You Never Give Me Your Money.. (CBA & Lockout Discussion) - Part XII

[hairylikebear]

How are they deceiving the players? I'm just a fan but I know

1. Individual player contracts are subject to the terms of the existing CBA and subject to change in future negotiated CBA's.

2. Regardless of the salary specified in a player's contract, the monies paid out is directly correlated to revenues earn with players receiving no more than their entitled percentage - which is where escrow comes into play.

2. Owners signed players this off season using the CBA available in order to improve their team knowing that the next CBA could be different. Players signed contracts this off season under the CBA available knowing that the next CBA could be different.

If I can understand all of these things as a fan, how can the players not understand these things when they pay lawyers and agents to explain it to them and help negotiate on their behalf? If that's the case, the players shouldn't have any existing contracts honoured in full because I don't think it sends a good message to society when you reward stupidity, lol.

I understand the process too, or at least I think I do, but I also understand that the process is confusing and it's possible for a reasonable person, whether hockey player, agent, or lawyer, to make a mistake. I believe the terms of these contracts should be simpler to prevent misunderstandings of this scale. It's a profitable but unhealthy way to do business.

 

[Crows*]

Richard Labbé @Richardlabbe:
Am told D.Fehr, on conference call with players tonite, insisted on trying to get a deal done. This is not over yet, folks.

https://twitter.com/richardlabbe/status/259097509480251393

" trying"

They would be something new from the pa

 

[Aqualung]

" trying"

They would be something new from the pa

I hope they're trying. And this time crunch numbers before you present it.

 

[Riptide]

You're still misunderstanding. On it's face the deal looks fair but there are problems.

The owners want 50/50 immediately and with the "make whole" portion, players pay for players to make themselves whole. In full, it's less than 50/50.

Yet couldn't the PA negotiate that this make whole share comes out of the owners share? Couldn't the PA negotiate that that split is gradual and looks like 54%, 51%, 50% or something like that (where 5% growth covered their 1.9B)?

In the player's version of 50/50, the effect is gradual, conditional, and player's initially earn greater than 50/50 early on.

And there's also no mechanism should revenue not be 3.3B, and the owners get completely screwed.

It's about how 50/50 is defined. The NHL proposal had a lot of issues in it. I never said that the players are right, but to think that their offer wasn't a step forward is misinformed.

Their offer was basically almost the exact same crap they offered in their first offer. In fact they've barely moved an inch. At least the owners to an extent have shown a willingness to move. We're still waiting on the PA to show the same.

The fact that the NHL wasn't planning on listening to how the NHLPA defined 50/50 favorably for them (instead of how it was favorable for the owners) and wanted the NHLPA to tweak their offer, shows that the owners want this deal on their terms. There needs to be a middle ground. And I do see one (the two sides are not as far off as one thinks), just need to remove the smoke and mirrors.

They heard it from their proposal in August. And their minutely tweaked one in Sept. No real need to hear it again in one that's almost identical to those.

 

[mikeda1940]

To me, Proposal 3 basically means...

1) 50/50 split an all future contracts as linked to revenue
2) A delinked grandfathering of all existing contracts

They are saying to the owners, you have your 50/50, you just have to deal with your prior commitments first as negotiated in good faith.

 

[Crows*]

I hope they're trying. And this time crunch numbers before you present it.

Agreed. They should be embarrassed

 

[WayneSid9987]

I think the NHL hoped there would be something that would lead to some traction. Some owners, knowing Fehr, probably knew that wouldn't be the case, though.

Bettman's "these were all variants of the PA's initial proposal" is pretty accurate.

 

[Ziggy Stardust]

Leave it to lawyers to redefine what 50/50 truly means. "We'll agree to a split down the middle, so much so that you guarantee us $1.9B." The only way this is going to work is through escrow or if they expand on what constitutes for HRR. Otherwise, it's not going to work.

I said it before and it bares repeating, Fehr will not budge from the $1.8B share that the players earned in 2012. He is stuck on retaining that number for the players.

 

[Top 6 Spaling]

I agree with the players with only one thing, the contracts already signed should be fully honoured.

1. Impossible to have that and a 50/50 split.

2. The contracts are not actually a dollar amount, but a % of the player's share.

 

[BoHorvat53]

From my understanding -

PA Offer 1:

If HRR increases to higher than $3.6 billion, we get 50%.
Otherwise, we get $1.8 billion (which would currently be 57%).

PA Offer 2:

All existing contracts become guaranteed.
If league revenues go down or stay the same, we keep our $1.8 billion (which would be 57% or higher).
For every dollar that league revenues go up, we get 25 cents, so our share gradually decreases until we're at 50%.

PA Offer 3:

All existing contracts become guaranteed.
All free agents and new players will sign for less than market value, until our share gradually decreases to 50% (if mossey3535's math is right that would take 6+ years).

First two proposals were essentially, 50% in five years but included an increase to 1.91B. The third was a fallacy, wherein the PA claimed it was 50/50 but stipulated the NHL had to honor existing contracts. Fehr admitted to not crunching the numbers. Daly opted to do so and pointed out (as many had already done so here on HF beforehand.) That the 50/50 alleged split is mathematically impossible.

In short, the PA offered three proposals based on variations of their original proposal and rejected everything the NHL offered. The response had the NHL rejected the PA's new offers in little more than ten minutes. And now the PA is pissed.

All three proposals are five year proposals.

First two proposals are basically the players taking a raise in Year 1 and then freezing their salaries until a 50/50 split can be achieved. Based on a projected 7.1% growth, the NHL gets to 50/50 split in Year 3 of 5. Based on a 5% projection, the NHL gets to 50/50 in the last year of the CBA.

The third proposal was not an official proposal and the PA didn't even do the calculations to see how the proposal would work. But their proposal was that they would take the immediate 50/50 split so long as all existing contracts are honoured. The immediate split would result in about 650M coming off of existing contracts. What the PA proposes that the league pay that 650M PLUS the players get their 50% share (and that share would include any league growth).

Thanks guys!

 

[Riptide]

I agree with the players with only one thing, the contracts already signed should be fully honoured.

They were not fully honored under the last deal... why should that change under a new one?

 

[Top 6 Spaling]

Am I the only one that thinks the players did crunch numbers, saw they didn't work, and proposed it anyway, as a PR ploy to say "we proposed a 50/50 split if they'd just honor the contracts!"

 

[Do Make Say Think]

Fair enough. I was incorrect in saying that doesn't happen (I wish I knew where to get that kind of information...) However, since the lockout, owners have definitely claimed a lot more escrow than the players. I think we can both agree to that.

That's one way of looking at it. The players not getting all their escrow back is partly their fault: they raised the cap everytime they could and kept asking for more money, which the owners were happy to pay. When salaries grow faster than revenues and salaries are tied to revenues, the salaries fluctuate.
I can see why the players don't like it but it's not like the owners are robbing them either.

 

[UsernameWasTaken]

To me, Proposal 3 basically means...

1) 50/50 split an all future contracts as linked to revenue
2) A delinked grandfathering of all existing contracts

They are saying to the owners, you have your 50/50, you just have to deal with your prior commitments first as negotiated in good faith.

I wonder how all the players would feel about that? I was thinking of the players who are coming up to UFA status this year - like Getzlaf and Perry...the new deal would put downward pressure on whatever contract they could get (relative to the $ handed out this year) - while they were standing there looking at people like Parise and Suter having gotten paid big time. That might just be life in the big city - but I'd think there are going to be other players like them who will see it as a haves/have nots situation.

 

[Iggy77]

Am I the only one that thinks the players did crunch numbers, saw they didn't work, and proposed it anyway, as a PR ploy to say "we proposed a 50/50 split if they'd just honor the contracts!"

That's what I thought it was.

"The NHL made a 50/50 offer for PR purposes ! We need to do the same"

 

[mouser]

The players are right, the contracts signed should be paid in full, find a way to have the share go down to 50% gradually while these contracts expire.

It's an understandable position, however one key thing to understand is those contracts were never going to be paid in full under the old CBA rules. The NHLPA is asking for something "new" that didn't exist in the prior CBA when proposing they be paid in full in the new CBA.

I'm not implying the NHLPA is right or wrong for doing so. It's a completely new CBA that's being negotiated, either side can ask for whatever they want.

 

[542365]

I just can't understand how the PA could make a proposal without working the numbers to be certain what they were actually offering. That is absolutely unbelievable to me. How does that happen?

 

[MikeK]

I just can't understand how the PA could make a proposal without working the numbers to be certain what they were actually offering. That is absolutely unbelievable to me. How does that happen?

It happens when you have a Union that isn't really a Union and a negotiator with very little pressure to get a deal done.

 

[mikeda1940]

I wonder how all the players would feel about that? I was thinking of the players who are coming up to UFA status this year - like Getzlaf and Perry...the new deal would put downward pressure on whatever contract they could get (relative to the $ handed out this year) - while they were standing there looking at people like Parise and Suter having gotten paid big time. That might just be life in the big city - but I'd think there are going to be other players like them who will see it as a haves/have nots situation.

It seems the players are willing to accept 50/50 as their future lot in life, including all future unrestricted agents. Its their existing contracts where they feel like they are being mugged. Kind of like the way Ottawa folks felt about Yashin I guess

Negotiations are acceptable to the players. Re-negotiations are not.

 

[Bourne Endeavor]

Am I the only one that thinks the players did crunch numbers, saw they didn't work, and proposed it anyway, as a PR ploy to say "we proposed a 50/50 split if they'd just honor the contracts!"

If they did, they are more incompetent than before, seeing this would hinge on the NHL not doing exactly what it did. Granted, at this stage. I'm not about to put anything passed them. It does have a good PR spin... until it blew up in their face.

 

[Top 6 Spaling]

If they did, they are more incompetent than before, seeing this would hinge on the NHL not doing exactly what it did. Granted, at this stage. I'm not about to put anything passed them. It does have a good PR spin... until it blew up in their face.

To die-hards, it's suicide. To casual fans who dont spend their nights cramming CBA numbers? It might actually work......

 

[LickTheEnvelope]

To me, Proposal 3 basically means...

1) 50/50 split an all future contracts as linked to revenue
2) A delinked grandfathering of all existing contracts

They are saying to the owners, you have your 50/50, you just have to deal with your prior commitments first as negotiated in good faith.

Except that is not at all 50/50 in revenues over the term of the deal if (as i've heard) it would cost $500 million or so, at least, to cover the difference off the old contracts... which means it's not lower than 53/47 for the players over this cba, and potentially more in favour of the players if revenues should halt or fall.

 

[Crease]

The dispute is simple. The owners want linkage. The players do not.

The players want a guaranteed nominal amount (around $1.8B) with guaranteed raises each year. If the NHL continues to experience revenue growth at the rate it has in the past, then the owners share of the pie will grow. The owners want to peg the player's share to a specific % of revenues.

For an investor, linkage is much more attractive. The reason is risk. If the league were to use the players' model and isn't able to sustain revenue growth at a certain rate, then fixed costs will quickly begin to outpace revenues. A huge problem when half the franchises already struggle to break even. Simply put, the players' model depends on revenue growth. The owners' model doesn't.

Good thing Bettman pressed the mute button on the owners. Imagine what the owners would be tweeting when they found out the players came in today with another proposal to increase the risk of their investments.

 

[kfan22]

Richard Labbé @Richardlabbe:
Am told D.Fehr, on conference call with players tonite, insisted on trying to get a deal done. This is not over yet, folks.

https://twitter.com/richardlabbe/status/259097509480251393

Not seeing this anywhere else??

 

[LickTheEnvelope]

The dispute is simple. The owners want linkage. The players do not.

The players want a guaranteed nominal amount (around $1.8B) with guaranteed raises each year. If the NHL continues to experience revenue growth at the rate it has in the past, then the owners share of the pie will grow. The owners want to peg the player's share to a specific % of revenues.

For an investor, linkage is much more attractive. The reason is risk. If the league were to use the players' model and isn't able to sustain revenue growth at a certain rate, then fixed costs will quickly begin to outpace revenues. A huge problem when half the franchises already struggle to break even. Simply put, the players' model depends on revenue growth. The owners' model doesn't.

Good thing Bettman pressed the mute button on the owners. Imagine what the owners would be tweeting when they found out the players came in today with another proposal to increase the risk of their investments.

Would be amazing. I'd like the reactions to the first offer to increase player's salaries next year too.