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The Puck Stops Here

The Hypocrisy Of The Lockout

The NHL is locked out ... again.  This is the third time under Gary Bettman this has happened.  When the owners attempt to make an argument that this lockout is something they need to do to "fix" the NHL as opposed to an effort to maximize profits at any expense that was built into the business plan years in advance of the end of the CBA and start of the current lockout, they often argue something like about player contracts being too big.  They may state the dollar values of contracts signed by players this summer (for example Ryan Suter and Zach Parise who signed for $98 million each over 13 years.  They forget to mention that these dollar figures are essentially "funny money".  The owners knew they had no intention to actually pay those amounts as they would demand a salary rollback when they locked out players.  I would argue those contracts were not negotiated in good faith.  In fact I predicted a salary rollback before free agency opened this summer in order to help explain some of the expected deals. 

The fact is these contracts do not cost the NHL any more money than they would be spending on players had they not signed Parise or Suter or anyone else to a big money contract.  Player salary costs are set by the expired CBA to be 57% of the defined NHL revenue.  If the contracts signed exceed that amount, players lose some money to the league that was collected as escrow payments.  If the contracts signed fall below that amount, players get a bonus cheque as soon as final accounting is done.

I also predicted a limit to the length of contracts would be negotiated into the new CBA.  That was the reason many players were signing new contracts before the old CBA expired.  Both teams and players wanted longterm deals and were rushing to sign them before the rules were changed so they couldn't.

Teams like these longterm deals.  That is why they negotiate them.  They liked them so much that they couldn't take the risk that new rules would not allow them in the future.  Yet these same teams are holding up play by locking out the players in order to change the rules that they were rushing to use.

Within the last two days of the expired CBA players were signed to almost $200 million in funny money contracts.  It is doubtful that they will actually be paid that amount due to expected salary rollbacks.  Several of the contracts were five and six years long and if the NHL has its way there will be strict length limits to contracts which may prevent those contract lengths in the future.  Many of the players signing deals are younger players who are restricted free agents and may be forced into entry level type deals if the NHL fully gets their way which will significantly limit how much they can be paid.  Likely many of the current contracts that have been signed in the last week or so were signed because teams fear that the new agreement they are locking out players to obtain will not allow them to make these moves they desperately want to make.

Perhaps the most alarming of the new contracts was signed by Shane Doan of the Phoenix Coyotes.  He signed a four year deal worth $21.2 million.  Given that he is 35 years old now this is a dreaded 35+ contract where all the money will count toward the Phoenix salary cap hit (assuming that rule stays unchanged) even if he retires before it ends.  This contract is alarming because the NHL essentially negotiated it with Doan.  The NHL owns the Phoenix Coyotes (it has for a few years since they purchased the team out of bankruptcy).  While Phoenix management has some freedom to operate under the rules provided to them by the NHL (their owners), they must operate under the rules they are provided.  The NHL did not prevent them from signing a large contract just before the CBA expired, while at the same time arguing that players have to be locked out because these contracts are out of control (at least when they attempt to make an argument).

The actions at the end of the CBA show that the owners are hypocrites.  They negotiate contracts knowing they have no intention to actually follow through on their terms because they will demand a salary rollback.  They rush to sign contracts that they claim they do not want to allow under the next CBA.  Even the NHL owned Phoenix Coyotes are involved in this hypocrisy. 

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Comments

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Good article in todays Wall street Journal.  Attorney s for NHL are same as those for NFL and NBA.  This is all about how to split the pie.  When they finally come up with a number the owners will withdraw are the crazy demands.  I imagine number will be similar to NBA.

Posted by 13 user names on 09/17/12 at 08:34 PM ET

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Both teams and players wanted longterm deals

If they both want this, then why would they eliminate it in the next CBA.  I think the GMs, players and their agents want this, but the small market owners are probably dead set against this and may be the one concession the big markets will make to the help the smaller markets.

Posted by hockey1919 from mid-atlantic on 09/18/12 at 09:03 AM ET

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imageThe Puck Stops Here was founded during the 2004/05 lockout as a place to rant about hockey. The original site contains over 1000 posts, some of which were also published on FoxSports.com.

Who am I? A diehard hockey fan.

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