Rumored Current CBA vs. February Offer

[Icey]

Certainly no resumes are provided. Were they required, your impressive credentials counting Chicken McNuggets in the thriving hotbed of Kelowna might not have made the cut. We then would not need to have had the displeasure of reading foolish/dishonest post after foolish/dishonest post from you to confirm that you are indeed full of **** and have not a clue about how business works.

For the record, Smail's contributions to this discussion place him in the highest rank of contributing posters here. If only your own dismal record measured up as well as his.

Perhaps you should consider growing up and stop attacking people and their views. Your rants get old and tiresome despite the fact that you just joined.

 

[txomisc]

I don't think a lot of knowledgeable people around here put too much weight into what a poster on a message board has to say. They are free to post as they like ..

I find that the people in the know as in Saskin here would have far more insight and credibility in regards to knowledge on the subject matter being in the room after all.

but prepare yourself for ..anti don't shoot the Messenger type reply's that takes the focus off the real issues in 3 .. 2... 1 ..

Yeah here it comes. Sure Saskin knows more than your average person here, but he also has more bias. Would you admit that your failed strategy cost people millions of dollars?

 

[timlap]

Certainly no resumes are provided. Were they required, your impressive credentials counting Chicken McNuggets in the thriving hotbed of Kelowna might not have made the cut. We then would not need to have had the displeasure of reading foolish/dishonest post after foolish/dishonest post from you to confirm that you are indeed full of **** and have not a clue about how business works.
. . .

GS, I'm not sure about the quality of your posts in general, but when I read posts like this I sure don't like them very much. Stick to talking about issues and don't insult the posters.

 

[txomisc]

Are you sure you understand the concept of linkage fully?

When you use the word nasty that gives the impression that its a bad thing ..

Linkage at 54% is what is going to determine what the Hard Cap is set at .. It allows the floor and ceiling to move with league revenue .. This is not a bad thing in fact is has the benefit of being a real good thing for the players while always protecting the owners.

If the sport grows then the players salaries will rise with the cap.. If the sport shrinks then the sport remains healthy as the owners can continue to make a profit.

The 54% partnership to the players means that they are getting their share of the business .. For every $1 spent on Hockey, the players get 54 cents at all levels in this CBA ..

The only possible nasty thing about linkage is that it involves trust in the figures presented and if that issue can be controlled and verified than the NHLPA feels comfortable in the accuracy then the issue is moot to a point and if the proper penalties exists that police the system then we all should be fine.

What people seem to forget is that the 42.5% was optional .. ZERO teams were required to spend that amount .. Good businessmen and teams would have set their budgets based on expected revenue and internally only spent a certain percentage of it on player salaries keep enough back to pay other bills and show a profit at year end..

Bottom line: Depending on what revenues were you could have seen all 30 teams spend only an average of $30 mil/team in the $42.5 mil FINAL offer and there would be nothing the NHLPA could do about it .. To be honest .. Minimum wage at 300 K times X 23 players per team is all each team was REQUIRED TO PAY on player Salaries under that FINAL OFFER ..

Linkage at 54% prevents that from EVERY happening and the players always receiving their fair share.

Oh hell i am totally confused now. For months on end i heard how horrible linkage would be for players. Now that it looks like linkage it is, I am hearing how great linkage could be for players. Huh pretty much exactly what proowner posters said from teh beginning, linkage is the fairest way to handle this.

 

[Scoogs]

I think the main difference between the two deals is linkage.

If revenues go up substantially = New deal better for players.

If revenues go down substantially = Feb. deal better for players.

That's it.

 

[txomisc]

That's it.

Yep the real issue to me is how does this possible CBA compare to the "profit sharing" cba. I dont recall exact details but it seems to me that one was the absolute best for the players.

 

[Scoogs]

Yep the real issue to me is how does this possible CBA compare to the "profit sharing" cba. I dont recall exact details but it seems to me that one was the absolute best for the players.

Ohh ya... There was something like profit sharing kicked in at $100mil profits.. Or something.. I dunno.. It was the Feb 3rd proposal I think.

I think...... But I remember me saying "dude wtf this is pretty good considering.."

 

[GSC2k2*]

Ohh ya... There was something like profit sharing kicked in at $100mil profits.. Or something.. I dunno.. It was the Feb 3rd proposal I think.

I think...... But I remember me saying "dude wtf this is pretty good considering.."

Good point on this post and the one above. I know the thread subject IS to compare to the deadline $42.5 proposal, but the real question is whether the current deal is better than ANY of the previous proposals made by the NHL. Had the PA at the last minute smartened up and said they will instead take the Feb 3 proposal" or the December league proposal, the NHL would have taken them up on it.

The Feb 3 proposal was really the last true kick at the can by the NHL before the season was cancelled. THe last minute proposals were designed to paint Goodenow into a corner that would get him fired, since the NHL saw by then that they would never get a deal with him at the helm (and I know he is still the PA head, but I believe that to be simply a sham at this point to avoid screwing up the process).

 

[Mess]

Yeah here it comes. Sure Saskin knows more than your average person here, but he also has more bias. Would you admit that your failed strategy cost people millions of dollars?

Well in fact I know that Ted Saskin knows more then everyone here on to the topic of the current CBA not just the average poster here.

His statement was not even about bias though. It was about the fact that the CBA is not final so how could any one make a definitive statement like Mario did that the previous Final Offer CBA is better then something that doesn't exist yet?.

Well the players where told to be prepared for the possibility of a "failed strategy" from the start by the NHLPA including their own player committee in the words that this battle could go 18 months to 2 years so plan ahead .. The only way the NHLPA had of winning this was to out last the owners like they did in previous bargaining sessions. The majority of the players new that would require the loss of at least 1 years pay unless the owners caved and did not cancel the season in February.

The reason all this had to occur is because of the vast difference to the landscape that the CBA required from moving from a FREE SOCIETY CBA of old to a very player RESTRICTIVE Hard Cap and Linkage system of today. The drastic change forced both sides to dig in and take polar opposite philosophically different positions. No one IMO is naive enough to think that would not have financial consequences and ramifications on both sides in the long run as a result of the battle.

You could picture this **LIGHTLY ** in analogy similar to a country that is going from a free CAPITALISTIC society to a COMMUNISTIC one, from the NHLPA point of view. That would not happen without a fight, and no reasonable thinking person would suggest otherwise.

Future CBA negotiations should never come to this again as now similar to the NBA recent CBA as the GAP is manageable and does not need a war to resolve in the future IMO ..

This was a necessary evil that had to occur IMO..

Only the future will dictate if this CBA does what its expected to, and if it was all worth it long term ..

 

[nyr7andcounting]

If they get 54% of revenues, that's what they'll get, no more, no less.

If revenues are $2B, they'll get on average $36M per team.
If revenues are $2.5B, they'll get $45M per team.

I don't see what changes the initial numbers will change, as it'll be % based?

You answered your own question. If the initial range is based on $2B, than the cap will go down after year 1 and might never get back to $36-$38M. If the reported range is on projected revenues of $1.7B, as somebody here said, than it will most likely go up over the next 6 years. Odds are it's based off of a projection, like 1.7B, but we don't know for sure.

Regardless... Losing this season was catastrophic for them. I ran numbers earlier with actualized amounts to see what they'd need to win to get the money back, and it was sure that they wouldn't get that. Which did bring the question... Why didn't they settle then and cut their loss?

Catastrophic for both sides.

Why didn't they settle? I can't answer that, but obviously in there minds they would gain enough in the current deal that it's worth the wait. You also have to remember that the gains are small for each player, but for every player over 6 years it might add to something more than they felt they lost. Also the current deal, unfortunetly, has an affect on the next time we go through these negotiations. It does pay in the long run to get as much as you can get.

 

[Mess]

Oh hell i am totally confused now. For months on end i heard how horrible linkage would be for players. Now that it looks like linkage it is, I am hearing how great linkage could be for players. Huh pretty much exactly what proowner posters said from teh beginning, linkage is the fairest way to handle this.

I think you are confusing issues here .. IMO

A linkage system from a players point of view is a worst CBA then the Old expired one for them ..

However

A linkage CBA with a HARD CAP is better then one without linkage as the hard cap is stationary and fixed ..

If the market grew the players realized that they would be cheating themselves because as I stated in my other post they are guaranteed nothing by that final offer of $42.5 mil when people understand that was just the most any single team could spend on Salary .. With a guaranteed % to the players that provides a floor and a ceiling and a moving hard cap is better.

You know very well that the biggest issue with linkage from a NHLPA point of view was never really the concept of it but the fact it requires trust in the owners reporting practices..

With owners like Wirtz and Jacobs I am sure it is understandable .. A former owner like John Rigas getting set away for 15 year to jail can't leave the NHLPA with a real warm and fuzzy feeling going into this, but what choice do they have. Hopefully a good system is in place the polices the Owners and holds them accountable.

 

[Mess]

You answered your own question. If the initial range is based on $2B, than the cap will go down after year 1 and might never get back to $36-$38M. If the reported range is on projected revenues of $1.7B, as somebody here said, than it will most likely go up over the next 6 years. Odds are it's based off of a projection, like 1.7B, but we don't know for sure..

Recent reports I have read is that first year levels are set at 2002-03 total Hockey Revenes rather then the 2.1 bil based on the Levitt report for 2003-04 ..

Not sure if that is 1.7 bil but certainly lower then based on $2.1 bil .

Why didn't they settle? I can't answer that, but obviously in there minds they would gain enough in the current deal that it's worth the wait. You also have to remember that the gains are small for each player, but for every player over 6 years it might add to something more than they felt they lost. Also the current deal, unfortunetly, has an affect on the next time we go through these negotiations. It does pay in the long run to get as much as you can get.

I think the number 1 thing that this will boil down to is UFA in the new CBA.. IMO

People always view everything from a $$$$ perspective, when in fact freedom of choice at a much earlier age might actually be more of a motive to some players. The city they play for OF THEIR CHOICE and raise their families in may mean more then $$$.. The recent rumours are that the new UFA could be as low as 28 by the end of the term ..

Most players are just coming into their primes at that level, so combined with city choice are also able to allow the market to determine their Salary as UFA. That is a pretty good proposition for a player like a Joe Thornton or Jerome Iginla and may be worth the trade off of sacrificing a years wages to make it happen .. The Final Offer kept UFA at 30 .. unless the players tossed out Arbitration and then it would go to 28.. but without arbitration that would be a bad position for a player ..

 

[reckoning]

I think the number 1 thing that this will boil down to is UFA in the new CBA.. IMO

People always view everything from a $$$$ perspective, when in fact freedom of choice at a much earlier age might actually be more of a motive to some players. The city they play for OF THEIR CHOICE and raise their families in may mean more then $$$.. The recent rumours are that the new UFA could be as low as 28 by the end of the term ..

Good point. There are other factors besides just money than choosing where to play. If you`re a backup goalie/ fourth liner not getting much playing time or if you`re having differences with your coach then a better career move might be to take a little less money if it gives you an opportunity you`re not currently getting,

Also, memories from the lockout will last a long time. I think a lot of players won`t even consider any offers from Jeremy Jacobs no matter how much they`re worth.

 

[R0CKET]

I don't want to be too harsh, but
- 1st... A linkage deal was offered back in February (with 42M being the cap with bonus)
- 2nd... If the players receive a set % of revenues, who cares about revenue sharing (especially since revenue sharing is detrimental to total revenues if it's local revenues)
- 3rd... The NHLPA can't break even, they're already down at least $900M.
- 4th... When you use numbers, either use all numbers including players costs or not including them (including player costs, the unlinked offer was $45M cap). The linked offer was $42M cap (Well based on revenues, in a linked environment the % is more important than the cap amount)
- 5th... If I had been at the head of the NHLPA, I would have negociated a better deal than what the players will get AND there would have been at least half a season last year. You wouldn't have liked me though, cause I would have talked about a cap since the start and base the negociations off that. I would have shooted for 58-61% of revenues (and if you look at my old "pro-owner" posts from a long time ago you should see that).

So...summing it up here.

In a nutshell, here's a "pro-owner" person who would have landed a better deal for the PA than Bob Goodenow?

Now that is something to think about eh?

 

[GSC2k2*]

You answered your own question. If the initial range is based on $2B, than the cap will go down after year 1 and might never get back to $36-$38M. If the reported range is on projected revenues of $1.7B, as somebody here said, than it will most likely go up over the next 6 years. Odds are it's based off of a projection, like 1.7B, but we don't know for sure.

I think you are still missing the point.

With linkage, it does not really matter what the projection is. The share of revenues to go to the players is 54%. To the extent that there is a variation from that level, that is addressed either by the escrow account (in the event of a shortfall) or by the owners making a supplemental payment (if there is an overage).

The only purpose of the projection is to set the INITIAL CAP at a certain level. This controls the first cap level, and it is important to set it correctly so that the escrow account can handle it. Since there are no actual useful numbers, projections need to be used. For example, it would be a very complicating set of circumstances if there was too much of a shortfall for the escrow account to satisfy. I am certain it has been a contentious issue to negotiate, since the owners need the escrow account to be able to handle shortfalls, and the PA leadership wants it to be high enough to be able to sell to the players and MAYBE keep their job. In the end, though, the amount paid to the players is still 54%.

The expected cap in subsequent years goes up depending on what revenue is for a given year, but is always eventually subject to what revenues ACTUALLY ARE.

To go through an example in a standard cap system:

2005/06: assume initial revenues are going to be $1.8 billion.
Linkage # is $1.8 B x .54 = $972 million.
Average Cap per team is $972 M divided by 30 = $32.4 million.
(adjust to give the spread as designated by the CBA, using the agreed mechanism - i.e., 51% to 57%)

2005/06 ACTUAL REVENUES = $2 Billion
Linkage # is $1.08 B
Supplemental Payment to players = $108 million

2006/07: assume actual revenues will be $2.1 billion (last years revenue plus 5% for anticipated growth) (NOTE: anticipated growth probably another hotly negotiated item)
Linkage # is $2.1 B x .54 = $1.134 B
Average Cap per team is $1.134 B divided by 30 = $37.8 million
(adjust to give spread as above).

2006/07 ACTUAL REVENUES = $2 Billion
Linkage # is $1.08 B
Escrow account drawn on by NHL for $54 million.

Of course, the above is affected if in either year the league did not spend up to the 54% linkage figure.

Now, that being said, it should be apparent that in the standard cap system, the salary floor is in fact a complete red herring. If the cap is set at a number fairly close to 54%, and teams spend far below that number, the NHL is going to have to top up the salaries to get the league to an overall 54% number. It is for this reason that I have never understood the PA supporters' view that a floor was important.

 

[kdb209]

The 42.5 in Feb included all player costs/benefits without exclusion and "undefined". It also had no floor and no real revenue share. Most importantly, it could not move up over the life of the deal.

The new deal was recently reported to be in the 39.5 range including "defined" player costs/benefits and it includes a floor and significant revenue sharing. It is linked and can move up if revenues move upward (it can also move down). Yes, it is lower but with more safeguards and a good chance that it could reach 50M or more by the end of the likely six year deal if revenue growth continues even at reduced rates to the past decade.

If this is true (and we don't know the final numbers), then I think most peple would take the lower deal with safeguards and the chance to grow upward rather than being in a fixed, static system that offers no rewards for trying to grow revenues from the players perspective.

The last $42.5M offer wasn't a real offer. It was a public FU to BG.

Take a look at the league's last real offer - the Leagues Feb 2 proposal with linkage: 53%-55% linkage, a salary range of $29.8M to $40M not including benefits (a $32M floor and $42.2M cap inc benefits), 50/50 revenue sharing above a negotiated threshold, enough revenue sharing to meet a $30M floor, a third of lost 04-05 salaries recovered, a 54% share of '05 playoff revenue, and looking forward to 54% of revenues of a much less economically damaged league.

BG turned that deal down flat. That deal alone will be much better than the new rumoured CBA, let alone any deal that could have been negotiated up off of that as a starting point.

 

[txomisc]

I think you are confusing issues here .. IMO

A linkage system from a players point of view is a worst CBA then the Old expired one for them ..

However

A linkage CBA with a HARD CAP is better then one without linkage as the hard cap is stationary and fixed .

Ok so then why did the NHLPA fight tooth and nails to avoid linkage and even come out and decide theyd accept a hard cap but only one without linkage? To put it another way, they were much more willing to accept a nonlinkage hardcap system than they were to accept a linkage hardcap system.

 

[GirardIsStupid]

Ok so then why did the NHLPA fight tooth and nails to avoid linkage and even come out and decide theyd accept a hard cap but only one without linkage? To put it another way, they were much more willing to accept a nonlinkage hardcap system than they were to accept a linkage hardcap system.

Because previously the owners hadn't been willing to discuss their revenues. Months ago when the NHL opened the books to the PA, the players union found unreported revenues of a few teams which prompted the NHL to shun them from further analyzing other teams' revenues. Put yourself in their position...it's hard to trust someone who shuns you from examining their books and lies about their revenues through the Levitt report. Would you be open to linkage initially?

 

[Mess]

The last $42.5M offer wasn't a real offer. It was a public FU to BG.

Take a look at the league's last real offer - the Leagues Feb 2 proposal with linkage: 53%-55% linkage, a salary range of $29.8M to $40M not including benefits (a $32M floor and $42.2M cap inc benefits), 50/50 revenue sharing above a negotiated threshold, enough revenue sharing to meet a $30M floor, a third of lost 04-05 salaries recovered, a 54% share of '05 playoff revenue, and looking forward to 54% of revenues of a much less economically damaged league.

BG turned that deal down flat. That deal alone will be much better than the new rumoured CBA, let alone any deal that could have been negotiated up off of that as a starting point.

Yikes since you agreed with me .. Then I see no reason not to return the favour here ..

I think your first line colourfully describes the intent of the FINAL OFFER including the memos through the media to put a cherry on top ..

The other earlier offer certainly has far more merit to work off of and much closer for comparison purposes to the deal being discussed now .. Figures year 1 being lower because of the lost season .. The problem at that time was that philosophical differences gap had not yet been breached.

Many of those items could very well be in this new deal again now ..Although I don't think you are 100% on all the facts ie. Enough Revenue sharing which has been a tough sell to the owners all along.

The one thing that has me confused on this latest round of talks is that if we remember back to when they began that they all started with concepts that the NHLPA presented to the NHL .. After the BOG meeting the owners decided to work off of these concepts and work towards a deal.

So there must be some major differences from this and the offer you are discussing above with profit sharing etc .. I think there are things in there we have yet heard leaked out.

 

[Mess]

Ok so then why did the NHLPA fight tooth and nails to avoid linkage and even come out and decide theyd accept a hard cap but only one without linkage? To put it another way, they were much more willing to accept a nonlinkage hardcap system than they were to accept a linkage hardcap system.

Posturing during the bargaining process is my answer ..

jericholic19 did a good job explaining the problem, as I said as well it has always been about trust .. Here the point was extended to what actually composes HOCKEY Revenue.. They never really sat down and spent time until now to define it and accept it from both sides. So when the NHLPA sat down and looked at for books their deifition was differnet then the NHL's and thus the problem arose of missing revenue as per the NHLPA ..

While its true at Final offer time the league dropped linkage which meant owners books were no longer an issue because $42.5 was just a number linked to nothing.. However the NHLPA accepting a cap is true but also was a farce at the same time if you consider the $52 and $49 mil Hard/Soft Caps offers with other things that allowed teams to exceed them as well. .. Their offer was just as unrealistic as the NHL's at that point and neither side would ever accept the others to save the season.

You are seeing now what is involved in 100's of hours of meetings to get a deal done, it kind of emphasis how naive we all may have been that those Final Letters through the media really meant a partial season could be saved ..

While it seemed the sides were close it really wasn't at all.. So they really were not prepared to take that deal ..

Remember the NHLPA has always wanted some kind of way to have the Hard Cap Ceiling move the NHLPA called it "indexing" the NHL refer to it as "linkage". The purpose was the same a floating cap (but the players only wanted to accept it if it went up but not down). Again a trust issue of not wanting owners to make business decisions that could hurt them and the Cap ..

 

[me2]

Because previously the owners hadn't been willing to discuss their revenues. Months ago when the NHL opened the books to the PA, the players union found unreported revenues of a few teams which prompted the NHL to shun them from further analyzing other teams' revenues. Put yourself in their position...it's hard to trust someone who shuns you from examining their books and lies about their revenues through the Levitt report. Would you be open to linkage initially?

If the NHLPA had wanted to negotiate they could have gotten much of what they wanted by giving in other areas. It seems the owners are happy to work with revenue sharing suitable to the NHLPA if the NHLPA was prepared to negotiate on the the numbers, linkage and cap. The NHLPA was not prepared to negotiate at all. The NHLPA was not genuinely interested in talking about revenue sharing because that would mean they would have to talk about the numbers, the cap, linkage.


One only has to remember back to the talk from the NHLPA about how they didn't want to tell the owners how to manage their business.

Despite the rhetoric at the time, they most like could have improved the NHLs $42.5m offer (floor, QO, Arb, RS). I still wonder just what the NHLPA could have added to the $42.5m unlinked cap had they tried. I don't see a $20m-22.5m floor as being an unrealisitic outcome from the negotiations. Like wise they could have had 100% qualifiers or close to it. And probably had the same revenue sharing plan as the new CBA. Lost opportunities...

 

[Mess]

Despite the rhetoric at the time, they most like could have improved the NHLs $42.5m offer (floor, QO, Arb, RS). I still wonder just what the NHLPA could have added to the $42.5m unlinked cap had they tried. I don't see a $20m-22.5m floor as being an unrealisitic outcome from the negotiations. Like wise they could have had 100% qualifiers or close to it. And probably had the same revenue sharing plan as the new CBA. Lost opportunities...

The problem with that is that its not true as you stated it ..

It would have been nice if both sides would have sat down .. but Bettman gave the NHLPA no opportunity to talk about the systemic issues at that time , nor do we know what that would have resulted in.

Proof of that is in Bettmans letter to Goodenow at Final offer time ..

TAKE IT OR LEAVE IT .. so no opportunity to do as you say above.

February 15, 2005

Mr. Robert Goodenow
Executive Director
National Hockey League
Players' Association
Toronto, Ontario

Dear Bob:

We attempted to reach out to you with yesterday's offer of a team maximum cap of $42.2MM ($40MM in salary and $2.2MM in benefits) which was not linked to League-wide revenues. As Bill told Ted, "de-linking" a maximum team salary cap from League revenues and total League-wide player compensation has always been problematic for us, especially since we cannot now quantify the damage to the League from the lockout. This presents the risk we will pay out more than we can afford. As you know, if all 30 teams were to spend to the maximum we proposed, and if the damage to our business is as we discussed at our meetings in New York, then the League would continue to lose money.

I know, as do you, that the "deal" we can make will only get worse for the players if we cancel the season -- whatever damage we have suffered to date will pale in comparison to the damage from a cancelled season and we will certainly not be able to afford what is presently on the table. Accordingly, I am making one final effort to reach out to make a deal that will let us play this season.

We are increasing our offer of yesterday by increasing the maximum individual team cap to $44.7MM ($42.5MM in salary and $2.2MM in benefits).

This offer is not an invitation to begin negotiations -- it's too late for that. This is our last effort to make a deal that's fair to the players and one that the Clubs (hopefully) can afford. We have no more flexibility and there is no time for further negotiation.

If this offer is acceptable, please let me know by 11:00 A.M. tomorrow, in advance of my scheduled press conference. Hopefully, the press conference will not be necessary.

Sincerely,

Gary B. Bettman
Commissioner

http://www.nhlcbanews.com/news/bettman_letter021505.html

 

[me2]

Again, I'd say if both sides had wanted to negotiate of the NHLs offers over the middle weeks of Feb they might well have gotten a deal done. Renegade NHLPA members were prepared to deal and almost got something done. The NHLPA exec wasn't interested and killed it dead. Goodenow was still talking $50m or bust. Boom goes the dynamite.

 

[misterjaggers]

.
...The reason all this had to occur is because of the vast difference to the landscape that the CBA required from moving from a FREE SOCIETY CBA of old to a very player RESTRICTIVE Hard Cap and Linkage system of today...

You could picture this **LIGHTLY ** in analogy similar to a country that is going from a free CAPITALISTIC society to a COMMUNISTIC one, from the NHLPA point of view. That would not happen without a fight, and no reasonable thinking person would suggest otherwise...

Anyone who believes that the relationship between the NHLPA and the NHL was a competitive, free market relationship needs to re-read Economics for Dummies.

 

[Steve L*]

If this is true (and we don't know the final numbers), then I think most peple would take the lower deal with safeguards and the chance to grow upward rather than being in a fixed, static system that offers no rewards for trying to grow revenues from the players perspective.

If thats the case, why was Goodenow fighting long and hard against linkage?