Leavitt interview transcript

[Tom_Benjamin]

And if the Phoenix Coyotes' land deal goes belly up and they lose the $750m will every player in the NHL turn up at Gretzky's door and hand him $1,000,000 or would we hear "Its not our fault the owners made a mistake and lost money. They should get better management. We shouldn't be held responsible. Where are our cheques?"

If the land deal goes belly up, it goes belly up. The Phoenix ownership group can decide they don't want to count any of the capital gain as hockey revenues if they want. They can structure the books any way they want. On the other hand if the ownership group figures that revenues in the retail and restaurant area surrounding the rink goes up because the hockey team draws a big crowd 41 times a year, they can decide to make that a reason to invest more in the team.

The players aren't forcing the owners look at the development that way, but they don't think the Coyotes should be prevented from considering a piece of the retail action to be hockey related.

Tom

 

[ceber]

No, he's not. He's saying "We are not defining revenues. Define them any way you want. We don't care."

Exactly. Their answer is easy. "It can be anything the owners want it to be. We don't care."

So what's their problem with the Levitt report then? That it exists? I thought they didn't like the report because "At the outset it is clear the Levitt report, commissioned by the League, is fundamentally flawed when the author "elects" to define hockey revenues on the same basis as used in the NBA and NFL for defining revenues in their salary cap systems."

Sounds like they do care how revenues are defined. I must not get it, I guess.

 

[I in the Eye]

They are employees, not partners. They don't want to be partners.

Tom

IMO, the NHLPA wants to be partners when it is convenient for them to be partners... and they don't want to be partners when it's not convenient for them to be partners...

The NHLPA wants to go to the weddings as skip the funerals...

As said by Goodenow:

"An honest partnership can never be achieved under the League's ‘my way or the highway' approach. Partnerships are built on respect, trust and willingness to compromise. Partnerships are not built through confrontation. Nonetheless, Gary and the Owners have chosen, through a lockout, to try to force Players to accept a system they know Players would never agree to."

http://www.nhlpa.com/Content/FEATURES/feature_stories.asp?ID=3362

So does the NHLPA consider themselves partners, employees, or a little of both depending on the issue... and depending on who they are talking to?

IMO, the NHLPA wants to have all of the benefits of a 'partnership', but not share in the challenges of a 'partnership'... IMO, the NHLPA suffers from a role and image complex - and that 'slippery slope role image' is affecting the negotiations...

If the NHLPA are employees, then they shouldn't expect to be treated like (nor share in the rewards and problems of) 'partnerships'... If the NHLPA are 'partners', then they shouldn't expect to be treated like 'employees' (however, they should be expected to try to figure out how MSG works, how MLSE works, and how the arena in Nashville subsidises the team)... The NHLPA can't have everything... Which is it?

 

[Tom_Benjamin]

"An honest partnership can never be achieved under the League's ‘my way or the highway' approach. Partnerships are built on respect, trust and willingness to compromise. Partnerships are not built through confrontation. Nonetheless, Gary and the Owners have chosen, through a lockout, to try to force Players to accept a system they know Players would never agree to."

http://www.nhlpa.com/Content/FEATURES/feature_stories.asp?ID=3362

So does the NHLPA consider themselves partners, employees, or a little of both depending on the issue... and depending on who they are talking to?

Doesn't this sound to like the players reject the idea of a partnership? I wouldn't want to be seen in the same room as William Wirtz let alone trust him enough to call him a partner. A partnership can only take place between equals in an environment of mutual respect. The players are not equals in this arrangement and they know the owners lie like rugs.

IMO, the NHLPA wants to have all of the benefits of a 'partnership', but not share in the challenges of a 'partnership'...

What benefits are you talking about?

If the NHLPA are employees, then they shouldn't expect to be treated like (nor share in the rewards and problems of) 'partnerships'...

What rewards? They don't expect to be treated like a partner. Bob Goodenow is not a league governor and he has not demanded player representation on the board. A partner has some control over the running of the business. What control do the players have? What control could they possibly want?

If the NHLPA are 'partners', then they shouldn't expect to be treated like 'employees' (however, they should be expected to try to figure out how MSG works, how MLSE works, and how the arena in Nashville subsidises the team)... The NHLPA can't have everything... Which is it?

Exactly why they don't want to be partners. Can you name a single reason why the players would want to be a partner?

Tom

 

[Tom_Benjamin]

If we are to take some of the examples as cash the NHLPA wants to consider as hockey generated, then wouldn't the owners be equally allowed to apply Naslunds endorsment earnings as income against his wages owed?

Sure. All they have to do is negotiate that with Naslund. One of the reasons Kariya got so much money from the Ducks is that he agreed to allow Disney to use him and his name to promote movies for nothing.

The first hockey strike in 1992 was about who did own the marketing rights and who got the money from hockey card companies. The individual players can negotiate away the right to their image. Kariya did. Mind you, he also decided not to accept any endorsement deals, probably in part because Disney would benefit more than he would.

The players have every opportunity to negotiate the criteria for assessing NHL driven income. The fact they are not doing so leads one to believe they have no interest in arriving at that destination.

Again, exactly. Why on earth would the players want to do this? How does this benefit them in any way? It is not possible to do it in any way that reflects reality. So why would the players - any employees in a similar situation - accept it if they had a choice? Football players and basketball players did not have the choice. Baseball players and hockey players do.

Tom

 

[I in the Eye]

Doesn't this sound to like the players reject the idea of a partnership? I wouldn't want to be seen in the same room as William Wirtz let alone trust him enough to call him a partner. A partnership can only take place between equals in an environment of mutual respect. The players are not equals in this arrangement and they know the owners lie like rugs.

This sounds to me like Goodenow is implying that an honest partnership won't be achieved because of the league's 'my way or the highway' approach... IMO, he's implying that the goal is for a partnership to be reached (which is utter garbage)... IMO, he's implying that the NHLPA is negotiating in good faith, like a good partner should... But that their partner is not co-operating... Goodenow is very careful with his words... He chose to use the word 'partnership' rather than 'employer/employee realtionship'... IMO, because 'partnership' implies 'equals'... More deserving of the high demands (in the eyes of average wage Joe fan)...

IMO, this is just NHLPA propoganda (for the benefit of average wage Joe fan)... He's using the term 'partnership' because it is convenient for him to do so... Because it has the potential to make average wage Joe fan a little more sympathetic to the player cause (or at least not rattle them up against them even more)... If he called a spade a spade, he'd replace the word 'partnership' with 'employer/employee relationship'... It much more accurately depicts the relationship... IMO, the average wage Joe fan is much more tolerant of 'partners' bickering over millions of dollars, than an employee and an employer bickering over millions of dollars... If I was a union worker earning an average wage, I would imagine it would be hard to appreciate the NHLPA's demands - given that the players will be millionaires regardless of the system in place...

Clearly, the NHLPA are not partners... Nor do I think that they honestly consider themselves partners... But when they are communicating their position to the average fan - the word 'partnership' comes up... Convenient...

The NHL players have it way too good to ever want to be NHL partners... They get to be millionaires with minimal risk... Perfect for them...

 

[quat]

1) Because they don't need to see the revenues as long as they reject a link between revenues and salaries. The owner sees the complete revenue picture - defined any way he wants - and plans accordingly. That is what owners get paid to do.

Tom

Exactly. They reject a link between revenues and salaries. Simple, isn't it? From the mouths of babes so to speak. Well... Tom in this case, but he'll do. What clearer picture of what is wrong with the players position can there be?

"Players, here are our revenue streams (or a goodly estimation of them, feel free to inquire and discuss at lenght), here is how salaries have risen to a point where some in the league are losing millions of dollars, will you please concider (negotiate), taking steps to linking salary to revenue so you (players),have a guaranteed chance at financial riches, while we (owners), have a better chance at financial reward as well?"

No. We reject a link between revenues and salaries.

But as Tom pointed out earlier (in this thread or another?), he doesn't care if many teams fail and are shut down. The health of the league as is does not concern him.

There are countless examples of companies going to their employees when they were in financial troubles to ask for their assistance in righting the ship. It is clear that the NHLPA does not care about the financial health of the NHL, their work place.

 

[quat]

If the land deal goes belly up, it goes belly up. The Phoenix ownership group can decide they don't want to count any of the capital gain as hockey revenues if they want. They can structure the books any way they want. On the other hand if the ownership group figures that revenues in the retail and restaurant area surrounding the rink goes up because the hockey team draws a big crowd 41 times a year, they can decide to make that a reason to invest more in the team.

The players aren't forcing the owners look at the development that way, but they don't think the Coyotes should be prevented from considering a piece of the retail action to be hockey related.

Tom

You can extrapolate this kind of thing endlessly it seems. The application of a little common sense would certainly benifit. Someone earlier in this thread offered a fair example of what would constitute Hockey related Revenue... talking about how much more a cab company also owned by say Orca Bay makes during game night as Hockey revenue is nuts.

 

[mr gib]

You can extrapolate this kind of thing endlessly it seems. The application of a little common sense would certainly benifit. Someone earlier in this thread offered a fair example of what would constitute Hockey related Revenue... talking about how much more a cab company also owned by say Orca Bay makes during game night as Hockey revenue is nuts.

the issue is a partnership between the nlhpa and the owners - ray ferarro was just on tv re-iterating daly's comment that's it's better for cablevision - ( the rangers parent company ) - if the rangers lose money - ie write-offs - he also went on to expound on the illitch - karmonos relationship -

how can the player's committ to any type of cap with this crap going on? - the owner's can't save each other from themselves - 0 trust

 

[quat]

Sure. All they have to do is negotiate that with Naslund. One of the reasons Kariya got so much money from the Ducks is that he agreed to allow Disney to use him and his name to promote movies for nothing.

The first hockey strike in 1992 was about who did own the marketing rights and who got the money from hockey card companies. The individual players can negotiate away the right to their image. Kariya did. Mind you, he also decided not to accept any endorsement deals, probably in part because Disney would benefit more than he would.


Again, exactly. Why on earth would the players want to do this? How does this benefit them in any way? It is not possible to do it in any way that reflects reality. So why would the players - any employees in a similar situation - accept it if they had a choice? Football players and basketball players did not have the choice. Baseball players and hockey players do.

Tom

And you are calling owners dishonest? Not that I care two cents about Disney, but that's as equally cunning, or sad as an example of stealing money I've read for a while.

Why? Because their work place is in jeapardy. Because if they can't come to a reasonable working agreement you have what is going on today. Nothing. Nothing. Playing in Europe for a fraction of what you would earn at home to spite your face. Seems obvious to me.

Football players and Basketball players all had a choice. You want to make huge sums of money? More than any other place on the planet? Here, come and play in our league. You want to play somewhere else? Go ahead.

 

[Tom_Benjamin]

And you are calling owners dishonest? Not that I care two cents about Disney, but that's as equally cunning, or sad as an example of stealing money I've read for a while.

I laughed and laughed. Disney thought it would be perfect. A good looking boy next door image, Japanese heritage in Southern California... They were planning to make Kariya more famous than Mickey Mouse. They couldn't imagine that Kariya would turn down that kind of fame and fortune so they didn't bother to ask him whether he was interested.

Why? Because their work place is in jeapardy. Because if they can't come to a reasonable working agreement you have what is going on today. Nothing. Nothing. Playing in Europe for a fraction of what you would earn at home to spite your face. Seems obvious to me.

The players don't see it that way. They don't think that the death of the NHL is imminent. They aren't cutting off their nose to spite their own face. They are doing it to stick it to the owners. They think it is worth the money it is costing them.

Tom

 

[Tom_Benjamin]

You can extrapolate this kind of thing endlessly it seems.

That's right.

The application of a little common sense would certainly benifit.

Good idea. The individual who collects all the revenue should decide how to define what comes from hockey, how much there is and how much he can afford to pay his employees.

Tom

 

[Tom_Benjamin]

But as Tom pointed out earlier (in this thread or another?), he doesn't care if many teams fail and are shut down. The health of the league as is does not concern him.

I'm not worried about the health of the league.

There are countless examples of companies going to their employees when they were in financial troubles to ask for their assistance in righting the ship.

For sure. The owners asked, the players offered. The owners rejected their offer of asistance and are trying to dictate a system the players want no part of.

It is clear that the NHLPA does not care about the financial health of the NHL, their work place.

Accept that this is true. Now what? There is no workplace or NHL without them.

Tom

 

[me2]

If the land deal goes belly up, it goes belly up. The Phoenix ownership group can decide they don't want to count any of the capital gain as hockey revenues if they want. They can structure the books any way they want. On the other hand if the ownership group figures that revenues in the retail and restaurant area surrounding the rink goes up because the hockey team draws a big crowd 41 times a year, they can decide to make that a reason to invest more in the team.

The players aren't forcing the owners look at the development that way, but they don't think the Coyotes should be prevented from considering a piece of the retail action to be hockey related.

Tom

I doubt very much that the players would want loss making entities dragged into "hockey related". If teams were losing money on side deals the players wouldn't want that coming out of their pockets. If the whole real estate deal did stink and was losing $25m a year the players would go nuts if the Coyotes tried to include it.

Wang wants to build a massive complex near the Islanders rink. Lets say cost blow out by $200m, Wang writes those off against the Islanders. He then spins the whole shebang into some new company, with a new investor taking a 25% stake, and makes $50m/y profit. The new investor wants nothing to do with hockey, so the entity is non-hockey revenue. Do you think the Islanders players/NHLPA would be happy that Wang considered the $200m in blowout costs against hockey revenue, then considered the new entity's profit, at the urging of the new 25% partner, as non-hockey revenue.

If the players leave it up to the owners what constitues hockey and non-hockey they'll risk getting shafted because owners will drag in non-profitable entities and keep out profitable ones. Make it optional on both sides and the owners will keep the profitable ones and the NHLPA will reject the negative ones: net effect no change Its either all in or all out, given how tricky some of these dealings are with part-ownership, deferred this and that, how many degrees of seperation of income etc, it's very, very ugly.

Stick to core hockey revenue. Gate, TV contracts, merchandising, etc sure they have a claim. Let them argue over naming rights and luxury boxes. If the players want a piece of the side action they can pour in their own money like everyone else. If it booms they get rich, if it busts they lose out.

 

[thinkwild]

The players dont want a piece of the side action. They want the owners to be able to pay them whatever owners think they are worth. If owners are losing money on real estate deals or their meat packing companies, they will sell Gretzky. If Gretzkys team is moving into a new arena and has an opportunity to market a lot of ticket sales, they can make the investment if they feel its worth it, and leases retail space for higher amounts. Whatever is in their best interest.

 

[quat]

That's right.



Good idea. The individual who collects all the revenue should decide how to define what comes from hockey, how much there is and how much he can afford to pay his employees.

Tom

Tom, that's what they are doing right now. You just don't like it. Most do.

 

[YellHockey*]

The individual who collects all the revenue should decide how to define what comes from hockey, how much there is and how much he can afford to pay his employees.

Tom, that's what they are doing right now. You just don't like it. Most do.

No it's not what they are doing right now. They are collectively getting together and saying that no one can pay more then $30M on payroll.

That's not an individual deciding how much he can afford to pay his players. That's a cartel deciding for him.

 

[ceber]

No it's not what they are doing right now. They are collectively getting together and saying that no one can pay more then $30M on payroll.

That's not an individual deciding how much he can afford to pay his players. That's a cartel deciding for him.

But the individuals aren't in a vacuum here. This is a franchise system. The league has decided that it needs to dictate how much money can be spent on salaries by each franchise in the system (I'm not sure why, but that's the conclusion). Part of owning a franchise is that you are restricted in some aspects of how you run that franchise, typically because there are benefits to being a franchise that outweigh the restrictions. Surprisingly, the owners seem to be ok with this idea of limiting the amount they can spend. They don't appear to be interested in having the players champion their right to spend money as they please for them. So, I'm guessing the players real motivation is not that they want the owners to be able to pay whatever the owners feel like paying, but they want to be paid whatever they can get (and I don't blame them.. who wouldn't?).
Of course, that doesn't spin as nicely as putting it the other way.

 

[DuklaNation]

This discussion re: players sharing in all hockey revenues (including parking outside arena) is outrageous. Until the players accept a risk of loss than they can never "share" in all revenues. I don't recall any of the players having a net financial loss last year as individuals. The argument should revolve around what revenue streams to use as a base for salary caps/tax.

 

[Brent Burns Beard]

Until the players accept a risk of loss than they can never "share" in all revenues. .

another good point ... the answer of course is the players dont want to "share in revenues". they simply want to be able to negotiate with the owners of those revenues and think the owner of those revenues should decide on a case by case basis how much they are willing to share with that player.

DR

 

[thinkwild]

But the individuals aren't in a vacuum here. This is a franchise system.

This isnt your normal franchise system. The oft used example of Mcdonalds franchises, are designed to provide cookie cutter franchises. All the same. None in competition with each other. Is this really an analogy you want to be making with hockey. Cookie cutter franchises that all play nice and centrally plan a system that channels the rosters so they are all equal? Out of fear of fans not wanting to pay to cheer a losing sports team?

These teams may be NHL franchises, but they are in cutthroat competition with each other for players, to build their teams into greatness, have several years of sustained playoff success, letting them raise ticket prices while increasing attendance, get higher rink advertising rates and tv money, and to make 10s of millions of dollars more than the teams in the bottom of the standings while they are doing it. Winning and especially in the playoffs creates a system where there are huge revenue disparities. So far the only solution that has been accepted as conventional wisdom is to solve the revenue disparity by capping salaries at a level the losing markets can afford. When I suggest this is unfair, I am accused of being an NHLPA supporter. I dont think so. This is a plain as day ethical issue to me. What have we become that we think otherwise?

The franchises are being put into ring of pitbulls. They have to find ways to compete and succeed. And as teams like Tampa show, there are.

The league has decided that it needs to dictate how much money can be spent on salaries by each franchise in the system (I'm not sure why, but that's the conclusion).

You know why. You just dont want to have to admit it to yourself.

Surprisingly, the owners seem to be ok with this idea of limiting the mount they can spend.

I find this slightly surrprising too. I would of thought amongst the arch capitalists they would resent this inflexibilty in terms of their ability to make the investments in their business they see fit. But really they can still tie salaries to revenues without a uniform team payroll cap and still meet their objectives.

They don't appear to be interested in having the players champion their right to spend money as they please for them. So, I'm guessing the players real motivation is not that they want the owners to be able to pay whatever the owners feel like paying, but they want to be paid whatever they can get (and I don't blame them.. who wouldn't?).
Of course, that doesn't spin as nicely as putting it the other way.

Paid whatever they can get based on what the market deems them to be worth spins fine to me. I would think any economic model would expect and plan for that.

The argument should revolve around what revenue streams to use as a base for salary

This is for the owner to decide in the best interests of his business. He decides what he can afford as a budget, or if he's willing to spend a little more and possibly lose some money, or spend a lot less and just make money. Why do they want to make this elaborate exercise of trying to prove their revenues are actually lower than they are and then get the players to split a percentage of that? He can decide all on his own and still make money. If there is revenue disparity causing imbalance in the league, make the teams share revenue.

 

[ceber]

This isnt your normal franchise system. The oft used example of Mcdonalds franchises, are designed to provide cookie cutter franchises. All the same. None in competition with each other. Is this really an analogy you want to be making with hockey. Cookie cutter franchises that all play nice and centrally plan a system that channels the rosters so they are all equal? Out of fear of fans not wanting to pay to cheer a losing sports team?

These teams may be NHL franchises, but they are in cutthroat competition with each other for players, to build their teams into greatness, have several years of sustained playoff success, letting them raise ticket prices while increasing attendance, get higher rink advertising rates and tv money, and to make 10s of millions of dollars more than the teams in the bottom of the standings while they are doing it. Winning and especially in the playoffs creates a system where there are huge revenue disparities. So far the only solution that has been accepted as conventional wisdom is to solve the revenue disparity by capping salaries at a level the losing markets can afford. When I suggest this is unfair, I am accused of being an NHLPA supporter. I dont think so. This is a plain as day ethical issue to me. What have we become that we think otherwise?

The franchises are being put into ring of pitbulls. They have to find ways to compete and succeed. And as teams like Tampa show, there are.

You've thrown a lot of things out there. I'll just respond with this: it is a normal franchise system in that the franchises are not in typical capitalistic competition with each other. They do not want to drive the other franchises out of business. A healthy league with the right number of teams is good for all the franchises. It's not good for Philly or Toronto to drive other teams out of business. The league feels they need changes to the CBA to ensure this.

As far as the cap goes...

You know why. You just dont want to have to admit it to yourself.

What?!? I've got zero stake in this. I don't know why. If I knew, why wouldn't I want to admit it to myself? It's not like I'm the one pushing for a salary cap. I could care less what the CBA says. As long as it gets the job done and there's decent hockey to watch for a fair price, I'm has happy as a pig in ****.

 

[thinkwild]

I didnt mean to suggest you have a stake in it, but like a husband hiding money from his wifes divorce lawyer, I think you know one of the reasons the owners are proceeding as they are.

All you can spend money foolishly under the old CBA on, (I guess I should start getting used to saying that now) is free agents. Great teams arent built with free agents. Its not stopping Tampa Bay. I dont feel threatened here in Ottawa. I doubt Calgary or SJ cant compete. I dont see how their spending is putting each other out of business. Owners cant steal each others customers. They are miles apart and have heavy restrictions on showing other teams games on tv in their market.

 

[quat]

No it's not what they are doing right now. They are collectively getting together and saying that no one can pay more then $30M on payroll.

That's not an individual deciding how much he can afford to pay his players. That's a cartel deciding for him.

Uh... yes it is. These individuals have grouped together to do what they deem is best for their investments. It's still individuals deciding what they want to do with their money re: payroll.

It's not like a cartel because they all hold an interst in a joint venture. The Detroit Red Wings don't play hockey arbitrarily around the world.

I understand what you are saying and what Tom means as well, but in both cases it is still an individual acting on what is best for his interests.

 

[quat]

another good point ... the answer of course is the players dont want to "share in revenues". they simply want to be able to negotiate with the owners of those revenues and think the owner of those revenues should decide on a case by case basis how much they are willing to share with that player.

DR

Actually, and with I agree with Tom on this one, the players have no interst in defining revenue streams. They don't want to go their because that sends a message that they are willing to look at some kind of relationship between revenue and salaries... and they certainly are not. Why kill the goose that (up till now), has laid the golden eggs?