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CBA Report- NHL Owners Looking For More Money

from Larry Brooks of the NY Post,

Seven years after mortally wounding the Players’ Association, the NHL Board of Governors is moving in for yet another kill, its first collective bargaining submission yesterday in Toronto as much a declaration of war as an initial proposal off which to negotiate.

The league power brokers who canceled the 2004-05 season in order to get the hard cap that is contained in the CBA that expires on Sept. 15 after seven seasons of unprecedented revenue growth, are essentially challenging the players, now led by Donald Fehr, to accept another round of massive givebacks or be prepared to miss 2012-13.

Unless the players cave in historic fashion, a lengthy lockout is a certainty.

Sources within the industry last night told The Post the league is not only demanding the players accept a cut in their percentage of the gross from the current 57 percent to 46 percent, but also recalculating the definition of Hockey Related Revenue so the pot from which the owners and players share would be drastically reduced.

continued

Filed in: NHL Talk, NHLPA, | KK Hockey | Permalink
 

Comments

Hank1974's avatar

It’s not secret that Larry Brooks is a pro-union writer.  He’s also a bit on the eccentric side when it comes to his style.

Also, people need to remember that when you go into a negotiation if you want half the moon, you ask for the whole moon to start.

By the league asking for a 54/46 cut, it means they’ll be ecstatic to get a 50/50 split.
The union knows this, the league knows this, so I’m still not worried about a deal getting done.

If the NHL and PA really think another stoppage or complete lockout is good for the sport, then I hope the NHL dries up and blows away.

If it does, maybe we’ll get a new league? And maybe that league will actually like the idea of more than 2 even strength goals per game.

Posted by Hank1974 on 07/14/12 at 10:04 AM ET

RorSchach's avatar

Another lockout will cripple the sport. Not that Mr. Gary Ass B. Hasn’t done it already.

Posted by RorSchach from Datsberg on 07/14/12 at 11:01 AM ET

PenguinJuice's avatar

I always though the process of asking for the moon early was a maga moronic way to gain trust and conduct business, and is why unions have been such a dirty word over the last 20 years. Why can’t both sides prepare and be honest, they are well payed for sure, but forget to think about the fans who make their lives comfertable. Do the players understand how far the game has grows since they gave more on the last CBA. A cap is the only way to maintain balance in a large roster team sport. That everyone learned. We all know what is screwing up the sport now, long term contracts, players comming off entry level deals and bolting, coaching a system that chokes the flow out of games and inflates goalie stats. Something has to be done about teams losing their farm grown talent and high drafted superstars. I hate the amount of turnover every year, and think it’s bad for the game. Flame me if you want, but as much as I am a fan of the game, I think the owners have some valid points. And knowing how Satan ” aka Donny Fehr ” works and thinks. There is no chance we will see an upcominig season, all the goodwill from popular markets winning over the last few years, Detriot, Pittsburgh, LA, Boston, Chicago all goes down the toilet.

Posted by PenguinJuice on 07/14/12 at 01:05 PM ET

Primis's avatar

One thing I’ve heard some people saying is that the owners are the ones paying the players these outrageous salaries so it’s 100% their fault.

While this is indeed true that the owners are culpable for some of the blame with that (in certain circumstances more than others), I would also like to remind everyone that to a certain extent the owners also DON’T have control.

For instance, the owners can’t just get together and decide “Hey, we’re not going to pay guys over $5m/yr any more” because the PA will cry “collusion” and unfortunately other pro sports have shown that accusations of collusion are often upheld legally in court.

As bad as it is when a moron like Leipold cries poor and then goes out and pays out the nose for 2 players to marginally improve his poor team, that’s not what’s really setting and skewing the market prices (or hurting the market) in the end.  The real problem is the 20-Goal guys getting $4m/yr, or a guy like Doan and what he’ll get paid.  And the PA knows that.  The owners in the end don’t have full control of the salaries they pay.

Just remember guys:  You want to side right now with the PA because they got “screwed” the last time.  Remember where the salary cap is currently, look at the player salaries, and think about how sweet a deal it has been for quite a few players.  Both sides really have screwed things up here, and the PA is just as guilty of us ending up here.

Posted by Primis on 07/14/12 at 04:15 PM ET

Guilherme's avatar

What, Primis, you want players to look at a $5 million contract and say “No, Im not worthy, put me up for $3M”?

Posted by Guilherme from Brazsil on 07/14/12 at 04:19 PM ET

HockeyFanOhio's avatar

Owners have to compete (bid) against each other to sign available players.  The CBA prevents them from setting pay guidelines or agree on what to pay players.  That’s called a free market. 

I like the five year limit on contracts.  The long deals are bad for the game IMO.  The 46 percent revenue and the redefinition of what counts as revenue is ridiculous and the final amount won’t be close.  It seems like a serious low ball offer to me.  I mean I know you start low on your first offer, but there is such a thing as going too low.  I also think the UFA at 10 years is way too long. 

Not the best start in negotiations, but at least its a start.

Posted by HockeyFanOhio from Central Ohio on 07/14/12 at 04:40 PM ET

Avatar

I like the five year limit on contracts.  The long deals are bad for the game IMO.

I don’t agree at all.  I think the problem with the long-term contracts isn’t that they’re long-term, but that the cap hit is calculated by getting an average salary instead of using the actual salary.

If they simply took away the average then nobody would care how long the contracts are, because Ryan Suter and Parise would account for $24M in cap space instead of $15M.

It would also pretty much get rid of the long-term contracts anyhow because it wouldn’t help Suter to sign a longterm contract if he had to play for 13 years in order to collect all the money, rather than now when he can retire at 35 if he wants and he won’t have missed out of much of the money.  Also, GMs wouldn’t be rushing to make the deals because then if Suter still wanted to play at 39 he’d still be collecting $7.5M even though his skill would be diminishing.

Posted by Garth on 07/14/12 at 04:52 PM ET

John W.'s avatar

Posted by Garth on 07/14/12 at 02:52 PM ET

Exactly.  Making the cap hit be what the player is actually making for the current year would solve the problem and make a limit on terms a moot point.  The sole reason for these 10-15 year contracts is to lower out the average cap hit.  Take the ‘average cap hit’ out and make it the actual cap hit per year and then there’s no problem.

As for Primis saying it’s on the players for making too much money, that’s just way off base.  Like Herm said, what do you expect, the players to turn down the outrageous money the owners throw at them?  If the owners don’t want to pay a 20 goal scorer 4-5M a year, then don’t offer it to them.

Posted by John W. from a bubble wrap cocoon on 07/14/12 at 06:24 PM ET

John W.'s avatar

I always though the process of asking for the moon early was a maga moronic way to gain trust and conduct business, and is why unions have been such a dirty word over the last 20 years. Why can’t both sides prepare and be honest, they are well payed for sure, but forget to think about the fans who make their lives comfertable. Do the players understand how far the game has grows since they gave more on the last CBA.

Posted by PenguinJuice on 07/14/12 at 11:05 AM ET

I’m confused.  You say these low ball offers are moronic and that’s why unions have been a dirty word, and how both sides should just be honest but it’s the owners that put this offer out there, not the union.  You are essentially trashing the greedy players and the union for the insulting offers the owners made.

Posted by John W. from a bubble wrap cocoon on 07/14/12 at 06:31 PM ET

gowings's avatar

ok, me and math don’t go together..but here’s my question:

IF the owners get what they want here…for the sake of argument. Will that help the struggling teams? Would that be good for those markets and thus prevent further “Phoenix” stories and help poor markets?


Thanks guys

Posted by gowings from MTL on 07/14/12 at 07:10 PM ET

PenguinJuice's avatar

I think I combined my two biggest issues. I ment its moronic for either side to come out low balling. Just state what you want off the bat, and save months of give and take , give and take. I also do not like unions in pro sports, these are not people struggling to feed their familys. When more teams went to a trap system, mostly in smaller markets, that started the wave of 20 goal scorers in that system leaving for 5 mill contracts, and not producing in a different market. Thus salays were a mess, and teams started handing out large contracts to marginal players because the market was a joke. Look at how the Vanek situation set Buffalo back. Also the agents are at fault. Untill 90% of the teams are making money, I have to side with the owners. And why does a pro sports league with the average player salary is at $2.4 million, need a union? This is not steel workers, miners or auto plants.

Posted by PenguinJuice on 07/14/12 at 07:20 PM ET

Avatar

And why does a pro sports league with the average player salary is at $2.4 million, need a union? This is not steel workers, miners or auto plants.

What does the amount of money they make have to do with whether they need a union or not?  They need one so they don’t get screwed by the owners, plain and simple.  The owners have more money, and if they decided to release a player on some sort of flimsy breach of contract claim it would be on the player to come up with the money to take the owners to court.  Some players could afford to do this, but most could not.  If there was no union there’d be 150 games a season, probably 15 roster spots, no guaranteed contracts, many would go without any kind of health care coverage, etc etc etc.

If they simply took away the average then nobody would care how long the contracts are, because Ryan Suter and Parise would account for $24M in cap space instead of $15M.

There are just as many flaws with that system.  If a team like, say the Red Wings, had a ton of cap space they could offer a FA $15 million in year 1 when they won’t use the cap space on anyone else because there’s no one else to sign, then drop the salary in subsequent seasons to $3 million and maintain cap space when there might be more players to sign.  That’s why the system takes into account t he average salary for the cap number.

What they should do is stipulate that the cap number can be no lower than X% of the highest salary season in the contract.  If X was high enough (say 85-90%) then there’s no way a team is going to throw big money years up front at players because they wouldn’t be able to use phony back end years at lower salaries to decrease the overall cap number.

The idea behind using the average number was to keep teams that don’t mind spending over the cap in real dollars from offering huge money up front to lure free agents.  Unfortunately the plan backfired because of the cheap years on the backend.

Posted by RoneFace on 07/14/12 at 10:05 PM ET

shazam88's avatar

And why does a pro sports league with the average player salary is at $2.4 million, need a union? This is not steel workers, miners or auto plants.

Posted by PenguinJuice on 07/14/12 at 05:20 PM ET

Learn a bit about the history of player rights in the NHL.  Similar to baseball and its reserve clause back in the day, and even more one-sided if you add in territorial rights prior to the draft.  Without collective bargaining by the NHLPA, players would be without pensions, any right to free agency, and salaries would be a fraction of the figure that you quote.

Posted by shazam88 from SoCal on 07/14/12 at 10:39 PM ET

PenguinJuice's avatar

Funny how someone making 80k a year, without a union can take care of his self, his family, and his parents….
But like I said, this is 2012, and now there are other options for players. IF you make 10 mill in salary during your playing days, do you really need a pension. In this day and age, the players will get there money no matter what. To lose a season because of a union is horrible. They should get healh care from their employer, and draw social security like everyone els does. Get raises for performance and climb the ladder. Get your contract, get your loot and play. Look how baseball has been ruined. And the NBA is headed down the same path. To much union is a bad thing for the fans that pay the money for the mega rich and richer.

Posted by PenguinJuice on 07/14/12 at 11:34 PM ET

Avatar

Funny how someone making 80k a year, without a union can take care of his self, his family, and his parents….

Are you a salaried employee or do you work as an at-will contractor?  Because there’s a world of difference between the two.  Most that work on contracts don’t get health care from their employer, don’t have access to a pension, and aren’t eligible for the other benefits that salaried employees receive.  It’s much cheaper for employers to hire people on contracts because they aren’t responsible for the benefits and, in a lot of cases, can terminate the contract at any time and for any reason without exposure to a wrongful termination lawsuit.  That’s why we’re seeing a lot of people working on contracts that were salaried employees 5, 10, 15 years ago.  It’s cheaper for employers and the job market is a buyer’s market right now.  If the economy turned around and employers had more competition for qualified employees they wouldn’t be able to keep so many people on contracts.  A union helps the players share the costs of the benefits many salaried employees take for granted.

I’ll be honest, you sound woefully ignorant of how the world actually works these days.  Unions have a lot of problems but they’ve done a tremendous amount of good for this country.  If you don’t believe me I’d suggest you look into the labor history of the United States, particularly during the late nineteenth and early twentieth centuries.

Posted by RoneFace on 07/14/12 at 11:42 PM ET

J.J. from Kansas's avatar

It always devolves into a turgid debate about unions, doesn’t it? 

There is a players’ union to keep the NHL out of court every season, that’s why.

Posted by J.J. from Kansas on 07/14/12 at 11:49 PM ET

PenguinJuice's avatar

I work as an engineer in the medical field, salary + OT. My grandfather and father both worked for US Steel their entire lives, both union, one got screwed, and one didn’t. I see how unions push a lot of jobs over seas. I know back in the 20’s to early 80’s work conditions and such caused a need for them. But when the unions gets to much, the owners are forced to raise costs, and that trickles down to the fans. In the late 90’s I could take my dad to a Penguins game, front row seats and the whole package, tickets, parking, food etc.. was about 200$, now the same deal is about 600 to 700. Lucky for me I can affored to do this a few times a year, but the average fan can’t. I don’t like Donald Fehr at all, his tactics runied Baseball forever, he is no fan of hockey. As much as I love sports, I don’t llike to hear players cry about how bad they have it playing in the NHL. There is a guy busting his butt everyday making 15$ an hour trying to raise a family that would trade lives with them any day. That same guy is helping pay the players salary. I hope the players understand that the league has to be healthy in the majority of markets. Of the demands owners made on the first day, I like some of them, we can’t have a Yankees Redsox like thing going on in the NHL.
True I might be outta touch with current union and labor issues, I just wanna see Hockey played this year, and grow over the next 50.

Posted by PenguinJuice on 07/15/12 at 12:09 AM ET

J.J. from Kansas's avatar

The players don’t set ticket prices, the teams do. The owners claimed that a big part of the reason for the last lockout was to get ticket costs under control. 

All these years later, NHL revenues have doubled and ticket prices have continued to go up. Since the players’ pay is a set percentage of league revenues (which was implemented as the “solution” to those outlandish ticket price problems), this is not the players’ fault.

As much as I love sports, I don’t llike to hear players cry about how bad they have it playing in the NHL

If the players had their way, they’d probably re-sign the current CBA and we wouldn’t have a problem.  It’s not the players crying about how bad things are for them.

I don’t like Donald Fehr at all, his tactics runied Baseball forever

Not for the owners, he didn’t. Baseball hasn’t had a work stoppage in 15 years and we’re not hearing anything about how much the owners hate MLB’s collective bargaining agreement.

There is a guy busting his butt everyday making 15$ an hour trying to raise a family that would trade lives with them any day. That same guy is helping pay the players salary.

If he were smart, he should be trying to trade lives with Mike Ilitch or Mario Lemieux or any of the other owners of the successful teams. He’d be a shitload richer. That same guy is also helping play the owners’ salary.

Posted by J.J. from Kansas on 07/15/12 at 12:19 AM ET

Avatar

As I said, unions are far from perfect.  They haven’t adapted to the changing labor environment in this country by expanding into lower level white collar professions and have, for the most part, stayed blue collar, public sector, and service oriented.  As more manufacturing jobs are moved overseas fewer Americans benefit from unions, but If more people benefited from them the perception of unions would be dramatically different.  They also spend way too much time and energy protecting the turds in their ranks, from teachers who don’t care to blue collar workers who sleep on the job to athletes who have made a career out of intending to injure other players. 

At the same time I get a kick out of those who think that we don’t need unions anymore, that if we just eliminate them there’s no way corporations would take advantage the way they did before unions became prevalent.  All you have to do is look at the causes of the recent economic downturn to know that greed is alive and well and that most (not all obviously) companies would do just about anything to increase profits.  Unions haven’t done enough to help themselves but they aren’t the reason government budgets can’t be balanced or that people are out of work.  In my opinion the answer isn’t eliminating unions it’s reforming unions in a way that acknowledges the changing labor environment, particularly in this country, while preserving the protections they provide those who put in an honest day’s work.  It’s sad that our leaders can’t place themselves in the gray area between abolishing all unions and preserving every union as it currently exists and giving them as much power as possible.

Posted by RoneFace on 07/15/12 at 12:31 AM ET

Primis's avatar

What, Primis, you want players to look at a $5 million contract and say “No, Im not worthy, put me up for $3M”?

Posted by Guilherme from Brazsil on 07/14/12 at 02:19 PM ET

Where did I say that?  All I’m saying is that the owners don’t have 100% control over the market salaries.

Imagine for a second if Suter and Parise had gone to the UFA market and not liked any of the offers they received.  Forget 7, forget 6… think in terms of only 4 or 5 mil/yr offers.  That’s it, that’s all any of the owners offered them, because the owners decided to take a stand.

Do you really think after a few weeks the PA wouldn’t file a grievance in federal court claiming collusion amongst the owners to keep salaries down?  Of course they would have, and they would have raised holy hell in the press about it.

So I guess I ask this:  At what starting point and HOW are the owners supposed to bring player salaries down if need be?

You have to start somewhere, and I can kinda’ understand the owners’ plight in that they have no way of doing it without legislating and negotiating it into the CBA, because putting it in the CBA is the only enforcable way that the PA won’t sue sue sue sue and then sue some more…  so they try to put it into the CBA and then everyone cries “LUNACY!”.

Now the owners are indeed the one that STARTED this mess to begin with years ago.  However, I understand how the PA has them in a corner with no way out unless it’s through the CBA, because player values on the market can’t be “corrected” normally without lawsuits flying everywhere.

Posted by Primis on 07/15/12 at 01:59 AM ET

J.J. from Kansas's avatar

individual players salaries work within the constraints of the system. At some point, all of these “overpayments” just becomes what the market price is and people complaining just aren’t putting that into the context of what has happened with the economic system in which the market price is set.

$3,300,000,000 is a shitload of money.

out-of-control player salaries is a red herring.

Posted by J.J. from Kansas on 07/15/12 at 10:59 AM ET

PenguinJuice's avatar

Maybe the NHLPA and Owners should read this thread. Just extend the current CBA for one or two more seasons, check the health of the league and start the talks again.

Posted by PenguinJuice on 07/15/12 at 12:07 PM ET

Primis's avatar

out-of-control player salaries is a red herring.

Posted by J.J. from Kansas on 07/15/12 at 08:59 AM ET

I agree with this to an extent.

The real issue here is that someone needs to raise the veil on the finances of these teams that continually claim they “lose” money.  Teams like Chicago, where it’s quite obviously a bunch of baloney.  That *is* 100% the owners’ fault.

Someone needs to come in and scrutinize the owners’ books.  Once that’s done, then the process can move on.  It’s entirely possible that of the say 20 teams crying poor that 15 of them truly are I guess.  Unlikely but possible.  However the burden needs to be on them at this point to prove it.  It won’t, because owners know it’s a scam.

I do however think it sucks that there’s probably a small handful of good, reasonable owners in the group that get lumped in with the rest.  These owners aren’t signing ridiculous contracts, aren’t screwing the CBA every chance they get, and are treating players decently and fairly by comparison.  But they’re such a minority it doesn’t matter.

Posted by Primis on 07/15/12 at 04:01 PM ET

J.J. from Kansas's avatar

Complete agreement, Primis.  It kind of sucks to have to say “The owners” when talking about some of these things because not all owners act the same way and treat their franchises the same way.  Not all of them are dishonest and not all of them would throw a player down an elevator shaft if it meant making them a buck.

But you hit the nail on the head there. If any owner wants to tell us how poor he is for owning an NHL franchise, he’s welcome to put his money where his mouth is and open his books.

Posted by J.J. from Kansas on 07/15/12 at 04:31 PM ET

Avatar

The real issue here is that someone needs to raise the veil on the finances of these teams that continually claim they “lose” money.  Teams like Chicago, where it’s quite obviously a bunch of baloney.  That *is* 100% the owners’ fault.

Someone needs to come in and scrutinize the owners’ books.  Once that’s done, then the process can move on.  It’s entirely possible that of the say 20 teams crying poor that 15 of them truly are I guess.  Unlikely but possible.  However the burden needs to be on them at this point to prove it.  It won’t, because owners know it’s a scam.

It’s all semantics.  I know the Sharks “lose” money on hockey, but they’re able to at least close the gap in other areas.  I believe the company that owns the Sharks doesn’t pay rent to the city of San Jose, instead they manage the arena (which I think is still one of the 4-5 busiest in the world) and share some of the revenues.  So while “the Sharks” lose money, the company that owns them either loses very little or turns a small profit when the other enterprises are taken into account, enterprises that wouldn’t exist without the hockey team.  I suspect more and more owners are taking the profitable segments of their operations and moving them outside the team so as to make the team look less profitable, and that’s what this CBA fight is really going to be about: what constitutes hockey revenue and what is the split between players and owners.

Posted by RoneFace on 07/15/12 at 05:22 PM 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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