2011 Toronto Raptors/NBA/Labour Negotiations Spectacular

[cw]

It wasn't "ignored" by me, Levitt nor any of the players unions. But, as the saying goes, "it's none of their business". Those are legally distinct business entities in their own right. The players negotiating a labor agreement with their employers don't work for them. Those separate entities can be bought and sold separately from the team. They are not required to be owned by a team for that team to be able to function in the league. They are a completely separate business decision for an owner.

But the point is that it distorts the actual financial picture of the league. During the '05 lockout one of the clubs that was cited as one of the teams was the NY Rangers. A team with a storied history in the biggest market in North America had no business losing money. But James Dolan didn't care much about whether the Rangers lost five or ten million dollars because, to him, the Rangers value was as programming. That was where he made his real money. Likewise, and again I'd urge to read the Gladwell article on the Nets issue, Bruce Ratner didn't care much if the Nets were a bad investment or if they lost money because they were going to be the centre piece of a multi-billion dollar real estate development.

That's the issue. You can't run a business as if you don't care if it makes a profit and then, when it comes time for labour negotiations, pretend as if it weren't the case. You can't pretend that the Nets being profitable is a crucial and fundamental issue when it comes to the continued existence of the franchise and that it drove Bruce Ratner's decisions with regards to the operation of the team when it wasn't. The only way the New York Rangers can be profitable if, given the choice, they intentionally run at a loss is if profitability is guaranteed.

It's a clear case of billionaires trying to have their cake, eat it and then go in for pie. If you use a sports teams to generate profit in another business and your overall investment is profitable you can't then turn around and demand cuts in labour costs because otherwise your future involvement is in jeopardy. If I own a sports team and they lose five million dollars annually but because I own that sports team I make 50 million dollars annually elsewhere you seem to think that I should be able to cry poor about that five million dollars even if I clearly ran the team without regard to it.

And, just so we're clear and you don't come back with legal stuff, you can do a lot of the things I said you can't do, it just makes you a scumbag.

Nolan, MSG and Cablevision own a bunch of sports TV rights. The Rangers were hardly the only piece that made it for Cablevision. As well, they can lose rights like Cabelvision did with the Yankees, Nets & Mets. So there's some overstatement of that claim. It goes both ways and more than just one team is usually involved.

There is absolutely no doubt there are business synergies going on with sports teams, venues, broadcasting, etc. And I would agree that a broadcaster can take on a sports team and not care as much about the bottom line because it's small relative to the bigger financial picture. But that doesn't mean they throw money all over the place mindlessly and don't care at all about their bottom line either. If that were the case, why bother with bickering about a CBA and not just give the players all the money they want? You can't have it both ways in the same argument.

But convince me that the unions do not know that stuff is going on and don't take it into account when they're haggling their CBA. They're not stupid.

It's kind of like the earlier Forbes problem. No set of numbers are going to be perfect. The bickering about this and that - where does this dollar or that dollar go - could be endless and insane.

So they define league and league related revenue dollars and work with that number to haggle a rate. It's up to them to determine if that rate is going to be 40%, 75% or somewhere in between.

Coming back to hockey, when you get past the  few teams at the top, there is not a ton of broadcast and synergistic revenue for the balance of the NHL teams. That's simply a pretty blunt fact.

When those total league revenues are $3 billion and after the Leafs take their cut, the 29 other teams get to divide up $44 mil in profits, I think those owners have a legit beef - in revenue sharing and with the level of players payroll.

As for the waivers/AHL contracts complaint. That's money the players make. And it's only 3.1% of their basic payroll. GMs make mistakes and I don't see how one can legislate in a CBA that they won't make mistakes with contracts.

At the end of the day, the unions know all of the above and then some. It's up to them to haggle the best deal they can. If they don't like it, they can strike or go elsewhere to work. They're not going to get tons of sympathy from the fans because they're already being paid insane sums of money to play a game we enjoyed as kids.

 

[Kin]

Nolan, MSG and Cablevision own a bunch of sports TV rights. The Rangers were hardly the only piece that made it for Cablevision. As well, they can lose rights like Cabelvision did with the Yankees, Nets & Mets. So there's some overstatement of that claim. It goes both ways and more than just one team is usually involved.

I'd say that the fact that Cablevision can and did lose the rights to the teams it didn't own is a pretty strong argument for how unimportant the Rangers' bottom line was to them.

There is absolutely no doubt there are business synergies going on with sports teams, venues, broadcasting, etc. And I would agree that a broadcaster can take on a sports team and not care as much about the bottom line because it's small relative to the bigger financial picture. But that doesn't mean they throw money all over the place mindlessly and don't care at all about their bottom line either.

Really? Really want to stand by that when we're talking about the NY Rangers pre-lockout?

If that were the case, why bother with bickering about a CBA and not just give the players all the money they want? You can't have it both ways in the same argument.

I'm not trying to. Again, the mistake you're making is in trying to apply what's true of some NHL teams to all NHL teams. What I said was absolutely true about the Rangers. That doesn't make it true for everyone. The Rangers were a club that, whispers had it, where not Bettman's #1 supporter during the lock-out.

And, again, we're getting away from the meat of the issue. The point is that the Rangers' bottom line was used by the league to point out the flaws with the CBA when the Rangers bottom line was indicative of nothing other than a choice by management.

But convince me that the unions do not know that stuff is going on and don't take it into account when they're haggling their CBA. They're not stupid.

I'm not trying to. They know those things. That's why the owners numbers are disputed and dismissed. That's why most labour negotiations aren't all that smooth these days. The problem is that any sort of hard line stance by the players is undercut by the fact that none of them are really willing to miss a paycheck and they fold. I'm not arguing that they've made great deals for themselves.

But the fact remains that the NHL uses those synergies to their advantage during CBA negotiations even though it paints a distorted picture of the realities of the league.

When those total league revenues are $3 billion and after the Leafs take their cut, the 29 other teams get to divide up $44 mil in profits, I think those owners have a legit beef - in revenue sharing and with the level of players payroll.

Again, the only evidence for a beef with the CBA is that it hasn't worked out well for them. That's in part because of bad decisions they've made. That's not on the players. A deal isn't unfair just because one side is unhappy. If you sell me five dollars worth of apples and then blow my five dollars on a lottery ticket, that's not a reason to raise the price of apples.

As for the waivers/AHL contracts complaint. That's money the players make. And it's only 3.1% of their basic payroll. GMs make mistakes and I don't see how one can legislate in a CBA that they won't make mistakes with contracts.

I agree. Bad contracts shouldn't be negotiated away. They should be a sign that they didn't run their businesses well within a fair framework.

At the end of the day, the unions know all of the above and then some. It's up to them to haggle the best deal they can. If they don't like it, they can strike or go elsewhere to work. They're not going to get tons of sympathy from the fans because they're already being paid insane sums of money to play a game we enjoyed as kids.

They're getting paid a lot, no doubt. But it's not insane. It's what the market dictates. The owners want to clamp down on the free market and run a cartel. I understand why, Pablo Escobar had a lot of money near the end there, but it doesn't make it right. Fans jealousies, to my mind, has nothing to do with it.

 

[cw]

Nolan, MSG and Cablevision own a bunch of sports TV rights. The Rangers were hardly the only piece that made it for Cablevision. As well, they can lose rights like Cabelvision did with the Yankees, Nets & Mets. So there's some overstatement of that claim. It goes both ways and more than just one team is usually involved.

I'd say that the fact that Cablevision can and did lose the rights to the teams it didn't own is a pretty strong argument for how unimportant the Rangers' bottom line was to them.

Cablevision did try to own them and failed in their bids. But I don't think that or your conjecture has much to do with the Rangers bottom line.

There is absolutely no doubt there are business synergies going on with sports teams, venues, broadcasting, etc. And I would agree that a broadcaster can take on a sports team and not care as much about the bottom line because it's small relative to the bigger financial picture. But that doesn't mean they throw money all over the place mindlessly and don't care at all about their bottom line either.

Really? Really want to stand by that when we're talking about the NY Rangers pre-lockout?

Here's as much as I could find for the old CBA from Forbes

Rangers
Year  Operating Revenues
1998 $  0.0 mil
1999 $  8.7 mil
2000 $ -1.4 mil
2001 $  3.6 mil
2002 $ -2.3 mil
2003 $ -6.9 mil
2004 $ -3.3 mil
==========
Total $ -1.4 mil loss over 7 seasons
= $200,000 lost per year (peanuts to any team)

= 0% of $800 mil in revenue over seven seasons per Forbes guesses.

According to Forbes guesses, the Rangers were basically a break even operation over those seven years.

Your claim that the Rangers incurred all kinds of silly losses to be absorbed by Cablevison because the Rangers were so small that ownership didn't care doesn't seem to hold much water factually according to Forbes.

It looks like management was roughly allowed to spend what they took in.

 

[cw]

As for the waivers/AHL contracts complaint. That's money the players make. And it's only 3.1% of their basic payroll. GMs make mistakes and I don't see how one can legislate in a CBA that they won't make mistakes with contracts.

I agree. Bad contracts shouldn't be negotiated away. They should be a sign that they didn't run their businesses well within a fair framework.

People don't come with guarantees. Anyone who has hired and fired, in spite of doing all the right things, finds themselves with mistakes that don't work out.

Such is the case in pro sports and contracts. No GM gets them all right all of the time. Nor would any GM being honest about it claim such a thing. I've never heard it in my lifetime of following sports.

I don't think a 3% error rate is a horrible number in the business of sports contracts. Nor is it "a sign that they didn't run their businesses well within a fair framework."

The NHL framework is probably the fairest it's been since the inception of the league nearly 100 years ago.

 

[cw]

If that were the case, why bother with bickering about a CBA and not just give the players all the money they want? You can't have it both ways in the same argument.

I'm not trying to. Again, the mistake you're making is in trying to apply what's true of some NHL teams to all NHL teams. What I said was absolutely true about the Rangers. That doesn't make it true for everyone. The Rangers were a club that, whispers had it, where not Bettman's #1 supporter during the lock-out.

And, again, we're getting away from the meat of the issue. The point is that the Rangers' bottom line was used by the league to point out the flaws with the CBA when the Rangers bottom line was indicative of nothing other than a choice by management.

I agree with the bolded sentence above to an extent. The Rangers appear to have spent as much money as they took in. They could have chosen to spend less on payroll. If they had done that, their revenues might have been less but they could have profited rather than break even. That would improve the league's P&L numbers some.

As for the rest of your conjecture, that would have to assume that the NHLPA either ignored it or the NHL wouldn't accept it during negotiations. I sincerely doubt that because when they ran their spreadsheets with the cap, it would show the Rangers making a profit. And that spreadsheet result had to be very much a part of the negotiations or Bob Goodenow & company are vastly dumber than I thought they were.

You'd see the same thing with the Leafs and other big market/bigger revenue teams.

We saw numbers like that when the issue was being debated during the lockout.

But the reason we know they all saw it and it was a part of the negotiations was because of the revenue sharing. They couldn't possibly reach agreement on something as contentious as that among the owners without looking at what the new world with a cap looked like. That would expose the Rangers potential for a healthier bottom line and it must have. The math is so darn simple a grade school child could figure it out.

So that argument is absolute pure smoke as to how the Rangers over spending on payroll would fool the CBA haggling.

What is a little tougher to precisely project but some projection would have been allowed for would be the revenue increases a smaller market team might expect to see because they could be more competitive with the top but capped payrolls belonging to the big market teams. And the associated playoff dollars the small market teams would get more frequently because of the improved parity.

Since the lockout, we've seen that. And the teams and players have a solid sense of how things have worked out with years of 3rd party audits of every team to put them in a better place to make fair adjustments.

 

[L K]

Yeah so Chris Paul to the Lakers for Pau Gasol and Lamar Odom

 

[cw]

But convince me that the unions do not know that stuff is going on and don't take it into account when they're haggling their CBA. They're not stupid.

I'm not trying to. They know those things. That's why the owners numbers are disputed and dismissed. That's why most labour negotiations aren't all that smooth these days. The problem is that any sort of hard line stance by the players is undercut by the fact that none of them are really willing to miss a paycheck and they fold. I'm not arguing that they've made great deals for themselves.

But the fact remains that the NHL uses those synergies to their advantage during CBA negotiations even though it paints a distorted picture of the realities of the league.

There are two things going on in CBA negotiations:
1. the acrimony howled to the media during the process
2. the real facts dealt with around the negotiation table.

The howling may place some pressure on one party or the other. But it's the real facts agreed upon by both parties that advance the ball down the field towards the goal line of an agreement. That's what has happened when I've haggled CBAs.

In 2005, when Goodenow and his acrimony got pushed aside and the players themselves got to sit down and go through Levitt's report and the real data, that's when the light bulbs went off for the players. Several of the players said as much. What Goodenow had portrayed to them and what the facts turned out to be were two very different things. The league was not being nearly as unreasonable as Goodenow had led them to believe. Levitt's numbers were not BS as the years since have proven.

The Rangers numbers were never the real problem. The real problem was the league was making $400 mil less in operating income than it is today. Many teams were going to go out of business if they didn't correct it. Over the six seasons since the lockout, that's roughly a $2.4 billion bottom line correction - that didn't all wind up in the Rangers and Leafs pockets.

As much as you've howled about the Rangers spending more because you allege Cablevision supposedly didn't care (which I don't entirely agree with per the above), another thing the CBA did was correct that, didn't it? The Rangers are capped so that the 4% bottom line figure we see today is a heck of a lot better, audited by both parties number with the Rangers, Leafs and big market teams making a profit.

There's a difference with what is said to the media and what actually gets the deal done. I think you're missing that.

 

[cw]

At the end of the day, the unions know all of the above and then some. It's up to them to haggle the best deal they can. If they don't like it, they can strike or go elsewhere to work. They're not going to get tons of sympathy from the fans because they're already being paid insane sums of money to play a game we enjoyed as kids.

They're getting paid a lot, no doubt. But it's not insane. It's what the market dictates. The owners want to clamp down on the free market and run a cartel. I understand why, Pablo Escobar had a lot of money near the end there, but it doesn't make it right. Fans jealousies, to my mind, has nothing to do with it.

Depending on the frame of reference, it's insane. So many people hurting in this economy, losing their homes or going bankrupt or soldiers making $60 k/yr dying or getting maimed at the hand of terrorists and some of these players playing a boys game are so outraged that a $100 mil contract isn't enough that they'll get into a big labor dispute. To me, those frames of reference make it look kind of crazy no matter what the free market dictates.

I don't think fan jealousies have much to do with it. It's such a surreal amount of money. All the money does with most fans is limit their sympathy for the players cause.

 

[maplesyrup]

Yeah so Chris Paul to the Lakers for Pau Gasol and Lamar Odom

 

[Kin]

I don't think a 3% error rate is a horrible number in the business of sports contracts. Nor is it "a sign that they didn't run their businesses well within a fair framework."

It's also a bogus number. That's only the contracts that they wiped clean so that they could spend even more money. That's not their only failures and you know it.

 

[Kin]

As much as you've howled about the Rangers spending more because you allege Cablevision supposedly didn't care (which I don't entirely agree with per the above), another thing the CBA did was correct that, didn't it? The Rangers are capped so that the 4% bottom line figure we see today is a heck of a lot better, audited by both parties number with the Rangers, Leafs and big market teams making a profit.

Yet another thing you're willfully ignoring in the service of your point is that the Rangers are just an example. They're one of the ways in which teams prior to the lockout were not being run like a typical business. Pegula's statement after buying the Sabres, was only problematic in it's honesty. That 4% still doesn't account for the monies being made off the books.

 

[cw]

I don't think a 3% error rate is a horrible number in the business of sports contracts. Nor is it "a sign that they didn't run their businesses well within a fair framework."

It's also a bogus number. That's only the contracts that they wiped clean so that they could spend even more money. That's not their only failures and you know it.

Show me a major pro sports league that is close to 100% then. If the level of contracts the NHL has signed are so poor to demonstrate mismanagement, this should not be a problem.

 

[Kin]

As for the rest of your conjecture, that would have to assume that the NHLPA either ignored it or the NHL wouldn't accept it during negotiations.

No. It assumes that the NHLPA knew it and the NHL knew it but the NHL had the entirety of the leverage in the situation and everyone on the BOG was going to be rich if the NHL blinked out of existence. They could wait it out. The NHLPA couldn't. They had a bogus argument with bogus numbers but could win because they were richer than the other guys. So they did and made a clearly transparent cash grab that was cheered on by people who think it's tremendous when the rich get richer.

 

[Kin]

Depending on the frame of reference, it's insane. So many people hurting in this economy, losing their homes or going bankrupt or soldiers making $60 k/yr dying or getting maimed at the hand of terrorists and some of these players playing a boys game are so outraged that a $100 mil contract isn't enough that they'll get into a big labor dispute. To me, those frames of reference make it look kind of crazy no matter what the free market dictates.

Wow, so you write for Fox News full-time or just as a hobby?

They're professional entertainers looking to make a fair deal for themselves with the same freedoms we all have in the market. Using "the right frame of reference" practically everyone in North America is an overfed spoiled baby including you and me. You want to play that game and nobody in the world will have sympathy for the sports fans who bitch and moan when one of their numerous forms of entertainment is disrupted by the collective bargaining process for a month or two.

But that's the mentality, I guess, of a lot of people in your shoes. The free market is great for some, but terrible when it benefits labour at the expense of management.

I don't think fan jealousies have much to do with it. It's such a surreal amount of money. All the money does with most fans is limit their sympathy for the players cause.

Please. This is billionaires vs. millionaires. Fans shouldn't have sympathy for anyone here. Fans, however, are largely ruled by the fact that they'd give their right arms to be as talented as these players and enjoy the benefits of them so they vindictively let their sympathies be ruled by criticizing anyone who they don't feel is appreciative enough of it. Fans had no more sympathy for Curt Flood than they did for Allen Iverson.

Of course that has a subtext all it's own, doesn't it?

 

[Kin]

Show me a major pro sports league that is close to 100% then. If the level of contracts the NHL has signed are so poor to demonstrate mismanagement, this should not be a problem.

As I've said all pro sports leagues have this in common. I didn't say the NHL was singularly mismanaged. I said it was mismanaged in exactly the same way that the NBA and NFL were. Baseball doesn't have a perfect record in signing contracts but at least that league is dignified enough that when they make mistakes they don't start crying about how terrible it is that their owners are going without lunch because of all the money in the hands of those greedy athletes.

 

[Kin]

In 2005, when Goodenow and his acrimony got pushed aside and the players themselves got to sit down and go through Levitt's report and the real data, that's when the light bulbs went off for the players. Several of the players said as much. What Goodenow had portrayed to them and what the facts turned out to be were two very different things. The league was not being nearly as unreasonable as Goodenow had led them to believe.

Yeah, that's it. They remembered they were good little boys and should be grateful for what they get. They realized the owners were truly benevolent souls. It had nothing to do with missing paychecks and willing to compromise on the earnings of future players so they could get back to making money.

C'mon. Be in the owners pocket as much as you want but don't try to feed that to me. The union broke, the owners got the deal they wanted.

 

[Kin]

Yeah so Chris Paul to the Lakers for Pau Gasol and Lamar Odom

Wow. I figured that any deal for Paul would have to include Bynum. That's a heck of a move.

Edit: It's being reported as a three-team deal now

To LA: CP3
To NO: Luis Scola, Kevin Martin, Lamar Odom, Goran Dragic
To Houston: Pao Gasol

That's massive.

 

[Erndog]

That is absolutely massive.

Think they move Bynum + now and get Howard?

Bryant + Howard + Paul... Whoa baby!

 

[Kin]

Also, Caron Butler to the Clippers. 3 years/24 million.

And ESPN is reporting that Tyson Chandler to the Knicks is 98% done.

So the exodus from the Champs starts.

 

[Deebo]

Bynum is more valuable than Gasol?