Lyle Richardson takes on CBA issues/solutions

Discussion in 'Fugu's Business of Hockey Forum' started by LadyStanley, Jun 25, 2011.

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  1. LadyStanley

    LadyStanley RIP Fugu

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    http://www.yardbarker.com/blog/spec...ext_round_of_nhl_labor_talks_part_one/5166367
    Issues (part 1)

    http://spector.yardbarker.com/blog/...ext_round_of_nhl_labor_talks_part_two/5166580
    Solutions (part 2)

    Lyle Richardson: SpectorsHockey.net and writes for Fox Sports, guests on THN.
    Thinking through some of the problems/issues that face the league/owners and union/players in the upcoming CBA negotiations.

    (FWIW, I've seen reports of desire to start negotiations from anytime of this fall, January, late winter. YMMV. It may be that the league has one idea of when they'd like to start negotiations and when the union might. Also, the resolution of the NFL and NBA labor situations may play into the NHL CBA negotiations and the timing of discussions.)
     
  2. Northern Dancer

    Northern Dancer The future ain't what it used to be.

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    I think the real issue will be revenue sharing and the salary floor gap. Big market teams I would think are very upset with the current revenue sharing. Didn't the Chicago Black Hawks announce they lost money the year they won the Stanley Cup despite obviously playing 4 rounds? On top of that they had to contribute to revenue sharing.

    Olympics and everything else are mere negotiating tools.

    I could also see players getting even quicker UFA status for a reduction in the cap per centage.

    I don't think escrow will ever be removed.

    One final note it always amazes me the power of the super stars in deliberations at the expense of the lower end of the NHLPA. Why the lunch bucket brigade supports the NHLPA to the extent they do always amazes me.
     
  3. Fugu

    Fugu Guest

    Meh. No surprises here. It was always about the revenue gap.

    Then they made it worse by lowering the UFA age, the biggest protective factor for smaller revenue teams.


    @ND. The small guys have no pull. The average career length is only ~4-5 yrs? Don't neglect the influence of the agents on their clients. The big stars will always get their money, no CBA wil change that because it's the GM's that want those names on their rosters.
     
  4. Finlandia WOAT

    Finlandia WOAT Bench Constance Garnett

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    The Blackhawks lost money mainly because they did massive renovations to their training facilities, locker rooms, etc, as well as general arena renovation.

    The Lightning lost money this year for the exact same reasons.

    http://sports.yahoo.com/nhl/blog/pu...t-of-cash-didn-t-profit-despit?urn=nhl-259192

    This article (by Puck Daddy) outlines pretty well why the Hawks lost money. Another key reason was that they had the second cheapest tickets in the league.

    As many of our Canadian friends incessantly put forth, sold out buildings mean nothing if ticket prices are dirt cheap.
     
  5. LadyStanley

    LadyStanley RIP Fugu

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  6. Hawkscap

    Hawkscap Registered User

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    The Hawks lost money because they repaid the loans to other Wirtz corporations. The loans were needed to keep pay the bills during those lean years.

    The Hawks don't own their practice facility. It is owned by Johnny's Ice House.

    The renovations of the UC were paid by the company that own the UC. The Hawks actually pay rent to them. (The UC is owned by Wirtz 51% and 49% of Reinsdorf group.

    http://www.nytimes.com/2010/06/02/sports/hockey/02wirtz.html?scp=2&sq=rocky wirtz&st=cse

     
  7. Northern Dancer

    Northern Dancer The future ain't what it used to be.

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    And they took all those costs up front instead of amortizing it over the expected life of the renovations? They both should seek a better accountant.
     
  8. Finlandia WOAT

    Finlandia WOAT Bench Constance Garnett

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    Odd, I could have sworn I read an article about the Blackhawks doing major renovations being the reason that they lost money...

    Maybe it's the Capitals I'm thinking off? :dunno:
     
  9. awfulwaffle

    awfulwaffle Registered User

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    Is that even legal though? I know when you have a car or a building, you can make an estimated life, and depreciate the asset over time, but can you really take expenses to improve something and amortize it over time? Like it or not, you paid the money to rennovate said asset. You can't pay money you have and space it out over time. Unless of course the company that that did the rennovations allows you to pay a certain amount over time, which I don't understand why a company would let you pay over time after their rennovation.
     
  10. MAROONSRoad

    MAROONSRoad f/k/a Ghost

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    Some ideas:

    What if the midpoint of the cap and floor was based not on % or league revenues, but rather on the median gross revenue of the clubs -- let's say the 15 or 16th revenue ranked club or an average of those two? The bands might be 'normalized' by taking out the skewing affect of a few markets.

    The players would still receive a fixed % of league wide revenues, perhaps scaled down to the low 50% range. The NHLPA would agree to the lower percentage only if most of the % roll back went into revenue sharing for the lower revenue clubs which might otherwise fold -- a trade off in support of NHLPA jobs.

    The Canadian clubs should push for a further mechanism in the new agreement to address future fluctuations in the exchange rate whereby the US teams share more of the exchange rate risk inherent in a two country league. There is no compelling reason why the Canadian teams should bare all of the exchange rate risk associated with paying the players in USD only. The currency issue was a major factor in the relocation of the Jets and Nordiques in the 90s.

    A solution to this issue could be implemented in a number of ways and already is to an extent in the revenue sharing provisions and the fact that the players are paid a percentage of league revenues. The players would likely cooperate on this since their salaries fluctuate with the exchange rate as % of league wide revenue sourced in USD and CAD. In real terms the players salaries would not change. One possibility would have players paid in nominal "NHL dollars," a hybrid basket currency, which shifts some currency risk to the US based teams and is tied into the revenue sharing provisions.
     
  11. Crazy_Ike

    Crazy_Ike Cookin' with fire.

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    The league has wanted to start negotiations for over a year. The hangup has been first the NHLPA being a headless chicken, and then Fehr taking half a year to learn the hockey business.

    It's probably about time for the NHLPA to start moving forward on this, I would say, but both sides probably want to see what happens in the NFL and at least the start of the NBA lockout.
     
  12. Dado

    Dado Guest

    They'd better get used to more of it - revenue sharing has to go up dramatically if the current hard cap, narrow band is going to survive - unless the league is willing to accept contraction.

    It seems it will come down to a question of whether the owners are less unhappy with increasing the floor/ceiling range, or giving up more revenue to the low-revenue markets.
     
  13. Northern Dancer

    Northern Dancer The future ain't what it used to be.

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    I am not an accountant but I believe it may be the law that you have to depreciate the cost of renovations to assets.
     
  14. Northern Dancer

    Northern Dancer The future ain't what it used to be.

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    I think you read me wrong. I do not think big market teams have a problem with revenue sharing at all. It is just that the current model is very unfair.I think you will see the big market teams argue very strongly for a luxury tax as a means of revenue sharing (ala baseball) as oppossed to the current model.
     
  15. Thomas Malthus

    Thomas Malthus The Dismal Team

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    Would small market teams not want to increase the age players are eligible for UFA and push for limitations on second and third contract raises?
     
  16. TheMoreYouKnow

    TheMoreYouKnow Registered User

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    The cap floor and the ability of teams to reach it looks to be one of the real biggies. Maybe the best solution is just to scrap the cap and let the competitive chips fall where they may. I mean if 1/3 of the teams struggle to spend to the floor, what's the point of the cap in terms of competitiveness?

    If you lower the floor or get rid of it, the discrepancy is going to grow anyway. May as well save yourself the fight with the players and get rid of the cap.
     
  17. mouser

    mouser Business of Hockey

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    For all we know they did both: depreciated the expenses for tax accounting purposes and claimed a cash flow/operating loss to the media. Deceptive practice, but not inaccurate.
     
  18. Northern Dancer

    Northern Dancer The future ain't what it used to be.

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    In all likelihood this is the truth !!!
     
  19. y2kcanucks

    y2kcanucks I Am Negan Sponsor

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    If teams are struggling to get to the cap floor, perhaps those markets aren't strong enough to handle an organization? I think the NHLPA's biggest issue should be low revenue teams, while there are current unserved markets that would produce stronger revenue figures.

    The NHLPA has a pretty good deal receiving 57% of league revenues. Overall salaries have increased. In 03-04, the average NHL salary was $1.83M. According to Forbes, the average NHL salary in 09-10 was $2.4M. They've seen a steady increase in player salaries under the CBA, and that will continue under the current framework as revenues increase.
     

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