Myth busters - long

Discussion in 'Fugu's Business of Hockey Forum' started by vadardog, Mar 8, 2005.

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  1. vadardog

    vadardog Registered User

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    Here is my opinion on a few myths that seem to float around these threads:

    1. Bettman and Goodenow are stupid and should be fired.

    Actually both are in all probability very intelligent men who are representing two sides which have diametrically opposed interests. Time will tell if they have made wise choices, but you don't win any business negotiation without some level of holdout. I also believe that both take alot of flak for decisions made be their constituents.

    2. Owners are at fault for high salaries.

    Every team has overpaid some players at some point. If you are going to be a successful team you have to make bold moves and some times you will fall on your face. The salaries are so high because of the inequities in team revenues and the fact that some owners consider their teams hobbies and don't mind loosing a little money to win (which isn't stupid when your worth billions).

    3. Agents want their players to ink a deal.

    I can't believe that more people don't see that agents have the most to gain from players holding out for a better deal. Remember the average NHL career is something like 5 years so the loss of a season represent 20% of earnings gone, but you could be an agent for 30 or 40 years, hell you could even hand your business down to your kids or sell it so what does 1 year hold out mean. And who have players been getting all their financial advice from since they were 16 years old - Agents. I smell a rat.

    4. Fans deserve better

    No we don't. We continually throw our money to organizations and indirectly players who have always told us that hockey is a business. They never lied to us. They told us they were out for the money not the love of the game. I think we could probably spend our money on better things in life.

    5. The #1 reason the last CBA failed was arbitration

    While arbitration amoung other things did escalate salaries, the #1 reason was that star players started player to much later ages. One of the reasons the owners signed the last cba is that it gave them control of salaries for what amounted to about 90% of star players careers by not letting them be unrestricted free agents until 30. But something unpredicted happened. Star players got in better shape and started being able to play effectively into their late 30's and now even early 40's. A decade of freedom was not what the owners envisioned. To illustrate my point I will use real players who probably never had the following conversations, but if you follow the logic you see how it affects salaries.

    Scott Stevens: Lou, we just won the Stanley Cup, I'm one of the best defensemen in the league, the fans will crusify you if you let me go for nothing, I'm unrestricted, I deserve a boat load of money.

    Lou Lamerello: Well Steve, I have to agree with all your points and you've earned it through proving yourself valuable year after year.

    Chris Pronger: Larry, Steve just got a boatload of money, based on my last year I'm just as good as him and I'm 15 years younger. I deserve 2 boatloads of money. If you don't give it to me I'll sit out.

    Larry Pleau: Well Chris, you've only had one/a couple good seasons and we didn't really go too far in the playoffs, but if you hold out I'll never get your true value and you never win if you piss off your stars so against my better judgement here's two boatloads of money.

    See how Unrestricted free agents affect the whole market. When they set up the last CBA they expected players to be negotiating contracts as unrestricted free agents once or maximum twice in their careers, but guys like Larionov, Chelios, Yzerman, Stevens, Messier etc are now doing it 4,5 and even 6 times. This is what sets the pace for salary escalation.

    If anybody actually read this far thanks.
     
  2. Weary

    Weary Registered User

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    #1 - Agreed.

    #2 - I wouldn't say it is a myth even though I agree with your reasoning. The level of revenue sharing up to now was determined by the owners. So I would say they are at fault.

    #3 - Agreed

    #4 is exactly correct, although I think a lot of foiks won't want to hear it.

    #5 - You're missing one dynamic of the equation. The reason Goodenow didn't put up much of a fight on UFA age was that he wanted it high. Notice how it hasn't been a point of contention this year. That's because it helps the players.

    I don't think Lou is as generous as you portray him. He wants value for his money. The reason he pays Stevens is because he has no other options. He looks at Pronger and realizes Pronger is an RFA -- and will remain so for a few more years. He looks at the UFA market. Because the UFA age is so high, there aren't many UFA players, and that makes the ones who are there highly prized. So Lou pays off Scott.

    If the last CBA had a UFA age of 27, salaries wouldn't be near what they are today.
     
  3. shveik

    shveik Registered User

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    The only things I do not totally agree with are #2 and #5.

    2. You basically are making a case that we should not say "owners are at fault for high salaries", but "most owners are at fault for high salaries". But that's how most of us mean it anyway.

    5. Well, you are missing the part of the equation where Pleau says "sorry Chris, but I do not have the two boatloads of money to give you, or I will lose my job". The truth is that most owners did not count the money they spend on the team until the last few years.
     
  4. vadardog

    vadardog Registered User

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    Thanks for the reply, in retrospect including that example using Stevens, pronger, lou and larry was not so helpful for my point. I never meant to imply anything about Lou's generosity or even Pronger's potential. I just feel that in the last CBA the owners said to themselves who cares if we let guys who have prooved themselves to be star players for over a decade get one chance at a big contract. However what happened is that these guys have gotten 4 or 5 chances at being unrestricted and the whole market has followed this.

    Its like this who would you rather have for the next 5 years Yzerman or LeCavailer. I'd rather have LeCavailer. Who's had a better career Yzerman or LeCavailer. Obvious answer Yzerman. Who deserves more money. Well the reality is LeCavailer will get a larger paycheck. Sometimes the player won't even have had to proove himself at all (ie Daigle). The last CBA was set up to allow players to get one really good paycheck before retirement. But was was not calculated was that players would start retireing at 40 instead of 30. Because of this Yzermans salary will drag Lecavailer's up because of his percieved potential, not because of his actual accomplishment. Yzerman's salary gets used as a base. If Yzerman's career had ended at 33 like the owners predicted it would then he would not have had the same effect on Lecavailer's salary.

    Remember that the players used are just examples, you could substitute any UFA star and any up and coming star in for Yzerman or Lecavailer.
     
  5. shveik

    shveik Registered User

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    I do not see why it matters for the salary escalation that a player becomes UFA more than once. It's enough for him to break the bank once for his peers to want the same. But what it does, it set expectations of the players and the agents at that level. The teams however do not have to meet those expectations. With RFA they do not have to bid against other teams.
     
  6. vadardog

    vadardog Registered User

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    Shviek

    Well I'll agree to disagree. We all know the system is broke. Even the players admit that. The disagreement is about who should take the pain financially to fix it. I'll argue that many of the so called stupid contracts that were signed by owners who have made more money than most of our entire families will for generations were more due to a broken system than actual stupidity. They were in a dammed if you do, dammed if you don't situation. Either you loose your star thereby losing revenue when fans don't show up and your losing games or you pay him more than you can afford. Yes some owners have spent heaps to win games, but it was money they could spend so what makes it a dumb decision. The problem with the system is that most teams can't keep up.
     
  7. Drury_Sakic

    Drury_Sakic Registered User

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    Yeah..

    The owners would be wise to lower UFA age..

    More players on the market means each player on the market is worth less..

    When a rich owner see's only two 30 goal scorers on the market, the 3-4 teams that can spend alot outbid each other to get typically old, suspect talent... If the UFA age was lower, and there was say 10 30 goal scorers on the market... the value of each would be lower..

    UFA age, not arbitration is the biggest factor in the owners shooting themselves in the foot(from the standpoint of a few rich teams driving payroll up)

    Plus.. owners had the right to walk away from arbitration.. and it only happend twice...


    Both sides just need to get over their love of themselves and get to work.
     
  8. Munchausen

    Munchausen Guest

    I don't agree that UFAs tip the overall scale in favor of the players league wide. I cannot say I'm 100% sure the agents can't base their demands for their RFAs on past UFA signings, but it just doesn't make sense that they could.

    UFA signings are based on a bidding war. That's the advantage of being a UFA, an advantage that is earned and should not impact RFA salaries. The fact their salaries come from a bidding war usually means that, if there's lots of interest, the player will get a huge amount, more than any other RFA of similar talent/value. The RFA cannot (should not) compare himself to UFAs to set his demands, he didn't earn the right to be valued based on a player that got his salary number from the free market. I can't imagine for the life of me a scenario where a youngster who's been in the league for 3 years and produces and plays like Holik would hold out until he gets what Holik got on the UFA market. If the owners have allowed this to happen, they're dumber than I ever thought they were.

    I really think UFA salaries and RFA salaries are 2 different issues. UFAs can get some major over-payment because, since the UFA age is 31yo, there are not that many quality players on the market each year, so the big names can let the teams desperate for their services throw indecent amounts of money at them. It's all about offer and demand. If the UFA age gets lowered, that means more to choose from so less money per player.

    The cap will rectify everything (the only thing) that is wrong with UFAs, which is teams trying to buy their way to success by offering ludicrous contracts to all the good UFAs on the market.

    As for RFAs, what raises their salaries is mostly rookie contract bonuses, qualifying offers and arbitration. If you can cap all bonuses for rookies so we don't get Thornton level contracts anymore, you implement a 2-way salary arbitration, and you allow qualifiers to go downward, it gives back to the owners the tools they need to control the RFAs' salaries.
     
  9. Wisent

    Wisent Registered User

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    Actually I always thought that arbitration is the crucial factor in increasing player salaries. Of course the big contracts have to be there first for another player to go to arbitration. but imo the big contracts shouldn't be a model for the other contracts. This has nothing to do with market value anymore. I mean just if one player gots the big contract doesn't say that the other one will get it as well. And the reasoning that some club will pay that is flawed as well. Since there are not that many clubs out there to pay that big salary or that have a vacant spot for that player. Perhaps I'm missing something in my reasoning but that is how it always occured to me.
     
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