To the "Pro-PA" crowd...

Discussion in 'Fugu's Business of Hockey Forum' started by Phanuthier*, Mar 26, 2005.

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  1. Phanuthier*

    Phanuthier* Guest

    Not trying to be condecending, but I have to ask...

    Being as you are "pro-player" or "pro-union," what is your solution to solving this problem?

    Do you continue to hope the owners are lying, or do you believe that the 42.5 million was their breaking point? It is at least evident to me that they were obviously lying about their 31 million cap (930$ million) and 38 million, but their "final" offer at 42.5 mill before canceling the season to me was the most they could give. From here on in, the offer is going to drop.

    So I have to ask, does the PA keep on fighting for a no-cap? (Even though they have caved for that once already.) Dispite losing interest, contracts and future revenue, do you... hope for a higher cap?

    If your in charge, what do you do?

    * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

    If it were me, putting on my "Pro-PA" cap on, I'd say try to negotiate as much percentage as possible to a LINKED cap (~57%) to get the floor cap (53%). As well, to generate MORE revenue to UP the cap (since salaries are tied to revenue) I'd want open access to the owners books, and fight tooth and nail for all the income the owners bring in. I'd also want a voice in helping market the game, to ensure max revenue to maximize the cap. This "partnership" could be a win-win for the union and the league if they actually worked together (rather then drown each other in this lockout) and the players could better help market the game with the league's help.
     
  2. sakicisstupid

    sakicisstupid Registered User

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    as an anti-owner partisan, i believe it is in the PA's best interest to negotiate a deal based on the NHL's previous offer. linkage is undesirable, especially considering any potential damage to the game. perhaps, it would have been best for the PA to give in to a salary cap much earlier.
     
  3. 19nazzy

    19nazzy Registered User

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    Its hard to solve anything when only 1 side is giving up things and not getting anything back in return
     
  4. Phanuthier*

    Phanuthier* Guest

    Well I think its a given that is whats going to happen. In fact, that is a given in every single offer even the PA has made (be it the 5% rollback, 24% rollback and the 49mill$ cap).

    The alternative is less teams, meaning less jobs, meaning a 240 players in the NHLPA and the rest toiling with Derian Hatcher in the UHL.
     
  5. BitterEnd

    BitterEnd Registered User

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    Exactly, so when do the players start giving back to the game that has seen them make more money than most people will make in a lifetime?

     
  6. Brent Burns Beard

    Brent Burns Beard DontTouchMyDonskoi!

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    i happen to think the PA would make more money if they were to fight for a higher floor and not worry so much about cap levels most teams wont get to.

    what will make the PA more money, a 35m floor or a 70m cap ?

    clearly, neither one will happen, but given a choice, the PA will make more money for its members with the higher floor.

    dr
     
  7. Winger98

    Winger98 powers combined

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    My personal feeling is that there isn't enough trust between the players and owners to hammer out all of the details that a linked cap would entail. Going through and determining what constintutes hockey revenues, what goes into player costs, who oversees the whole process of figuring the revenues, etc. just wouldn't get done, imo.

    So if I was the union, I would shoot for a system with a high hard cap, and a decent luxury tax stepping up to the hard ceiling, and with no floor. My example in the other thread would be to offer something like:

    $50 million hard cap
    $1/$1 tax on $45million+
    .75/$1 tax on $40-45 million

    That, together with revamped arbitration and closing the rookie bonus loophole would go a long way towards leveling the financial playing field a bit and preventing teams from building solely through free agency. Meanwhile, the cap would be high enough to potentially allow team to keep the majority of players they develop without having to deal them off because of cap concerns.

    An idea that would probably never be suggested, but that I like, is the creation of an "NHL Dollar." One of the biggest problems within the NHL is the value discrepency between the Canadian and American dollars. So come up with a system that, at the begining of every NHL season, an "NHL value" is established and contracts are re-interpreted to reflect this value. For example, let's say we take a straight average value between the two dollars. we'll set the American $ at an even 1 while the Canadian dollar is .80, so we would have an "NHL Value" of ninety cents on the dollar. So on a ten million dollar contract, the team would only have to pay $9 million for that season. Maybe even limit this to just the canadian teams and have the money collected from the luxury taxes go to making up the $$$ difference between the regular contract and the adjusted value. :dunno: It has a lot of flaws (like teams abusing it, figuring they would get out of paying the majority of the contract and would hope to pass a hefty share off onto the league) but at least it's something different.
     
  8. Phanuthier*

    Phanuthier* Guest

    Winger98,

    RE: Proposal

    Isn't that almost identitcal to the 49$ million that was already rejected?

    RE: Dollar

    That sounds vaguly like the former Canadian Assistance Program. While I would love to have as much go to my time (Flames) as possible, the problem isn't just Calgary, Edmonton and Ottawa. It includes Carolina, Buffalo, Pittsburg, Chicago, Boston, and many other American markets.
     
  9. futurcorerock

    futurcorerock Registered User

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    I still havent heard fair, unbiased argument from a pro-pa'er throughout this entire lockout. They are defending the same barganing entity that has yet to offer any major proposal aside from the one they made in December. To gracefully touch on American Politics, i've heard more rational defense of American Occupation in Iraq than the pro-players' rhetoric.

    Thank god this will all be settled when they are hanging by the NLRB's order in July.
     
  10. shveik

    shveik Registered User

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    Regardless of the financial situation the league is in (and we cannot really make any conclusion on that since the books of the NHL teams remain closed), I think that the notion that a cap is the only solution that can make the league work is ridiculous. If the river of tears that flows out of the NHL office is for real, do you think they will continue giving out 10+ million per year contracts if the previous CBA is still in place? Then the NHL GM offices are filled with cartoon characters (a picture of Homer Simpson repeatedly biting his finger wrapped in a hot dog bun, and crying, and cursing, comes to mind).

    What would I do? I would wait until the NHL quits playing hardball and starts negotiating in good faith. There was one moment to make a compromise and accept a deal that may not make sense, but it would be reasonable to take it to save the season. That moment is over now.
     
  11. SuperUnknown

    SuperUnknown Registered User

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    When your company is doing business in a sector of activity that's not doing well (and bleeding red ink), you still have to continue paying the going rate to continue your activities until clearer days come by. In the case of the NHL, the teams have to follow the flow and pay their players what the "market" (in a current CBA) dictates regardless of the economic sense for the team. That's why the NHL is so bent on changing the system.
     
  12. shveik

    shveik Registered User

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    And how is this post is relevant to the thread?
     
  13. shveik

    shveik Registered User

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    The abstract example that you bring up actually works against the NHL. If in so many other industries the companies go through the periods of red ink (which is overwhelmingly the case during any business expansion), then how come the NHL wants to change the system? What is it that would prevent the black ink to come back "under current CBA"? The market does have certain inertia, but it doesn't dictate, it adjusts. And the 24% rollback would take care of the bulk of the adjustment (if it is necessary) to put NHL in black ink.
     
  14. Phanuthier*

    Phanuthier* Guest

    So in other words, your going to wait.

    I'm just trying to get an idea of what the Pro-PA crowd thinks is the solution and what they would do now. I honestly don't know what the other side's argument is, and I'm hoping to get a gauge of it in this thread.
     
  15. Phanuthier*

    Phanuthier* Guest

    Yes, I'm sure everyone knows well about that 24%. (I mean, how can we not?)

    Besides the fact that it doesn't solve anything long term, exactly how much effect will the 24% have? How many players are under contract? Because those are the only ones that will take the 24% hit. With all the UFA's right now, that 24% is meaningless.
     
  16. Jaded-Fan

    Jaded-Fan Registered User

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    ....... under 290 players this upcoming season, less than half of that number next season.

    And the players 'solution' is fairly obvious. They will strike and take their chances with the NLRB. It became fairly obvious when they rejected the $42.5 million unlinked offer and then played games with Mario and Gretzky that was their strategy all along.
     
  17. kolanos

    kolanos Registered User

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    The PA offered a 24% rollback.

    The old CBA their payroll was ~63% of revenues. So a 24% rollback would equate to cutting back their share to 39%, for the near-term anyway. Then presumably salaries would inflate back up to the 60% range again in a few seasons (without a cap, that is).

    The owners have offered 55% linkage, which would be an 8% cut in the players' potential share, but would be 16% higher than the players' proposed 24% rollback.

    Is it really such a stretch for the players' to offer 59% linkage? Or how about a 39% floor and a 55% ceiling for linkage? That way, worse case scenario, they cannot make any less than what they've already proposed with the 24% rollback.

    I guess Goodenow is too good to make an offer when a gun isn't being held to his head.

    What do you pro-PA posters think? Are you all really against linkage? Seems like the best option for the PA, as long as they play their cards right.
     
  18. broman

    broman Registered User

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    Not sure if I qualify as "pro-PA" -- although I am certainly not a rabid millionaire-basher -- but here's my $0.02...

    First, I would continue to oppose a hard cap set at an artifically low level. Markets are different, teams likewise. Major markets such as NY or TO will be able to generate major revenue, benefiting not just themselves but the league as a marketable entity. Therefore they should be allowed (encouraged even) to sustain major spending. That's Economics 101, plain and simple: supply/demand, free enterprise, land of hope and glory etc.

    That is not to say we should ignore the financial difficulties felt league-wide and in developing markets in particular. These should be addressed both through controls that curtail extreme cost build-up and mechanisms for distributing wealth. Is is paramount that both come into play, as financial viability is not just about costs but revenues just the same. Teams' ability to compete and pay for players' services is very much a CBA issue.

    We would suggest a progressive tax starting at $38m and a hard cap of $49m, ready to adjust both depending on additional terms. Tax revenue would be shared evenly between all teams in order to balance differences in team revenue while making sure teams are not discouraged from investment (=spending) and team development. Significant shares of playoff ticket sales and any national TV contract would be included in the distribution pool.

    We would remain opposed to linkage (although caps should be adjusted annually to counter inflation), as experience shows it is next to impossible to come up with a jointly agreed definition of hockey-related revenue, mostly due to wildly differing accounting practices and owner business arrangements. Far too much time and energy has been wasted in this: it's time to focus on what matters. A percentage point never paid anyone's bills.

    In relation to this, we would appreciate the owners' concern over diminished revenues due to the current stoppage. While it would be all too easy to say this is something they should have thought of before they declared lockout ;) suffice to say we believe our 24% rollback offer should be sufficient to address any immediate (short-term) concerns. Yes, it is back on the table. Coupled with a modicum of common sense on owners' part that should be more than enough to keep all 30 franchises well and truly afloat.

    How's that for a coherent argument? :D
     
  19. Johnnybegood13

    Johnnybegood13 Registered User

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    I'm fairly certain those numbers are wrong. in 2003 i think the player salaries were somewhere around 76% of league revenues and the 24% rollback just put the percentage down to 55% because not all players had contracts.who knows what it would have been in the end after ufa's and fa's signed.

    Correct me if i'm wrong
     
  20. Sanderson

    Sanderson Registered User

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    Actually, you can't just subtract 24 percentage points of the percentage the players got, they are totally different numbers.

    You'd have to take the percentage the players got and reduce it by 24% not by 24 percentage points.
    If the players got roughly 75% it would mean that they would get roughly 56% after the pay cut (75- 1/4 of 75).
    Players without contract are not included in this, because there is nothing you could subtract from.
     
  21. broman

    broman Registered User

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    Usatoday.com hockey salaries database

    Combined total payroll $1.33bn / much quoted league revenue $2.1bn = ~63%. Rollback 24% and you get ~48%.

    Not that anyone cares though cause of course it's just PA smoke and mirrors. Poor owners would be at gunpoint to double that in no time at all.

    Pardon the sarcasm, I am not really *that* vehemently pro-PA, but this particular issue is something that hits the nerve for me.

    Edit: oh yes and I do realize the 48% figure is meaningless as such, it's there just to complete the maths.
     
  22. kolanos

    kolanos Registered User

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    Of course the 63% figure is a pre-lockout figure, but it should be the basis for this bargaining process. Just because most of the players in the PA no longer have contracts does not mean that they wouldn't just end up back at ~60% if we started the league back up again using the old CBA. So it's a good basis in which to come to something that could be considered fair for both sides whether you agree with linkage or not.

    After checking my math, I believe I was incorrect about the way the 24% rollback would work. I was applying the 24% rollback to the entire revenues pie (63% share, minus 24% = 39%), and not to just the PA's share (24% of 63% = 48%). Which ends up being about a difference of $7MM per team, or $210MM league-wide.. Apologies for the confusion there. :)

    But you get the idea!
     
  23. 24xchking

    24xchking Registered User

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    Kolanos said:
    " Which ends up being about a difference of $7MM per team, or $210MM league-wide.. "

    Which, I believe, is why nobody is particularly impressed by the 24% rollback. Nobody believes that the same owners who got themselves into this mess would suddenly become responsible and not give that $7MM back to the players in the first few contracts they made.
    A cynic might even say that the players were counting on it and didn't think the owners would catch on.

    The owners have said they're losing millions of dollars each year. The PA says we'll give you 7 back...for a while. Pffft.
     
  24. CarlRacki

    CarlRacki Registered User

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    The problem with the 24 percent rollback is twofold.

    First, at this point any rollback would affect fewer than half (perhaps less than a third?) of all the players. So any claim that it would reduce team payrolls by 24 percent, or any other significant figure, is simply wrong.

    Second, and more importantly, it contains no significant mechanism to prevent salaries from again spiraling upward at an unsustainable rate. It's luxury-tax system was (20 cents on the dollar) plainly would not act as a major disincentive. Also, the plan calls for any luxury-tax revenue generated to be fed back into the player salary pool, thus serving as an inflating pressure on salaries.
     
  25. Winger98

    Winger98 powers combined

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    re: proposal

    It is very similar, except my tax numbers are much higher. While a similar deal was rejected earlier, this is still where I would start again from. This was when the talks were really getting close and, if the pot is sweetened enough, I think the owners would bite on a system similar to this, or that they should bite at it. While the number sounds high, it would have either effectively removed all of the UFA from the Wings from the past few seasons, or forced them to sign everyone at drastically lower amounts (no $10 million contracts for Lidstrom, no $6 million deals for Chelios, etc).

    Also, not everyone will spend the absolute max. I did the math awhile back (but trashed the excel file...) and if every team over the $50M limit was brought down to exactly that number, and the salary numbers for the rest of the league remained static, the total salary % for the league would have come out around 54% of league revenues. And that's with six or so teams spending exactly $50 million a year, something I think is fairly unlikely considering it would eliminate any payroll flexibility.

    Another idea is a cap around $40 million, but with a loose, NHL version of the "Larry Bird Rule," allowing teams to go over the cap to re-sign their own players.

    My personal hope for this CBA has always been a system that allowed teams to build a team and then keep it together, but not allowing teams to build largely through UFA. I do not want to see a league where teams are forced to dismantle because of cash, either because of exorbitant costs or because of artificial caps, but that's something I greatly fear coming about with the low cap numbers the NHL has consistantly put forth.

    RE: Dollar

    I had the Canadian Assistanceship Program in mind with the dollar idea. When I look at American teams that are "in trouble," I honestly have a hard time blaming the system. Buffalo was ran by a literally criminal owner, Pittsburgh signed itself into a horrible lease agreement, Carolina might simply be a failed experiment in NASCAR country, and Chicago and Boston have made their own beds. By placing greater restrictions on salary escalation (refined arbitration process, closing rookie loopholes, etc.), it should allow teams like Pittsburgh, Carolina and Buffalo to build better organizations more affordably from the ground up and not have to trade away talant. As they put better teams on the ice, more people should show up to the rink, and those teams should have more money to spend on their teams. Detroit is often pointed to as a big market team that abuses their resources, but that's exactly how they gained their financial advantage. Winning largely draws you more fans, unless you're NJ.

    The Canadian franchises, though, are getting reamed by something that is entirely out of their control. While the NHL's proposals have generally had far lower ceilings than the PA's, a few of them have also included floors around the $30 million level. While that sounds low, a couple of years ago Edmonton spent in the mid $30 million range American, but $56 million Canadian. Regardless of a cap system, numbers like that are killers and something has to be in place to help the Canadian franchises specifically, imo.
     
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