Why players wont accept a cap?

Discussion in 'The Business of Hockey' started by jcpenny, Jan 29, 2005.

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  1. jcpenny

    jcpenny Registered User

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    I always hear that players won't accept a cap under any circumstances but i never heard why. Can someone tell me some of their main reasons or give me a link to an interview it could be great. I'm starting to question if players actually know why they dont want a cap.

    I know why some posters here dont like a cap but they're aint players. I'd like to know why accepting a cap would be like getting AIDS cuz they make it sound like it.
     
  2. Captain Lou

    Captain Lou Registered User

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    Because they do not want an artificial restraint on how much money they CAN make. Although, at this point, it doesn't matter anyway; we have seen the last of the NHL as we know it. Hope everyone enjoyed the SCF last year!
     
  3. hackey

    hackey Oh Did I Offend You

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    Its all based on conditioning, Goodenov brainwashing and principles. An average of $1.3M is still $1.3M whether there is a cap or not.
    It really shows how ignorant and out of touch the players really are. They cannot and will not relate their salaries with league income. Pure arrogant stupidity.

    What healthy business does not relate/link its expenses with income?
     
  4. Captain Lou

    Captain Lou Registered User

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    If the market naturally dictates that the average salary is $1.3 MM, then the players would be fine with that. If the CBA artificially dictates that the average salary is $1.3 MM, then the players have a problem.

    If these owners are all bleeding money, then why can't they show fiscal responsibility--for the good of the league?

    If some (NYR, TOR, DET, etc.) can't show fiscal responsibility, why don't they want to share revenues with the non-revenue teams---for the good of the league?

    Why then, should the players be asked to cap their earnings, when the large market teams are the ones doing most of the damage to the league, and those teams don't want to do anything about it, except line their own pockets?
     
  5. Trottier

    Trottier Very Random

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    Today's HF "life" lesson:

    Having principles is...well...ignorant! ;)
     
  6. snakepliskin

    snakepliskin Registered User

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    the players can rot in europe if that is where they would rather be. i think the league should go ahead and file bankruptcy, re-organize and start holding tryouts. then we would really see where these guys would really rather play. they are for the most part morons!
     
  7. vanlady

    vanlady Registered User

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    4. We were given access to the UROs for 30 clubs, but were only able to conduct a thorough review of four NHL clubs. On those four clubs alone we found just over $52 million in hockey related revenues and benefits not reported in the League's voluntary and unaudited URO process. If we are given similar access to all of the other individual teams' financial information, presumably used in the Levitt report, we will be in a position to provide further comment.

    http://www.nhlpa.com/MediaReleases/ReleaseDetails.asp?mediaReleaseDisplayId={C70AAA96-E756-4BC5-87BE-4C0621FA42A9}

    Here is one quote.
     
  8. Captain Lou

    Captain Lou Registered User

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    Yeah, some partnership the league wants. We want to cap your salaries as a percentage of revenue, which we are going to lie about and underreport. I can't believe the players havent agreed to this yet!
     
  9. quat

    quat winsome, loathsome

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    Sure. What are they? Oh.... they don't say. But it must be true... "hockey related revenues" . Obviously there is a difference in opinion as to what they may be. It certainly would make sense for the PA to help decide what they would be, as it's obvious they are easy to discover if someone tries to hide them (as I believe you are suggesting).

    I'm not sure why you keep posting the same stuff... the PA didn't want to discuss a CBA based on revenues, so all this kind of fluff is simply PR. If they had any interest in this kind of CBA, the problems defining "hockey related revenues" would be likely quite easy to overcome.
     
  10. quat

    quat winsome, loathsome

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    Only if they don't agree with your own ! :D
     
  11. quat

    quat winsome, loathsome

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    Perhaps they disagree on what the definition is for hockey related revenue?
     
  12. vanlady

    vanlady Registered User

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    Discuss this with an accountant, someone who is a forensic auditor will tell you that the system you seek is a fantasy, UNLESS the accounting firm controls every penny from the time it walks in the door. The owners will never accept this.
     
  13. SENSible1*

    SENSible1* Guest

    And yet by some miracle it works for both the NBA and NFL.
     
  14. Wetcoaster

    Wetcoaster Guest

    A hard cap requires tying salaries to revenues and defining what those revenues are. In the NFL and NBA this was done after the owners completely opened the books. It is not just a number.

    "We have consistently stated that one critical issue of disagreement between the NHLPA and the League on finances is how to define the complete business of owning an NHL franchise, and how to address the significant inconsistencies contained in the NHL's voluntary and unaudited URO reporting process," union chief Bob Goodenow said in his media release responding to the release of the Levitt Report.

    The issue is how to determine how to divide up revenues for items such as licensing of suites and club seats, sponsorships, naming rights, fixed advertisements within the arena and distinguish what share goes to NHL related business and what goes elsewhere.

    That doesn't apply just to arena revenues, but other facets of a team's business as well. In 1999 and 2000 the union gained access to four teams -- Buffalo, Montreal, Boston and Los Angeles -- and found $52 million in revenues not accounted for in the teams' UROs.

    "We went and requested further information that spoke to a lot of the related entities and disclosed a lot of revenue sources that clearly were not being counted in the URO process," NHLPA senior director Ted Saskin told The Sporting News. "Just on those four teams alone, we saw a swing of $50 million toward profitability. That's only on four out of 30 teams.

    "We've always said it's not an accounting issue of making sure the numbers add up," Saskin said, "but a much more complex task of how one defines the revenues in a business with many related parts and complicated corporate structures. There's no way to tell because they continue to refuse to give you individual team financial information."

    Players have chimed on questionable URO entries as well.

    ''There are a lot of ways owners can move money around and hide it in certain situations,'' Philadelphia's Jeremy Roenick once said. ''I know in Chicago they claim no money on luxury boxes. They have 215 luxury boxes and they don't make a dime off that?''

    That's why the union has little faith in the URO process. The NHLPA doesn't believe it accurately reflects the financial state of the teams.

    "Absolutely not" said Saskin. "The financial reporting you get from the National Hockey League is only as good as the information they get from each team in what is an unaudited and voluntary submission. And the old adage 'Garbage in, garbage out' is unfortunately an apt description of the current system they have in place. We have numerous examples of teams simply putting down 'zero' for luxury suites, concessions and other items. You can't take that kind of reporting seriously."

    After the Levitt Report came out, Philadelphia Flyers chairman Ed Snider revealed his team was one of the 19 NHL teams the report said lost money in 2002-03. Team president Ron Ryan said the Flyers weren't among the teams whose bottom line was colored in red ink, i.e lost money.

    "Where it becomes confusing," Ryan told the Philadelphia Inquirer, "is that it sounds like there are two sets of books. The difference is that the report we make to the league, as directed by the players' association, is different from our own internal audited statement, which we view as the more accurate statement. So we were talking about two different reports."

    So how can the players possibly trust what the owners are saying when every time they look closely the numbers change.

    The other complementary part of a hard cap is revenue sharing and the NHL refuses to consider significant revenue sharing. The NHL shares at about 9% while the NFL shares at about 70%. With significant revenue sharing there is an incentive on low revenue teams to help monitor the reporting process. However that is why Bettman will not go there since it would require him to take on some of the most powerful owners.

    A consultant who works for the NHL was blunt, telling the New York Post recently, "Hockey owners won't do this; they'll fight to the end not to share their revenues, since most of them get their revenue locally. The real trouble is that the conflict isn't going to just a labor issue of players versus owners — it's going to be owners against owners."

    Former Ottawa Senators owner Rod Bryden gets the connection. "I am confident that any settlement that brings cost certainty to the NHL will also include a significant and different kind of revenue sharing among the teams. It is the only way that cost certainty can work," he told the Ottawa Citizen.

    Gary Bettman and a number of the owners just do not get it. And until they do there is no way they have achance of bringing the NHLPA on-side.

    There are also a number of studies and sports economists and labour law experts who are critical of the cap as proposed by the NHL. I am unaware of any independent study which supports the NHL's reasons.

    "Things need to be done to permit well run teams to make money. The problem is the salary cap guarantees all teams, well run and poorly run . . . will make money," Stephen Ross, an Illinois University law professor told the Canadian Press. "Yes, it does protect owners in advance from making really stupid decisions.

    "But what it also protects the owners against is an owner who could spend wisely on a new free agent who will put his team over the top. If a team has not been a contender recently, and they can spend more money to make more money, there should be no limit on their ability to do so."

    In other words, you are placing limits on good business owners and propping up poor ones. Others say there is only one group that can be a possible winner in a cap system and that is a team owner.

    "An effective salary cap is too Draconian and unreasonable. If you're going to use a cap to drive down player salaries, you're just padding owners' pockets," economist Andrew Zimbalist was quoted as saying by USA Today.

    As Joe Sheehan of the Baseball Prospectus explained it, the goal of the salary cap, which he says should be actually called a payroll cap, is "to restrict the amount of money management can spend on labor. It's an agreement among competitors to inhibit the labor market, lowering salaries."

    That would be an antitrust violation. The only way the league can avoid that issue is to get the union to agree to it in the collective bargaining process. That is why the NHLPA is so reluctant to agree to a cap.

    Bettman's view is "We need an enforceable, definable relationship between revenues and expenses. We need a system that will eliminate the disparities in payrolls, so that a team's ability to compete depends on its team building skills, not on its ability to pay."

    Critics say a cap would do anything but encourage team building. In the NFL teams are often forced to make decisions where staying under the cap takes priority over building or keeping together a competitive team. Teams that draft well could eventually have to part with their players if they could not fit them under the team's salary cap.

    Also the hard cap works in the NFL because the contracts arer not guaranteed and the owners can simply cut players and disregrd the rest of the term of the contract.

    "[A cap] punishes success, forcing well-built, winning teams to shed talent on a near-constant basis," according to Joe Sheehan.

    The New York Post says a cap "would destroy team-building, would destroy the ability of a successful club to maintain its nucleus. It would base every personnel decision on an ability to pay while remaining under a prohibitive cap."

    That, in a way, benefits teams who makes poor decisions. They'll have an excuse for not being able to put together a competitive team because their hands are tied by the cap.

    "No matter what the level of the salary cap, there are going to be a lot of teams who have lousy teams because they have overpaid, underachieving players and now they are at the cap level," Ross, the law professor, told the Canadian Press. "If you are an owner, that's exactly what you want. You want to be able to tell your fans 'I'm sorry there is nothing I can do to improve the product because of the cap.' The fans are stuck with another year of a lousy team."

    Here is an in-depth comparative study of salary caps by Matt Witting who concludes:
    http://www.washingtonhockey.com/200203/features/sc1.htm

    Hope that helps and provides an adequate answer to your question.
     
  15. Wetcoaster

    Wetcoaster Guest

    Because of the way their caps are constructed and the specific circumstances of the NBA and NFL. It does not apply to the NHL.
     
  16. Wetcoaster

    Wetcoaster Guest

    Basic rule, you cannot go bankrupt when your assets exceed your liabilities.
     
  17. The Maltais Falcon

    The Maltais Falcon Registered User

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    That's exactly what the owners are trying to do with their insistence on linking salaries to revenues. Yet the players who say the owners need to exercise fiscal responsibility somehow have a problem with this. I get the impression they prefer the owners be as irresponsible as possible, don't you?

    And a cap certainly won't place an artifical limit on how much money a player can make. They can still go out and get endorsement deals, run fantasy hockey camps ala Gretzky, invest in businesses to generate passive income, charge kids for autographs, get summer jobs mowing lawns, etc.
     
  18. SENSible1*

    SENSible1* Guest

    Thanks for re-posting the same PA propoganda. Re-reading that stuff just never gets old.

    Here is a simple one for you.

    Why doesn't the PA make a big show of agreeing to a linkage on the condition that the owners open the books?

    BTW,

    Once the PA has helped define "hockey revenues" and negotiated a fair percentage of those revenues, the issue of revenue sharing is moot. How the owners support each others business is irrelevant so long as the PA gets their share of league revenues.
     
  19. wazee

    wazee Registered User

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    Maybe. Maybe not. But one thing is for sure. The current system is not working. Something has to change and getting control over finances is a good place to start. IMO, a hard cap is the best way to accomplish this, but I could settle for a soft cap or even a luxury cap if it had teeth enough to act as a cap. I do not see another solution that will work.
     
  20. SENSible1*

    SENSible1* Guest

    What a load of crap. Make the necessary modifications and apply it.
     
  21. Wetcoaster

    Wetcoaster Guest

    All together now NHL owners and team management - WE ARE IDIOTS

    MEMO to Gary Bettman:

    Rather than asking the players to idiot-proof your business, quit bringing in owners who are idiots and quit hiring idiots to manage the teams.


    Let us hear from some of the major players from management, players, the NHL and the media :

    "I have never been more embarrassed to work in the NHL as I was on July 1st and 2nd [2001]. I know we can't support the salaries. I know that some of the teams who have spent that money are doing it without the financial capability to pay the money. I'm running my business like a business. I'm going head-to-head with people who are crazy, as far as I'm concerned."
    -Vancouver Canucks GM Brian Burke, July 2001

    "If [the owners] want to pay us, they must be making money, it's not up to us to say: 'No, don't give us that much money.' "
    -Sharks Center Vincent Damphousse, July 2001

    "The challenge for the future is making sure that we have an economic system that enables all of our clubs to be economically viable, stable and competitive where they're currently located. All of our fans need to know at the start of the season that their team has as good a chance of winning the Stanley Cup as any other team. It can't be based solely on how much teams spend on payroll."
    -NHL Commissioner Gary Bettman, February 1st, 2002

    "Obviously, [Bettman]'s making an assumption here. He seems to be convinced that all the owners are capable of creating a competitive team. There never has been the slightest bit of evidence that this is the case. There are some owners who know what they're doing and others who are totally inept. If Bettman doesn't know which of his governors is which, a list can be provided on request."
    - Al Strachan, Toronto Sun

    Matt Witting in his study of salary caps makes the following recommendations:
    Vancouver did this by hiring Dave Cobb a Chartered Accountant as the Chief Financial Officer and gave him total control over everything except hockey decisions. Orca Bay was smart enough not to let Brian Burke anywhere near the financial levers of the organization. And so the team prospered.
     
  22. Wetcoaster

    Wetcoaster Guest

    Happy to oblige - now if you actually comprehended it.....

    Two reasons:

    The NHLPA has no confidence that even with the books open that they will be able to trace down the real numbers - Enron, World.com, Waste Management, Sunbeam, Arthur Andersen - I trust you get what those names signify.

    A hard cap requires significant revenue sharing at or near the NFL level. The NHL is at about 9% and the NFL at about 70%. For the NHLPA revenue sharing is not irrelevant because they actually do care about the game and giving teams a chance to compete equally. The NHL obviously does not.

    A hard cap without revenue sharing does not work.
     
  23. Wetcoaster

    Wetcoaster Guest

    Why???

    The NHLPA has proposed a comprehensive system that they believe will work and fit the NHL.
     
  24. SENSible1*

    SENSible1* Guest

    I comprehend it and your intentions in posting it quite well thanks.
    Too funny. Now no business deal can ever be struck again, because no level of accounting will ensure an accurate picture. Is that what you are trying to pawn off as reasonable?

    No it most certainly does not. It only requires enough revenue sharing to ensure that the PA gets the agreed upon %.

    Big shovel time. The PA is in the business of maximizing their salaries. They don't give a crap about "giving teams a chance to compete equally."
    It most certainly can.
     
  25. quat

    quat winsome, loathsome

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    Except those simply aren't the reasons. The PA just doesn't want a salary revenue linkage, because then they become more responsible for the league... and if you make good money regardless of how well your company does, why would you choose to change that? Answer. Because you are given no choice.

    A hard cap doesn't "require" significant sharing, but I agree it should be there. Can't have your cake and eat it too.

    Both the Players and Owners should be expected to give.
     
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