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Will They Ever Get Back To The Bargaining Table?

from Elliotte Friedman of CBC,

We're heading into Week 2 of the lockout, of this super stupidity, complete with cancelled exhibition games and a complete lack of negotiation. The biggest concern, however, may be that it's hard to see where or when the thaw is going to come.

With the National Hockey League wanting player costs to drop immediately and the NHL Players' Association proposing instead to slow salaries against revenue growth, we're at an impasse. And the overwhelming answer to a question about how the gap can be bridged?

"I don't know."

But the majority opinion from people on both sides of the argument is this: there's no incentive for anyone to back down now and when they are ready for serious conversations, they (initially, at least) will be kept private.

The biggest issue remains the percentage split. And after spending a lot more time than I ever wanted researching hockey-related revenue, you can see the landmines.

continued

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

Comments

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Once again a very enlightening piece by Friedman. Once we know what they are dividing it’ll be easier to find a 50/50 split.  I do have one question that I cannot find an answer to, what is the average labor costs for a company in the service industry or entertainment industry? Is 50/50 even reasonable from either sides perspective or is it a much different split?

Posted by hockey1919 from mid-atlantic on 09/20/12 at 10:28 AM ET

NHLJeff's avatar

In the restaurant industry, labor costs are usually around 1/3 of revenue.  I think 50/50 could make sense since the NHL’s labor is much harder to replace.

I heard a good point on NHL Home Ice on XM from a reader e-mail saying something to the effect of “sure, let the players have the percentage they want, but they have to pay for their own charters, hire their own medical staff, facilities, etc.”

These guys seem to forget about all of the costs the league is incurring when they barely have any hockey-associated costs themselves.  People go on and on about “revenue,” but people need to keep in mind that that revenue goes toward a ton of costs.  Of course some of it is profit, but I think the costs need to be highlighted more.

Posted by NHLJeff from Pens fan in Chicago, IL on 09/20/12 at 11:00 AM ET

Avatar

In the restuarant industry you are really paying for food as much as the service and is supplemented by tips. The sports market is a different animal and if you read Friedman’s article it looks like they are actually paying a percentage for the charter, mssages etc right off the top, so there went that article. That’s why 50/50 is dependent on what 50 you are talking about.

Posted by hockey1919 from mid-atlantic on 09/20/12 at 12:05 PM ET

J.J. from Kansas's avatar

Do yourself a favor and go look at the current CBA. It’s available to download as a PDF from plenty of places.

When you do, search the document for the term “Direct Costs”

Then search out the definition and use of “benefits”

Then come back and tell me that the players barely have any hockey-associated costs themselves.  Here’s a juicy piece from in there:

The parties agree that the amount to be spent on Benefits for the 2005-06 League Year shall not exceed $81 million

That’s not cut off the front-end of HRR like Direct Costs, that’s cut directly off the back end, the total amount owed to the players. That was in a year where the salary cap was $39M and the league brought in about $1.6 Billion less than it does now. They had to build a provision that said the amount of benefits the players would compensate the league for was no more than double what they were allowed to spend to field an entire team.

So yes, the players are already helping to pay for things like their travel and for the salaries of arena employees by allowing those costs to be deducted from revenue.

Posted by J.J. from Kansas on 09/20/12 at 01:28 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.

From breaking news to in-depth stories around the league, KK Hockey is updated with fresh stories all day long and will bring you the latest news as quickly as possible.

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