Kukla's Korner

Kukla's Korner Hockey

Bettman And Fehr, Read This Every Day Until We Have A CBA

Jim Matheson of the Edmonton Journal wrote this on December 6th, but it still holds true today and probably every day going forward until we have a new agreement.

Lemme get this straight. The NHL’s second-in-command Bill Daly, normally a solid voice of reason, says term limits on contracts “are a hill to die on” in this nauseauting labour battle that is now in day 83. Term limits on contracts? C’mon, Bill. You’ve got to kidding.

The NHLPA says they’re fighting tooth and nail too on how long a player can be signed. Really?

The NHL wants five years, and only a five percent difference in salaries from year to year, but will go to seven years max if a team wants to sign its own free-agent. The Players Union wants eight years.

Are they both nuts? Arguing over that? How many of the 690 NHL players have a contract longer than the five years they so steadfastly say they will want unless a team opts to sign their own free-agent and they’ll allow then a little wiggle room to go an extra two seasons.  I bet you 600 of those 690 NHL players have contracts five years or less.  So we’re talking about three players a team with a contract longer than five years. And that’s a deal-breaker?

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Comments

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Until Matheson or any other columnist bothers to try to understand why the five year term limit is an important issue for both sides, he should really just not embarrass himself by writing about it. It’s not the trifling detail Matheson seems to think it is.

I realize Tyler Dellow is a mere hockey blogger, but this post—http://www.mc79hockey.com/?p=5098—is much more illuminating that Matheson’s.

Posted by YouppiKiYay on 12/09/12 at 08:20 PM ET

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So we’re talking about three players a team with a contract longer than five years. And that’s a deal-breaker?

Yes, because I will bet the author that the deals longer than 5 years are also in the top 10-15% of per year pay to boot.  There’s hundreds of millions of dollars in very risky cap space dangling out there at the ends of all these long deals GMs have rushed to sign in order to dodge the cap hits, and we haven’t really begun to see those deals go south for teams yet due to the relative newness of the tactic.

The Pronger deal is a disaster, the DiPietro deal is a disaster, and the next batch of long term deals (Zetterberg, Hossa, Franzen, et al) is up next to see how and when they all go south for the teams that inked them.

I realize Tyler Dellow is a mere hockey blogger, but this post—http://www.mc79hockey.com/?p=5098—is much more illuminating that Matheson’s.

It’s a good post, and it makes some good points, but I don’t think it’s entirely accurate.

For instance, a point the blogger makes there is that having lower cap numbers leaves more cap dollars on the table for lesser players.

True, but not true as well.

Yes, it does leave more cap dollars available for the team to spend… it’s just not clear whether those ‘extra’ dollars would go towards a depth player or would just be loaded up into a package for another elite player.

I mean, Dellow uses Parise as an example.  That’s all fine and good that the long deal saves some cap money… but the Wild have Suter too.  In Parise’s case it certainly looks like the Wild just used the cap ‘savings’ of Parise’s absurdly long contract to create space to slide Suter’s also absurdly long contract right in beside it.

So for Minnesota at least, the long contract isn’t going to help the depth players at all.

Furthermore, depth or even just not elite players are always going to be impacted very strongly by their replaceability.  It’s not terribly hard to find guys to play in the middle 6 competently.  Detroit routinely finds guys who can do that for well less than 3 million dollars a year.  I don’t see that changing any time soon, so middle-sixers are always going to have a much shallower curve in overall salary increases than will the guys at the top who are always going to be much, much more rare.

 

Posted by HockeyinHD on 12/09/12 at 09:02 PM ET

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That is why all these Hockey writers want a settlement because they are absolutely embarrassing themselves writing about Economics of the deal

Posted by Evilpens on 12/09/12 at 09:18 PM ET

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It might be that Dellow, David Backes and others are right. That if you’re Crosby of Malkin, you can get 15 million. If you’re Letang or Neal, you can get 5. But if you’re not getting an Olympic invite, the best you can hope for is 575k, regardless of if you’re Pascal Dupuis or Ben Lovejoy.

Or maybe star players start looking at what Stamkos did instead of what Parise did as a model for preferring a win to a max out and the rate with which “depth player” salary continues to rise doesn’t change.

Basketball’s an imperfect analogy. Dwayne Wade’s value over the guy who takes his shift when he needs a rest is ludicrously higher than the fall-off between a first line center and a second line center. In hockey, it matters that it’s David Krecji (instead of, like, Cal O’reilly) stepping over the boards when Bergeron gets tired. Wade isn’t off the court anywhere near as often as Bergeron is off the ice, so the guys who play his same position are pretty much irrelevant. That there have been a revolving cast of faceless, low budget shooting guards behind Kobe on the Lakers is a complete non-factor in their winning or not winning championships. As such, guys like that don’t make anything. But that the Kings having well-compensated depth D on their roster (Mitchell, Scuderi) is a big reason why they just won a cup.

It’s a valid thing to be a little wary of, but the truth is, nobody knows if it would happen. The guys they’re afraid will suffer did a Hell of a lot better in a capped system that was, at the time, predicted to destroy their earning potential, than they did in a free(ish) market. It’s hard to say how an elimination of circumvention would affect how money is allocated in practice.

Posted by larry on 12/09/12 at 09:53 PM ET

UMFan's avatar

Wouldn’t having contract limits that low be inflationary for the league? I mean, if I’m a star and can only get 5 years of contract security, with all the concussions going around I’m thinking max contract all the way. You’ll get less hometown discounts. And, more contracts during the lifetime of a players career usually equals more opportunity for raises. Unless I’m missing something, this just doesn’t seem to be something that is good for a league that wants to keep player costs down.

Posted by UMFan from Denver, Colorado on 12/09/12 at 10:06 PM ET

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Wouldn’t having contract limits that low be inflationary for the league?

Probably, but at least only in one direction.  As things are now contracts are inflationary in two directions.  Amount, specifically the real-cash amounts of the first 5-7 years of these long deals, and then term.

I think your point about more opportunity for raises is accurate, but incomplete.  The more often you’re up as a FA, the more chances you have to be in a market where there are more or less of what you do.  Sometimes that will work out to the benefit of the FA… others, not so much.

IMO it’s tough to make too many generalizations about how shorter contracts are going to affect the league differently than longer ones did.  We can be pretty sure a 5 year deal is much less risky than a 10+ year deal is, and that’s just about it.  Most everything else is going to be strongly influenced by events on the ground at that moment.

That if you’re Crosby of Malkin, you can get 15 million. If you’re Letang or Neal, you can get 5. But if you’re not getting an Olympic invite, the best you can hope for is 575k, regardless of if you’re Pascal Dupuis or Ben Lovejoy.

It’s possible, sure.  I just don’t think there’s a correlation between longer contracts leaving more cap money on the table and then that cap money going to depth guys rather than elite guys.  That’s the point Dellow was trying to make.

As far as the salary striation issue goes… that’s going to happen in any capped league.  Most teams (correctly in my view) build their rosters from the top down.  They make sure they have their best forwards, defensemen and goalies locked up and then they go and try and flesh out and fine tune the roster from there.

That’s because there isn’t a big difference between most mid-tier skaters and defensemen.  Every year we see a dozens of veteran guys signed for fairly low comparative wages who do a pretty competent job in those mid-range roles.  We very rarely see a team that chooses to not get or keep any elite players at forward, D or goalie accomplish much during a season.

So, teams make sure they have their best talent secured and then they do their best with what’s left.  That means the competition for the remaining bits of cap space is pretty fierce and lots of competent players can be had for very little, relatively.

Posted by HockeyinHD on 12/09/12 at 10:24 PM ET

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Truthfully, I think HockeyinHD is ultimately correct in that it’s not possible to know beforehand how limiting the length of contracts will play out. My first thought was not Parise, but Jason Garrison. The Canucks have a self-imposed cap of around $4,5 on D. They were able to sign Garrison last summer by offering a sixth year, so the cap hit averaged out to around $4.5. Without year six, they are either blowing the D budget or Garrison is signing with a team that has more to spend on a 3-4 D

I believe it was Larry Brooks who suggested last week that part of the reason teams were after contract limits is that they view very long term deals as significant liabilities that depress return should an owner wish to sell.

I would have hoped, though, that Matheson would have tried to understand the issues, instead of just throwing up his hands and saying “5? 8? What’s the difference? They’re so close!”

Posted by YouppiKiYay on 12/10/12 at 12:36 AM ET

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Instead of writing “I bet you 600 of those 690 NHL players have contracts five years or less”, why doesn’t the writer just say “I’m a lazy hack who doesn’t see the need and can’t get off my ass to google how many of the players have contracts over five years.”

Posted by CallMeJerry on 12/10/12 at 01:40 AM ET

Hockeytown Wax's avatar

Whats the difference how long their contracts are ??

Even money says Ilitch pays out more money to charities annually than he spends on his player payroll.

These guys are BILLIONAIRES ... and not from owning an NHL franchise.

NHL money means squat to them ... or it should anyways.

Like I said before .... owning an NHL franchise won’t make you rich ... being rich allows you to buy an NHL franchise.

Arguing over contract length has to be the most childish issue yet.  The owners are going to throw away an entire season over that ??

That just proves NHL revenues mean nothing to them.

Posted by Hockeytown Wax from West Bloomfield, Mi. on 12/10/12 at 05:02 AM ET

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NHL money means squat to them ... or it should anyways.

Well, we know NHL money as it currently exists means squat to them.  IMO this is because by and large it doesn’t actually exist.  So when you say:

Arguing over contract length has to be the most childish issue yet.  The owners are going to throw away an entire season over that ??

You answer your own question when you say:

That just proves NHL revenues mean nothing to them.

And I completely agree.  Where we differ is in the ‘why’ it doesn’t matter to them.  You think it doesn’t matter to them because the amount they make from hockey isn’t big enough.

I disagree with that because for the most part owners aren’t financial idiots.  They wouldn’t throw out one year of profits for 12% more in profits over 6 more years when those profits may or may not materialize.  My position is that except for a few teams those ‘profits’ don’t actually exist.  The 12% they’re arguing over is the amount that gets 10+ teams to a break even point, not the amount that takes 10+ teams from 5-10 mil a year in profit to 6-12 mil a year in profit.

The numbers are interesting:

We’re talking about 3.3B in Total Revenue.  For the purposes of this let’s assume that’s the pie being split, but we allow that this number is bigger than the actual pie being split.

The old owners share of that pie was 43%: 1.419 B
The new owners share of that pie is 50%: 1.65 B
The increase is 231 mil.
Split 30 ways, that’s 7.7 mil in space per team.

If you take that 7.7 mil and add it to the operating revenue of teams as listed by Forbes, and then figure in the financial bonuses paid to Phoenix by Glendale’s zombie council ( a hard number) and the Islanders far better stadium compensation (total guesswork) you end up with:

-Only 9 teams actually in the red from hockey ops.
-Only 3 of those teams (Columbus, Tampa, Florida) being 4 mil red or more.

Now you are talking.  That’s a financially healthy league right there.  Columbus gets moved to Toronto as their second NHL team, one of the Florida teams goes to Quebec and BAM, you’re golden.

Now you have 20 teams who can at least spend to the midpoint and break even (many of the teams with -1 through 5 mil operating revenues accomplished that by spending at or near the floor) and 10 teams pulling 20+ mil a year profits, which enables them to send 10-15% of those profits to the bottom 5 franchises and smooth out the financial plight of the league even more.

That’s what a league which can enjoy a long period of labor peace looks like.

Posted by HockeyinHD on 12/10/12 at 06:31 AM ET

Hockeytown Wax's avatar

Bill Clinton would be proud of you HD ... you can do the math.

They have already agreed to that split.  They are now arguing over contract length,  How does that influence HRR split ??

And again ... NHL money doesn’t mean squat to these guys.  If they can figure out a way to squeeze the players for more then sure they’ll take it but its pocket change.  A franchise $7 mil. in the red should be meaningless ... its a tax writeoff and an excuse to make the players feel bad and give back something thats really not needed.

Take Peter Karmanos for example.  Does he make any money off of any of the Compuware Hockey ??  No.  Does he make any money in Carolina ??  No.  Do we see him on the news pissing & moaning about how much he loses annually ??  No ... he does it all for 2 reasons ... #1 obviously he loves hockey but #2 is because he’s got so much freakin’ money he doesn’t know what to do with it all.  Players are stupid enough to give back more to “strengthen the weaker teams” ??  Hell yes he’ll take that money ... and donate it to some charity ... because its meaningless.

No amount of money is ever “enough” to these guys. They’re pigs ... they’ll take everything they can get their hands on.

They just need to feel like they’ve won the negotiations.

Posted by Hockeytown Wax from West Bloomfield, Mi. on 12/10/12 at 08:08 AM ET

Nathan's avatar

Posted by Hockeytown Wax from West Bloomfield, Mi. on 12/10/12 at 07:08 AM ET

Man, I’m firmly on the players’ side in this thing, but your posts make a lot of crazy assumptions and are just plain insulting to the owners.

I would agree that in general, it is fair to say that NHL team owners do not “need” to make money on their club. I would also say that it’s probably a fair statement to say that since most of these guys are wealthy from other businesses, they probably don’t even mind breaking even, or losing a little year-to-year, because they like the sport and almost see it as a hobby.

But the thing is, having financially healthy and stable franchises is important. If you want good owners, like Mike Ilitch, you can’t expect them fall on their sword over and over again just because they love the game. It might take a decade, but eventually the owner has to feel that they’re getting something out of it that is greater than what they’re putting into it. Obvious, that isn’t strictly a financial equation, which makes it so hard to measure.

But my point is, take a team like Tampa Bay. They have an owner that appears to be very passionate about professional hockey, and by all accounts, his first goal with the Lightning is to win hockey games, not make money. He is wealthy from his other business ventures, not his NHL team ownership. And he’s in a non-traditional market where the money the team makes is really going to be tied to how many casual sports fans they can draw in by creating a buzz around Stamkos and by ultimately winning games to build excitement (that is to say, the polar opposite of Toronto, Montreal, or the Rangers, where the fandom and the money that comes along with it is pretty much always there).

If the system doesn’t give Vinnik some hope and some path to building a solid organization on and off the ice, then eventually you will lose good owners. Then you end up with the cheats and criminals the NHL has had in its ranks all too often in the past. Or worse from a fan perspective… you end up with owners that just can’t find a recipe to put a decent product on the ice.

So, there has to be something in it for the owners, and really, something for all the owners from all market sizes and backgrounds. Otherwise, you just drive away good people that want to run good hockey clubs, which is bad for the other owners, bad for the players, and bad for the fans.

Posted by Nathan from the scoresheet! on 12/10/12 at 10:16 AM ET

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They have already agreed to that split.  They are now arguing over contract length,  How does that influence HRR split ??

Which tells me the argument is now about getting rid of Fehr. Once the owners got 50/50 and they settle on the “make whole” provision, it isn’t about the money, it is about how to restrain themselves in how they spend it. That should be up to the GMs and not the CBA that never gets it right anyway. The problem of disproportional growth and revenue generation isn’t going away and will keep the league as a bunch of haves and have-nots no matter how the player/owner split works out. The NHL has always preferred charlatans that approved of their vision than businessmen that know how to run a franchise.

Early on I said that no matter how badly the players lose, they’ll wind up winning. They lose revenue now, but the owners and GMs can’t help themselves and will undercut everything that was intended by the new CBA. AsS soon as the ink dries the agents will figure out ways to maximize their clients contracts. As we reach year 6, 7, 8 or 10 and this CBA expires the chickens will come home to roost and they’ll blow it up again.

Posted by hockey1919 from mid-atlantic on 12/10/12 at 11:32 AM ET

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They have already agreed to that split. 

Not really.  There’s 300ish million dollars of that absurd ‘make whole’ issue the NHLPA can’t let go of.

A franchise $7 mil. in the red should be meaningless .

Likewise, making 5.4 mil instead of 6 mil should be meaningless.  Or making 2 mil instead of 2.3 mil should be meaningless.

Somehow I think you’d have a hard time convincing a player making 3 million bucks a year that it’s ‘meaningless’ he’ll only make 2.6 mil going forward.

But hey, give it a shot and let me know how it goes.

So, there has to be something in it for the owners, and really, something for all the owners from all market sizes and backgrounds. Otherwise, you just drive away good people that want to run good hockey clubs, which is bad for the other owners, bad for the players, and bad for the fans.

Bingo.  If people want a bunch of NHL owners who only want an NHL team as a tax write-off, and who won’t give a crap about the franchise or how it does as long as it provides a shelter for their profits, then by all means keep on cheering for the players.

There are always a bunch of Jeffrey Loria’s out there.  Guys who will ‘own’ an NHL team (meaning, leverage the heck out of it and float the purchase with paper) just so they can run the building and make money with Taylor Swift concerts.  Dude in Phoenix smells like this kind of guy.

They don’t give a bleep about the hockey team, of course.  And that will show in the front office and on the ice.  Guys like Charles Wang, for instance.  That guy could not possibly care less about the Islanders.  He owns them so he could leverage that into a bunch of real estate shenanigans.  As soon as he can secure those holdings he’ll spin hockey ops off and cut the team lose as fast as he can.

So, if you want a league with 15+ Charles Wang’s owning the clubs, hey, you know which side to pick.

Which tells me the argument is now about getting rid of Fehr.

This has absolutely nothing to do with getting rid of Fehr.  This is about the NHL feeling like they need certain things.

Early on I said that no matter how badly the players lose, they’ll wind up winning. They lose revenue now

Then they lose.  On the players side there is quite literally nothing else that matters.  They don’t have to care what the bottom line of teams is, they don’t have to care what the future of the game is.  They have short careers and they need to get in, make as much as they can, and then retire.  On the player side contract terms almost don’t even matter.  Their share of revenue is going to players regardless.  Whether UFA status hits after 4, 5 or 8 years doesn’t have any impact on how much players get in aggregate.

Contract terms matter more for the owners because they want to be able to protect themselves from the idiot GMs trying to save their jobs who will always go for the extra year or the extra million on a contract because if the team doesn’t win right now they are going to get fired.

And then the team doesn’t win. 

And then they get fired.

And then the two or three desperately crappy contracts they signed as they flailed around to try and save their job are still there for 3, 4, 5, 12 years later killing that roster.

As we reach year 6, 7, 8 or 10 and this CBA expires the chickens will come home to roost and they’ll blow it up again.

That’s my biggest concern here too.  I don’t think Bettman is capable of fixing the financial problems of the league, even if he gets the deal he wants.  Heck, that’s part of the reason the NHL is being so adamant about these contracting issues.  They are trying as hard as they can to keep themselves, as in the NHL, from screwing up this CBA as badly as they did the last one.

Posted by HockeyinHD on 12/10/12 at 11:57 AM ET

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Not really.  There’s 300ish million dollars of that absurd ‘make whole’ issue the NHLPA can’t let go of.

Yeah, boy is it absurd that they don’t want to get fuched out of $300M that was promised them.

How fuching out of touch are you?

Likewise, making 5.4 mil instead of 6 mil should be meaningless.  Or making 2 mil instead of 2.3 mil should be meaningless.

Yeah, you’re right, because a couple hundred thousand dollars has the same effect on players who have a small window to make money as it does on billionaires throwing around tens of millions of dollars a year on a hobby.

Your arguments are UTTERLY unbelieveable.

Posted by Garth on 12/10/12 at 12:36 PM ET

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This has absolutely nothing to do with getting rid of Fehr.

You’re amazing.

Posted by Garth on 12/10/12 at 12:37 PM ET

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When Ted Lindsay worked to create a union he was stripped of his captaincy, traded and others who supported the formation of the union were sent to minors forever. I’m tired of the myth that some great owners created a league with risk to their own personal wealth instead of a monopoly. Those players lost revenue, revenue that the NHLPA has more than made up for in the decades since. Some of the individual owners have more time than indivdual players, but the players may just understand that if it weren’t for those before them they wouldn’t have millions to lose.

Maybe they are willing to sacrifice some revenue today so that the next generation of players will also have millions on the table to haggle over.  So yes, they can lose revenue today and still win if you consider principles to have some value and this an unending series of CBAs. Or just become an arm of the league like the NFLPA and no matter how much revenue you generate,  you’re just more grist for the mill.

Posted by hockey1919 from mid-atlantic on 12/10/12 at 12:57 PM ET

WingsFaninCO's avatar

Posted by hockey1919 from mid-atlantic on 12/10/12 at 11:57 AM ET

This. 

+19

Posted by WingsFaninCO on 12/10/12 at 01:43 PM ET

Hockeytown Wax's avatar

Nathan ... glad you brought up Tampa ... good example to work with.

Vinnik bought the team knowing he was going to lose money.  Why ??  Because its in a city that doesn’t know the difference between a puck and a diaphragm.  The only ice they’re worried about are the cubes & chips in their drinks.

Sure, Vinnik goes out and hires Yzerman to build the best team he possibly can.  Why ??  Not because he’s going to fill the seats and bring in money year over year but, because if they win the Stanley Cup, the franchise value goes WAY up according to Forbes Magazine.  The more cups Vinnik can win, the more money he’ll make when he re-sells the team.  THAT’S where an owners eventual profit margin is.

If an owner is worried about losing 3 or 5 or 10 million a season then he’s in the wrong business. If the team loses 20 or 30 or 50 mil. on a regular basis then they’re in the wrong city.  Time to pack up and move.

If a team is in a city where you lose money on a continuous basis because you get only half a house even though you’re in the playoffs every year, a smart business man would force a relocation of the team.

Don’t take poor location choices out on the players and take money away from them.  Their careers are short enough as it is.  Don’t penalize them for Bettman’s poor choice of markets to get into.

Posted by Hockeytown Wax from West Bloomfield, Mi. on 12/10/12 at 01:49 PM ET

J.J. from Kansas's avatar

I love that the lockout about money has suddenly become a battle to prevent NHL owners from running their businesses as businesses.

Posted by J.J. from Kansas on 12/10/12 at 01:54 PM ET

redxblack's avatar

Yup. Just like the cap, they’re punishing the players for the owner’s collective inability to manage their league. “Please make it illegal for us to sign contracts that are too long, that are too expensive or that are too front-loaded.” These are all things the owners can agree to do independently of the CBA going forward. They just don’t trust each other enough to do so.

Posted by redxblack from Akron Ohio on 12/10/12 at 02:29 PM ET

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Which tells me the argument is now about getting rid of Fehr.

Eh. I think the owners’ problem with Fehr is that they’re genuinely worried he’s being an unnecessary obstacle to a season getting started. This is an immediate problem, but not a long-term one—mostly because he’s given no indication that he intends to stay on for the next X years until the next lockout. I don’t think getting him fired is a must-have pillar of their strategy the same way it was with Bob G in 2004.

Posted by larry on 12/10/12 at 02:31 PM ET

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Fehr is that they’re genuinely worried he’s being an unnecessary obstacle to a season getting started

I think we crossed the Rubicon in October, it was called the initial “offer” and lockout. The NHL’s biggest fear with Fehr is that he has no skin in the game and can make the best deal available void of worrying about his legacy. He will leave as soon as this deal is done, regardless of what Bettman and the “Over the Hill” gang want.  He just isn’t leaving until the deal is done and it doesn’t matter to him how long that may take. Fehr may just allow the village to be burned to the ground to save it, but Bettman started the fire.

The NHL wants to go back to the Zeigler/Eagleson days and the whole idea of negotiating is just a nuisance to them since each proposal has been a take it or leave it proposition. Allowing Fehr to review any deal that the NHLPA attempts to sign ensures that someone can explain to the players how much less they are getting and that isn’t in the best interest of the owners. When the owners offered 43% it was just negoatiating, when Fehr is asked to enter the room to review any potential deal it is considered “stalling”. Aren’t they all just negotiating tactics?

From the start many of us said the lockout would be about figuring a way out to prevent the owners from screwing each other. It hasn’t come about in terms of revenue sharing just yet, but now in terms of how they can construct contracts. As anticipated, with the HRR argument basically won, the owners now once again look to the players to solve their next set of problems.

Posted by hockey1919 from mid-atlantic on 12/10/12 at 02:47 PM ET

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Yeah, boy is it absurd that they don’t want to get fuched out of $300M that was promised them.

Don’t be goofy.  First off, they all agreed that future CBAs could change their contracts.  Every one of them did.  So you can whine about the owners not paying the money they promised, and I can whine about the players not following through on their promise to not complain if the owners didn’t follow through on theirs.

What is absurd is that they would refuse to be ‘screwed out of’ 300 million, and seek to address that issue by…

... not playing a season that to date has cost them probably at least that much in salaries.

That’s the absurd/stupid/idiotic thing.  By fighting so hard to not lose 300 million, they’ve already lost at least that much and aren’t anywhere close to guaranteed to get the initial 300 million back they’ve been fighting over, and may end up losing 1.3+ BILLION, or more than 4 times what they started fighting over, by the end of it.

Are they going to demand the owners pay them 600 B now?  The 300 from their old deals plus the 300 they’ve lost already?  Will they ask for 1.6 B if the year is cancelled?  300 in ‘Make Whole’ plus 1.3 in ‘Double Plus Special Make Whole’?

Come on.

Yeah, you’re right, because a couple hundred thousand dollars has the same effect on players who have a small window to make money as it does on billionaires throwing around tens of millions of dollars a year on a hobby.

So how much money does someone have to have before losing it doesn’t make a difference to them?  Can a player who has made 20 mil over his career be expected to not care if his salary goes down?  30?  50?  Why is it just owners who you think should be able to absorb losses just because?

Hey, why not just give players 100% of the revenue from hockey, right?  After all, those billionaires wouldn’t miss the money.  They’re billionaires.  That’s, like, a really big number.  I can’t imagine how it could ever be spent or lost.

Obviously, the reality is that a business has to be financially sound.  Pro sports isn’t a charity.  Players who made 30 million in their careers aren’t going to cut anyone a break because, hey, they’re already rich… right?  I mean, how much money does anyone really need, eh?  Just sign for 3 mil instead of your market value of 6 mil, Mr. Elite Player.

Your arguments are UTTERLY unbelieveable.

I don’t expect incredibly biased people to either agree, believe or understand, Garth.

So yes, they can lose revenue today and still win if you consider principles to have some value and this an unending series of CBAs.

Then you must not be following the things the NHLPA is fighting over, Wax.  They’ve already agreed to the 50-50.  What they are fighting over is the money that goes into the pockets of guys today, not guys 10 years down the line.  This issue has absolutely nothing to do with the kids 10 years away.  It is 100% about the guy in the league right this minute.

And he is getting ska-roood by his Union right now.  Right in the ol’ pooper.

Just like the cap, they’re punishing the players for the owner’s collective inability to manage their league.

No, the players are being ‘punished’ because the NHL is in cities they shouldn’t be in, and those teams in those cities need a really good CBA in order to survive financially and still be competitive on the ice.  Bettman bleeped up the CBA last time when he had all the ability in the world to fix everything, so here’s hoping he’s not the moron now he was then and he can do something more than put duct tape over the hole in the tire.

Posted by HockeyinHD on 12/10/12 at 03:06 PM ET

redxblack's avatar

and for the fiftieth time, can does not mean will.

Posted by redxblack from Akron Ohio on 12/10/12 at 03:19 PM ET

WingsFaninCO's avatar

What they are fighting over is the money that goes into the pockets of guys today, not guys 10 years down the line.

Selective memory forgets the “hill [the owners] will die on.”  Contract term limits very much affect the guys 10+ years down the line. 

As a less tangible “goal” the players may be doing their damedest to make the lockout option completely unpalatable to the owners.  That would DEFINITELY benefit the future NHLPA members. 

 

Posted by WingsFaninCO on 12/10/12 at 03:37 PM ET

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Selective memory forgets the “hill [the owners] will die on.”  Contract term limits very much affect the guys 10+ years down the line. 

What do you think are the actual downsides to players only being able to sign for 5 years instead of 47 gazillion?  Other than 5 being less than 47 gazillion, so less must mean worse.

IMO all shorter term limits do is move around who makes the money.  It obviously doesn’t have any impact on how much the players make as a collective, the CBA determines that.

I haven’t quite had anyone explain to me what’s so awful about only being able to sign a 5 year deal, or how that’s worse than being able to sign a 12 year deal even from a player perspective.  I mean, we haven’t even seen the batch of 12’s ripen yet to see the downsides of those for players, and I can think of some:

- If they age quickly there’s a lot of pressure on the team to make the guy retire to get out from under the cap hit, or waive them out to the AHL ignominiously to accomplish the same (future changes to a CBA notwithstanding).

-Those 12 year deals absolutely limit player movement, and unless they are married to a full NTC/NMC any movement that does happen can completely crush an entire players career.  Carter signed a big deal to stay in Philly, and could have ended up playing it out in Columbus.  DiPietro’s had to stay on the freaking Islanders his whole career.  There are more than a few moments in there where I bet those guys wished they would have signed 5 year deals.

-It could cost those players a bunch of money.  Franzen and Z signed their deals under a 56.8 mil cap.  The cap grew to 70 mil.  If they are signing shorter term deals they can take better advantage of rising league revenues than they could if they lock in at 57 mil while the cap 12 years later might be 80.

As a less tangible “goal” the players may be doing their damedest to make the lockout option completely unpalatable to the owners.  That would DEFINITELY benefit the future NHLPA members.

A) Considering this is the second lockout in 7 years and third in 16, how’s that going?

B) Unpalatable how?  Any damage done to league revenue is done as much to players as it is to owners, more so if their share is above 50, and short term loss of revenue hurts players way more than it hurts owners, many of whom aren’t getting anywhere near the profit margins players have, if they are getting any profits at all?

and for the fiftieth time, can does not mean will.

?

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

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Posted by hockey1919 from mid-atlantic on 12/10/12 at 01:47 PM ET

What I’m saying is, in 2004, the governors wanted Goodenow’s head on a pike for display in the throne room. In 2012, they just want Fehr to go away.

Posted by larry on 12/10/12 at 04:04 PM ET

J.J. from Kansas's avatar

- If they age quickly there’s a lot of pressure on the team to make the guy retire to get out from under the cap hit, or waive them out to the AHL ignominiously to accomplish the same (future changes to a CBA notwithstanding).

Unless those notwithstanding changes to a CBA include an actual ability for teams to pressure a guy to retire, that’s really a non-issue. The AHL issue has been addressed by both sides and it appears as though that’s going to be addressed also (although just because you can’t hide salary in the AHL doesn’t mean you can’t still hide overpaid suck to get it away from your roster)

Carter signed a big deal to stay in Philly, and could have ended up playing it out in Columbus.

But he didn’t.. just like Dany Heatley didn’t stay in Ottawa and Rick Nash didn’t stay in Columbus and Brian Campbell didn’t stay in Chicago.. just like rumors persist that Roberto Luongo will become a Maple Leaf on day 2 after this whole matter is settled.

That’s not to say that those player deals don’t have limiting effects on player movement, just that it kind of misses the mark to use a guy who moved twice in one year after signing a long-term deal as evidence that those deals inhibit movement.

More than anything, what inhibits player movement is RFA and the AAV calculation tricks from the last CBA which led to differently-tiered player pay scales which were dependent upon where a team stood moneywise. Poor teams can’t afford players whose cap hits are lower than their actual salaries and rich teams can’t afford to buy up guys whose cap hits are artificially inflated.

It could cost those players a bunch of money.  Franzen and Z signed their deals under a 56.8 mil cap.  The cap grew to 70 mil.  If they are signing shorter term deals they can take better advantage of rising league revenues than they could if they lock in at 57 mil while the cap 12 years later might be 80.

Absolutely right.  No, seriously.  The player is essentially “banking” his future marketability to get a contract that protects him against the scary potential of two things:

1. Injury derailing his earnings potential.
2. Consistent sucking derailing his earnings potential.

Honestly, no matter how much I like the players, I’d kind of rather that every year, every player get paid what he’s worth and I hate the thought of scenario number 2 happening consistently.

I don’t necessarily agree that 5-year contract limits are the way to accomplish this, considering I think that simply changing the calculation where your cap hit is your salary for that year would do that (while still allowing stupid GMs to create years worth of schadenfreude with absolutely horrid contracts), but I’m not completely against the idea of using contract term limits to make hockey more competitive.

Posted by J.J. from Kansas on 12/10/12 at 04:33 PM ET

WingsFaninCO's avatar

What do you think are the actual downsides to players only being able to sign for 5 years instead of 47 gazillion?  Other than 5 being less than 47 gazillion, so less must mean worse.

I’m not going to get into whether or not the long-term contracts are good for the players.  Regardless, access to those long-term contracts is a right they currently have that the NHL is trying to take away.  Even if I were to agree that the long-term deals are bad (I don’t), why should the players give up that right?  (Just because you shouldn’t drink 48-oz sodas and eat candy and popcorn at the movies doesn’t mean it’s a right you want to give up.)  This is not so much about the details.  It’s about holding your ground and minimizing your losses in this lockout to set a precedent for future negotiations.  Likewise, just folding and taking whatever the NHL wants to give the PA also sets a precedent.  Which of those precedents is going to benefit the future players the most when the next CBA expires?

A) Considering this is the second lockout in 7 years and third in 16, how’s that going?

Thank you.  It’s going terribly.  Why?  Because the PA folded and the owners got everything they wanted last time.  All with minimal effort and no undesirable side-effects.  Not suprising that the game is locked out again.  Make the lockout option less desirable and maybe we won’t be here again next time.

B) Unpalatable how?  Any damage done to league revenue is done as much to players as it is to owners, more so if their share is above 50, and short term loss of revenue hurts players way more than it hurts owners, many of whom aren’t getting anywhere near the profit margins players have, if they are getting any profits at all?

Unpalatable from a couple angles.  First: obviously revenue.  The amount of money the players lose has nothing to do with how much it hurts the owners’ pocketbooks.  The loss of a billion dollars is still a billion dollars even if JImmy is losing money too.  Secondly: the negotiations.  They have been dirty, unpleasant, frustrating, and unpleasant.  Not to mention the damage to public image: the terrible PR, smear columns, youtube videos, boycotts of their teams other businesses, etc.  You may say “they don’t care” and some of them definitely don’t.  But some do, and the effects of this aren’t going to make the owners more likely to lockout.

 

Posted by WingsFaninCO on 12/10/12 at 04:45 PM ET

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What I’m saying is, in 2004, the governors wanted Goodenow’s head on a pike for display in the throne room. In 2012, they just want Fehr to go away.

But Goodenow’s head on a pike is a less signficant victory than just chasing Fehr away. The last CBA set the NHL up for the kill this time around and the NHLPA did itself no small disservice by having a revolving door leadership until Fehr was brought in.  I’m not sure Fehr is always the right guy, but I think for the NHLPA’s sake he is the right guy now.

Posted by hockey1919 from mid-atlantic on 12/10/12 at 05:31 PM ET

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But Goodenow’s head on a pike is a less signficant victory than just chasing Fehr away. The last CBA set the NHL up for the kill this time around and the NHLPA did itself no small disservice by having a revolving door leadership until Fehr was brought in.  I’m not sure Fehr is always the right guy, but I think for the NHLPA’s sake he is the right guy now.

Posted by hockey1919 from mid-atlantic on 12/10/12 at 04:31 PM ET

Couldn’t disagree more. We’re forgetting that Goodenow’s effectiveness had the players taking home such a high percentage in revenue that he personally caused billions in losses over the span of a decade.

Not lost revenue, mind you. That is what Fehr is causing. For the owners, lost revenue is greatly mitigated by a near-as-significant reduction in costs and a Television contract that pays out whether there’s a season or not (I’ve seen an estimate that says, if no games are played, the owners, as a whole, make $20 million in profit this season).

Goodenow, on the other hand, caused billions in actual losses.

Fehr has annoyed this group for about six months. Goodenow had nose in their face and his hand in their wallet for 10 years. The latter bothers billionaires a lot more than the former.

The NHLPA has had exactly one executive director, ever, who proved effective in that role. It sure as Hell isn’t Fehr. I’d actually argue he’s been the least effective they’ve had other than Eagleson. Even Saskin cut a better deal than Fehr proposed last Thursday in his cup of coffee on the job, and Paul Kelly was about 3 years ahead of the curve on the head shot issue..

Posted by larry on 12/10/12 at 06:42 PM ET

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That’s not to say that those player deals don’t have limiting effects on player movement, just that it kind of misses the mark to use a guy who moved twice in one year after signing a long-term deal as evidence that those deals inhibit movement.

I agree, I’m just pointing out one of the downsides of that kind of deal from a player perspective.

And funny thing, it’s been so long since there’s been actual hockey I forgot Nash was traded.

More than anything, what inhibits player movement is RFA

I don’t know about that.  I mean, there has to be some sort of system where a team can have a player they drafted for some period of time before they become a UFA, right?  Does having that number be one year more or less really change anything in aggregate?  It changes it for the specific player, sure, but having to wait one more year to be UFA… I don’t know what kind of general impact that has on movement.  Just as many guys will be FAs eventually.

The player is essentially “banking” his future marketability to get a contract that protects him against the scary potential of two things:

1. Injury derailing his earnings potential.
2. Consistent sucking derailing his earnings potential.

Those are the two big reasons why the owners want to get rid of the long deals, IMO.  2a might be ‘The player realizes he just got paid 80+ million dollars guaranteed whether he tries or not, so if his team starts to wallow… la de dah let me just skate in a circle over here and try not to get hurt or too tired.

cough RickNash cough.

I don’t necessarily agree that 5-year contract limits are the way to accomplish this, considering I think that simply changing the calculation where your cap hit is your salary for that year would do that (while still allowing stupid GMs to create years worth of schadenfreude with absolutely horrid contracts), but I’m not completely against the idea of using contract term limits to make hockey more competitive.

How about this idea.  You can sign a guy to as long of a deal as you want, but there are no NTC/NMCs allowed beyond year 5 and no contract can be guaranteed past year 7?  And the cap calculation stuff would need to change.  Make the AAV the average pay of the guaranteed years.  Something like that.

I’m not going to get into whether or not the long-term contracts are good for the players.

But you did already when you said “Contract term limits very much affect the guys 10+ years down the line”.  I wanted to know how.

Regardless, access to those long-term contracts is a right they currently have that the NHL is trying to take away.

No, it’s not.  It’s a right they had before, in an expired deal.  Just like everything else it is up for negotiation.

It’s about holding your ground and minimizing your losses in this lockout to set a precedent for future negotiations.

Look, if the NHLPA was smart what they would have done is caved months ago and put the owners in a position where they had a larger financial incentive to play hockey.  Then in the next CBA strike back on contracting terms.  They have to play chess, not checkers.

Hell, right now they’re barely playing tic tac toe.

Why?  Because the PA folded and the owners got everything they wanted last time.  All with minimal effort and no undesirable side-effects.  Not suprising that the game is locked out again.  Make the lockout option less desirable and maybe we won’t be here again next time.

Right, but how is this lockout less desirable than the last one… and how is it that the owners are the ones who are going to be bearing the brunt of the result of that undesirability and not the players?

That’s the problem here, CO.  This lockout is going to hurt the players more in every real, substantive way.  They’re losing more profit now than owners, they’ll never recoup what they are losing (and the owners will), and any long term damage to league revenues as the result of this lockout, if any, are going to affect the players just as much as it impacts the owners.

Heck this lockout is actually easier for the owners than 2005 was.  They got a nice fat 200 mil payout from NBC when the season (didn’t get) started.  Sure, they’ll be playing the last year of the tv deal for ‘free’, but since that’s a part of HRR the players will eat half of that loss too.

The amount of money the players lose has nothing to do with how much it hurts the owners’ pocketbooks.  The loss of a billion dollars is still a billion dollars even if JImmy is losing money too.

Revenue does not equal profits, though.

This is the key thing to understand.  Owners turn a very small percentage of profit from hockey ops league wide, and the vast majority of that goes to 5 teams.  Players have a gigantic profit margin from their salaries.  Huge.  Probably 5-10 times what the owners might be.

So sure, the league as a whole is losing 18-20 mil a day in revenue.  In a 50-50 that’s 10 mil each.  Of that 10 mil, the owners are clearing probably around a mil tops in ‘profit’ while the players are clearing 5+ mil even after taxes and agent fees.

So every day that passes the players are probably losing at least five times as much disposable income as the owners are.

But some do, and the effects of this aren’t going to make the owners more likely to lockout.

I agree, but the initial issue was whether this would make the owners less likely to lockout.  I don’t think how this goes has any real impact on how the owners will approach the next CBA, conceptually.  Hopefully the issues on the table are a lot different, but all of these guys have had to do God knows how many tough, dirty, bad PR things to get where they are.  They aren’t scared of bad press… especially bad press in Canada, considering there is no real American hockey press anyone reads.

Even Saskin cut a better deal than Fehr proposed last Thursday in his cup of coffee on the job, and Paul Kelly was about 3 years ahead of the curve on the head shot issue..

That last CBA was an unreported coup.  The escalating salary share and SPC loopholes were masterstrokes Bettman and his staff had no idea how to understand.

Posted by HockeyinHD on 12/10/12 at 07:22 PM ET

J.J. from Kansas's avatar

It changes it for the specific player, sure, but having to wait one more year to be UFA… I don’t know what kind of general impact that has on movement.  Just as many guys will be FAs eventually.

I meant RFA in general, not the extra year they’re fighting over.  Not saying that RFA is an inherently bad system (I’d say the EL length is the time that teams should expect to have exclusive rights to limit movement), but it’s not really that important in the overall scheme of things.

How about this idea.  You can sign a guy to as long of a deal as you want, but there are no NTC/NMCs allowed beyond year 5 and no contract can be guaranteed past year 7?  And the cap calculation stuff would need to change.  Make the AAV the average pay of the guaranteed years.  Something like that.

I would be in favor of a system like that. I might even move the no-guarantee up to something like 3 years, but make the cutting process involve having to put the guy through unconditional waivers first.

I really like players being rewarded for being awesome and being able to find ways to help keep a competitive team together, but I’m also in favor of letting teams (and fanbases) cut losses when a guy gets his lifetime deal and puts the motivation that got him there into a lockbox for the duration of his career.

Posted by J.J. from Kansas on 12/10/12 at 07:39 PM ET

WingsFaninCO's avatar

But you did already when you said “Contract term limits very much affect the guys 10+ years down the line”.  I wanted to know how.

No, it’s not.  It’s a right they had before, in an expired deal.

As of today, this very moment, is there a league-wide cap on contract length?  No?  hmm…  Regardless, you’re bringing up semantics.  But in an effort to simplify things:

In every previous CBA the players have had a right to (essentially) unlimited contract length. 

So…if the future players no longer had acces to those contracts, one could say that they have fewer options available to them.  Most would say that AFFECTS (to repeat the word you intentionally ignored) future NHLPA members.

And stop trotting out the line about “everything being up for negotiation”  every time the discussion isn’t going your way.  It’s utter BS and a complete cop-out of the discussion at hand. 

So every day that passes the players are probably losing at least five times as much disposable income as the owners are.

You’re being intentionally obtuse, I hope.  To try this again in different words:  The amount of money the players are losing does not affect how much the owners are losing.  This also has NOTHING to do with reveue vs profits.  If the NHL is losing money, then they are losing money (obvious statement is obvious).  Whether or not Joe Shmoe is losing money has NO effect on that statement. 

If the players have resigned themselves to losing the entire’s season income as a way to protect their future and the future of other PA members, then that’s their decision and how they have chosen to “spend” their money.  It just puts a price tag on what they think those other rights are worth.

 

Posted by WingsFaninCO on 12/10/12 at 08:17 PM ET

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Goodenow’s effectiveness had the players taking home such a high percentage in revenue that he personally caused billions in losses over the span of a decade.

But Goodenow was a big fish in a much smaller pond. As soon as the NHL put on its big boy pnats they figured out a way to bum rush him out the door.  I didn’t say Godoenow wasn’t effective either, just that he wasn’t the white whale that Fehr has become in labor negotiations.

Once Goodenow was out the door, the NHLPA really ran itself into the ground with intercine fighting. Fehr had the resume to pull all of the factions together, which was a much tougher job than it looked. The fact that he has the NHLPA backing him so far is testament that he did a good job of creating a cohesive union once again in relatively short order.

It is also pretty hard to compare the deal Fehr is offering after what the NHLPA accepted in the last CBA. Once a cap is in place, the only thing a player’s union can do is attempt to cut their losses each time.

Posted by hockey1919 from mid-atlantic on 12/11/12 at 10:59 AM ET

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