than a bunch of other teams.

The same buffonish dolt who's blown through double the NBA threshold with the Knicks also owns the Rangers. If you're trying to keep his spending down, which model are you going to pick?

It's easy ... right?

:lol:

if your trying to keep spending down how about you just don't spend :dunno:

hey i own a home and its damn cold outside but my gas bill was really high last month. so tonight instead of cranking the heat up i'll snuggle with the mrs start a fire in the fire place and keep the thermostat at 60. thankfully i can afford another high gas bill but why should i spend the money when i don't have too.

my point is nobody forced these nhl owners to spend the way they did on contracts.

just because you have the money doesn't mean you have to spend it.

you bring up baseball but three teams are over the luxary tax (yankees red sux, and angels) yet the average salary has gone down since the last cba was signed.

the football owners broke the union in 87 and look what the players have now. a small slice of a large pie. i really have tried to not take sides in this thing. infact if anything i was pro-owner but the players proposal in december got me on the players side. the owners could have tweaked it a little and made the luxary tax much higher than the .20 cents over 40 million.

its a shame that most posters blame the players when all the players did was take the money the owners offered. why should the players accept a salary cap? i have yet to see anybody give a valid argument as to why.
 

Son of Steinbrenner

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Wetcoaster said:
I have. The law is not that black and white.

Tell that to the 95% of the employers who fail before the NLRB to have declarations of impasse upheld. MLB did not get too far.

The NFLPA simply decertified to get the concessions they sought.
exactly.

what happens when the league loses an impasse. than the union has the owners by the balls and suddenly the 24% giveback is off the table. most people think this is the best time for the players to make a deal but actually thats wrong. this is the best time for the owners to make deal. just because you declare an impasse doesn't mean the nlrb will say there was one.

the players have done all the right things in this while the owners just sit back and say cost certanity. :shakehead

what a shame.
 

Wetcoaster

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Greschner4 said:
Collective bargaining refers to the players being able to gather together as a collective to bargain work terms, instead of having to do it one by one.

You partly of correct:

Method whereby representatives of employees (unions) and employers determine the conditions of employment through direct negotiation, normally resulting in a written contract setting forth the wages, hours, and other conditions to be observed for a stipulated period (e.g., 3 years). Term also applies to union-management dealings during the term of the agreement.
www.bls.gov/bls/glossary.htm

Literally, bargaining between and/or among representatives of collectivities (thus involving internal as well as external bargaining); but by custom the expression refers to bargaining between labor organizations and employers. See § 7103(a)(12) for a statutory definition.
www.opm.gov/LMR/glossary/glossaryc.asp

Collective Bargaining Law and Legal Definition
--------------------------------------------------------------------------------

Collective bargaining consists of negotiations between an employer and a group of employees that determine the conditions of employment. The result of collective bargaining procedure is called the collective bargaining agreement or CBA. Often employees are represented in the bargaining by a union or other labor organization. Collective bargaining is governed by federal and state statutory law, administrative agency regulations, and judicial decisions.
Unions and management engage in negotiations in order to reach a CBA agreement (contract). The main body of law governing collective bargaining is the National Labor Relations Act (NLRA). It gives employees the right to collectively bargain and join trade unions. The law (National Labor Relation Act) requires that both sides "bargain in good faith." This means that they both must come to the table willing to give and take. The NLRA requires the employer to bargain with the appointed representative of its employees. It does not require either side to agree to a proposal or make concessions but does establish procedural guidelines on good faith bargaining. Proposals which would violate the NLRA or other laws may not be subject to collective bargaining. The NLRA also establishes regulations on what tactics (e.g. strikes, lock-outs, picketing) each side may employ to further their bargaining objectives.

State laws also regulate collective bargaining and make collective agreements enforceable under state law. They may also provide guidelines for those employers and employees not covered by the NLRA, such as agricultural laborers. When state laws conflict with federal laws, the federal law is applied.
http://www.uslegalforms.com/lawdigest/legal-definitions.php/US/US-COLLECTIVE_BARGAINING.htm
 

Wetcoaster

Guest
Son of Steinbrenner said:
:lol:

if your trying to keep spending down how about you just don't spend :dunno:

hey i own a home and its damn cold outside but my gas bill was really high last month. so tonight instead of cranking the heat up i'll snuggle with the mrs start a fire in the fire place and keep the thermostat at 60. thankfully i can afford another high gas bill but why should i spend the money when i don't have too.

my point is nobody forced these nhl owners to spend the way they did on contracts.

just because you have the money doesn't mean you have to spend it.

you bring up baseball but three teams are over the luxary tax (yankees red sux, and angels) yet the average salary has gone down since the last cba was signed.

the football owners broke the union in 87 and look what the players have now. a small slice of a large pie. i really have tried to not take sides in this thing. infact if anything i was pro-owner but the players proposal in december got me on the players side. the owners could have tweaked it a little and made the luxary tax much higher than the .20 cents over 40 million.

its a shame that most posters blame the players when all the players did was take the money the owners offered. why should the players accept a salary cap? i have yet to see anybody give a valid argument as to why.

The problem is that there is not much of an argument in favour of a cap and all sorts of arguments against it. Also the NFLPA has indicated that they are not prepared to renew the cap at the end of the 2006 season.

I have made the following points variously in a number of threads over the past while. I am trying to bring them together in some semblance of order. The post is kind of long but please bear with me as this is a rather complicated subject. If you do not like long posts - DO NOT READ FURTHER!!!!

The problem Bettman has is that instituting a real salary cap starts with complete disclosure of revenues which is completely foreign to how the NHL owners operate. That is why every time a luxury tax or revenue sharing is mentioned Bettman acts like a deer caught in the headlights - like a cap, a luxury tax and revenue sharing would require financial disclosure.

What Bettman and the owners are trying to do is set an artificial cap level (proposed at $31 million) without first going through and proving what the total league revenues actually are upon which a cap would be based. The NFL, NBA and even MLB have disclosed revenues to the respective player associations - but not the NHL owners. The best we get is a work of fiction by Arthur Levitt, the guy who was supposed to ride herd on the the SU Securities and Exchange Commission and protect consumers - on his watch you has Enron and World.com.

A report on the NHL by by investment banker Moag & Company this past summer summed up the league's stand on revenue sharing this way:

"There is currently no plan emanating from the Commissioner’s office to tie a salary cap to revenue sharing. Previously, the players’ union has said that it would only consider limiting salaries in the context of significant revenue sharing. That said, the league has suggested in the past that revenue sharing does not require NHLPA approval. If nothing else, this rhetoric suggests that the owners have been unable to agree even amongst themselves as it relates to revenue sharing."

A consultant who works for the NHL was more blunt, telling the New York Post recently, "Hockey owners won't do this; they'll fight to the end not to share their revenues, since most of them get their revenue locally. The real trouble is that the conflict isn't going to just a labor issue of players versus owners — it's going to be owners against owners."

Many experts (such as Matt Witting and Stephen Ross of UBC law school) dispute that salary caps are at all useful. Other people have pointed out that the NBA soft cap doesn't work very well at all and the NFL cap is all but ignored.

The NFL system works fairly well NOT because of the salary cap but because of the socialistic nature of the NFL and its huge TV contract. Revenues are shared across the board in the NFL including locally generated rewvenues.

As John Davidson on SportsNet points out the owners in the NFL generally are family or closely held private companies not conglomerates that you see in the NHL. Such owners would have problems surviving in the NHL (think Arthur Griffiths) but because of the revenue sharing (and the HUGE TV contract) they can not only survive but compete. As Davidson points out it is easy for the conglomerates to move money around within subsidiary and associated companies to hide the actual ammount of hockey related revenues.

As one NFL insider put it rather pithily:
"If you can't make money in the NFL, I think you may be considered the village idiot," (referring to the owners).

However although the NFL supposedly has a hard cap M.J. Duberstein, who is research director for the National Football League Players Association, told USA Today "If you total up the actual dollars paid to players since the cap came in with the 1994 season, the total is $2 billion greater than the sum of all the salary caps."

So even the so-called hard cap is honoured more in the breach than in practise even in the NFL AND the NBA is worse.

"An effective salary cap is too Draconian and unreasonable. If you're going to use a cap to drive down player salaries, you're just padding owners' pockets," economist Andrew Zimbalist was quoted as saying by USA Today.

While good for owners, Stephen Ross, a University of Illinois sports law professor who also teaches classes at the University of British Columbia, said salary caps can be bad for fans.

"It is the solution to cost certainly and it is a solution to rising costs," said Ross, who has written an article on salary caps for the UBC Law Review.

"But salary caps come at the expense of the best interests of fans of every team other than the Stanley Cup champion."

A salary cap can make it difficult for a team to rebuild, Ross said.

He also argues the NHL wants a salary cap that guarantees owners can make money even if they are bad businessman and no matter what market they operate in.

"Things need to be done to permit well run teams to make money," Ross said.

"The problem is the salary cap guarantees all teams, well run and poorly run . . . will make money."

As Joe Sheehan of the Baseball Prospectus explained it, the goal of the salary cap, which he says should be actually called a payroll cap, is "to restrict the amount of money management can spend on labor. It's an agreement among competitors to inhibit the labor market, lowering salaries."

That would of course be an antitrust violation but for the NHLPA. The only way the league can avoid that issue is to get the union to agree to it in the collective bargaining process. That is why the NHLPA is so reluctant to agree to a cap.

How about the argument that Bettman and the NHL owners trot out that a salary cap will let them lower ticket prices? Not likely since revenue and profitability have little to do with ticket prices.

"Prices are set by teams to maximize revenue, and are based on anticipated demand. They are not set to "make up" whatever rise in payroll is anticipated, no matter how many teams send out letters to season-ticket holders claiming this to be the case. Rising player salaries do not drive ticket-price increases," Sheehan wrote in a column for the Baseball Prospectus.

Toronto Sun columnist Al Strachan once put it this way: "As for ticket prices, they reflect what the market will bear. The Maple Leafs have the highest prices in the league for one simple reason. People will buy them at that price. Surely you don't think that ticket prices will go down if salaries are reduced, do you? If you're that stupid, you could become a judge in this country."

How about building a team? Critics say a cap would do anything but encourage team building. In the NFL teams are often forced to make decisions where staying under the cap takes priority over building or keeping together a competitive team. Teams that draft well could eventually have to part with their players if they could not fit them under the team's salary cap.

"[A cap] punishes success, forcing well-built, winning teams to shed talent on a near-constant basis," said Joe Sheehan of the Baseball Prospectus.

Larry Brooks of the New York Post said a cap "would destroy team-building, would destroy the ability of a successful club to maintain its nucleus. It would base every personnel decision on an ability to pay while remaining under a prohibitive cap."

That, in a way, benefits teams who makes poor decisions. They'll have an excuse for not being able to put together a competitive team because their hands are tied by the cap.

"No matter what the level of the salary cap, there are going to be a lot of teams who have lousy teams because they have overpaid, underachieving players and now they are at the cap level," Ross, the law professor, told the Canadian Press. "If you are an owner, that's exactly what you want. You want to be able to tell your fans 'I'm sorry there is nothing I can do to improve the product because of the cap.' The fans are stuck with another year of a lousy team."

Here is my analysis of salary caps based on Matt Witting's comprehensive study of salary caps.

The owners are trying to fix the problem - which is that any number of them and their GM's do not have a clue how to run their teams AS A BUSINESS. They want to transfer the results their own incompetence to the players without addressing the underlying management problems.

The NHL owners refuse to share revenue with one another yet they demand that the players in effect do this for them. Not likely to happen with someone as astute as Bob Goodenow at the helm for the players - Goodenow is NOT "Good Old Al Eagleson the Owners' Pal".

The NHL owners have historically misled and defrauded the players, diverted revenues, hid income, etc. - why is now any different? The NHL owners have steadfastly refused to open up the real books so there is no starting point for a salary cap since there is no real number to set such a cap against.

Some players have a different view as do some GM's. Here is one player and a former GM (The Mouth that Roared - Brian Burke) on this issue. Sather sang the same tune while in Edmonton but he has gone over to the dark side in New York.

"If they [the owners] want to pay us, they must be making money, it's not up to us to say: 'No, don't give us that much money.' " - Vincent Damphousse.

"I have never been more embarrassed to work in the NHL as I was on July 1st and 2nd [2001]. I know we can't support the salaries. I know that some of the teams who have spent that money are doing it without the financial capability to pay the money. I'm running my business like a business. I'm going head-to-head with people who are crazy, as far as I'm concerned."-Vancouver Canucks GM Brian Burke, July 2001

As former financial guru and the guy who guided the Canucks financial ship for the past few years prior to joining the Vancouver Olympic Committee, David Cobb, chief operating officer of the Vancouver Canucks, said it is important not to lose perspective in the debate.

"We're in a period of time with our franchise where we have an excellent team, we have excellent support from our fans, we have the top retail sales in the league, we have the busiest website in the league," Cobb said. "Everything's going well for us."

One moral - run your team as a business and do not hire financial idiots (think Pat Quinn, Mike Milbury and Booby Clarke) - and you can do well under the current system.

MEMO TO THE OWNERS AND BETTMAN - INSTEAD OF TRYING TO HAVE THE PLAYERS IDIOT-PROOF YOUR BUSINESS - TRY NOT HIRING IDIOTS IN THE FIRST PLACE.

And here is another quote to keep in mind when talking about salary caps from yours truly:

"Be careful what you ask for you just might get it." - Wetcoaster

Many are braying for a salary cap without faintest clue of what it is and what it entails.

It is complex and takes some time to wrap your mind around the concepts. Fortunately there was a consultant and statistician in Washington, DC, Matt Witting, who did an incredibly detailed and exhaustive in-depth study comparing the salary capped NFL and NBA to the capless MLB and NHL in February 2003. His figures, charts and analysis reveal some very interesting things. They also explode a number of popular myths about salary caps and their effects on competition and the movement of players.

There is a lot of simplistic bashing of the NHLPA and the players. It takes place IMHO because the players' salaries are visible. Crank up the NHLPA website and others and you can see what each player makes. Salary disclosure was one of the best things Bob Goodenow pushed so that teams could not trade on player ignorance in negotiations as had been the past practise but it is a two-edged sword. However try and find out what owners make off the game - good luck.

Most team owners run a series of companies, usually private, with the hockey operations in one company while revenue generation from hockey related operations are held elsewhere. The NHLPA has challenged the owners to open up all the books and prove their contention that the game is not economically viable. The owners have steadfastly refused the request. The Leavitt report did not look at the real books only those figures the owners already voluntarily disclose to the league.

If you intend to institute a salary cap as in the NFL or NBA, the first requirement is complete financial disclosure by ownership (as was done in those leagues) as there has to be some form of revenue equalization and establishment of a formula which forms the cap. Any other approach is pure salary suppression and done only on the backs of the players. That is the system the NHL owners are trying to impose.

The NHL owners refusal to disclose leads me to conclude what they are looking to do is cap salaries without revenue sharing. In other words the entire burden will fall on the players and ownership is free to do what it wishes. This was actually done in the last CBA where the NHLPA agreed to salary restrictions for new players entering the NHL. The maximum salary was set at $1.175 million for 2002 and bonuses were restricted. If you want to see this check out Article 9 of the CBA "Entry level Compensation". The CBA can be found at:
http://www-ix.oit.umass.edu/~splaw488/NHL_CBA.htm
or http://letsgopens.com/nhl_cba.php

It simply is not going to happen this way for established players. In restricting entry level compensation the NHLPA in effect gave away rights for players who were not yet even part of the association - cynical yes but a very good bargaining chip. Besides who was going to complain.

When salary controls are proposed they are supposed to accomplish all or at least most of the following:
-keep team salaries down
-keep individual player salaries at a reasonable levels
-keep ticket prices increases under control
-reduce the difference between "haves" and "have-nots" and
-increase competition on ice league-wide.

Salary caps are not the be-all and end-all and do not necessarily work as intended and they have side effects. For example under the NFL cap system trades of any skilled player is virtually impossible. Just think no more trade deadline fun in the NHL. The "Law of Unintended Consequences" has dogged the salary cap systems in the NBA and NFL

As I noted above many fans fail to realize that the NHL already has a salary cap in place. The maximum entry-level compensation for players under the age of 25 is dealt with under Article 9 of the NHL CBA which limits the maximum yearly compensation for rookies to just over $1.25 million in salary and 50% of that in signing, reporting and roster bonuses for 2002. It went up another $50,000 this year. Rookie contracts are also deemed to be two-way deals under the CBA.

The NHL had a salary cap in place for decades (they just lied to the players and colluded with Al Eagleson on sweetheart deals) until Goodenow brought the NHLPA into the modern pro sports world and the NHL still does for new players entering the league.

A general salary cap for players without the NHL owners agreeing to revenue sharing will be a non-starter. The NHLPA will never agree and do not forget the players have their agents and their own legal and finacial advisers who keep them informed of the effects and ramifications of any changes in the CBA. This is not the 1950's when you can give Gordie Howe a team jacket to keep him happy. Or banish superstars like Ted Lindsay to Chicago and Doug Harvey to New York for challenging the owners hegemony.

The NBA and NFL caps are based on calculating league-wide revenue from virtually all basketball/football sources and revenue streams to generate a figure against which an allowable salary ceiling for each team is calculated. If you have ever read the CBA's for the NBA or NFL (and I have) you will realize they are two of the most complicated and convoluted labour relations documents ever produced. Teams employ an army of legal and accounting consultants on a full-time basis to assist them in conducting their business and in negotiating contracts. It takes three weeks in the NBA to figure out if you can make a trade.

The NHL owners have consistently refused to consider revenue sharing and will not disclose how much money is being made from all hockey related enterprises. In most cases the hockey operation, i.e. the team is run under one set of books while other income is generated through other companies. The NHLPA has challenged the owners to open the books so a true picture of the financial system can be seen. The owners have refused. As noted the Leavitt report was nothing more than another PR exercise produced by the owners to buttress their position pending the nuts and bolts of the labour negotiations.

Quite rightly the players resist being the only side making the financial sacrifice. Historically in the NHL the owners r@ped and pillaged the players before the advent of the NHLPA. Probably the single most important move by the NHLPA was Goodenow publishing individual salaries and making contracts public. In the past players were forbidden from discussing salary on pain of suspension or being blackballed. It led to such things as Gordie Howe in his heyday being only the fourth or fifth highest paid player on the Wings while he was the best player in the league.

There are various forms of salary control.

The NBA cap which Bettman helped design and implement is a "soft" cap. The teams must disclose their Basketball Related Income ("BRI") which includes revenue from tickets, advertising, local concession and souvenir sales, local media and other league, team and arena income streams. The current NBA cap for each team is 55% of the total BRI for the league. Only two teams (Detroit and LA Clippers) were under the cap - the other 28 teams were over. There is also a luxury tax in the NBA. However there are so many exceptions and loopholes the cap is more honoured in the breach rather than compliance. Since most exceptions relate to the star players and their higher salaries, the cap has virtually no effect on the players for whom the cap was intended in the first place but it does hurt the journeymen.

The NFL has what is referred to as a "hard" cap. Again league revenue is calculated in much the same way as the NBA but it is called Defined Gross Revenues ("DGR"). There are virtually no exceptions - hence it is a "hard" cap. The cap is set at 63% - higher than the NBA but remember that football rosters are much larger.

Also you often hear of huge long-term NFL deals. However if a player is cut, his contract ends. So if he has 5 years left on a $5 million per year 7 year contract once he is released, the team is no longer obligated to pay. This differs from the NHL where contracts are guaranteed and if you want to end a contract you must pay out the remainder at 2/3 or negotiate a buy-out. This was the Pierre Turgeon situation in Dallas.

Of course many star NFL'ers (and their agents) know this and they sign deals with huge signing bonuses paid up front. Under the NFL system teams can then average out the bonus over the term of the contract for the purposes of calculating the team's yearly cap number.

So taking the example above a player may sign a $35 million contract with a 7 year term. His salary is $2 million per year and he has $21 million dollar signing bonus in his pocket. Essentially he has a $23 million guaranteed contract. The team is not charged $23 million in the first year under its cap but rather is permitted to spread out the total contract over the total term so it is only charged $5 million per year against its cap. However if the player is released, traded or injured the entire signing bonus (or its remainder) now becomes part of the team's next year cap. For example our player blows out his knee and retires. Now the cap room is lessened by $19 million dollars and you must still try to replace the player. Many NFL teams have run into this problem. Also do you think there is any way this player is going to be traded?

Mark Witting in his extremely detailed study of salary caps has concluded a number of things. If a cap is in place there is less of a gap between the "haves and "have nots" and the wealth distribution is more even. That is not surprising since that is the starting point for a salary cap.

However he found that in the NFL the competitive balance difference pre- and post cap was negligible and had done nothing for league wide parity.

In the NBA the cap was instituted (according to the league) to protect smaller market teams and increase their competitiveness. It has not worked as in 18 years the 4 largest markets have won 14 titles while in the previous 18 years (pre-cap) the 4 largest market team only won 5 titles.

He finds that baseball with no salary cap has excellent competitive balance across the league and that the NHL has been its most competitive in the last 20 years looking at each decade since 1926-27.

After his detailed calculations and analysis he concludes:

"The two leagues (NHL and MLB) without caps and significant revenue sharing seem to produce more balanced competition than the leagues with cost-of-labour restrictions over the last 8 years. In addition, we saw that the restrictions did little if anything to improve competition in the NFL and may have actually hurt the NBA's pursuit of parity."

How about player salaries? He found as follows:
"Just like in un-capped sports, salary caps don't strongly influence the escalation of player salaries. Players perceived as stars are being paid tremendous sums in all four sports (hockey least of all) while the salaries and job status of the low end and mid range players are adjusted to compensate."

On trades he finds:
"Salary caps were not set up to decrease the ability of teams to better themselves for the post-season/future through trades, but they have had that effect in both the NBA and NFL."

That could mean no more fun on trade deadline day when real hockey fans take a sick day and hunker down in front of the sports channels.

How about the effect of salary caps in rebuilding a team:
"(NFL) teams are often encumbered with "dead money", payable to players no longer on the roster but still counting against the cap. Teams with significant dead money can't afford to sign as many experienced/quality players and suffer for it. The descent into salary cap hell is often caused by a team doing everything possible to win in one season by knowingly compromising the future. The team and fans are then forced to pay for a short period of prosperity with what can be a long stretch of mediocrity or worse. This peculiar phenomenon is not found in baseball or hockey, although it is appearing occasionally in the NBA."

The moral - be careful what you ask for you just might get it.

Sorry it is so long - but it is a complicated subject.

Okay - over and out. Hope you enjoyed my mini-novel. I am going off to soak my typing fingers in ice water.[/quote]
 

Hab-a-maniac

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Some of the ailing franchises who Bettman is going to bat for blame the escelating prices on their team's lack of success financially. But, isn't it weird how most of these teams also have struggled on the ice for long periods of time that cannot be blamed on low budget. If anyone tells me the Hurricanes/Whalers' inept 3 playoff appearances in 12 years is because of money issues, then you're sadly mistaken. Calgary went 7 years w/out the playoffs and blames it on the expensive NHL. Well, they did have to rid themselves of high contracts and let guys like Vernon, MacInnis walk while trading Suter, Nieuwendyk, Fleury, etc. What have they got today to show for it; Iginla and Regehr! Not bad. But they had a severe inability to get a real team together while the team up the road managed well, was because of idiots like Al Coates, Nick Polano, Lanny McDonald, Jim Peplinski and the misplaced abilities of Craig Button (shoulda been their director of player personnel instead of GM). They finally learned their lesson by getting Sutter in there.

The Islanders have sucked and if you wanna blame it on money, then forget it. That Yashin contract was outlandish and the idiot Milbury still in the NHL shows you how bad some ownerships are. Hmmm, got rid of Luongo (then drafted Dipietro ahead of Gaborik and Heatley), Kasparitis, Palffy, Bertuzzi, McCabe, Berard, Chara, possibly Spezza, Jokinen, the list goes on and ends up with a fringe playoff team. The Ottawa and Buffalo bankruptcies have NOTHING to do with player costs. Bryden kept relying on investors and stuff because the team had to pay for the highway overpass to the Corel Centre. The Sabres owners were frauds!!! Yet Bettman points to those two issues as reasons for a cap. If you wanna use facts, don't use the wrong ones, Gary. Then we have the financially well-off, but anti-spending dolts in Jacobs and Wirtz. Other franchises are in trouble because they play in places like Anaheim, Florida, Phoenix and don't draw flies. Yet, that is irrelevant because players cost too much?

The only teams who I believe want a cap, that I feel sorry for in the mess of the league are the Oilers (they keep drafting and trading well yet never have the assets to beat big budget teams like Dallas and Colorado), the Wild, and that's about it. If you look at the success stories in the league in non-traditional markets, what are they? Minnesota is the only true homegrown one because Dallas and Colorado inherited franchises with a future in place and already competitive.

People in these cities, especially in D-town, will keep away from the arena like a plague if they start stinking. So they spend lots of money to make sure it doesn't happen, thus hurting the league. Stan Kroenke and Tom Hicks are two more problematic pieces in the puzzle. Bettman knows all the sunbelt teams can be good at the same time, so he's making sure the owners can make up for this by saving money with a cap. This lockout may help other teams, but in essence it is to save the weaker children of this league while appeasing the anti-union figures in Wirtz and Jacobs. The teams nobody gives a darn about north of the Mason-Dixie line except Bettman and his NHL buddies. Remember, if this season is killed it was because of greed on both sides. And also because we have to baby the Carolinas, the Anaheims, the Nashvilles, the Floridas, the Phoenixes, the Atlantas, of this league. While other teams may cry out like the Isles, the Hawks, the Bruins, the Kings, etc. I will only feel sympathy for the non-mismanaged clubs in Minny and Edmonton that did it right and still get screwed.
 

Son of Steinbrenner

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Jul 9, 2003
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Wetcoaster said:
The problem is that there is not much of an argument in favour of a cap and all sorts of arguments against it. Also the NFLPA has indicated that they are not prepared to renew the cap at the end of the 2006 season.

I have made the following points variously in a number of threads over the past while. I am trying to bring them together in some semblance of order. The post is kind of long but please bear with me as this is a rather complicated subject. If you do not like long posts - DO NOT READ FURTHER!!!!

The problem Bettman has is that instituting a real salary cap starts with complete disclosure of revenues which is completely foreign to how the NHL owners operate. That is why every time a luxury tax or revenue sharing is mentioned Bettman acts like a deer caught in the headlights - like a cap, a luxury tax and revenue sharing would require financial disclosure.

What Bettman and the owners are trying to do is set an artificial cap level (proposed at $31 million) without first going through and proving what the total league revenues actually are upon which a cap would be based. The NFL, NBA and even MLB have disclosed revenues to the respective player associations - but not the NHL owners. The best we get is a work of fiction by Arthur Levitt, the guy who was supposed to ride herd on the the SU Securities and Exchange Commission and protect consumers - on his watch you has Enron and World.com.

A report on the NHL by by investment banker Moag & Company this past summer summed up the league's stand on revenue sharing this way:

"There is currently no plan emanating from the Commissioner’s office to tie a salary cap to revenue sharing. Previously, the players’ union has said that it would only consider limiting salaries in the context of significant revenue sharing. That said, the league has suggested in the past that revenue sharing does not require NHLPA approval. If nothing else, this rhetoric suggests that the owners have been unable to agree even amongst themselves as it relates to revenue sharing."

A consultant who works for the NHL was more blunt, telling the New York Post recently, "Hockey owners won't do this; they'll fight to the end not to share their revenues, since most of them get their revenue locally. The real trouble is that the conflict isn't going to just a labor issue of players versus owners — it's going to be owners against owners."

Many experts (such as Matt Witting and Stephen Ross of UBC law school) dispute that salary caps are at all useful. Other people have pointed out that the NBA soft cap doesn't work very well at all and the NFL cap is all but ignored.

The NFL system works fairly well NOT because of the salary cap but because of the socialistic nature of the NFL and its huge TV contract. Revenues are shared across the board in the NFL including locally generated rewvenues.

As John Davidson on SportsNet points out the owners in the NFL generally are family or closely held private companies not conglomerates that you see in the NHL. Such owners would have problems surviving in the NHL (think Arthur Griffiths) but because of the revenue sharing (and the HUGE TV contract) they can not only survive but compete. As Davidson points out it is easy for the conglomerates to move money around within subsidiary and associated companies to hide the actual ammount of hockey related revenues.

As one NFL insider put it rather pithily:
"If you can't make money in the NFL, I think you may be considered the village idiot," (referring to the owners).

However although the NFL supposedly has a hard cap M.J. Duberstein, who is research director for the National Football League Players Association, told USA Today "If you total up the actual dollars paid to players since the cap came in with the 1994 season, the total is $2 billion greater than the sum of all the salary caps."

So even the so-called hard cap is honoured more in the breach than in practise even in the NFL AND the NBA is worse.

"An effective salary cap is too Draconian and unreasonable. If you're going to use a cap to drive down player salaries, you're just padding owners' pockets," economist Andrew Zimbalist was quoted as saying by USA Today.

While good for owners, Stephen Ross, a University of Illinois sports law professor who also teaches classes at the University of British Columbia, said salary caps can be bad for fans.

"It is the solution to cost certainly and it is a solution to rising costs," said Ross, who has written an article on salary caps for the UBC Law Review.

"But salary caps come at the expense of the best interests of fans of every team other than the Stanley Cup champion."

A salary cap can make it difficult for a team to rebuild, Ross said.

He also argues the NHL wants a salary cap that guarantees owners can make money even if they are bad businessman and no matter what market they operate in.

"Things need to be done to permit well run teams to make money," Ross said.

"The problem is the salary cap guarantees all teams, well run and poorly run . . . will make money."

As Joe Sheehan of the Baseball Prospectus explained it, the goal of the salary cap, which he says should be actually called a payroll cap, is "to restrict the amount of money management can spend on labor. It's an agreement among competitors to inhibit the labor market, lowering salaries."

That would of course be an antitrust violation but for the NHLPA. The only way the league can avoid that issue is to get the union to agree to it in the collective bargaining process. That is why the NHLPA is so reluctant to agree to a cap.

How about the argument that Bettman and the NHL owners trot out that a salary cap will let them lower ticket prices? Not likely since revenue and profitability have little to do with ticket prices.

"Prices are set by teams to maximize revenue, and are based on anticipated demand. They are not set to "make up" whatever rise in payroll is anticipated, no matter how many teams send out letters to season-ticket holders claiming this to be the case. Rising player salaries do not drive ticket-price increases," Sheehan wrote in a column for the Baseball Prospectus.

Toronto Sun columnist Al Strachan once put it this way: "As for ticket prices, they reflect what the market will bear. The Maple Leafs have the highest prices in the league for one simple reason. People will buy them at that price. Surely you don't think that ticket prices will go down if salaries are reduced, do you? If you're that stupid, you could become a judge in this country."

How about building a team? Critics say a cap would do anything but encourage team building. In the NFL teams are often forced to make decisions where staying under the cap takes priority over building or keeping together a competitive team. Teams that draft well could eventually have to part with their players if they could not fit them under the team's salary cap.

"[A cap] punishes success, forcing well-built, winning teams to shed talent on a near-constant basis," said Joe Sheehan of the Baseball Prospectus.

Larry Brooks of the New York Post said a cap "would destroy team-building, would destroy the ability of a successful club to maintain its nucleus. It would base every personnel decision on an ability to pay while remaining under a prohibitive cap."

That, in a way, benefits teams who makes poor decisions. They'll have an excuse for not being able to put together a competitive team because their hands are tied by the cap.

"No matter what the level of the salary cap, there are going to be a lot of teams who have lousy teams because they have overpaid, underachieving players and now they are at the cap level," Ross, the law professor, told the Canadian Press. "If you are an owner, that's exactly what you want. You want to be able to tell your fans 'I'm sorry there is nothing I can do to improve the product because of the cap.' The fans are stuck with another year of a lousy team."

Here is my analysis of salary caps based on Matt Witting's comprehensive study of salary caps.

The owners are trying to fix the problem - which is that any number of them and their GM's do not have a clue how to run their teams AS A BUSINESS. They want to transfer the results their own incompetence to the players without addressing the underlying management problems.

The NHL owners refuse to share revenue with one another yet they demand that the players in effect do this for them. Not likely to happen with someone as astute as Bob Goodenow at the helm for the players - Goodenow is NOT "Good Old Al Eagleson the Owners' Pal".

The NHL owners have historically misled and defrauded the players, diverted revenues, hid income, etc. - why is now any different? The NHL owners have steadfastly refused to open up the real books so there is no starting point for a salary cap since there is no real number to set such a cap against.

Some players have a different view as do some GM's. Here is one player and a former GM (The Mouth that Roared - Brian Burke) on this issue. Sather sang the same tune while in Edmonton but he has gone over to the dark side in New York.

"If they [the owners] want to pay us, they must be making money, it's not up to us to say: 'No, don't give us that much money.' " - Vincent Damphousse.

"I have never been more embarrassed to work in the NHL as I was on July 1st and 2nd [2001]. I know we can't support the salaries. I know that some of the teams who have spent that money are doing it without the financial capability to pay the money. I'm running my business like a business. I'm going head-to-head with people who are crazy, as far as I'm concerned."-Vancouver Canucks GM Brian Burke, July 2001

As former financial guru and the guy who guided the Canucks financial ship for the past few years prior to joining the Vancouver Olympic Committee, David Cobb, chief operating officer of the Vancouver Canucks, said it is important not to lose perspective in the debate.

"We're in a period of time with our franchise where we have an excellent team, we have excellent support from our fans, we have the top retail sales in the league, we have the busiest website in the league," Cobb said. "Everything's going well for us."

One moral - run your team as a business and do not hire financial idiots (think Pat Quinn, Mike Milbury and Booby Clarke) - and you can do well under the current system.

MEMO TO THE OWNERS AND BETTMAN - INSTEAD OF TRYING TO HAVE THE PLAYERS IDIOT-PROOF YOUR BUSINESS - TRY NOT HIRING IDIOTS IN THE FIRST PLACE.

And here is another quote to keep in mind when talking about salary caps from yours truly:

"Be careful what you ask for you just might get it." - Wetcoaster

Many are braying for a salary cap without faintest clue of what it is and what it entails.

It is complex and takes some time to wrap your mind around the concepts. Fortunately there was a consultant and statistician in Washington, DC, Matt Witting, who did an incredibly detailed and exhaustive in-depth study comparing the salary capped NFL and NBA to the capless MLB and NHL in February 2003. His figures, charts and analysis reveal some very interesting things. They also explode a number of popular myths about salary caps and their effects on competition and the movement of players.

There is a lot of simplistic bashing of the NHLPA and the players. It takes place IMHO because the players' salaries are visible. Crank up the NHLPA website and others and you can see what each player makes. Salary disclosure was one of the best things Bob Goodenow pushed so that teams could not trade on player ignorance in negotiations as had been the past practise but it is a two-edged sword. However try and find out what owners make off the game - good luck.

Most team owners run a series of companies, usually private, with the hockey operations in one company while revenue generation from hockey related operations are held elsewhere. The NHLPA has challenged the owners to open up all the books and prove their contention that the game is not economically viable. The owners have steadfastly refused the request. The Leavitt report did not look at the real books only those figures the owners already voluntarily disclose to the league.

If you intend to institute a salary cap as in the NFL or NBA, the first requirement is complete financial disclosure by ownership (as was done in those leagues) as there has to be some form of revenue equalization and establishment of a formula which forms the cap. Any other approach is pure salary suppression and done only on the backs of the players. That is the system the NHL owners are trying to impose.

The NHL owners refusal to disclose leads me to conclude what they are looking to do is cap salaries without revenue sharing. In other words the entire burden will fall on the players and ownership is free to do what it wishes. This was actually done in the last CBA where the NHLPA agreed to salary restrictions for new players entering the NHL. The maximum salary was set at $1.175 million for 2002 and bonuses were restricted. If you want to see this check out Article 9 of the CBA "Entry level Compensation". The CBA can be found at:
http://www-ix.oit.umass.edu/~splaw488/NHL_CBA.htm
or http://letsgopens.com/nhl_cba.php

It simply is not going to happen this way for established players. In restricting entry level compensation the NHLPA in effect gave away rights for players who were not yet even part of the association - cynical yes but a very good bargaining chip. Besides who was going to complain.

When salary controls are proposed they are supposed to accomplish all or at least most of the following:
-keep team salaries down
-keep individual player salaries at a reasonable levels
-keep ticket prices increases under control
-reduce the difference between "haves" and "have-nots" and
-increase competition on ice league-wide.

Salary caps are not the be-all and end-all and do not necessarily work as intended and they have side effects. For example under the NFL cap system trades of any skilled player is virtually impossible. Just think no more trade deadline fun in the NHL. The "Law of Unintended Consequences" has dogged the salary cap systems in the NBA and NFL

As I noted above many fans fail to realize that the NHL already has a salary cap in place. The maximum entry-level compensation for players under the age of 25 is dealt with under Article 9 of the NHL CBA which limits the maximum yearly compensation for rookies to just over $1.25 million in salary and 50% of that in signing, reporting and roster bonuses for 2002. It went up another $50,000 this year. Rookie contracts are also deemed to be two-way deals under the CBA.

The NHL had a salary cap in place for decades (they just lied to the players and colluded with Al Eagleson on sweetheart deals) until Goodenow brought the NHLPA into the modern pro sports world and the NHL still does for new players entering the league.

A general salary cap for players without the NHL owners agreeing to revenue sharing will be a non-starter. The NHLPA will never agree and do not forget the players have their agents and their own legal and finacial advisers who keep them informed of the effects and ramifications of any changes in the CBA. This is not the 1950's when you can give Gordie Howe a team jacket to keep him happy. Or banish superstars like Ted Lindsay to Chicago and Doug Harvey to New York for challenging the owners hegemony.

The NBA and NFL caps are based on calculating league-wide revenue from virtually all basketball/football sources and revenue streams to generate a figure against which an allowable salary ceiling for each team is calculated. If you have ever read the CBA's for the NBA or NFL (and I have) you will realize they are two of the most complicated and convoluted labour relations documents ever produced. Teams employ an army of legal and accounting consultants on a full-time basis to assist them in conducting their business and in negotiating contracts. It takes three weeks in the NBA to figure out if you can make a trade.

The NHL owners have consistently refused to consider revenue sharing and will not disclose how much money is being made from all hockey related enterprises. In most cases the hockey operation, i.e. the team is run under one set of books while other income is generated through other companies. The NHLPA has challenged the owners to open the books so a true picture of the financial system can be seen. The owners have refused. As noted the Leavitt report was nothing more than another PR exercise produced by the owners to buttress their position pending the nuts and bolts of the labour negotiations.

Quite rightly the players resist being the only side making the financial sacrifice. Historically in the NHL the owners r@ped and pillaged the players before the advent of the NHLPA. Probably the single most important move by the NHLPA was Goodenow publishing individual salaries and making contracts public. In the past players were forbidden from discussing salary on pain of suspension or being blackballed. It led to such things as Gordie Howe in his heyday being only the fourth or fifth highest paid player on the Wings while he was the best player in the league.

There are various forms of salary control.

The NBA cap which Bettman helped design and implement is a "soft" cap. The teams must disclose their Basketball Related Income ("BRI") which includes revenue from tickets, advertising, local concession and souvenir sales, local media and other league, team and arena income streams. The current NBA cap for each team is 55% of the total BRI for the league. Only two teams (Detroit and LA Clippers) were under the cap - the other 28 teams were over. There is also a luxury tax in the NBA. However there are so many exceptions and loopholes the cap is more honoured in the breach rather than compliance. Since most exceptions relate to the star players and their higher salaries, the cap has virtually no effect on the players for whom the cap was intended in the first place but it does hurt the journeymen.

The NFL has what is referred to as a "hard" cap. Again league revenue is calculated in much the same way as the NBA but it is called Defined Gross Revenues ("DGR"). There are virtually no exceptions - hence it is a "hard" cap. The cap is set at 63% - higher than the NBA but remember that football rosters are much larger.

Also you often hear of huge long-term NFL deals. However if a player is cut, his contract ends. So if he has 5 years left on a $5 million per year 7 year contract once he is released, the team is no longer obligated to pay. This differs from the NHL where contracts are guaranteed and if you want to end a contract you must pay out the remainder at 2/3 or negotiate a buy-out. This was the Pierre Turgeon situation in Dallas.

Of course many star NFL'ers (and their agents) know this and they sign deals with huge signing bonuses paid up front. Under the NFL system teams can then average out the bonus over the term of the contract for the purposes of calculating the team's yearly cap number.

So taking the example above a player may sign a $35 million contract with a 7 year term. His salary is $2 million per year and he has $21 million dollar signing bonus in his pocket. Essentially he has a $23 million guaranteed contract. The team is not charged $23 million in the first year under its cap but rather is permitted to spread out the total contract over the total term so it is only charged $5 million per year against its cap. However if the player is released, traded or injured the entire signing bonus (or its remainder) now becomes part of the team's next year cap. For example our player blows out his knee and retires. Now the cap room is lessened by $19 million dollars and you must still try to replace the player. Many NFL teams have run into this problem. Also do you think there is any way this player is going to be traded?

Mark Witting in his extremely detailed study of salary caps has concluded a number of things. If a cap is in place there is less of a gap between the "haves and "have nots" and the wealth distribution is more even. That is not surprising since that is the starting point for a salary cap.

However he found that in the NFL the competitive balance difference pre- and post cap was negligible and had done nothing for league wide parity.

In the NBA the cap was instituted (according to the league) to protect smaller market teams and increase their competitiveness. It has not worked as in 18 years the 4 largest markets have won 14 titles while in the previous 18 years (pre-cap) the 4 largest market team only won 5 titles.

He finds that baseball with no salary cap has excellent competitive balance across the league and that the NHL has been its most competitive in the last 20 years looking at each decade since 1926-27.

After his detailed calculations and analysis he concludes:

"The two leagues (NHL and MLB) without caps and significant revenue sharing seem to produce more balanced competition than the leagues with cost-of-labour restrictions over the last 8 years. In addition, we saw that the restrictions did little if anything to improve competition in the NFL and may have actually hurt the NBA's pursuit of parity."

How about player salaries? He found as follows:
"Just like in un-capped sports, salary caps don't strongly influence the escalation of player salaries. Players perceived as stars are being paid tremendous sums in all four sports (hockey least of all) while the salaries and job status of the low end and mid range players are adjusted to compensate."

On trades he finds:
"Salary caps were not set up to decrease the ability of teams to better themselves for the post-season/future through trades, but they have had that effect in both the NBA and NFL."

That could mean no more fun on trade deadline day when real hockey fans take a sick day and hunker down in front of the sports channels.

How about the effect of salary caps in rebuilding a team:
"(NFL) teams are often encumbered with "dead money", payable to players no longer on the roster but still counting against the cap. Teams with significant dead money can't afford to sign as many experienced/quality players and suffer for it. The descent into salary cap hell is often caused by a team doing everything possible to win in one season by knowingly compromising the future. The team and fans are then forced to pay for a short period of prosperity with what can be a long stretch of mediocrity or worse. This peculiar phenomenon is not found in baseball or hockey, although it is appearing occasionally in the NBA."

The moral - be careful what you ask for you just might get it.

Sorry it is so long - but it is a complicated subject.

Okay - over and out. Hope you enjoyed my mini-novel. I am going off to soak my typing fingers in ice water.
[/QUOTE]
:bow:

thank you for you hard work and time putting this all together
 

Sinurgy

Approaching infinity
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Feb 8, 2004
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Man I respect Wetcoaster for putting together such an explanation but after about a 1\3 of the way through I couldn't help but get that "being sold" feeling. Maybe it was just all those quotes: "...this movie will rock your world" says Joe Blow of the NY Times.

Nonetheless a well thought out post! :bow:
 

Wetcoaster

Guest
Sinurgy said:
Man I respect Wetcoaster for putting together such an explanation but after about a 1\3 of the way through I couldn't help but get that "being sold" feeling. Maybe it was just all those quotes: "...this movie will rock your world" says Joe Blow of the NY Times.

Nonetheless a well thought out post! :bow:

If I said it (and I have in the past) I would be (and have been) attacked for not having supported my argument.

So I give you sports economists, legal experts, hockey commentators etc. to support my position.

Thus far I have yet to see a sports economist who actually favours a hard cap imposed on the NHLPA.
 

PecaFan

Registered User
Nov 16, 2002
9,243
520
Ottawa (Go 'Nucks)
Wetcoaster said:
If you do not like long posts - DO NOT READ FURTHER!!!!

Any particular reason why you just re-posted an old message in an old thread, instead of just referring to it, or posting in the original thread?

And you didn't even fix the outright error I pointed out, saying the NHL wants a $31 million cap. Once is a mistake. Twice appears to be a genuine attempt to misrepresent things.

Anyway, my post #374 still stands:
http://www.hfboards.com/showthread.php?p=2308612#post2308612

Wetcoaster said:
What Bettman and the owners are trying to do is set an artificial cap level (proposed at $31 million)

Flat out wrong. The NHL proposal was 38.6 million. And of course, should the NHLPA accept a cap, they could surely bargain that even higher.

Many experts (such as Matt Witting and Stephen Ross of UBC law school) dispute that salary caps are at all useful.

And yet again, a PA supporter proves that caps don't work. So the PA won't be affected if a cap is in place, and they're being totally unreasonable to not accept one then.

How about the argument that Bettman and the NHL owners trot out that a salary cap will let them lower ticket prices?

The owners aren't promising lower ticket prices. That's wishful fans that talk about that.

Salary caps are not the be-all and end-all and do not necessarily work as intended and they have side effects. For example under the NFL cap system trades of any skilled player is virtually impossible. Just think no more trade deadline fun in the NHL.

Hmm, the trade deadline, I'm unfamiliar with that. Oh, I remember, that's when the same old high spending teams year after year snatch up all the good players and then one of them goes on to win the Cup.

The trade deadline is one of the problems in the current NHL. And a cap fixes that? Perfect.

However if the player is released, traded or injured the entire signing bonus (or its remainder) now becomes part of the team's next year cap. For example our player blows out his knee and retires. Now the cap room is lessened by $19 million dollars and you must still try to replace the player. Many NFL teams have run into this problem. Also do you think there is any way this player is going to be traded?

Gosh. A team made a big money signing, and now has to deal with the consequences. Shucks, what a terrible situation. The quality of a team would actually be affected by the huge contract, and they can't just go out and sign some other player for big bucks to replace him. Oh no, we wouldn't want *that*, would we?

Mark Witting in his extremely detailed study of salary caps has concluded a number of things. If a cap is in place there is less of a gap between the "haves and "have nots" and the wealth distribution is more even. That is not surprising since that is the starting point for a salary cap.

Fine, there's no problem with that.

However he found that in the NFL the competitive balance difference pre- and post cap was negligible and had done nothing for league wide parity.

The NHL is not trying to implement a cap for parity reasons. They've made only the smallest of mentions of it, usually in the cities that most want to hear it. Yes, that's pandering to them, but no one is saying they're perfect.

How about the effect of salary caps in rebuilding a team:
"(NFL) teams are often encumbered with "dead money", payable to players no longer on the roster but still counting against the cap. Teams with significant dead money can't afford to sign as many experienced/quality players and suffer for it. The descent into salary cap hell is often caused by a team doing everything possible to win in one season by knowingly compromising the future. The team and fans are then forced to pay for a short period of prosperity with what can be a long stretch of mediocrity or worse. "

Again. Aw shucks. Teams that overspend massively in an attempt to win the Cup will suffer long term? Gosh, how terrible. It's so much better in the current NHL where they can continue to do that for a decade straight.

The moral - be careful what you ask for you just might get it.

Geez, I sure hope so. Everything you've pointed out about a cap as a so called drawback would be *wonderful*.
 

The Maltais Falcon

Registered User
Jan 9, 2005
1,156
1
Atlanta, GA
mr gib said:
you don't believe that do you? - it's about the dough re mi - they don't give a flying **** about hockey -
Then why did they buy hockey teams? If all they cared about was money, there are far better investment vehicles out there than hockey teams.
 

Greschner4

Registered User
Jan 21, 2005
871
222
The baseball team in Kansas City was a powerhouse in the 70s and 80s until the economics of the game became rigged against them and the big market teams could take cable TV money which has nothing to do with performance or even viewership and spend it against them. Now they have to trade every single one of their top-notch players when they become eligible for free agency because they can't afford him. Carlos Beltran was the latest.

The football team in Kansas City is a very competitive team year-in and year-out and is a lot better now than they were before a salary cap.

The baseball team in Pittsburgh was a powerhouse in the 70s and early 90s until the economics of the game became rigged against them and the big market teams could take cable TV money which has nothing to do with performance or even viewership and spend it against them. They had a powerhouse team of young players in the early 90s that included Barry Bonds and Doug Drabek. Had the team had the access to cable revenues in a bigger market, they could have kept these players and built a dynasty. It simply isn't fair that a dynasty can only be built in New York and a few other large markets.

The Minnesota Twins and Oakland A's can also tell you what it's like to develop a stream of great players that could very well be a dynasty only to lose them to undeserving bigger markets who have money that has nothing whatsoever to do with performance on the field.

Turning to hockey, it's blatantly obvious to all but the most hopelessly biased that the small market teams can make the playoffs here and there, but consistently lose players they drafted and developed to larger market teams who can buy their way out of mistakes that the Edmontons and Calgarys can't. Everyone knows the list of players and it's not even remotely arguable that this happens. Hockey doesn't want the Kansas City Royals and Pittsburgh Pirates i its smaller markets, it wants the Kansas City Chiefs and Pittsburgh Steelers and I for one am in full support.
 

grego

Registered User
Jan 12, 2005
2,390
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Saskatchewan
Wetcoaster said:
The NHL had a salary cap in place for decades (they just lied to the players and colluded with Al Eagleson on sweetheart deals) until Goodenow brought the NHLPA into the modern pro sports world and the NHL still does for new players entering the league.

I am confused. At one point he states that a cap makes it harder for a team to build. But then here he said that for years, until the 90s essentially there was a cap in the NHL they just never talked about it. Doesn't that mean then if there was a cap that the great teams of the Philly Flyers in the 70s, NY Islanders and Edmonton Oilers were built under a silent cap system.

If this is true then it actually is possible to build a winner and keep the team together long enough to have a dynasty.

A league cap will not break all the teams apart like they say, it just means that good management on any team will give them a chance to win a Cup.
 

Greschner4

Registered User
Jan 21, 2005
871
222
grego said:
I am confused. At one point he states that a cap makes it harder for a team to build. But then here he said that for years, until the 90s essentially there was a cap in the NHL they just never talked about it. Doesn't that mean then if there was a cap that the great teams of the Philly Flyers in the 70s, NY Islanders and Edmonton Oilers were built under a silent cap system.

If this is true then it actually is possible to build a winner and keep the team together long enough to have a dynasty.

A league cap will not break all the teams apart like they say, it just means that good management on any team will give them a chance to win a Cup.


The confusion is because the story's a myth. It's the kind of thing pro-labor extremists of a conspiratorial bent -- who see in all workplaces, even one with multimillionaire employees like the NHL or MLB, an exploitative sweatshop -- are prone to believe.
 

mr gib

Registered User
Sep 19, 2004
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vancouver
www.bigtopkarma.com
The Maltais Falcon said:
Then why did they buy hockey teams? If all they cared about was money, there are far better investment vehicles out there than hockey teams.
prestige, ego, and the building - good for buisness - there are now only a few owner's left that are hockey people - as they say -
 

mr gib

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Sep 19, 2004
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vancouver
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mr gib said:
prestige, ego, and the building - good for buisness - there are now only a few owner's left that are hockey people - as they say -
and i have to add - the cap with dismantle all the work the - hockey people - did to build their team's - it's a shame -
 

djhn579

Registered User
Mar 11, 2003
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Tonawanda, NY
mr gib said:
and i have to add - the cap with dismantle all the work the - hockey people - did to build their team's - it's a shame -

You mean that all the hockey people on all the well managed teams, will suddenly no longer be competent if they had to build a team on the same budget as everyone else?
 

Sammy*

Guest
Wetcoaster said:
The problem is that there is not much of an argument in favour of a cap and all sorts of arguments against it. Also the NFLPA has indicated that they are not prepared to renew the cap at the end of the 2006 season.

I have made the following points variously in a number of threads over the past while. I am trying to bring them together in some semblance of order. The post is kind of long but please bear with me as this is a rather complicated subject. If you do not like long posts - DO NOT READ FURTHER!!!!

The problem Bettman has is that instituting a real salary cap starts with complete disclosure of revenues which is completely foreign to how the NHL owners operate. That is why every time a luxury tax or revenue sharing is mentioned Bettman acts like a deer caught in the headlights - like a cap, a luxury tax and revenue sharing would require financial disclosure.

What Bettman and the owners are trying to do is set an artificial cap level (proposed at $31 million) without first going through and proving what the total league revenues actually are upon which a cap would be based. The NFL, NBA and even MLB have disclosed revenues to the respective player associations - but not the NHL owners. The best we get is a work of fiction by Arthur Levitt, the guy who was supposed to ride herd on the the SU Securities and Exchange Commission and protect consumers - on his watch you has Enron and World.com.

A report on the NHL by by investment banker Moag & Company this past summer summed up the league's stand on revenue sharing this way:

"There is currently no plan emanating from the Commissioner’s office to tie a salary cap to revenue sharing. Previously, the players’ union has said that it would only consider limiting salaries in the context of significant revenue sharing. That said, the league has suggested in the past that revenue sharing does not require NHLPA approval. If nothing else, this rhetoric suggests that the owners have been unable to agree even amongst themselves as it relates to revenue sharing."

A consultant who works for the NHL was more blunt, telling the New York Post recently, "Hockey owners won't do this; they'll fight to the end not to share their revenues, since most of them get their revenue locally. The real trouble is that the conflict isn't going to just a labor issue of players versus owners — it's going to be owners against owners."

Many experts (such as Matt Witting and Stephen Ross of UBC law school) dispute that salary caps are at all useful. Other people have pointed out that the NBA soft cap doesn't work very well at all and the NFL cap is all but ignored.

The NFL system works fairly well NOT because of the salary cap but because of the socialistic nature of the NFL and its huge TV contract. Revenues are shared across the board in the NFL including locally generated rewvenues.

As John Davidson on SportsNet points out the owners in the NFL generally are family or closely held private companies not conglomerates that you see in the NHL. Such owners would have problems surviving in the NHL (think Arthur Griffiths) but because of the revenue sharing (and the HUGE TV contract) they can not only survive but compete. As Davidson points out it is easy for the conglomerates to move money around within subsidiary and associated companies to hide the actual ammount of hockey related revenues.

As one NFL insider put it rather pithily:
"If you can't make money in the NFL, I think you may be considered the village idiot," (referring to the owners).

However although the NFL supposedly has a hard cap M.J. Duberstein, who is research director for the National Football League Players Association, told USA Today "If you total up the actual dollars paid to players since the cap came in with the 1994 season, the total is $2 billion greater than the sum of all the salary caps."

So even the so-called hard cap is honoured more in the breach than in practise even in the NFL AND the NBA is worse.

"An effective salary cap is too Draconian and unreasonable. If you're going to use a cap to drive down player salaries, you're just padding owners' pockets," economist Andrew Zimbalist was quoted as saying by USA Today.

While good for owners, Stephen Ross, a University of Illinois sports law professor who also teaches classes at the University of British Columbia, said salary caps can be bad for fans.

"It is the solution to cost certainly and it is a solution to rising costs," said Ross, who has written an article on salary caps for the UBC Law Review.

"But salary caps come at the expense of the best interests of fans of every team other than the Stanley Cup champion."

A salary cap can make it difficult for a team to rebuild, Ross said.

He also argues the NHL wants a salary cap that guarantees owners can make money even if they are bad businessman and no matter what market they operate in.

"Things need to be done to permit well run teams to make money," Ross said.

"The problem is the salary cap guarantees all teams, well run and poorly run . . . will make money."

As Joe Sheehan of the Baseball Prospectus explained it, the goal of the salary cap, which he says should be actually called a payroll cap, is "to restrict the amount of money management can spend on labor. It's an agreement among competitors to inhibit the labor market, lowering salaries."

That would of course be an antitrust violation but for the NHLPA. The only way the league can avoid that issue is to get the union to agree to it in the collective bargaining process. That is why the NHLPA is so reluctant to agree to a cap.

How about the argument that Bettman and the NHL owners trot out that a salary cap will let them lower ticket prices? Not likely since revenue and profitability have little to do with ticket prices.

"Prices are set by teams to maximize revenue, and are based on anticipated demand. They are not set to "make up" whatever rise in payroll is anticipated, no matter how many teams send out letters to season-ticket holders claiming this to be the case. Rising player salaries do not drive ticket-price increases," Sheehan wrote in a column for the Baseball Prospectus.

Toronto Sun columnist Al Strachan once put it this way: "As for ticket prices, they reflect what the market will bear. The Maple Leafs have the highest prices in the league for one simple reason. People will buy them at that price. Surely you don't think that ticket prices will go down if salaries are reduced, do you? If you're that stupid, you could become a judge in this country."

How about building a team? Critics say a cap would do anything but encourage team building. In the NFL teams are often forced to make decisions where staying under the cap takes priority over building or keeping together a competitive team. Teams that draft well could eventually have to part with their players if they could not fit them under the team's salary cap.

"[A cap] punishes success, forcing well-built, winning teams to shed talent on a near-constant basis," said Joe Sheehan of the Baseball Prospectus.

Larry Brooks of the New York Post said a cap "would destroy team-building, would destroy the ability of a successful club to maintain its nucleus. It would base every personnel decision on an ability to pay while remaining under a prohibitive cap."

That, in a way, benefits teams who makes poor decisions. They'll have an excuse for not being able to put together a competitive team because their hands are tied by the cap.

"No matter what the level of the salary cap, there are going to be a lot of teams who have lousy teams because they have overpaid, underachieving players and now they are at the cap level," Ross, the law professor, told the Canadian Press. "If you are an owner, that's exactly what you want. You want to be able to tell your fans 'I'm sorry there is nothing I can do to improve the product because of the cap.' The fans are stuck with another year of a lousy team."

Here is my analysis of salary caps based on Matt Witting's comprehensive study of salary caps.

The owners are trying to fix the problem - which is that any number of them and their GM's do not have a clue how to run their teams AS A BUSINESS. They want to transfer the results their own incompetence to the players without addressing the underlying management problems.

The NHL owners refuse to share revenue with one another yet they demand that the players in effect do this for them. Not likely to happen with someone as astute as Bob Goodenow at the helm for the players - Goodenow is NOT "Good Old Al Eagleson the Owners' Pal".

The NHL owners have historically misled and defrauded the players, diverted revenues, hid income, etc. - why is now any different? The NHL owners have steadfastly refused to open up the real books so there is no starting point for a salary cap since there is no real number to set such a cap against.

Some players have a different view as do some GM's. Here is one player and a former GM (The Mouth that Roared - Brian Burke) on this issue. Sather sang the same tune while in Edmonton but he has gone over to the dark side in New York.

"If they [the owners] want to pay us, they must be making money, it's not up to us to say: 'No, don't give us that much money.' " - Vincent Damphousse.

"I have never been more embarrassed to work in the NHL as I was on July 1st and 2nd [2001]. I know we can't support the salaries. I know that some of the teams who have spent that money are doing it without the financial capability to pay the money. I'm running my business like a business. I'm going head-to-head with people who are crazy, as far as I'm concerned."-Vancouver Canucks GM Brian Burke, July 2001

As former financial guru and the guy who guided the Canucks financial ship for the past few years prior to joining the Vancouver Olympic Committee, David Cobb, chief operating officer of the Vancouver Canucks, said it is important not to lose perspective in the debate.

"We're in a period of time with our franchise where we have an excellent team, we have excellent support from our fans, we have the top retail sales in the league, we have the busiest website in the league," Cobb said. "Everything's going well for us."

One moral - run your team as a business and do not hire financial idiots (think Pat Quinn, Mike Milbury and Booby Clarke) - and you can do well under the current system.

MEMO TO THE OWNERS AND BETTMAN - INSTEAD OF TRYING TO HAVE THE PLAYERS IDIOT-PROOF YOUR BUSINESS - TRY NOT HIRING IDIOTS IN THE FIRST PLACE.

And here is another quote to keep in mind when talking about salary caps from yours truly:

"Be careful what you ask for you just might get it." - Wetcoaster

Many are braying for a salary cap without faintest clue of what it is and what it entails.

It is complex and takes some time to wrap your mind around the concepts. Fortunately there was a consultant and statistician in Washington, DC, Matt Witting, who did an incredibly detailed and exhaustive in-depth study comparing the salary capped NFL and NBA to the capless MLB and NHL in February 2003. His figures, charts and analysis reveal some very interesting things. They also explode a number of popular myths about salary caps and their effects on competition and the movement of players.

There is a lot of simplistic bashing of the NHLPA and the players. It takes place IMHO because the players' salaries are visible. Crank up the NHLPA website and others and you can see what each player makes. Salary disclosure was one of the best things Bob Goodenow pushed so that teams could not trade on player ignorance in negotiations as had been the past practise but it is a two-edged sword. However try and find out what owners make off the game - good luck.

Most team owners run a series of companies, usually private, with the hockey operations in one company while revenue generation from hockey related operations are held elsewhere. The NHLPA has challenged the owners to open up all the books and prove their contention that the game is not economically viable. The owners have steadfastly refused the request. The Leavitt report did not look at the real books only those figures the owners already voluntarily disclose to the league.

If you intend to institute a salary cap as in the NFL or NBA, the first requirement is complete financial disclosure by ownership (as was done in those leagues) as there has to be some form of revenue equalization and establishment of a formula which forms the cap. Any other approach is pure salary suppression and done only on the backs of the players. That is the system the NHL owners are trying to impose.

The NHL owners refusal to disclose leads me to conclude what they are looking to do is cap salaries without revenue sharing. In other words the entire burden will fall on the players and ownership is free to do what it wishes. This was actually done in the last CBA where the NHLPA agreed to salary restrictions for new players entering the NHL. The maximum salary was set at $1.175 million for 2002 and bonuses were restricted. If you want to see this check out Article 9 of the CBA "Entry level Compensation". The CBA can be found at:
http://www-ix.oit.umass.edu/~splaw488/NHL_CBA.htm
or http://letsgopens.com/nhl_cba.php

It simply is not going to happen this way for established players. In restricting entry level compensation the NHLPA in effect gave away rights for players who were not yet even part of the association - cynical yes but a very good bargaining chip. Besides who was going to complain.

When salary controls are proposed they are supposed to accomplish all or at least most of the following:
-keep team salaries down
-keep individual player salaries at a reasonable levels
-keep ticket prices increases under control
-reduce the difference between "haves" and "have-nots" and
-increase competition on ice league-wide.

Salary caps are not the be-all and end-all and do not necessarily work as intended and they have side effects. For example under the NFL cap system trades of any skilled player is virtually impossible. Just think no more trade deadline fun in the NHL. The "Law of Unintended Consequences" has dogged the salary cap systems in the NBA and NFL

As I noted above many fans fail to realize that the NHL already has a salary cap in place. The maximum entry-level compensation for players under the age of 25 is dealt with under Article 9 of the NHL CBA which limits the maximum yearly compensation for rookies to just over $1.25 million in salary and 50% of that in signing, reporting and roster bonuses for 2002. It went up another $50,000 this year. Rookie contracts are also deemed to be two-way deals under the CBA.

The NHL had a salary cap in place for decades (they just lied to the players and colluded with Al Eagleson on sweetheart deals) until Goodenow brought the NHLPA into the modern pro sports world and the NHL still does for new players entering the league.

A general salary cap for players without the NHL owners agreeing to revenue sharing will be a non-starter. The NHLPA will never agree and do not forget the players have their agents and their own legal and finacial advisers who keep them informed of the effects and ramifications of any changes in the CBA. This is not the 1950's when you can give Gordie Howe a team jacket to keep him happy. Or banish superstars like Ted Lindsay to Chicago and Doug Harvey to New York for challenging the owners hegemony.

The NBA and NFL caps are based on calculating league-wide revenue from virtually all basketball/football sources and revenue streams to generate a figure against which an allowable salary ceiling for each team is calculated. If you have ever read the CBA's for the NBA or NFL (and I have) you will realize they are two of the most complicated and convoluted labour relations documents ever produced. Teams employ an army of legal and accounting consultants on a full-time basis to assist them in conducting their business and in negotiating contracts. It takes three weeks in the NBA to figure out if you can make a trade.

The NHL owners have consistently refused to consider revenue sharing and will not disclose how much money is being made from all hockey related enterprises. In most cases the hockey operation, i.e. the team is run under one set of books while other income is generated through other companies. The NHLPA has challenged the owners to open the books so a true picture of the financial system can be seen. The owners have refused. As noted the Leavitt report was nothing more than another PR exercise produced by the owners to buttress their position pending the nuts and bolts of the labour negotiations.

Quite rightly the players resist being the only side making the financial sacrifice. Historically in the NHL the owners r@ped and pillaged the players before the advent of the NHLPA. Probably the single most important move by the NHLPA was Goodenow publishing individual salaries and making contracts public. In the past players were forbidden from discussing salary on pain of suspension or being blackballed. It led to such things as Gordie Howe in his heyday being only the fourth or fifth highest paid player on the Wings while he was the best player in the league.

There are various forms of salary control.

The NBA cap which Bettman helped design and implement is a "soft" cap. The teams must disclose their Basketball Related Income ("BRI") which includes revenue from tickets, advertising, local concession and souvenir sales, local media and other league, team and arena income streams. The current NBA cap for each team is 55% of the total BRI for the league. Only two teams (Detroit and LA Clippers) were under the cap - the other 28 teams were over. There is also a luxury tax in the NBA. However there are so many exceptions and loopholes the cap is more honoured in the breach rather than compliance. Since most exceptions relate to the star players and their higher salaries, the cap has virtually no effect on the players for whom the cap was intended in the first place but it does hurt the journeymen.

The NFL has what is referred to as a "hard" cap. Again league revenue is calculated in much the same way as the NBA but it is called Defined Gross Revenues ("DGR"). There are virtually no exceptions - hence it is a "hard" cap. The cap is set at 63% - higher than the NBA but remember that football rosters are much larger.

Also you often hear of huge long-term NFL deals. However if a player is cut, his contract ends. So if he has 5 years left on a $5 million per year 7 year contract once he is released, the team is no longer obligated to pay. This differs from the NHL where contracts are guaranteed and if you want to end a contract you must pay out the remainder at 2/3 or negotiate a buy-out. This was the Pierre Turgeon situation in Dallas.

Of course many star NFL'ers (and their agents) know this and they sign deals with huge signing bonuses paid up front. Under the NFL system teams can then average out the bonus over the term of the contract for the purposes of calculating the team's yearly cap number.

So taking the example above a player may sign a $35 million contract with a 7 year term. His salary is $2 million per year and he has $21 million dollar signing bonus in his pocket. Essentially he has a $23 million guaranteed contract. The team is not charged $23 million in the first year under its cap but rather is permitted to spread out the total contract over the total term so it is only charged $5 million per year against its cap. However if the player is released, traded or injured the entire signing bonus (or its remainder) now becomes part of the team's next year cap. For example our player blows out his knee and retires. Now the cap room is lessened by $19 million dollars and you must still try to replace the player. Many NFL teams have run into this problem. Also do you think there is any way this player is going to be traded?

Mark Witting in his extremely detailed study of salary caps has concluded a number of things. If a cap is in place there is less of a gap between the "haves and "have nots" and the wealth distribution is more even. That is not surprising since that is the starting point for a salary cap.

However he found that in the NFL the competitive balance difference pre- and post cap was negligible and had done nothing for league wide parity.

In the NBA the cap was instituted (according to the league) to protect smaller market teams and increase their competitiveness. It has not worked as in 18 years the 4 largest markets have won 14 titles while in the previous 18 years (pre-cap) the 4 largest market team only won 5 titles.

He finds that baseball with no salary cap has excellent competitive balance across the league and that the NHL has been its most competitive in the last 20 years looking at each decade since 1926-27.

After his detailed calculations and analysis he concludes:

"The two leagues (NHL and MLB) without caps and significant revenue sharing seem to produce more balanced competition than the leagues with cost-of-labour restrictions over the last 8 years. In addition, we saw that the restrictions did little if anything to improve competition in the NFL and may have actually hurt the NBA's pursuit of parity."

How about player salaries? He found as follows:
"Just like in un-capped sports, salary caps don't strongly influence the escalation of player salaries. Players perceived as stars are being paid tremendous sums in all four sports (hockey least of all) while the salaries and job status of the low end and mid range players are adjusted to compensate."

On trades he finds:
"Salary caps were not set up to decrease the ability of teams to better themselves for the post-season/future through trades, but they have had that effect in both the NBA and NFL."

That could mean no more fun on trade deadline day when real hockey fans take a sick day and hunker down in front of the sports channels.

How about the effect of salary caps in rebuilding a team:
"(NFL) teams are often encumbered with "dead money", payable to players no longer on the roster but still counting against the cap. Teams with significant dead money can't afford to sign as many experienced/quality players and suffer for it. The descent into salary cap hell is often caused by a team doing everything possible to win in one season by knowingly compromising the future. The team and fans are then forced to pay for a short period of prosperity with what can be a long stretch of mediocrity or worse. This peculiar phenomenon is not found in baseball or hockey, although it is appearing occasionally in the NBA."

The moral - be careful what you ask for you just might get it.

Sorry it is so long - but it is a complicated subject.

Okay - over and out. Hope you enjoyed my mini-novel. I am going off to soak my typing fingers in ice water.
[/QUOTE]
Nice shill. Where did you get u get it from & why didnt you just give us the link from the old post?
 

Sammy*

Guest
mr gib said:
you don't believe that do you? - it's about the dough re mi - they don't give a flying **** about hockey -

No, in Edmonton the owners do but its kinda apparent the players only want to maximize their revenues.
I take it you really dont think the players are doing this for the love of the game, or are you that thick?
 

FlyersFan10*

Guest
Maybe it's just me, but why in God's Green Earth did neither side go to a mediator? You know why, because each side has something to hide. C'mon, most of these owners are businessmen and if they're losing hundreds of millions every year, do you not think they wouldn't cut their losses and get out ASAP? As well, when you hear Bettman talk about exact losses and payrolls, yet says that luxury tax is guess work at best, does anyone not question that. I mean, c'mon people. If the owners can calculate their losses and calculate how much they spend on payroll, how the hell can they not calculate what they'd be paying via a luxury tax? As for the salary cap being used as a means to ensure all teams are generating a profit, I have absolutely no doubt about that at all. A salary cap ensures that teams being run into the ground can continue to do so all while making money. As a fan, that pisses me off. That allows for bad ownership and management to continue and as long as owners don't speak out about that, all is OK.

As for the players, I have a hard team believing that a capped system is going to reflect poorly on pay. I think you'll eventually see payrolls tied into revenue because most other sports do that. As well, players can't lump all owners and GMs as the enemy because there are some who have really gone out of their way to get things done. For instance, Eugene Melnyk and Tom Golisano didn't have to get involved with either of the Ottawa and Buffalo franchises, yet both of these guys came to their rescue. If Golisano and Melnyk, both self-made billionaires are claiming losses, then it is something to be listened to. As well, if you have owners like Ed Snider and Mike Illitch saying the same thing, then there's something to be said. Ed and Mike are probably two of the more bigger spenders in the league and to hear them say that they are losing money is probably an indication that these guys aren't BSing the PA. I'm sure the Detroit and Philly reps can respect their positions and I'm sure that Ed and Mike's word carry weight with each teams respective PA member.

The fact of the matter is this. In order for this to work, each side needs to be open and honest and they need to work on forging a partnership. So far, no one is willing to forge that partnership. It's been a matter of "my way or the highway". The owners are telling the players that seeing as to how the owners own the teams, they should have a say as to how money is going to be spent. Players counter that none of the fans go to see the owners, they go to see the players. Without the players, the owners don't have a market. Owners respond without a team, players don't have an opportunity to showcase themselves for a market.

What it comes down to is that full disclosure of revenue needs to be displayed to the NHLPA. And that's the problem. When you have reports of teams not fully disclosing revenue, then there is always going to be doubt. Fact of the matter is that the relationship between the NHLPA and the NHL was severely damaged by Alan Eagleson and it is continuing it's disintegration with Bob Goodenow and Gary Bettman. Until the relationship and the dynamic of the relationship changes, they'll never get one another and there won't be hockey anytime soon.
 

shveik

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Jul 6, 2002
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djhn579 said:
You mean that all the hockey people on all the well managed teams, will suddenly no longer be competent if they had to build a team on the same budget as everyone else?

I am sure they will do just fine, in time. I think his point was that a lot of effort was spent to build something under a certain set of rules, and that will have to be dismantled with the new set of rules in place.
 

Sinurgy

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mr gib said:
you don't believe that do you? - it's about the dough re mi - they don't give a flying **** about hockey -
I dont think they care much either but they're not the ones I expect to give a flying f, it's the players whom I expect to care but I was wrong there too. You'd think they would have a little more respect for a game and league that has turned them into instant millionaires. Without hockey the players are just regular ol working stiffs like the rest of us. Without hockey what are the owners...that's right, they are still billionaires. Now who owes hockey what?!
 
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