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*Official* CBA Negotiations and Lockout Thread

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smurf47 Canucks Rookie

smurf47

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One thing I don't understand is why the public/media isn't making a bigger deal about the owners wanting to rollback salaries without reimbursing the players for the money guaranteed by their contracts?

Personally, I think that is unethical. I realize in the case of Zach Parise, its not like he would be hard hit, but considering the Wild owner was negotiating with promises of a huge contract with huge amounts of moneying, knowing very well when the CBA was up, he'd be arguing to cheat his way out of paying them the money while keeping the 13 years.

I think players salaries need to be rolled back, with a reasonable contract limit and max variance on new signed contracts, but the owners should have to reimburse the players fully.

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elvis15 Canucks Hall-of-Famer

elvis15

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Friedman's 30 thoughts this week (just the lockout related stuff):

4. I really hate filling this with lockout-related items, so sorry in advance. But there's some stuff to go over. Let's look at some of the sticking points. In the aforementioned NYC negotiations, the NHLPA dropped a demand that, starting in Year 2 of the new CBA, its amount of the financial pie was protected from dropping below the previous season's. But it did ask for a cap on escrow. I just can't see the owners going for that at all, even with the 2012-13 schedule on the line.

5. I think the $300-million make-whole is back on the table if the NHL gets a 10-year agreement with an out after eight (as requested by the players).

6. We've heard Fehr's arguments that 10 years is too long because too many players entering the league will be subject to a CBA they didn't vote on. To me, the bigger question is what's better for the players -- that philosophy or business partners confident that they can sign a decent-sized contract with the NHL and not have to worry about another work stoppage?

7. NHL owners are going to have to move on the five-year max contracts (seven for your own free agents). I know I mentioned it last week, but the effects of Vincent Lecavalier on the Tampa sale and Ilya Kovalchuk on the continuing New Jersey situation have these guys totally spooked. Yes, it's their own fault and they know it. That's why they've got to go six and eight.

8. The one I'm really having trouble pinning down is the amnesty buyout. It's very difficult to get a read on what's going to happen here because word is the commissioner is absolutely against anything that doesn't count against the salary cap. But you look at the possibility of a $60-million ceiling next season, see where some teams are and say, "This isn't possible without one."

9. One possibility: when Ken Hitchcock was hired by St. Louis, he was still owed about $1.3 million by Columbus. The Blues can't pay him $1 and have the Blue Jackets cough up $1,299,999. There is a formula the league uses where the new team must pay market value, where you look at the salaries of other coaches with his level of experience.

10. So what if you tried that? Well, Wade Redden has played 994 NHL games. If you add up the combined 2011-12 salaries of active players within 50 games of that, you get $3,657,533. (Range: Lecavalier to Petr Sykora.) Redden's current contract pays him $5 million for this year and next with a cap hit of $6.5 million. The New York Rangers should get stuck with the higher number so, if another team wants him, it must take a cap hit of $2,842,467 (ie. 6.5 million minus 3,657,533).

11. I have to tell you, nothing I've suggested in my career was dismissed as quickly as that and I've had some really bad ideas. The first two execs I asked shot it down so badly that I didn't even ask a third. It was interesting because the first GM said, "No one would sign Redden at that number." What's key here are the words "at that number" -- we'll get to that later.

12. In the middle of the night, I thought of something else. As it stands now, the buyout for Redden is 67 per cent of his salary over double the term remaining, so the Rangers pay out $6.7 million during the next four years (assuming no change in the next CBA). What if you affected his cap hit the same way? Give New York a choice: $6.5 million on your cap for two years or $4.355 million for four. Do the math and $4,355,000 minus $3,657,533 is $697,467. Now Redden gets another shot.

13. One final note on Redden. It looks like the Rangers have all but guaranteed he is getting the buyout (if there is one) and the sense is there is going to be a lot of interest in him. Don't know what the final salary will be. But if he's willing to be reasonable -- and you have to believe he will be -- he's going to have options. Lots of execs think he will be good value at a lower number.

14. I ran the same numbers on Scott Gomez. He has played 902 NHL games. The average salary in 2011-12 for players who've dressed for between 852 and 952 games was $3,124,656 (Range: Brad Richards to Jamal Mayers).

15. The second thing I suggested was what if teams who buy out a player can only carry 22 on their roster instead of 23? The execs liked it even less ... can't imagine that would thrill the NHLPA, either.

16. Anyway, if I was the commissioner, I'd be quietly polling my owners, asking how many of them would consider an amnesty buyout on their roster. I didn't ask a ton of guys. But those I did talk to said the number might be lower than we think. Bettman can decide what's an acceptable amount. However, for argument's sake, if it's 15, is it really worth cancelling the season for that?

17. Last thing on this topic. If I was a "have" financially, I'd be demanding it. What else are you getting in this CBA? The share is going down to 50/50 and anything you save there is going into revenue sharing.

18. I get asked about the Olympics quite a bit. Nothing is nailed down and it might be done separately from this CBA, but it sounds like both sides want to make it work.

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WiDeN Canucks Rookie

WiDeN

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Nope, lol. He did say mid january is the last possible time to get a deal done.

He went through a bunch of the things they are not meeting on, and said Fehr is oversimplifying the issues of contention.

It was mostly him avoiding some really pointed questions from the panel.

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Boudrias Canucks All-Star

Boudrias

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Nope, lol. He did say mid january is the last possible time to get a deal done.

He went through a bunch of the things they are not meeting on, and said Fehr is oversimplifying the issues of contention.

It was mostly him avoiding some really pointed questions from the panel.

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poetica Canucks First-Line

poetica

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Hockey’s Wealth Redistribution Problem: What’s Really Behind The NHL Lockout

You may not have noticed that the NHL hasn’t started its season yet, which is arguably Problem #1 for the wannabe major league: Ice hockey is fourth in a three-horse race of pro team sports vying for the affection of casual U.S. fans. Problem #1A is the lockout of players that’s been in force since Sept. 15, which has resulted in the cancellation of nearly 550 regular-season games to date. But in the event you are following the inaction rinkside, don’t be fooled when league officials or anyone else claims that the main issue is greedy players. The real problem in hockey is not in the locker room, but in the owners’ suites and commissioner’s office.

The NHL would like you to believe that owners give too much money to players. That was management’s position almost a decade ago—the last time the league locked out its talent—when players were getting three-quarters of total revenues. After an entire season was voided, the NHL Players Association caved, agreeing to lower its members’ share of revenue to 57%. Peace and harmony have ensued since, but now the owners want an even bigger piece of the pie, claiming financial hardship.

Don’t believe them, not for a minute. First, as I’ve written about before, sports team accounting is misleading at best, given that club owners can claim to be losing money when a) the losses are on paper only; b ) there are tax benefits from whatever losses happen to be real; and c) the value of their teams continue to rise.

All this is true for NHL owners as a group. The average NHL team, according to Forbes, is worth $282 million, an 18% increase from one year ago. It’s true, certainly, that sky-high values for a handful of mega-successful teams (Toronto Maple Leafs, $1 billion; New York Rangers, $750 million; Montreal Canadiens, $575 million; Chicago Blackhawks, $350 million; Boston Bruins, $348 million) raise the overall average, while some struggling teams (Carolina Hurricanes, $162 million; New York Islanders, $155 million; Columbus Blue Jackets, $145 million; Phoenix Coyotes, $134 million; St. Louis Blues, $130 million) are worth much less. But it’s also true that $282 million is higher than the price tag Forbes placed on the most valuable team in the league just a decade ago (Rangers, $277 million). And the average value for the bottom five teams today ($145 million) is nonetheless higher than the price tag for fully half the league’s team in 2002. Few teams have struggled financially in the past decade as much as the Coyotes, for example, and yet their valuation over the past decade has increased 69% ($79 million to $134 million).

Businesses don’t increase in value if the underlying model isn’t sound.

None of which is meant to say that the NHL doesn’t need tweaking. It does, in two ways. First, there’s a strong argument to be made that there are too many NHL teams, or at least too many in places where ice hockey is not exactly a native sport. i.e., the American South. This is the fault of NHL commissioner Gary Bettman, long a champion of NHL expansion. But hockey in the U.S. is not a national sport; it’s a collection of regional enthusiasms, and not enough fans in the American Southwest and Southeast are as enthusiastic about hockey as they are about football, baseball, and basketball. Is it any wonder that the Atlanta Thrashers’ fortunes improved after they relocated to Winnipeg last year (changing their name to the Jets)? With a rabid regional fan base, management could raise ticket prices and secure a more lucrative local TV deal. Forbes has the franchise’s value increasing by a fifth in just a year (to $200 million). Alas, there aren’t that many large markets without an NHL franchise left north of the border, or in the northern U.S. Likewise, contraction isn’t a likely prospect. Major (or even minor major) sports leagues reduce their ranks of teams about as often as owners speak honestly about their finances.

More to the point, contraction might not be necessary if NHL owners would only grow up. The problem in hockey, as ESPN The Magazine‘s Peter Keating recently explained, is that NHL owners don’t share enough of their own money with each other. And share they must, because the nature of the NHL’s “popularity” in the U.S.—intense interest among small pockets of local fans, consistent disinterest otherwise—translates into paltry national TV contracts. As a result, Keating writes, NHL teams “share a far tinier proportion of their revenues than teams in other sports do, because NHL clubs rely much more on local media deals for money than on national TV contracts.” So big-market teams, with lots of local TV money, spend more on player salaries, forcing small-market owners to choose between paying their players more than they can afford or putting a subpar product on the ice. Either choice has unpleasant financial consequences.

This has long been a problem, of course, for all major sport leagues. But we’ve known for a while that the way mature owners and strong commissioners have to deal with this imbalance is to share revenues between teams. Practically, this allows all teams to be competitive, ensuring a consistent and popular product. Philosophically, this recognizes the we’re-all-in-this-together aspect of professional sports leagues, one of the more curious economic constructs in history. It’s not a coincidence that the most successful North American sports league also has the most rational approach to revenue sharing. Some 60% of the NFL’s $11 billion revenue pie is shared, which is why tiny Green Bay, Wisconsin can compete with big bad New York or Chicago. The other two Big Three leagues aren’t quite as egalitarian but have improved their models in recent years: MLB teams share nearly a third of localTV revenue, while NBA teams reportedly approach a 50% total revenue share (give or take a few complex calculations).

The NHL, meanwhile, has been sharing 4.5% of its $3.3 billion revenue (with not much more on the table in current talks.)

So greed is the issue, alright: owners’ greed, specifically owners in larger markets who refuse to recognize that sports leagues are in many ways socialist enterprises, in which the needs of the many fat cats should outweigh the few obese cats. At least if the obese cats want to keep purring.

Again: NHL owners with struggling teams, to the extent that they are actually struggling, are largely in the shape they’re in because of their fellow owners, not because of NHL players.

And all NHL owners would be wise to recognize their own culpability ASAP, rather than engaging in more legal maneuvering. (At the moment, the league is busy filing lawsuitsand complaints, while the NHLPA is trying to decertify itself, so players can sue owners for anti-trust violations.) The urgency is not because NHL fans will give up on the sport; hockey fans are absolute gluttons for abuse and incredibly desperate to watch pro hockey. (Seriously, check this out.) No, NHL owners should get their act together because their league faces something none of the other major sports do: Russia’s KHL, an aggressive and surly rival league that has long resented how many European players in general and Russians in particular choose to play in North America rather than staying on their home continent. The KHL’s finances, like most things Russian, are a little murky, so it’s hard to know if the league could seriously compete with the NHL for top talent in the long run. But a surprisingly large numberof iced NHLers are now playing in the KHL while they wait out the lockout, including a lot of North Americans.

You have to worry that at some point many will simply decide to stay for the long haul.

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Boudrias Canucks All-Star

Boudrias

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I had heard about the request for a cap on escrow (which seems reasonable...if you don't tank revenue it shouldn't be needed in excess anyway), but I hadn't heard they'd dropped their request for the share guarantee. Just goes to show that the players were still moving in the owners' direction in the NYC meetings. And it makes me even more frustrated that the owners couldn't take a single step in return.

Exactly! The NHL wants to claim to not being asking for a dramatic rollback in salaries yet again despite record revenues and yet that is exactly what they're doing if they don't allow for a transition. I'm just confused as to why this is an issue since the NHL knew what they were asking and that they were locking out players and losing games, so they should have been ready with any number of transition options to cover any amount of lost games.

I don't think a union's mandate is to protect all players in collective bargaining simply because I don't believe it's always possible. Rather, I believe their mandate is more to protect the most members without causing undue damage to any individual ones.

Buyouts were used to help teams get under the cap system last CBA, so it makes sense they would use them this time. And, generally speaking, players did just fine last time:

Source: http://www.thehockey...o-sort-out.html

So, even if some players have to lower their asking price for their next contract, they'll still get a significant portion of the previous contract paid even though they were released from it, meaning if you add the buyout money to their new contract their salary probably won't drop at all, and might actually increase.

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poetica Canucks First-Line

poetica

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There is no way I want NYR to worm out from under the Redden contract or Montreal from the Gomez contract or TBay from the Lecav deal. Ultimately Minnie from the Parise and Sutter contracts. You make the deal, you pay the contract in full and the CAP hit goes for the duration. How else do you force responsibility onto teams who make such deals? Trading CAP space yes. Anything less is a sneaky move by owners who screwed up and by the PA who is trying to take money outside the CAP. I don't trust either of them.

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elvis15 Canucks Hall-of-Famer

elvis15

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...

I don't think a union's mandate is to protect all players in collective bargaining simply because I don't believe it's always possible. Rather, I believe their mandate is more to protect the most members without causing undue damage to any individual ones.

Buyouts were used to help teams get under the cap system last CBA, so it makes sense they would use them this time. And, generally speaking, players did just fine last time:

Source: http://www.thehockey...o-sort-out.html

So, even if some players have to lower their asking price for their next contract, they'll still get a significant portion of the previous contract paid even though they were released from it, meaning if you add the buyout money to their new contract their salary probably won't drop at all, and might actually increase.

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Boudrias Canucks All-Star

Boudrias

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I agree with you to be honest, but I just don't see it happening. The only other options would be some sort of cap trading system, like you suggested, or possibly a revenue based step down to 50/50 to ensure the contracts were paid in full and counted against the cap. Being that I haven't heard either of those 2 options even mentioned, I'm guessing buyouts are the best we can hope for. At least with the buyouts the players get the better end of the deal (as they should since they aren't the ones looking to terminate the contract prematurely) by getting most of the money owed but getting out of their remaining obligations, freeing them to go elsewhere, and teams have to at least take the immediate financial hit for the bad contract, even if not the long-term cap hit. A light spanking is better than no discipline at all.

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