The Player Advantage No one Talks About

[Lanny MacDonald*]

There is a base advantage to the system that the players have in their arsenal that no one ever seems to talk about. That advantage is collusion. The players are allowed to engage in collusion and the ownership is not. This is an important issue that no one cosiders in this CBA discussion.

I hear a lot of people say that the owners and general managers must police themselves and must prevent themselves from spending too much on player salaries and set a reasonable market. Well the owners and general managers cannot do this because this is considered collusion and the NHLPA would scream this from the tallest of pulpits and take the NHL to court, suing them for millions if not billions of dollars. This is the primal fear of the league when it comes to contract negotiation. Any impropriaty could be construed as collusion and put the league into court.

Now the players, their agents and the players association regularly participate in collusion to further their cause. They regularly discuss what a given player is making and how to leverage a given team into coughing up more money. If the ownership or the teams did this they would find themselves in court. This is a huge advantage that the PA and the players have on their side, one they exploit in every negotiation. They know this and they use it to their advantage.

So when people ask why the owners want these control mechanisms (a cap and salary limits) in the CBA they should understand that it is to combat the players, the agents and the players association's efforts at collusion and setting a false marketplace. The only way to combat this collusion is to have these mechanisms in place so that the ownership has some justification for holding salaries in check and prevent the players from bringing up collusion and a potential lawsuit.

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[SENSible1*]

There is a base advantage to the system that the players have in their arsenal that no one ever seems to talk about. That advantage is collusion. The players are allowed to engage in collusion and the ownership is not. This is an important issue that no one cosiders in this CBA discussion.

I hear a lot of people say that the owners and general managers must police themselves and must prevent themselves from spending too much on player salaries and set a reasonable market. Well the owners and general managers cannot do this because this is considered collusion and the NHLPA would scream this from the tallest of pulpits and take the NHL to court, suing them for millions if not billions of dollars. This is the primal fear of the league when it comes to contract negotiation. Any impropriaty could be construed as collusion and put the league into court.

Now the players, their agents and the players association regularly participate in collusion to further their cause. They regularly discuss what a given player is making and how to leverage a given team into coughing up more money. If the ownership or the teams did this they would find themselves in court. This is a huge advantage that the PA and the players have on their side, one they exploit in every negotiation. They know this and they use it to their advantage.

So when people ask why the owners want these control mechanisms (a cap and salary limits) in the CBA they should understand that it is to combat the players, the agents and the players association's efforts at collusion and setting a false marketplace. The only way to combat this collusion is to have these mechanisms in place so that the ownership has some justification for holding salaries in check and prevent the players from bringing up collusion and a potential lawsuit.

Excellent post.

CBA negotiations are the ONLY time the NHL can legally collude to control spending. Anyone who is surprised that the owners intend to take full advantage of this fact to turn the table on players is missing the most important consideration.

 

[thinkwild]

The table of RFA salaries is clear and laid to bare. Everyone can see what a Pronger, Heatley, Kovalchuk, Iginla are worth. What collusion do the owners need?

4 agents are negotiating with the one owner for his 4 players, and they are sharing their offers. But the GM knows that the offers are. All the GMs know what the salary they are negotiating for, they need no collusion, it is only whether or not the player is as good as the player he is comparing to or not. The salaries are set. If in hindsight they made a mistake and a players salary is upsetting the market, they can reset it.

For UFA's, several teams will make an offer they think will be the winning one. Obviously no one would make an offer they cant afford. Or, well wouldnt make it and then complain they are losing money anyway.

When they make these UFAoffers, a choice, that they can afford, that they think will win them the auction, we will see what they really think fair market value is.

To complain that you dont currently have the means to win every UFA auction, and then go on to complain this proves the systems is unfair, is the call of the poodle.

 

[chriss_co]

The table of RFA salaries is clear and laid to bare. Everyone can see what a Pronger, Heatley, Kovalchuk, Iginla are worth. What collusion do the owners need?

4 agents are negotiating with the one owner for his 4 players, and they are sharing their offers. But the GM knows that the offers are. All the GMs know what the salary they are negotiating for, they need no collusion, it is only whether or not the player is as good as the player he is comparing to or not. The salaries are set. If in hindsight they made a mistake and a players salary is upsetting the market, they can reset it.

Thats the problem with the CBA!!! Owners can't reset past contracts!

Qualifying offers can not be lower than what a player earned previously. The only choices a GM has is give the player the same salary/a raise or release him. And the GM isn't going to release a player thats being overpaid even if that player can still atleast contribute measly to the team.

Also, this is a bit beside the issue but the NHL has to fix how contracts are made. Just because Thornton gets X amount of dollars with the Bruins doesn't mean another player 'like' Thornton should get the exact same contract (or similar). Different players in different situations get different contracts. So stop comparing yourself to some obscure player just because they have similar stats are were drafted in the same year.

 

[thinkwild]

What other player is like Thornton?

This new proposal allows GMs to appeal to reset past contracts. Ones that will have already been lowered 24% and this will be the new benchmark for all comparables.

Qualifying offers are made to players who are making less than their market value. It is expected they will be getting raises, the question is how much if any.

If you have a player Wiemer who is making too much, and so has no trade value, then you dont qualify him or waive him and hope someone else picks up the contract. You arent losing anything except his rights. Which apparently you no longer value either.

If you have a player like Brian Savage, or worse traded for his contract, then what is the value to you of keeping his rights. Why not let him walk and then bid for him as a UFA? Or better let Taffe come up and get draft pick compensation picks. But if you want to waste an arbitration round getting him to play for less rather than risk losing him as a UFA, you have the ability.

But there is probably room to move on qualifying offers so you can keep someones rights even while giving them a paycut that someone else wouldnt find necessary

 

[Lanny MacDonald*]

This new proposal allows GMs to appeal to reset past contracts. Ones that will have already been lowered 24% and this will be the new benchmark for all comparables.

No, we don't know that. If you bothered to read the language of the proposal you would know that the roll back applies to only those players presently under contract. It does not apply to those NOT under contract. As for comparables, they are null, as the players not under contract are not subject to said roll back, and the agents and GMs will set the marketplace after the CBA is agreed upon. To say that it is a certain that the players not under contract are going to be subject to the same roll back is extremely naive and short sighted. Just how many years of agent manipulation do you have to look at to understand that all loopholes must be closed for to prevent this player collusion for taking place?

Qualifying offers are made to players who are making less than their market value. It is expected they will be getting raises, the question is how much if any.

Hilarious. So players get to dictate what their market value is? And any time the owners do this they get sued for collusion. That's the point of the mechanisms that the league wants. When you have no talent grinders making a million dollars a year is tells you just how broken the system is and just how badly mechanisms need to be put into place that prevents this.

If you have a player Wiemer who is making too much, and so has no trade value, then you dont qualify him or waive him and hope someone else picks up the contract. You arent losing anything except his rights. Which apparently you no longer value either.

A big problem with your logic is that any player that has a one way contract is subject to that salary at any level. Arturs Irbe is the best example of that. Waiving a player that is overpaid is almost a guarantee that you are going to be eating that player's contract for a good long time. A mechanism needs to be in place to prevent these one year wonders and mistakes of the system to become nothing more than escalation tools for the NHLPA and anchors around the NHL's neck.

If you have a player like Brian Savage, or worse traded for his contract, then what is the value to you of keeping his rights. Why not let him walk and then bid for him as a UFA? Or better let Taffe come up and get draft pick compensation picks. But if you want to waste an arbitration round getting him to play for less rather than risk losing him as a UFA, you have the ability.

And how do you let him walk? In a league where asset management is crucial you cannot allow a player with any sort of potential to get away for nothing. You also have to worry about a guy having one big year and then being undumpable.

But there is probably room to move on qualifying offers so you can keep someones rights even while giving them a paycut that someone else wouldnt find necessary

How?

 

[PecaFan]

The table of RFA salaries is clear and laid to bare. Everyone can see what a Pronger, Heatley, Kovalchuk, Iginla are worth. What collusion do the owners need?

4 agents are negotiating with the one owner for his 4 players, and they are sharing their offers. But the GM knows that the offers are. All the GMs know what the salary they are negotiating for, they need no collusion, it is only whether or not the player is as good as the player he is comparing to or not.

You're assuming that there's only one GM involved. Not true. Those multiple agents are negotiating with multiple GM's. And those individual GM's do *not* know what the other offers are, they can only know the ones they are directly involved in.

Every agent knows every offer to every player in the league. The moment it is made. A guy can be negotiating with X on Vancouver for 2 million, and suddenly finds out that Y on Philly has been offered 2.3 million.

I have no problem with the publication of salaries. But the sharing of offers, which are private confidential negotation, is clearly wrong.

If GM's published a report in a newspaper saying "We offered X 1.4 million for 3 years", you'd be all over them.

 

[PecaFan]

And how do you let him walk? In a league where asset management is crucial you cannot allow a player with any sort of potential to get away for nothing.

That's the most misunderstood issue here. Assets have value, even when they're overpaid vs the value they can now provide. You don't just throw an asset in the garbage just because it's costing you money.

It's like if you have a home that needs $20,000 in house repairs. You don't just walk away and toss it in the trash. Even though it's costing you money, and it's more than you want to pay, you have to fix it up, because replacing it would cost more than the repairs.

Only in the most extreme of situations is walking away the best solution.

 

[Brent Burns Beard]

That's the most misunderstood issue here. Assets have value, even when they're overpaid vs the value they can now provide. You don't just throw an asset in the garbage just because it's costing you money.

It's like if you have a home that needs $20,000 in house repairs. You don't just walk away and toss it in the trash. Even though it's costing you money, and it's more than you want to pay, you have to fix it up, because replacing it would cost more than the repairs.

Only in the most extreme of situations is walking away the best solution.

interesting analogy, but you just described why its ok that the owners lose some money from year to year.

consider:
house = hockey team -- (significant investment that is intended to grow)
car = player --- (some investment, but dimishing returns)

you rarely walk away from a house and instead invest in the repair and upkeep of it.
you often walk away from a car when its simply a wiser choice to replace it than repair it.

dr

 

[Potatoe1]

interesting analogy, but you just described why its ok that the owners lose some money from year to year.

consider:
house = hockey team -- (significant investment that is intended to grow)
car = player --- (some investment, but dimishing returns)

you rarely walk away from a house and instead invest in the repair and upkeep of it.
you often walk away from a car when its simply a wiser choice to replace it than repair it.

dr

Yea but lets face it, recently the NHL has been, the "money pit" type of home, in a crappy neibourhood, that never seems to go up in value...

(smile)

 

[Brent Burns Beard]

Yea but lets face it, recently the NHL has been, the "money pit" type of home, in a crappy neibourhood, that never seems to go up in value...

(smile)

Melnyk sure got a great fixer upper with instant tenants.

anyhow, how can it be argued NHL teams wouldnt have a lineup of owners if they decided to walk away from their investment.

dr

 

[Lanny MacDonald*]

anyhow, how can it be argued NHL teams wouldnt have a lineup of owners if they decided to walk away from their investment.

dr

I dunno, how many people lined up to buy the Sabres? How many people lined up to buy the Senators? How many people are lined up to buy the Hurricanes, the Predators, the Panthers, the Ducks, the Islanders, etc. I don't just buy the whole line that there is a huge market for hockey teams. Even in Canada a hockey team is a hard sell. The Canucks and Canadiens are owned by Americans. The Leafs are corporate owned. The Oilers and Flames are community owned. Yet you say there is a huge demand for hockey teams even though hockey mad Canada doesn't seem to be able to find single owners for their franchises (the Senators being the exception). Doesn't wash IMO.

 

[thinkwild]

No, we don't know that. If you bothered to read the language of the proposal you would know that the roll back applies to only those players presently under contract. It does not apply to those NOT under contract. As for comparables, they are null, as the players not under contract are not subject to said roll back, and the agents and GMs will set the marketplace after the CBA is agreed upon. To say that it is a certain that the players not under contract are going to be subject to the same roll back is extremely naive and short sighted.

Funny you should mention reading the language of the proposal. Lets do that then

The six major elements of this proposal are:
1. An overall market deflator that resets Player compensation at a new, sharply reduced level, rolling back by 24% the NHL compensation due in every year of all current contracts. In addition to its immediate impact, this deflator will have major ongoing effects in the market for new contracts.

2. A new set of system deflators that will reduce spending on individual contracts executed in the new, rolled-back marketplace. These system deflators include substantial restraints in the Entry Level System ; reduced qualifying offers ; the use of rolled-back and new contracts as the only comparables available in salary arbitration and in negotiations for new contracts; and the use of arbitration at the election of the Club for two new purposes identified by the NHL as important.

Our proposals in Paragraphs 1 and 2, above, will:
reduce the compensation due under existing Player contracts by at least $570 Million , with $528 Million in the first 3 years;
take $400 Million out of the Entry Level System over the next 6 years; reduce the aggregate Qualifying Offers due to Group II Players by $285 Million over the next 3 years;
reduce the level of comparable contracts by 24% ; and allow Clubs to use salary arbitration , either to reduce the compensation of
certain players or to ensure that certain other Players are in the lineup with contracts at the start of the season

Does this language of the proposal suggest to you it is one time? Calling it one time is the most misunderstood complaint over this proposal

Or more specifically:

C. Salary Arbitration Comparables.

2. Only rolled-back and new contracts will be used as comparables in salary arbitration. A Player who goes to salary arbitration under the new system will have much lower comparables than before. This will have a major downward impact on awards.

Does this language in the proposal not contradict you? Having read the language of the proposal, i can further go on to state that they then supplied specific examples demonstrating that players not under contract are subject to that rollback via the comparables system.

Of course their agents can attempt to negotiate the old system value, but they could also attempt to ask for $46Million a year too.

The unsigned players are going to come back and negotiate new salaries. And they will be higher than the ones rolled back 24%, because they will find the new supply demand equilibrium, which if the owners were lying about their losses is higher than the 24% rolled back amount.

You don't just throw an asset in the garbage just because it's costing you money

You don't? Sure you do? An asset that costs you money .. that would be a liability or an expense? What is the trade value of an asset like Savage? A 3rd rounder? If you bring up your 2nd round pick prospect, didnt you just get better value?

 

[Brent Burns Beard]

I dunno, how many people lined up to buy the Sabres? How many people lined up to buy the Senators? How many people are lined up to buy the Hurricanes, the Predators, the Panthers, the Ducks, the Islanders, etc. I don't just buy the whole line that there is a huge market for hockey teams. Even in Canada a hockey team is a hard sell. The Canucks and Canadiens are owned by Americans. The Leafs are corporate owned. The Oilers and Flames are community owned. Yet you say there is a huge demand for hockey teams even though hockey mad Canada doesn't seem to be able to find single owners for their franchises (the Senators being the exception). Doesn't wash IMO.

i know what you are saying, but its not quite what i was implying.

i said if NHL owners simply walked away from their teams there would be a lineup for their markets.

dr

 

[thinkwild]

Two people attempted to buy the Sabres. 7 reported, 3 known bidders on the Sens.

 

[me2]

Two people attempted to buy the Sabres. 7 reported, 3 known bidders on the Sens.

How much did Melnyk pay for the Sens + the Corel centre? How much did it cost to build the Corel centre?

 

[me2]

Does this language of the proposal suggest to you it is one time? Calling it one time is the most misunderstood complaint over this proposal

the use of rolled-back and new contracts as the only comparables available in salary arbitration and in negotiations for new
contracts;

Will the NHLPA agree to lock in the current 24% off prices for the life of the CBA (allowing for adjustments for inflation of 2-3% each year of course)? Now I call that not one time, its what the players are offering now but written in stone for the future. Block any newer contracts from being used by the players.

If they offer the owners the right to use 2004 -2005 prices in all future arbitrations (+inflation) during the life of the CBA and allow as many owner initiated arbitrations as they want, and agree to go along with the any arbitrators decision. It might just work.

 

[PecaFan]

What is the trade value of an asset like Savage? A 3rd rounder? If you bring up your 2nd round pick prospect, didnt you just get better value?

Let's assume the 2nd round prospect your bring up to replace Savage plays just as well as Savage. So you now have a player and a 3rd round prospect, whereas before you had a player and a 2nd round prospect. In essence, you've become worse off. Your salary has gone down a bit, but the team's prospects are worse.

And of course, if the prospect isn't as good as Savage, you've lost out on both ends. Your prospects are worse, and your current team is worse.

And that's why teams don't cut guys, only unless they're so bad, that you not only save money, but become better.

 

[Lanny MacDonald*]

Does this language in the proposal not contradict you? Having read the language of the proposal, i can further go on to state that they then supplied specific examples demonstrating that players not under contract are subject to that rollback via the comparables system.

Of course their agents can attempt to negotiate the old system value, but they could also attempt to ask for $46Million a year too.

The unsigned players are going to come back and negotiate new salaries. And they will be higher than the ones rolled back 24%, because they will find the new supply demand equilibrium, which if the owners were lying about their losses is higher than the 24% rolled back amount.

You say it yourself. The unsigned players will comeback and sign new contracts and will ask what they want. And what happens if the GM tries to say no? Hold out. And why will the hold out work? Because the agent, player and NHLPA know each team now has a boatload of cash available and will burn the team to the ground. You seem to think that agents are morons who don't know how to manipulate a situation. This is what they get paid to do. Use the language of the CBA and the loopholes they find to milk the situation. Oh, and how does the new CBA affect all of those players that were RFA's and were qualified before the expiration of the last CBA? There's that loophole I was talking about. You'd have a completely different tune of Gaborik was a RFA who was qualified during the summer. You'd also have a different tune if teanms were sniffing around Minnesota looking for talent.

 

[Brent Burns Beard]

You'd have a completely different tune of Gaborik was a RFA who was qualified during the summer. You'd also have a different tune if teanms were sniffing around Minnesota looking for talent.

??? odd comment. why would he care specifically about MIN ?

dr

 

[Lanny MacDonald*]

??? odd comment. why would he care specifically about MIN ?

dr

I'm assuming he's a Wild fan. Things take on a different perspective when its your player or your team that is at that root of the problem. I think you would take a completely different angle as well if it were Naslund or Bertuzzi that were subject to the issue. Who knows, maybe you will have that change of heart when Naslund's contract is up after next season and its time to renegotiate (if he stays in North America). All of a sudden you likely won't be in favor of such a system that allows one of your team's best players to hold the gun to the head of the fans, causes escalation to the salary structure of the league/team, forces a trade or that allows him to walk away for nothing. That's the point.

I think people are being extremely short sighted in this. They get stuck on that 24% (one time) roll back and say was a magnamanous gesture this is on the players part. They can't believe how the players would take such a huge hit for the game. Well if you looked past that number and looked at the long term impacts of the situation you would take a different line I'm sure.

The players are willing to take this one time hit for several reasons.

1) The majority of players are either in the final year of contracts or without contracts. Any possible hit that the players take can be recouped almost immediately in the next round of negotiations as salaries continue to escalate.

2) The players are in a position where they have already lost almost 50% of their salary from this season (no hockey will be played until mid January at the earliest which will kill 50% of their salary for this year). So over two seasons this means they have lost 25% of their potential earning. In other words, they have lost nothing through this manamanous gesture.

3) It gives the owners a load of money that the players know they have and will be unable to claim poor when it comes to negotiations.

4) The most important factor, they get to retain the majority of the systems that allowed salaries to spiral out of control and gurantee their ability to see salaries rise again.

The offer is nothing but a PR stunt and does nothing to address the issues that affect the teams. The players get to collude throughout the duration of the CBA. This is the only chance the owners have to put mechanisms in place that battle that collusion.

 

[SENSible1*]

I'm assuming he's a Wild fan. Things take on a different perspective when its your player or your team that is at that root of the problem. I think you would take a completely different angle as well if it were Naslund or Bertuzzi that were subject to the issue. Who knows, maybe you will have that change of heart when Naslund's contract is up after next season and its time to renegotiate (if he stays in North America). All of a sudden you likely won't be in favor of such a system that allows one of your team's best players to hold the gun to the head of the fans, causes escalation to the salary structure of the league/team, forces a trade or that allows him to walk away for nothing. That's the point.

I think people are being extremely short sighted in this. They get stuck on that 24% (one time) roll back and say was a magnamanous gesture this is on the players part. They can't believe how the players would take such a huge hit for the game. Well if you looked past that number and looked at the long term impacts of the situation you would take a different line I'm sure.

The players are willing to take this one time hit for several reasons.

1) The majority of players are either in the final year of contracts or without contracts. Any possible hit that the players take can be recouped almost immediately in the next round of negotiations as salaries continue to escalate.

2) The players are in a position where they have already lost almost 50% of their salary from this season (no hockey will be played until mid January at the earliest which will kill 50% of their salary for this year). So over two seasons this means they have lost 25% of their potential earning. In other words, they have lost nothing through this manamanous gesture.

3) It gives the owners a load of money that the players know they have and will be unable to claim poor when it comes to negotiations.

4) The most important factor, they get to retain the majority of the systems that allowed salaries to spiral out of control and gurantee their ability to see salaries rise again.

The offer is nothing but a PR stunt and does nothing to address the issues that affect the teams. The players get to collude throughout the duration of the CBA. This is the only chance the owners have to put mechanisms in place that battle that collusion.

Thinkwild is a Sens fan.

 

[Lanny MacDonald*]

Thinkwild is a Sens fan.

Okay, even better. Then think Marian Hossa instead of Gaborik.

 

[Brent Burns Beard]

I'm assuming he's a Wild fan. Things take on a different perspective when its your player or your team that is at that root of the problem. I think you would take a completely different angle as well if it were Naslund or Bertuzzi that were subject to the issue..

im pretty certain ThinkWild is an OTT fan....

I wont be upset if Naslund decides he doesnt want to play hockey for what the Canucks offer. What I would be upset about is if the Canucks wanted to offer Naslund an amount and he would agree to play for that amount, but they are prohibited because of a salary cap.

Do you think I cared when Pavel Bure decided he would not sign with VAN ? In hindsight it was one of the best things to happen to the team. Not only did we get rid of a garbage player who wanted 10m, but we also landed Jovanovski.

Do you think OTT fans are upset about losing Yashin (Spezza/Chara) becuase of money ?

Do you think CGY fans are upset about losing Nieweundyk (Iginla) and Fleury (Regehr) over money ?

What if OTT, VAN and CGY were unable to trade those players due to cap prohibtions on the other teams ? They would have NOTHING today to show for those players.

Yup, sounds like a good system.

DR

 

[SENSible1*]

im pretty certain ThinkWild is an OTT fan....

I wont be upset if Naslund decides he doesnt want to play hockey for what the Canucks offer. What I would be upset about is if the Canucks wanted to offer Naslund an amount and he would agree to play for that amount, but they are prohibited because of a salary cap.

Do you think I cared when Pavel Bure decided he would not sign with VAN ? In hindsight it was one of the best things to happen to the team. Not only did we get rid of a garbage player who wanted 10m, but we also landed Jovanovski.

Do you think OTT fans are upset about losing Yashin (Spezza/Chara) becuase of money ?

Do you think CGY fans are upset about losing Nieweundyk (Iginla) and Fleury (Regehr) over money ?

What if OTT, VAN and CGY were unable to trade those players due to cap prohibtions on the other teams ? They would have NOTHING today to show for those players.

Yup, sounds like a good system.

DR

You do realize that a capped system would make ALL players more affordable because of the permanent deflation it would cause. In addition, a cap can be softened with "franchise player" tags and/or a reduction in homegrown talent cost towards a cap.