New York Islanders and CA International Inc.

Discussion in 'Fugu's Business of Hockey Forum' started by medhatcanuck, Mar 24, 2011.

  1. medhatcanuck

    medhatcanuck Registered User

    Joined:
    Jul 8, 2010
    Messages:
    2,371
    Likes Received:
    0
    Trophy Points:
    0
    Location:
    Inside JayZ's Belly
    I posted this under the Charles Wang thread but thought this was more relevant to the Business of hockey.

    So I was sitting in class and suddenly we get on topic of CA International. I was like, o great, let's hear about another fraudulent corp and they're jailtime, yadda yadda. Then I hear the founders names. Apparently in the 1960's Charles Wang and his 3 buddies started Computers Associates International Inc.
    Interesting.

    Wang built one of the most admired computer corporations of the 90's from ground up. His company made software applications for IBM. His company was regarded as one of the top tech companies along with Microsoft and IBM at the time.

    This is where it gets interesting. in the late 90's a few of the top execs get jailtime for misleading financial reporting. CA aka Creative Accounting, found ways to backdate revenue and sign enormous contracts that recognized huge lumps of revenue in current periods. Sound Familiar?

    At first I came here to protect Charles Wang because I'm pretty sure he gets disregarded around here for minor reasons, but the guy can't seem to learn from his mistakes.

    CA International was hugely penalized and the stock price fell almost 40 some % because of backdating and revenue recognition fraudulence on long-term contracts. Now if you understand what these things are, they are quite similar to the contracts that have been handed out to Ilya Kovalchuk and Rick Dipietro. 15-20 year contracts in which revenue (cap-space) can be recognized in the 1st few years and in later years, record smaller amounts. In the business world, this allows statements to appear that they are on steroids and make the shareholders happy and for exponential growth (R&D). In the Hockey world, it allows or smaller cap hits in certain years to circumvent the cap.

    This isn't the only thing that had an connected CA International to the Islander's organization. Wang set a corporate structure in which analysts set the sales goals. Which meant employees were compensated based on piece work that seemed fair to non-specialists. Now, there is no evidence to support this, but this is why I think the Islander's team is going to fall apart again, even with all it's young talent:
    Wang likes creating high pressure environments in which analysts create compensation structures based on empirical data that might not be the correct way to motivate workers. You pay employees based on piece work, they will find ways to maximize their earnings without giving their best work. Now, hockey players are known to get performance bonuses, (piece work: goals=money). We have seen the goalscoring emergence of Grabner and Moulson, neither of which were goalscoring monsters with their formers. There is no doubt in my mind that the NYI have a performance-heavy compensation structure based towards individualism. teams like Detroit and Vancouver no doubt have broad-concentrated compensation packages where players earn bonuses based upon team performance. this means we will always see individuals excel in NY b/c of Hygiene factors such as compensation and bonuses but will never see a good team in NY because they don't have any real motivators.

    As long as Wang keeps his CAInternational Inc. mentality in NY you won't be seeing a Chicago-like emergence anytime in the near or long term future.

    If anyone is interested in this kind of stuff read (A Letter From Prison) from the Harvard Business Review. The hockey stuff won't be there since that was my perception and opinion. But yeah, hope i didn't bore whoever read this.
     
  2. tarheelhockey

    tarheelhockey Highest Boss

    Joined:
    Feb 12, 2010
    Messages:
    57,961
    Likes Received:
    33,996
    Trophy Points:
    190
    Location:
    The Triangle
    Interesting stuff. I don't know enough about the Islanders to comment productively, but it is food for thought.
     
  3. IceAce

    IceAce Strait Trippin'

    Joined:
    Jun 9, 2010
    Messages:
    5,164
    Likes Received:
    8
    Trophy Points:
    67
    Location:
    Philadelphia
    LOL DP's contract wasnt done to circumvent the cap, trust me. This isnt the Devils/Kovalchuk situation where they got creative to keep the team under the cap by giving him a ridiculous ocntract. The Islanders barely spend to the cap floor, and have been that way for 3-4 years now. Hell the only reason we make it to the Cap is due to Yashin and Witt's buyouts still counting against our cap number. You can find his contract terms pretty readily on line. It's spread out equally over 15 years.

    You can say that again....

    That makes almost no sense. First off your resting the crux of your assertion on an assumption about the contracts on the team vs the league at large. Unless you've got specific examples of performance incentives in Islander contracts that vary greatly form the rest of the NHL at large. That being said, simply having contract incentives doesn't automatically make you a 30 goal scorer.

    Secondly, Grabner, who is a rookie, was a waiver pick up, the Isles assumed the ELC he had with Florida, the one he signed with the very "model team" Canucks you mentioned. If there's performance incentives in his current deal, theyre form the Canucks.

    As for Moulson, he was a tryout signee based on Tavares' recommendation. Do you really think he became a 30 goal scorer suddenly because he was given performance incentives in an NHL contract?

    Again, you're stating that as if you know it as fact, and secondly, even if he does, you're assuming that a business practice for sales associates can be applied to hockey players? C'mon now.

    Look I don't like Wang all that much, and there's a ton of things to be critical of about his ownership of the team, but youre cooking up a pretty tall tale here.
     
    Last edited: Mar 24, 2011
  4. medhatcanuck

    medhatcanuck Registered User

    Joined:
    Jul 8, 2010
    Messages:
    2,371
    Likes Received:
    0
    Trophy Points:
    0
    Location:
    Inside JayZ's Belly
    I'm sorry i'm not gonna argue with you, you've taken alot of logic leaps and assumptions and taken what i said out of context. I'm sorry if I've offended you by talking about the islanders organization in a negative context.
     
  5. medhatcanuck

    medhatcanuck Registered User

    Joined:
    Jul 8, 2010
    Messages:
    2,371
    Likes Received:
    0
    Trophy Points:
    0
    Location:
    Inside JayZ's Belly
    To the people reading, please don't take what I said literally, these are just assumptions based on Wang's previous ventures.
     
  6. Killion

    Killion Registered User

    Joined:
    Feb 19, 2010
    Messages:
    36,723
    Likes Received:
    2,908
    Trophy Points:
    156
    Charles Wang is a strange man. He believes in running things by Committee, and yes, much of it is performance based on the Sales & Management side. Nothing wrong with that hypothetically, provided people are allowed to do their jobs without interference, but alas, thats where it gets sticky for Mr. Wang. He does/has indeed carried over some the less onerous CA doctrine within the Islanders organization. Anecdotally I've read stories about CA's modus-operandi as well, which was pretty bizarre. When they'd acquire a new firm in software, they'd herd the entire staff into a gymnasium sized ballroom, introduce themselves, hand out non-disclosures that everyone signed right then & there or they were ushered out by Security & fired. Performance bonuses & salaries cut for those that remained, re-negotiated. That team just needs a new owner and a new arena in the worst possible way IMO, and I sure dont like its prospects under this guy.
     
  7. Killion

    Killion Registered User

    Joined:
    Feb 19, 2010
    Messages:
    36,723
    Likes Received:
    2,908
    Trophy Points:
    156
    No worries. Pretty sure many are more than aware of what kind of person their dealing with in one Charles Wang, I just hope he does sell up & moves on to Florida where he's set his sites on conquering the thoroughbred race track industry. Yep. Give him a good 10yr run down there & the sport should pretty much be toast in the Orange State, once home to Kentucky Derby, Preakness & Belmont Stakes Champions. I even hear his name, I think Donald Pleasance wearing a Monocle & Mandarin Collared Suit, stroking a Cat, sitting in an oversized mid-century modern black leather chair.. . :laugh:

    "Extortion is a messy business Gentlemen, go away & think it over. Im busy"

    Ernst Stavro Blofeld
     
    Last edited: Mar 24, 2011
  8. IceAce

    IceAce Strait Trippin'

    Joined:
    Jun 9, 2010
    Messages:
    5,164
    Likes Received:
    8
    Trophy Points:
    67
    Location:
    Philadelphia
    Uh I didnt take offense to anything you said, Trust me, I talk negatively about the Islanders all the time. That doesnt bother me in the slightest.

    I just think you're actually the one taking the logistical leaps here based on the actual facts at hand. In order to give your "theory" any credit you've literally got to:

    A) assume Wang runs the Islanders like he did CA when Sanjay Kumar and Co were there with him.
    B) assume the Islanders contracts focus more on individual performance incentives.
    C) assume that a business strategy aimed at motivating sales people applied to and works with NHL players
    D) assume contract incentives motivate career AHLers and rookies to 30 goal season.
    E) explain what was different in all of the other years where Wang either actually spent money on the team and/or we didnt have standout individual performers like Moulson and Grabner.

    Trust me, I'm also one for a good conspiracy theory, but I think it's a stretch here to say the team is going under because of how Wang managed CA.
     
  9. medhatcanuck

    medhatcanuck Registered User

    Joined:
    Jul 8, 2010
    Messages:
    2,371
    Likes Received:
    0
    Trophy Points:
    0
    Location:
    Inside JayZ's Belly
    :facepalm: please stop, we aren't even talking about the same things anymore. I have no idea why you are talking about conspiracy theory. You haven't quite comprehended what I said, reading comp isn't my strength either. Believe me, I could argue this with you and we would both reach an understanding but it doesn't seem worth it.
     
  10. Bert Marshall days

    Bert Marshall days Registered User

    Joined:
    Oct 31, 2006
    Messages:
    4,331
    Likes Received:
    0
    Trophy Points:
    0
    I think you're in the right church but the wrong pew....as the saying goes. Wang does run NYI somewhat like he did CA via the management by committee idea, 15 year deal for DP and 10 for Yashin to have stability under contract with long term employees who he values, lack of self wanted attention to avoid criticism, getting rid of truth tellers like Jaffe and Botta and a say in most decisions etc.

    Where you're off are that DP's and Kovalchuck's contracts aren't similar at all as one was front loaded and one was even over the term, bonus and incentives are done to keep the payroll to as close to the cap floor as possible as most won't reach the bonuses not to promote individualism as opposed to team success.

    Wang never managed CA successfully, he just acquired other s/ware firms. He doesn't know how to manage he just knows how to acquire. NYI is proof he can't manage and unless he can acquire the Red Wings, NYI is in trouble until he leaves.
     
  11. IceAce

    IceAce Strait Trippin'

    Joined:
    Jun 9, 2010
    Messages:
    5,164
    Likes Received:
    8
    Trophy Points:
    67
    Location:
    Philadelphia
    I've comprehended exactly what you've written. Whether it's what you meant to actually convey, well now I wouldn't really know that unless you choose not to get involved in a mature discussion and perhaps maybe attempt to clarify what you feel I've missed but you dont seem willing to do so (which is odd considering this is, after all, a discussion forum).
     

Share This Page

monitoring_string = "358c248ada348a047a4b9bb27a146148"