Nik? said:
cw said:
Everyone knows what the numbers are with respect to the leagues finances so there's no big mystery.
I don't know to what extent that's true but I'd argue that the point, from the PA's side, isn't necessarily what the numbers are but what the numbers mean. The proposal to limit non-player expenses, to me at least, says that the PA thinks that addressing the owner's financial concerns shouldn't solely be an issue of demanding givebacks from players.
To me, that's pretty reasonable. As I said to Frank, the league can't just pretend that they don't have any responsibility for the league's bottom line. Especially not when owners buy teams, announce that they don't care if the teams make money and then sign a bunch of contracts that drive home that point.
The financial reporting structure for the CBA was lifted largely from Levitt's analysis. Some of the "forms" look identical to Levitt. Each line item entry on the form for revenues and expenses is backed up with a pretty well written definition with the boundaries of what can be included and what should be excluded, etc.
They did go through these definitions with a focus on what was hockey revenue and hockey expense during the last CBA negotiations. Obvious things like an owner paying a relative big bucks to do next to nothing got excluded for example.
If something fell down there, both parties bear responsibility because they mutually signed off on the CBA with those definitions.
The current CBA provided for a mutually agreed upon 3rd party auditor. Over the last six years, that auditor could investigate anything about those numbers so beyond the theoretical written definition, the NHLPA should have a crystal clear understanding of the actual practice showing what types of expenses actually hit those various expense line items within the CBA reporting.
So if the NHLPA don't know "what the numbers mean", then there's little doubt they didn't do their job for the players they represent. There are no meaningful excuses available to them there because if the league inhibited them from getting that information, we would have heard about a grievance before an arbitrator.
If the owners are booking unreasonable expenses against those line items - allowed under the definitions, I'm all for the players getting that stopped. If the owners are not being fair or reasonable with the players, I'm dead against that and have zero sympathy or patience for the owners on that issue. A good CBA deal is a fair deal for both parties and fans should want a good deal. I have not heard nor seen evidence of that happening with any great degree of substance relative to the overall financial result. I'm sure both sides probably have some issues where they could tweak the definitions under that theme of reasonable fairness.
If the players are looking for a radical restructuring to isolate to player related expenses excluding other hockey related (non-player related) expenses (whatever that means...), I'm not sure I see the point because whether the legitimate non-player hockey related expenses appear in the CBA or not, those can grow or decline at a different rate than the revenue so the owners have to take them into account when assessing the players share of the revenues - no matter what. They do affect the bottom line result. So some of this may well be just union smoke.
Some time ago, I did compare NBA (which Levitt used to some extent) and NFL definitions in their CBAs with the NHL's. There were differences but I didn't see anything stick out that was horrible.
I also haven't seen anything when I did some ratio tests that exposed the NHL's expenses being vastly out of line with the other two leagues. It was hard to be precise because there are differences between them. But I'm confident that we're not talking mega bucks proportional to the league revenues.
The fact that the NHLPA extended this deal two years also speaks to that. If this CBA wasn't a pretty fair deal for the players, they wouldn't have extended it. Since the players are getting a percentage of revenues, under the current CBA and from what I understand of the leagues latest proposal, they're exempt from any suffering if the expenses are high. The only place expenses comes in is where they debate how much money the league is making.
The fact that the NHLPA offered to accept a reduced % of revenues also speaks to the accuracy of the NHL expenses to some degree.
It's a delicate road for the NHLPA to go down because, relative to the NBA and NFL, the NHL revenues are considerably less. All leagues have some fixed costs - no matter what the revenue is. Higher revenue leagues can absorb fixed costs easier (at a lower rate per revenue dollar) than lower revenue leagues. So that helps make the simple business argument that the NHL players should be paid less than the NFL and NBA players as a percentage of revenue because the fixed costs per revenue dollar are very, very likely to be higher for the NHL. The league was likely to raise this anyway but if the NHLPA wants to go down the questionable expense road, they're guaranteeing that they'll run into that and the math is too straight forward for the NHLPA to refute it.
If the players are seeking to dictate to the owners how many sales people they can hire for example or having some say in the league expenses to that extreme, I'd promptly tell them to enjoy their lockout and cease discussions because that gets silly and unreasonable really fast. They're employees - not managers and have no management right since they don't bear the risk of investment.
So they may tweak these line item expense definitions but there's no evidence that this issue, like virtually all the other issues, is anywhere materially close to the % of revenues in terms of financial impact for the new CBA.