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starsfan26's avatar

The only thing that will slow this down is if the players refuse to offer a counter proposal in a reasonable amount of time.

I personally don’t see how making it public makes a difference in negotiations.  Although after I first read the details this morning I thought “Just take the deal and play!”  So, It probably does sway some people’s opinion (mine), but our opinion doesn’t matter anyway right?

Posted by starsfan26 on 10/17/12 at 12:41 PM ET

J.J. from Kansas's avatar

I personally don’t see how making it public makes a difference in negotiations.

Speaks to the mental state of the side who said “We don’t negotiate publicly” less than 12 hours before releasing their proposal to the public and doing just that.

Posted by J.J. from Kansas on 10/17/12 at 01:05 PM ET

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Speaks to the mental state of the side who said “We don’t negotiate publicly” less than 12 hours before releasing their proposal to the public and doing just that.

Yeah.

As in, they know that by releasing the offer they can heap boatloads of pressure on the other side to accept it, effectively win the PR war barring a series of Devellano-esque gaffes, and get advertisers, TV partners and wavering owners all more or less lined up on their side.

The public side of major sport negotiations is a big factor in how the negotiations go, because major sports relies so heavily (in most cases) on public perception and the advertising money that comes from that.

Posted by HockeyinHD on 10/17/12 at 02:06 PM ET

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Posted by HockeyinHD on 10/17/12 at 02:06 PM ET

As in, they know it’s not a great offer, but on the surface it seems good and they know that if they go public with look it’s a 50/50 split (just don’t look at what it is we’re defining as 100) they can try to turn the public tide and bully the PA into signing something so as to not be seen as the villains.

Smart.

Underhanded and incredibly shitty, but what can one expect from seasoned villains like Gary Bettman and Bill Daly?

Posted by Garth on 10/17/12 at 02:10 PM ET

Nathan's avatar

This time the PA has someone that knows how to deal with this stuff. I would expect this to shift public perception for a time if the players don’t accept it or provide a close counter-offer. But Fehr knows how this works and probably has a plan to balance out the PR tug-of-war if it becomes necessary.

Posted by Nathan from the scoresheet! on 10/17/12 at 02:12 PM ET

J.J. from Kansas's avatar

The PR war only has to remain close for both sides to be winning. What the NHL has done in the last day is to make up for the focus group problem and to take over the lead, but I wouldn’t say the PR war is exerting much pressure. 

I also wouldn’t categorize this as something that’s going to be horribly difficult for the players to overcome in the court of public opinion.

In the meantime, it’s a needless distraction which is causing both sides to take as much caution in spinning their demands creatively as they should be actually creating and discussing those demands. That slows down the process.

Posted by J.J. from Kansas on 10/17/12 at 02:18 PM ET

Keyser S.'s avatar

In no way did I plagiarize this from J.J. from Kansas, but I think….....

That’s very true. If the NHLPA is concerned with the fans who don’t understand the difference between gross and net revenues, all they really have to do is offer a counter-proposal asking for a 50/50 split of the gross.

Then both sides can watch as the fanbase eats itself alive arguing over the fact that both sides have asked for a 50/50 split of revenues yet remain $400M apart in their demands.

Posted by Keyser S. on 10/17/12 at 02:18 PM ET

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As in, they know it’s not a great offer,

Compared to what?  It’s as good or better than the deals in every other major league as far as I can tell.

I mean hey, 7 or so years ago the players were getting 74% of revenue, so I guess 57% was an awful deal too, comparatively.  IMO though, a better analysis is one between leagues.

Underhanded and incredibly shitty,

That seems a bit hyperbolic.  Both sides stand up and take questions after major negotiations and there is all sorts of subvocalized commentary going on.

I think most of the anti-owner reaction here is just because as regular workers we rarely but occasionally have to deal with the reality of a pay cut.  Those of us who have had to didn’t like it, so we’ll sympathize with the players to a certain degree.

Mostly it’s just a matter of perspective.  The people who view it as a pay cut are going to react one way.  The people who view it as rectifying a situation where the players were drastically overpaid in the first place will look at it in another.

But Fehr knows how this works and probably has a plan to balance out the PR tug-of-war if it becomes necessary.

I called the lockout.  I called the 50-50 offer from the NHL.  I have absolutely no idea how Fehr can spin digging in on 57% of HRR.  Or 55%  Or 53%.  Heck, even 51%.

I cannot begin to comprise a series of comments or strategies which could serve to shift focus off of the NHLPA refusing to take a 50-50 deal.

I see only two options: 1) a huge, huge own goal by the NHL.  Think ‘Jimmy Devellano starting up a 30 city bus tour”-level catastrophe.  2) responding to the NHL’s 50-50 offer with one of their own and burying the differences in a flurry of details 90% of fans aren’t going to care about much.

And it’s not like option 2 would really shift pressure back to the NHL or anything, it might just buy the NHLPA an extra week or so.  And if the NHLPA’s offer is too obviously rife with distractions and whatnot it will start to smell.

Posted by HockeyinHD on 10/17/12 at 02:34 PM ET

J.J. from Kansas's avatar

it might just buy the NHLPA an extra week or so.

An extra week or so before what? Before they’re crushed under the massive pressure of PR spin?

It’s not difficult to say “the NHL offered a deal comparable to the NFL and NBA and what we’ve countered with is something that is more comparable.”

Hell, throw in a piece about how you think it would be viable to relieve some of the pressure on the struggling teams by creating a more-realistic cap-to-floor index that allows teams to be competitive without being forced to spend well-above their means and as long as you don’t outright call it your “shared sacrifice”, you’re good to go.

Posted by J.J. from Kansas on 10/17/12 at 02:55 PM ET

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I mean hey, 7 or so years ago the players were getting 74% of revenue, so I guess 57% was an awful deal too, comparatively.

Yes, it was, and EVERY SINGLE PERSON IN THE WORLD knows that it was am awful deal comparatively and that the owners absolutely won with the recent CBA, yet now the owners want them to take ANOTHER cut.

Is it sinking in for you, maybe just a little bit?

That seems a bit hyperbolic.

Not at all.  The owners made it seem like to the public they were giving the PA the world, when in reality they are still asking the PA to take a much smaller cut of the pie and also making the pie smaller, all after having record growth for the league under the previous CBA.

But no, I guess when the owner of a business is making records profits yet demanding the employees take pay cuts while trying to tell the public that the employees are the villains, that’s not underhanded or shitty at all.

Posted by Garth on 10/17/12 at 02:57 PM ET

Nathan's avatar

I called the lockout.  I called the 50-50 offer from the NHL.  I have absolutely no idea how Fehr can spin digging in on 57% of HRR.  Or 55%  Or 53%.  Heck, even 51%.

I cannot begin to comprise a series of comments or strategies which could serve to shift focus off of the NHLPA refusing to take a 50-50 deal.

I see only two options: 1) a huge, huge own goal by the NHL.  Think ‘Jimmy Devellano starting up a 30 city bus tour”-level catastrophe.  2) responding to the NHL’s 50-50 offer with one of their own and burying the differences in a flurry of details 90% of fans aren’t going to care about much.

And it’s not like option 2 would really shift pressure back to the NHL or anything, it might just buy the NHLPA an extra week or so.  And if the NHLPA’s offer is too obviously rife with distractions and whatnot it will start to smell.

Posted by HockeyinHD on 10/17/12 at 02:34 PM ET

HIHD, I’ve appreciated your analysis on these issues and agreed with much of it, so don’t take offense, but… you called the stuff that was pretty easy to call, no?

I never suggested Fehr would have to spin asking to stay at 57% (or any specific % for that matter). So let me be specific what I did mean. I’m speaking more to the way in which the 50-50 split is achieved. It sure seems both sides understand and now are at least sort of on the same page with a 50-50 split. Even the definition of HRR, according to every insider that is reporting on this and is worth a damn, is less of a sticking point than before. The issue is the players not wanting—understandably—an immediate and painful salary drop. And while I do commend the NHL for putting together an offer I’d at least grant as being “reasonable” and “worthwhile” for a change, they are still trying to feed the players a shit sandwich with this “make whole” concept. Give me the same concept with the OWNERS paying the dollars and now we’ve got something.

Look, I don’t think anyone is naive enough to think the NHLPA holds more cards here. The only way the NHLPA could possible hold a better hand than the league is if some breakaway owners fractured the NHL’s solidarity. There’s nothing the players can do to change that.

And sadly, you’re probably right that if the PA doesn’t at least put forth a counter-offer that is similar to this, the mouth-breathers that make up 99% of sports fans will turn on the players again, just like they did last time (even though, by the way, the players offered much larger concessions than are reasonable in ‘04, only to see the league reject them).

In the end though, look at Fehr’s history. For all the animosity toward the baseball players in 1995 and 1996, by 1997 you could hardly tell. The league has experienced record growth and profits, all the while player salaries have continued to escalate. There has also been sustained labor peace. Fehr doesn’t have to spin it so folks like HIM. In fact, he can, will, and should make himself the evil one when and if it becomes necessary, so long as he protects the image of the players to his best ability.

Posted by Nathan from the scoresheet! on 10/17/12 at 03:22 PM ET

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Yes, it was, and EVERY SINGLE PERSON IN THE WORLD knows that it was am awful deal comparatively and that the owners absolutely won with the recent CBA, yet now the owners want them to take ANOTHER cut.

Just because the new deal was less awful than the old deal doesn’t make the new deal good.

The players went from ‘wildly overpaid’ (in terms of revenue share) pre-2005, to just ‘significantly overpaid’ post-2005.  A 50-50 split of net revenue after operating expenses is a fair deal.  If the owners try and push the players much past that point I’ll tap you on the shoulder and snuggle right in beside you on the barricades while we sing Les Miserables and hurl rocks at the NHL.

The owners made it seem like to the public they were giving the PA the world,

I’m curious.  Which comment or comments by anyone that represents the NHL said or implied anything even close to what you’re suggesting above?

That’s what I’m referring to when I use the term ‘hyperbolic’.

But no, I guess when the owner of a business is making records profits

Three things:  1) you’re confusing record revenues with record profits.  If My revenue goes up 10% but my expenses go up 12%... oops.

2) Let me ask you a question.  What do you think the profit margin is for an NHL team?  Give me a range, expressed in terms of percentage.

3) What percentage of NHL teams are either a) making profits at all or b) making record ones?

while trying to tell the public that the employees are the villains

Again, welcome to the big leagues.  The players are trying to portray Bettman and the owners as greedy feudal lords.  It’s not like this is Beauty and the Beast here.

An extra week or so before what? Before they’re crushed under the massive pressure of PR spin?

Before public opinion calcifies against the players.  Look, going into this the only real leverage the NHLPA had was the degree of the weight of public discontent they could settle on the NHL’s shoulders as being primarily responsible for the “lockout”.  The NHLPA has way more to lose financially from a lost season than the NHL does, and will lose that money forever in pretty much any situation where game checks are missed.

Everything else is laying in the owners favor.

It’s not difficult to say “the NHL offered a deal comparable to the NFL and NBA and what we’ve countered with is something that is more comparable.”

It’s not difficult to say it.  It is much more difficult to have it resonate.  By getting to 50-50 first the NHL has assumed the middle of the board.  ‘I agree, but better!’ is a difficult rhetorical capitulation to make and still have a vibrant, distinctive position.

Hell, throw in a piece about how you think it would be viable to relieve some of the pressure on the struggling teams by creating a more-realistic cap-to-floor index that allows teams to be competitive without being forced to spend well-above their means and as long as you don’t outright call it your “shared sacrifice”, you’re good to go.

I agree, in part.  I think the cap to floor ratio as it currently is calculated is stupid.  However, the cap to floor ratio facilitates player revenue share so you can’t lower the floor without simultaneously raising the ceiling.  The consequences of that should be fairly obvious:

1) There would be a much wider split between high revenue and low revenue teams in the standings.  This isn’t something I have a problem with in a vaccuum.  However…

2) I’d bet dollars to doughnuts those low revenue teams would primarily be the ones in the non-traditional markets, which means they’d effectively be relegated to a generally lower competitive tier indefinitely.  So…

3) The whole idea of having competitive, exciting hockey in non-traditional markets would be compromised because of a lower floor and a wider competitive spread.  We’d have the big money EST teams beating the crap out of the PST teams, and then in that offseason signing all the PST teams FAs.  And then beating the crap out of them again with the players the PST fans just got done cheering the year before.

Good times!

If the idea is to competitively prop up teams in non-traditional markets in an effort to ‘grow’ the league, the cap-floor ratio has to be fairly narrow and the non-traditional markets have to be financially viable under that auspice.  Otherwise, they’re all dead eventually.

Yeah, some kind of revenue sharing program could offset some of those problems, but when you’re talking about taking money away from the 5 or 6 teams that make a lot of it, and most if not all of those teams are major NHL powerbrokers, that’s called ‘a tough internal sell’.

And if you spread out the cap floor from 16 M under the cap to, say, 50-60% of the cap (24-30 M under a 60 mil average cap ceiling), how much revenue sharing are you advocating teams to get?  20 M a team?  More?  To how many teams?  It can end up being a whole lot of money.

Posted by HockeyinHD on 10/17/12 at 04:01 PM ET

J.J. from Kansas's avatar

‘I agree, but better!’ is a difficult rhetorical capitulation to make and still have a vibrant, distinctive position.

I don’t know about that. I think it makes them look both sacrificial and resolute. The backfire capability is in the fans that are going to get so fed up with the confusion caused by two sides saying the same thing but meaning two completely different things by it that they simply give up on the league.

However, the cap to floor ratio facilitates player revenue share so you can’t lower the floor without simultaneously raising the ceiling.

Sure you can. If the NHL can say “we’re going to have a $59M cap in the first year where teams can still spend to $70.2M”, then we can have a floor that indexes at a lower rate off the cap (as the cap indexes the same $8M above the midpoint that it always has). That’s the beauty of the PR move… it doesn’t make a dime’s worth of difference in how much the players actually get, but it’s every bit an outwardly-apparent compromise as the ‘Make-whole provision’.

Really, all lowering the floor while keeping the midpoint and cap the same does is make three tiers of spenders instead of two and a half.

You’re right in what it would do to parity. The sell to the big-market clubs is that they grow to the point where they can set their own local and regional television deals and that their making the playoffs more-consistently is worth the price paid to prop up cupcakes to beat up on.

Is that any better or worse a system than 30 basically interchangeable teams separated by nothing more than jersey logos throwing their lottery ticket into the hat every year for a chance at the cup?  I don’t know. I think we’ve danced around on this a bit before and if I’m remembering right, we weren’t far off on an agreement that a balance between the extremes would be preferable.  Correct me if I’m wrong on that though.

And if you spread out the cap floor from 16 M under the cap to, say, 50-60% of the cap (24-30 M under a 60 mil average cap ceiling), how much revenue sharing are you advocating teams to get?  20 M a team?  More?  To how many teams?  It can end up being a whole lot of money.

The current calculations in targeted team revenue and actual salary spending qualifying teams for the first batch of revenue sharing dollars isn’t a bad concept as long as they don’t throw in a lot of the roadblocks they had for teams to qualify for those dollars (which to the NHL’s credit, it seems like they’re eliminating).  I also like the basic concept of a committee featuring input from all sides having some say over exactly how sharing dollars are spent. Baseball’s system where teams are given money with the *wink-wink* promise that they’re supposed to use those dollars on improving their rosters has a problem because there isn’t that level of oversight.

The biggest issue remains how to sell it to the clubs which would be expected to put the most dollars into that revenue sharing pot with what appears to be limited short-term returns (and flat-out losses) and medium-to-high risk long term returns. That’s what I think will eventually come to a head between the NHL and NHLPA (and moreso between the individual member clubs of the NHL).  I certainly wouldn’t blame the Leafs for making a demand that if they’re going to have to drop between $20-40M into a hopper for some southwestern money-pit that they get to force a long, hard look at what that team is doing in that market and whether their investment into strengthening the league is worth the continued risk.

It’s just that we’re just now getting to the point where the NHL is warming to the reality that the NHLPA isn’t going to roll over and just assume that the answer to that question is their problem alone.

Posted by J.J. from Kansas on 10/17/12 at 04:47 PM ET

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I don’t know about that. I think it makes them look both sacrificial and resolute.

It would have, had they done it first.

Sure you can. If the NHL can say “we’re going to have a $59M cap in the first year where teams can still spend to $70.2M”, then we can have a floor that indexes at a lower rate off the cap (as the cap indexes the same $8M above the midpoint that it always has).

Here’s the problem.  If you push the floor farther away from the ceiling (comparatively), you either need to increase the ceiling or the players aren’t going to be getting their HRR share in SPCs.

As a general example, If next year’s cap is 70.2 but next years’ floor is 35-40 mil 54 mil… there are going to be five or six (or more) teams that might elect to spend closer to that lower floor.  Unless there is some mechanism for 5 or 6 teams to spend more to offset those reductions in salary this would reduce the total amount of money being paid out to players, almost certainly taking total payroll beneath the players HRR share.  Which would result in a sort of ‘reverse escrow’.  Instead of having a contract that pays you X and having Y taken out in Escrow, reimbursed as needed down the line, players would get X-z in SPCs and then they’d get some random amount of money at the end of the year to bring them up to their %.

Is that any better or worse a system than 30 basically interchangeable teams separated by nothing more than jersey logos throwing their lottery ticket into the hat every year for a chance at the cup?  I don’t know.

In a vacuum, no.  I liked having good teams and bad teams every year.  This was aided, probably, by being a fan of one of the good teams.

Still, this isn’t happening in a vacuum.  It’s happening in a situation where the NHL has spent hundreds of millions of dollars subsidizing teams in non-traditional markets.  If they mostly just cut those teams loose and leave them to their financial fates, all of that money and effort is wasted.

If it were me I’d have started moving out the Atlanta’s and Phoenix’s and Dallas’ and Tampa’s and Florida’s and Columbus’s and Nashville’s et cetera five years ago.

Since this is Bettman’s strategy though, it’s not happening.

Baseball’s system where teams are given money with the *wink-wink* promise that they’re supposed to use those dollars on improving their rosters has a problem because there isn’t that level of oversight.

IMO there are two problems with a huge RS program:

1) Teams will take the RS money and spend as little as they can anyway to maximize profit.  The on-ice product will still suck, and all the big-market teams are doing is cutting Joe Cheapskate a check so he can have a 15% profit margin on a team that finishes 10th or worst every year.  That will drive the big-market teams insane, as it should.

2) Teams will take the RS money and spend right up to the cap, essentially using other teams revenue to bid on their players and beat those teams in the playoffs.  This will also drive big-market teams insane, as it should.

The only way RS works, IMO, is to allow teams to receive RS up to a certain point that is some % beneath the ceiling.  Enough to get the teams off the deck if they want to try, but not enough to float them a top 8 payroll.

t’s just that we’re just now getting to the point where the NHL is warming to the reality that the NHLPA isn’t going to roll over and just assume that the answer to that question is their problem alone.

Oh, that’s not the impression I’m getting here at all, JJ.  I’m getting the impression that the NHL is either going to get their 50-50 terms or they are going to utterly destroy the NHLPA.  This 50-50 offer isn’t some starting point from which the NHLPA is going to talk them up to 47-53.  50-50 is the best it’s going to get.

The only negotiables are how quickly 50-50 is reached, what ‘revenue’ means, and the miscellaneous contract terms like FA, contract length, etc.

50-50 is in stone.

Posted by HockeyinHD on 10/17/12 at 05:25 PM ET

J.J. from Kansas's avatar

Which would result in a sort of ‘reverse escrow’.  Instead of having a contract that pays you X and having Y taken out in Escrow, reimbursed as needed down the line, players would get X-z in SPCs and then they’d get some random amount of money at the end of the year to bring them up to their %.

What better way to end the players’ complaining about escrow than to all but guarantee to reverse the system?  The players loss is the time-value of the money they haven’t been holding the entire year, but from my experience with the sheer number of people who look at getting a huge tax return with no change in either their income or the tax code as a good thing, I don’t think this would be much of a sticking point.

.... although, if they don’t fix the long-term contract loophole, they essentially have the guys who have those contracts eating up more of that “bonus escrow” than their union counterparts. 

If they mostly just cut those teams loose and leave them to their financial fates, all of that money and effort is wasted.

You can still grow something of a hockey culture in a small-but-stable market and create that generational growth.  Not as many people will show up to go see a perennial loser, but some is better than none.

The only negotiables are how quickly 50-50 is reached, what ‘revenue’ means, and the miscellaneous contract terms like FA, contract length, etc.

I don’t think the two ideas have to be exclusive. The league already offering enhanced revenue sharing is at least a sign that they understand there needs to be more responsibility shared for the struggling clubs.

Posted by J.J. from Kansas on 10/17/12 at 06:04 PM ET

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Just because the new deal was less awful than the old deal doesn’t make the new deal good.

What the *#$%@& are you talking about?  What about anything I have said suggests that I think the new deal was good?

Posted by Garth on 10/17/12 at 10:53 PM ET

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What better way to end the players’ complaining about escrow than to all but guarantee to reverse the system? 

I guess my general concern is this:

1) It’s really stupid for players to complain about escrow.  Players as a group get precisely as much of HRR as they are supposed to get.  Escrow insures that they aren’t presented with gigantic bills at the end of the season.

2) If it’s really stupid for players to complain about escrow, I think they will be equally stupid and complain about reverse escrow.  If I had to guess at their complaints it would be something like “This system costs players money in contracts because owners can’t control how much they spend.  We shouldn’t be the ones having to pay the price for that”

That would be a really stupid complaint.  I can totally see it happening.

You can still grow something of a hockey culture in a small-but-stable market and create that generational growth.

Hockey has been in non-traditional markets for 15-50 years and if pretty much any of those franchises missed the playoffs for two years in a row their attendance falls significantly.  If they spend two years in the bottom 3 or 4 teams, it falls through the floor.

In most non-traditional markets there is a shining line between support and success.

I don’t think the two ideas have to be exclusive.

I agree.  My general point is that it’s going to be a whole lot easier to sell big-market teams on putting an extra 5-10 mil each into a revenue sharing pot if Bettman can also tell them they can drop their salary costs by 10-15+ mil a year, so they end up 5 or so mil a year each ahead.

In any case, though, I don’t see there being enough of a revenue sharing pot to do much but get teams to a break-even point with a small floor.

What the *#$%@& are you talking about?  What about anything I have said suggests that I think the new deal was good?

Take a breath, Garth.

My point here is that you seem to be approaching this from the perspective that players making less than they made before is a sign of greed on the part of the people doing the reducing.  I have the point of view that the players as a group are overpaid at 57% of HRR after expenses, so while going from 57 to 50 is technically a pay cut what is really happening is that pay is being properly adjusted to reflect reality.

The old 74/26ish split of HRR was outrageously unfair.
The newer 57/43 split of HRR was less unfair, but still imbalanced.
An eventual 50-50 split of HRR is about as fair as it can get.

 

Posted by HockeyinHD on 10/18/12 at 11:10 AM ET

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Paul Kukla founded Kukla’s Korner in 2005 and the site has since become the must-read site on the ‘net for all the latest happenings around the NHL.

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