Sides 'a long way apart' (MOD: CBA negotiations status thread)

[Digger12]

Oh absolutely. But that doesn't mean the players should go down without a fight, even if it means the loss of a season. If the players give up too easily in these negotiations, what's to stop the owners from taking advantage of them next time?

If the players decide to sign off on the loss of an entire season just so they can say they went down fighting, that would be the very definition of cutting off your nose to spite your face.

But, I'm still believing that neither side wants it to get to that point. It would hurt both sides, but I have no doubt in my mind that the players would take a huge hit that they could never recover. They have a small window to make this kind of money. The owners have the rest of their lives to continue being billionaires.

 

[patnyrnyg]

What no one has mentioned yet is that much of the NHL's revenue increase is unusual type activity that is non-repeitive. Roughly one third of the revenue growth was due to the strengthening of the Canadian $. There was also a $120+m annual increase in the US TV deal, and there is no growth opportunity there for 9 more years. Also, the lift from moving ATL to the Peg has occurred and already included in the baseline.

All of those increases are significant, and are unlikely to repeat over the term of the CBA. The PA knows this, and tying their " concessions" to the 7.1% growth baseline makes them highly unlikely to ever come to fruition IMO.

IMO, the players won the last CBA, but failed to realize it. Fend has them eating out of his hand right now, and this isn't going to end well for the fans.

Hasn't the CDN$ been on par with the US$ since ~2006? I remember going to Rangers Habs in Montreal in March 2006, and not getting much of an exchange rate, if anything on my US money. I remember going with my family to Grey Rocks in 1992, 1993 and getting a very nice rate.

 

[Roomtemperature]

So what date do you guys think would be the drop dead date for cancelling games?

 

[patnyrnyg]

If the players decide to sign off on the loss of an entire season just so they can say they went down fighting, that would be the very definition of cutting off your nose to spite your face.

But, I'm still believing that neither side wants it to get to that point. It would hurt both sides, but I have no doubt in my mind that the players would take a huge hit that they could never recover. They have a small window to make this kind of money. The owners have the rest of their lives to continue being billionaires.

I agree. WHat is that saying, Penny-wise and dollar foolish? They stuck to their principles and lost out on $. Principles don't set up a trust fund for their kids. Principles don't pay for the vacation house on a lake.

 

[Bjindaho]

I agree on the MSG books part. However, the argument Dolan (and any other team that owns their arena and tv station) would make is they invested money for the benefit of their parent company. Why should they have out in money that other teams are not. Look at the Leafs, they have Leafs TV. Now, I do not know if they show games live (I don't live in Canada and I don't get Leafs TV on my cable), but obviously they generate revenues because of the team. How would that get put into play?

I honestly think the players, especially the younger players do not want to give in due to past history. They gave in in 95 and by 98 it still wasn't enough. They gave in eventually in 2005, and by 2009 we were hearing talk about this happening again now. They give in now, and in 1/2 way through the deal we will start hearing rumblings about how some owners are not happy with the deal and they need cut the percentage once the deal ends.

For teams that are owned by companies that own multiple pieces, it wouldn't be to share all, but they'd have to show that the tv deal is valued at a fair value and that the concessions are being split fairly. It's okay that MSG makes money (and should get to keep a good chunk of it), but it wouldn't be if Dolan had a way to manipulate what is charged one way or the other to prevent revenue sharing.

I 100% disagree with the owners on the 24%. But I do agree on the players share. I think it should be gradual (1% per year until it reaches 50) and CBA should be longer than 5 years minimum (so that arguments that one side or the other is going to go to war right away go away).

 

[TCsmyth]

Guys, I love the debate, and see very good points on all sides.

I am just wondering if anybody sees this whole thing as a very simple equation like I do. It is not about "fair", it is not about who was "right" when talking about systems or what would fix the ills of the game. I just think it is simpler than all of that.

I think the owners are generally very happy with the system that they have now, they just want more of a % for their businesses...and by the way, they told the players this a long time ago - so we all knew their starting point. This stuff about # of teams making money, # of teams losing money, # of teams in the league period - is all just noise...they want to pay less - and have said so. I think they feel that they have built the greatest hockey league in the world with the best working conditions, the best brands, etc...and they simply want to pay less for labor.

That is the framework, and that is the starting point. All I have heard from them is that they are willing to negotiate what the "less" is. Lots of posters have said that in negotiations, to get something - you have to give something. I think that is naive in this case...they have said they are going to pay less, period - and will lock the doors to the business if their current employees don't accept this premise. It is their prerogative to shutter the doors if they wish. I don't have to like it, you don't have to like it, the players certainly don't have to like it.

Yesterday, they went back to linking whatever % the sides would agree to the current definition of HRR. Huge win / opportunity for the players in my opinion. They should get their ***** in a room right now and say "Gary, we know your guys want to pay less - lets make that number as big as it can be for the next 10 years". Never mind all this crap about rollbacks last time - what about next time...just get the best that you can for yourself right now. We all know the world changes...get what you can now - and don't be like one of my friends on the unemployment line.

Sorry gang for the long diatribe...just wondering if anyone else kinda sees it like this?

 

[KingsFan7824]

Big market owners - they don't want to share more money with small market owners.

Small market owners - I'm sure they wish the cap floor was gone.

Players - they want the money that has been offered to them to advertise the logo's of the NHL and team they signed with before September 15th, 2012. The owners didn't really have a choice though, as they had to offer the money under the guidelines of the CBA. They have to reach a floor. They have to give players a certain amount. All it takes is one owner to offer X amount, and then every owner has to keep up, or else they don't get the talent, which makes fans angry, which makes fans not show up or watch, which then decreases revenue eventually.

Fehr - really just wants to get rid of the cap system entirely.

Every work stoppage in the NHL has gone on longer than the one before it. Does the trend of the past mean anything now? Only time will tell on that one.

 

[Beukeboom Fan]

Hasn't the CDN$ been on par with the US$ since ~2006? I remember going to Rangers Habs in Montreal in March 2006, and not getting much of an exchange rate, if anything on my US money. I remember going with my family to Grey Rocks in 1992, 1993 and getting a very nice rate.

Looking back at 2005, the CDN$ was at roughly .80 to the USD. If you go back 10 years (which is the period of time their using to develop the 7.1% average growth rate), it was at roughly .63. In the CDN$ thread, it was stated that about 30% of the NHL's revenue increase under the new CBA was due to the CDN $. If that's true, my rough math breaks down like this:

Increase from start of CBA to now - $1.1B ($3.3B in 2012, $2.2B at start of CBA)
CDN$: $330M (30% of $1.1B increase above)
US TV deal: $140M (I believe original SPIKE deal was $60M per year - new NBC deal $200M)
Jets to WINN: $50M (real rough WAG (wild ass guess) - anyone have a better estimate?

If my math is anywhere close - those 3 things make up just under half of the league revenue growth. The only one that is repeatable is relocation, and there are other issues with that.

If my math is close - the league "internal" growth rate is really closer to 3.5% than the 7.1% that people are using as the 10 year average.

 

[bert]

I'm not a gambler, but if I was, and if I was an owner, I'd be more than willing to bet that revenues are going to keep rising, perhaps significantly, and would be more than happy to delink player salaries from them in favor of a 2-6% raise. Consider:

* New NBC deal, means more money
* New Canadian broadcast deal in a couple of years, which will mean more money
* The eventual end to the worst recession in several generations, which will mean more money (won't happen next year, but within 3-5 years?)
* The eventual relocation/expansion to places like Quebec, the greater GTA, Seattle, wherever.

The league has grown revenues significantly with a deck stacked very firmly against them; coming out of a lockout, bad markets, bad ownership in several other markets, horrible recession, no significant TV deals for most of that time...

Seems to me the league is primed for an explosion.

This is a very optimistic way to look at it, if history has shown us anything this recession is still on its way down, how far it goes I dont know, but the longer the canadian dollar is worth more then the American the worse this is going to get. Eventually Canada will really start feeling it because we wont be able to trade with our biggest partner, it wont make any economic sense. The canadian housing market is already sliding, the government wouldnt be changing the housing conditions the way they are if they didnt see a crash coming.

I think the recession alone should be motivation for both sides to get this done in an aweful hurry, they are so short sighted and selfish its unbelievable. At a time when the league has never been healthier and the players have never made more money they are willing to risk losing momentum.

I received this email from the NHLFA

'The NHLFA's proposed solution to the current NHL/NHLPA labor issue calls for the players' share of hockey related revenue (HRR) to gradually roll back to a 50-50 split with owners. Each year, beginning this season, the players' share of HRR should be reduced by 1%. After six years, the 50-50 split would be achieved. For the sake of all stakeholders in the game, especially the fans, the length of the new CBA should be 10 years.'

Now clearly the players wont take a 10 year CBA however a 6 year cba with a declining split tied to revenues eventually ending up at 50/50 seems to be the logical decision to me. Keep the CBA tied to revenues and lower the cap floor. A rollback will not be necessary and the league gets healthier and more stable. The owners then implement revenue sharing and voila hockey and no one loses money.

 

[Ciao]

That's exactly how I would do it. Owners agree on the rules, players who want to play in the NHL have to accept them or go somewhere else. But if a player signes for 5 million a year, that's what he gets exactly and not less (Well, before taxes etc. of course). Owners own, GM's manage, players play, it's really simple.

Collusion, Milliardo, collusion. You've missed the entire 20th century. Business owners have not been allowed to do what you suggest since US anti-trust law was enacted in the 19th century to prevent monopolies and collusive business practices.

This is why I say the NHL needs a CBA more than the players need it.

 

[MaskedSonja]

So what date do you guys think would be the drop dead date for cancelling games?

Well, with about 3 weeks to go approx till reg season, I say within next two weeks (yea that famous phrase lol), if what I hear that after Sat the pressure is "off" so to speak, and the idea they may wait till end of the month of sept before talking again.

Right now IMO the earliest we could hope for is end of Oct games-my own view though we aren't seeing anything till New Year.

 

[Riptide]

I'm not a gambler, but if I was, and if I was an owner, I'd be more than willing to bet that revenues are going to keep rising, perhaps significantly, and would be more than happy to delink player salaries from them in favor of a 2-6% raise.

Seems to me the league is primed for an explosion.

But do you bet your cost certainty that took a year to get on it? I don't think they will.

If I was working for you, let's say I was a salesman in your company and I was making 57% of what I sold, and you came to me and said, "I only want to pay you 43%." I would ask for something in return. Extra vacation time, better hours, whatever.

If you then came to me and said, "Can't give you extra vacation time, but I can pay you 46%." Again, I would still want something in return. SOMETHING THAT I DON'T ALREADY HAVE.

You missed the key point here. The players haven't asked for anything. In your example you ASKED for vacation extra time. In reality the NHL offered 43%, but the players haven't come back and said we'll take 50% if you give us this.

Again I ask, the NHL has told the players they had to take a 14% cut, then said just take an 11% cut, then came and said, take an 8% now, but that will be 11% down the road. BUT, what have they been willing to give the players in exchange for the cuts? Have they offered a younger UFA age? Have they offered RFA rules that aren't so restrictive? Have they offered even better play-off or awards bonuses? ANYTHING?

What have the players asked for? NOTHING. Instead they've refused to negotiate off the NHL's proposal.

 

[patnyrnyg]

\

I think the owners are generally very happy with the system that they have now, they just want more of a % for their businesses...and by the way, they told the players this a long time ago

Hence why the players hired Donald Fehr.

 

[Ciao]

I think we've passed the drop-dead date. I bought my ski pass and made other plans long ago.

I think the only games will be the BOH for some time to come.

 

[patnyrnyg]

But do you bet your cost certainty that took a year to get on it? I don't think they will.



You missed the key point here. The players haven't asked for anything. In your example you ASKED for vacation extra time. In reality the NHL offered 43%, but the players haven't come back and said we'll take 50% if you give us this.



What have the players asked for? NOTHING. Instead they've refused to negotiate off the NHL's proposal.

true, but like I said. Current system according to Bettman isn't working. 3rd system in a row that isn't working. Cant say I blame the players for wanting a change.

 

[patnyrnyg]

What no one has mentioned yet is that much of the NHL's revenue increase is unusual type activity that is non-repeitive. Roughly one third of the revenue growth was due to the strengthening of the Canadian $. There was also a $120+m annual increase in the US TV deal, and there is no growth opportunity there for 9 more years. Also, the lift from moving ATL to the Peg has occurred and already included in the baseline.

All of those increases are significant, and are unlikely to repeat over the term of the CBA. The PA knows this, and tying their " concessions" to the 7.1% growth baseline makes them highly unlikely to ever come to fruition IMO.

IMO, the players won the last CBA, but failed to realize it. Fend has them eating out of his hand right now, and this isn't going to end well for the fans.

Not the players that were in the league at the time. The current players have benefitted, but not all of the players who were in the league back then are currently playing.

 

[Grudy0]

What no one has mentioned yet is that much of the NHL's revenue increase is unusual type activity that is non-repeitive. Roughly one third of the revenue growth was due to the strengthening of the Canadian $. There was also a $120+m annual increase in the US TV deal, and there is no growth opportunity there for 9 more years. Also, the lift from moving ATL to the Peg has occurred and already included in the baseline.

The strengthening of the CDN$ is not responsible for one-third of the rise in revenues. There was a thread here within the past six months that pegged it at about 10 percent of the growth.

Also, there is another TV deal coming down the pike, this time for the Canadian national TV contract, which will show another bump. And let's not forget that the NHL has been very good at negotiating sponsorship deals as of late, which is where a large chunk of the revenue has come from (besides those teams that can increase all prices by more than 10 percent yearly, such as TOR, MTL, NYR, etc.).

All of those increases are significant, and are unlikely to repeat over the term of the CBA. The PA knows this, and tying their " concessions" to the 7.1% growth baseline makes them highly unlikely to ever come to fruition IMO.

What are they supposed to do, tie it to a constant $3.3 billion, where any increase in yearly revenue goes straight to the owners? The NHL is looking for immediate salary cuts, so it doesn't matter that the players want a slight increase year-over-year to the cap. The worse part is that Fehr has pretty much admitted they can live with tying the HRR percentage to the current salary pool, but no, it's not good enough.

IMO, the players won the last CBA, but failed to realize it. Fehr has them eating out of his hand right now, and this isn't going to end well for the fans.

Please. The players caved last time. Now the league is trying to ram-rod another reduction down their throats, just because they've done it before.

Think about this: there will be at least three bidders for the Hockey Night in Canada franchise, and there may even be a secondary package of national games. The Canadian broadcasting contracts will be negotiated in 2014. You can bet the fees will be high. And now you can guess why the owners position substantially drops the HRR over the course of the next three years.

 

[WhatsaMaatta]

Looking back at 2005, the CDN$ was at roughly .80 to the USD. If you go back 10 years (which is the period of time their using to develop the 7.1% average growth rate), it was at roughly .63. In the CDN$ thread, it was stated that about 30% of the NHL's revenue increase under the new CBA was due to the CDN $. If that's true, my rough math breaks down like this:

Increase from start of CBA to now - $1.1B ($3.3B in 2012, $2.2B at start of CBA)
CDN$: $330M (30% of $1.1B increase above)
US TV deal: $140M (I believe original SPIKE deal was $60M per year - new NBC deal $200M)
Jets to WINN: $50M (real rough WAG (wild ass guess) - anyone have a better estimate?

If my math is anywhere close - those 3 things make up just under half of the league revenue growth. The only one that is repeatable is relocation, and there are other issues with that.

If my math is close - the league "internal" growth rate is really closer to 3.5% than the 7.1% that people are using as the 10 year average.

Very good point to add to the list of things the average hockey fan won't look at.

 

[Milliardo]

Damn right. As long as thery keep the cap that's exactly how it should be run and there wouldnæt be any need for CBA crap such as this. If they fancy playing somewhere else for money alone then bugger off to Russia or Switzerland. The cap is essential though because wtithout it the NHL would become like all the European football Leagues where only two or three teams can realistically win.

Yep. For example, 10 year CBA with a fixed cap. Starting at 60 and going up 1M every year. Cap floor is alway 80% of the cap, so the floor starts at 48 and rises to 56 over the next 10 years. Players get paid EXACTLY what it says when they sign their contract. Every contract needs to pay the same amount of money every year, signing bonus cannot exceed 1M. Remove the 35+ rule and replace it with a 18+ rule. Every player who retires before his contract ends still counts against the cap and I'm pretty sure you have a healty league in the future. All this crap about revenue sharing is not even necessary.

 

[Beukeboom Fan]

Please. The players caved last time. Now the league is trying to ram-rod another reduction down their throats, just because they've done it before.

Think about this: there will be at least three bidders for the Hockey Night in Canada franchise, and there may even be a secondary package of national games. The Canadian broadcasting contracts will be negotiated in 2014. You can bet the fees will be high. And now you can guess why the owners position substantially drops the HRR over the course of the next three years.

The players caved in the architecture of the CBA (aka - linkage and cap), but they were VERY smart and negoatiated the %'s to the point where they had the advantage. The devil is in the details, and when you have complex models - the %'s matter more than the overall architecture. The league average salary has increased by 60% ($1.4 to $2.4M) since the lock-out. Tell me how the players "lost", when compared to the organzations, when apparently 18 of the 30 are still losing money? From my perspective - that's not because the linkage & the cap don't work, but rather that the NHL let the %'s be set too high during the last CBA negotiations.

Some small minded people in the media, who either don't understand the economics or had an axe to grind, might say the players capitulated, but from my perspective they won big time.

On your second point - do you understand how the math works? To keep growing the league at 7.1% on a substantially larger base- you need more raw $'s? 7.1% of 3.3B is $235M. The next year 7.1% of 3.535B is $250M. The next year $269M increase required. How much do you think the Canadian TV deal is going to increase annually? Because if I remember correctly - that amount is already pretty significant. Situation is NOT similar to the Spike=>NBC transition where the NHL wasn't getting hardly anything from Spike originally. Just in the first 2 years of the the league would need to increase revenues by $485M. Assuming a 7% CAGR (compound annual growth rate) in a mature business is ludicrously difficult to sustain.

I would also note that if there is a lockout - I would expect there to be some negative revenue impact, which because the NHLPA would have removed the linkage, they wouldn't see any negative impact.

 

[mooseOAK*]

The players caved in the architecture of the CBA (aka - linkage and cap), but they were VERY smart and negoatiated the %'s to the point where they had the advantage. The devil is in the details, and when you have complex models - the %'s matter more than the overall architecture. The league average salary has increased by 60% ($1.4 to $2.4M) since the lock-out.

Some small minded people in the media, who either don't understand the economics or had an axe to grind, might say the players capitulated, but from my perspective they won big time.

That's why they want the old CBA to stay in place but they did get lucky because they didn't anticipate the value of the Canadian dollar going up as much as they did. No group in the continent probably saw their wages increase that much over 7 years and they don't want to give any of it up.

 

[bert]

The players caved in the architecture of the CBA (aka - linkage and cap), but they were VERY smart and negoatiated the %'s to the point where they had the advantage. The devil is in the details, and when you have complex models - the %'s matter more than the overall architecture. The league average salary has increased by 60% ($1.4 to $2.4M) since the lock-out.

Some small minded people in the media, who either don't understand the economics or had an axe to grind, might say the players capitulated, but from my perspective they won big time.

Very well put, I couldnt agree more.

 

[Milliardo]

Guys, I love the debate, and see very good points on all sides.

I am just wondering if anybody sees this whole thing as a very simple equation like I do. It is not about "fair", it is not about who was "right" when talking about systems or what would fix the ills of the game. I just think it is simpler than all of that.

I think the owners are generally very happy with the system that they have now, they just want more of a % for their businesses...and by the way, they told the players this a long time ago - so we all knew their starting point. This stuff about # of teams making money, # of teams losing money, # of teams in the league period - is all just noise...they want to pay less - and have said so. I think they feel that they have built the greatest hockey league in the world with the best working conditions, the best brands, etc...and they simply want to pay less for labor.

That is the framework, and that is the starting point. All I have heard from them is that they are willing to negotiate what the "less" is. Lots of posters have said that in negotiations, to get something - you have to give something. I think that is naive in this case...they have said they are going to pay less, period - and will lock the doors to the business if their current employees don't accept this premise. It is their prerogative to shutter the doors if they wish. I don't have to like it, you don't have to like it, the players certainly don't have to like it.

Yesterday, they went back to linking whatever % the sides would agree to the current definition of HRR. Huge win / opportunity for the players in my opinion. They should get their ***** in a room right now and say "Gary, we know your guys want to pay less - lets make that number as big as it can be for the next 10 years". Never mind all this crap about rollbacks last time - what about next time...just get the best that you can for yourself right now. We all know the world changes...get what you can now - and don't be like one of my friends on the unemployment line.

Sorry gang for the long diatribe...just wondering if anyone else kinda sees it like this?

I totally agree. Until the players understand, that the owners will get what they want, no matter what, because they're the ones footing the bill, we will not have a season.

 

[Butch 19]

Right. What has the average salary increased over the last 8 years - approx. 35-40% or so?

And yet we hear the players saying that they are not going to "give in" this time.

I just don't understand their logic. I wonder how many posters here at HF had their incomes increase 40% since 2005?

... for 9 months of work

 

[Milliardo]

Collusion, Milliardo, collusion. You've missed the entire 20th century. Business owners have not been allowed to do what you suggest since US anti-trust law was enacted in the 19th century to prevent monopolies and collusive business practices.

This is why I say the NHL needs a CBA more than the players need it.

I just say this is the way it should be. Whatever, make every player that wants to join the NHL sign something so it's viewed as a private club or whatever it takes. I'm just sick of this. Players need to accept the rules and play. That's like a player not acception that tripping is not allowed. Nobody cares, it's the rules, deal with it or you will get penalized again and again and again and again until you learn it.