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2012 CBA Negotiations Thread

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Gardiner51 said:
I wish that happen to all cities, prevent a lockout in 30 cities, force owners to pay the salary, the deal could be reached in a heart beat...

NHL would be forced to restart the CBA negotiations, since IMHO, the owners and NHL franshise digged their own grave once they started with those 10+ years deals...

That is the main reason I'm with the players, no one forced the owners to do such long, front loaded money deals. If no team practice such type of contract, negotiations would be a little easier as the main reason there is no deal is money distribution between NHL and the Players.

Kudos to Burke for not doing deals like these.

The long-term 7+ year deals make up a tiny fraction of all deals.  They have other bad properties but they aren't the main cause of the monetary imbalance.  Phoenix doesn't have any of those deals, but they do have the problem that they need to meet the cap floor which is $54 million or something currently and way over the budget at which they can be profitable.  Ignoring the Isles (and maybe minnesota) most of the teams signing the deals (Philly, Chicago, Detroit, Rangers) have tons of cash to do so and are highly profitable. 
 
Omallley said:
Bob McKenzie weighs in with a very thorough look at the current situation. Worth the read: http://www.tsn.ca/blogs/bob_mckenzie/?id=404989

I think he does a pretty good job laying out the basic facts but I think he stretches a little to come to the same sort of mushy "C'mon, just meet in the middle" conclusion that seems pretty popular. As far as I read it, his arguments that the players should agree to a lower % of the overall pie boils down to four things.

1. The owners want it to
2. Just because the players eventually reached 57% of the last revenues doesn't mean they should feel "entitled" to 57% in the next deal.
3. The players should be more willing to compromise because this is a dispute over money, not ideology.
4. The NFL and NBA deals reflect an economic landscape that would suggest that the player's proposal isn't realistic.

None of those strike me as particularly compelling. Except 1, I guess. At least that, in it's simplicity, is a compelling argument for why the player's share is almost certainly going to end up at below 57% and that the players should be inclined to get a deal done. What I don't get on McKenzie's part though is the sort of expressed incredulity at the idea that because such a concession is almost certainly inevitable that the players should be making it now. The players, as indicated by the deal struck in the NBA, are almost certainly better served by waiting until a league shutdown threatens things the League will desperately want to go on like the winter classic.

As to the others:

That said, though, just because the NHL has proposed such a dramatic reduction in the players' share of revenue doesn't necessarily mean the players should have an inalienable right or entitlement to 57 per cent. I mean, it went from 54 per cent in the first year to 55.6 to 56.7, to 56.73 to 57 over the life of this CBA. Is it insane to conceive that it could or should slide the other way?

Man, I'd love to be in the room when Bob McKenzie negotiates his next contract. "Sure, as you've put in your hard work and built a following your salary has consistently gone up but just because it's gone up recently, why not let it go down now?". I wonder how "entitled" Bob feels to his salary not getting cut. And, sure, TSN may not be in financial trouble but the Print Media sure is. Doesn't Bob feel an obligation to take a pay cut so that the Toronto Star can shore up it's numbers? And he sure better not start talking about getting it in writing that his pay cut will go to helping the Toronto Star. How TSN shares its revenues is their business.

No, I'm sure Bob feels that he has an "inalienable right" to negotiate his own deal with TSN and let other journalists do the same with their respective employers.

The last lockout was fought on ideology -- the free market system vs. the cap system. It was foolish to lose a whole season on that basis, but it's not the first or last time a war was fought defending a principle or ideal.

That, to me, strikes me as the biggest sort of oversight in his whole piece. He makes frequent reference to the 57% figure and the last lockout without linking them. That figure, the 57%, is what the player's got in return for their MASSIVE capitulation in the last lockout.

The idea that holding onto that 57% figure reads as an entitlement or inalienable right only really holds if you think that what the owners won in the last lockout is forever etched in stone tablets as if handed down by a divine being and what the players got as table scraps is the only thing fit to be negotiated. I'm sure if the PA started talking about doing away with the hard cap then we'd find out pretty quickly that the owners feel they're "entitled" to a lot of things from the old deal too.

It's quite obvious that within the NHL, there's been a growing disparity between the wealthy clubs that are largely driving the upward spiral of revenues and the more financially-challenged clubs who for a variety of reasons are not faring well economically. The players don't even dispute that.

This is because the central question, the central difference in ideology, really hasn't gone away despite the cap being in place. The central question still is that, in a league where the various teams have vastly different financial circumstances, what responsibility do the players have to ensure the continued success of the teams in financial difficulty. That's the ideology the last lockout was about. That's the one that Bob understood enough to see why the last lockout lasted as long as it did, even if it was "dumb".

That the League is coming back to the players and asking them to again address this issue is vindication to a lot of the people who didn't agree with what the league was after last time. Caps don't really change things. Revenue sharing does. If revenues were shared as equally as they were in the NFL then the NHLPA could be legitimately expected to sit down with the league and deal with the league's financial system as an amorphous whole.

But as we've seen, in a capped league where the majority of revenues aren't shared, all it does is heighten the absurdity in asking the PA to negotiate a deal on the basis that the Leafs and the Panthers should exist with the same artificial constraints and, indeed, escalators in what they pay their employees. Sitting down to negotiate a deal with 30 different employers each with their own sets of financial realities and trying to come up with one that treats them as if they're all one and the same just doesn't make sense.

What we've seen under the new deal is, yes, teams like Florida and Phoenix and Columbus get burned when they don't see an equal share of the revenue pie but are expected to foot a near equal chunk of the expenses. But that is the world wrought by the last CBA. I think, to use Bob's word, it is absurd for the NHL to use that reality, that they bargained, as the justification for reducing the player's share.

To the surprise of many who thought a salary cap was the end of the players' world as they knew it, the players have done quite well in the current system.

This is just flat-out straw manning to a pretty ridiculous extent. Bob Goodenow could do math. So could agents. They could work out that under the proposals the owners gave during the last lockout that their players would still be earning enough to be driving BMW's, buying out the bar and making it rain. Moreover they could look at the NBA and NFL, two leagues that beat them to the cap punch, and see that not only could pro athletes make a lot of money under a cap they could also see that money grow so long as the league's revenues did.

But as Bob himself said earlier in the piece, the last lockout was never about whether or not the players would "do quite well" under a cap system. It was largely about ideology and, again, even if Bob feels that a cap is now dogmatic law that fight hasn't died. I'm sure there are a lot of people at the PA, not to mention players and their agents, who still don't really like a cap. Who still, if they had their way, would rather see a return to a system that saw Bobby Holik sign a deal for a richer annual amount than what Sidney Crosby is going to be getting now.

But the players lost all that and, for good reason, they're not trying to address that in current negotiations. What Bob doesn't really seem to understand here is that 57% figure is tied to that ideology. That number is what they got for sacrificing all shreds of that ideology. Negotiating it downwards is not just dry mathematics. It's asking for further capitulation after a CBA that saw the players lose on just about every count that mattered to them and the NHL's revenues explode afterwards.

The NBA and its players, after going through their own lockout, recently agreed to a deal that is approximately 50-50. The NFL and its players did a deal that gave the owners' a favorable 53-47 split... In either case, I'm not sure one can simply ignore that the other two North American pro sports leagues with caps have ratios where the players get 50 per cent or less. It is at the very least indicative of some sort of a trend, is it not?

Well, it's been a long time since freshman economics but I think calling two vaguely similar things happening(with a third that contradicts it) a "trend" is a little bit on the side of overstatement but, hey, why not.

So, assuming this is a trend, what does this trend tell us? That rough economic times are tough for sports leagues? Well, no. The NFL is making a ton of money. Baseball too. As Bob has admitted, NHL revenues went shooting up while banks crumbled.

Alright. So does it tell us that there's some sort of hierarchy that the NHL should fit into in terms of what % they give their players and that it's determined by league revenues/expenses? Well, again, no. The NFL is the league with the greatest revenues but they're solidly on the bottom of the % their players make. MLB is, I'm assuming, the league with the most expenses like travel simply because of the number of games they play and trips they take but they don't even have a cap. The deal they signed was one that didn't do a whole lot to change player compensation. I suspect they probably pay the highest % of revenues on players.

So then, what trend are we looking at? The continuing amount of evidence that the NFLPA is clown shoes? Yeah, but I don't think that's what Bob had in mind. I think the only "trend" here is that leagues are getting a little wiser to the staggering amount of leverage they have. I think we're seeing the that the further and further the labour movement in sports gets from the days where players were winning real, important ideological battles the less and less cohesion their unions have as players become more and more self-interested and the owners are, smartly, taking advantage of that to sign more favourable deals.

Kudos to them. If the world has taught us anything of late it's that Billionaires are good people who just want the best for everyone. Just don't try and sell me that a sports economics landscape that sees the Dallas Cowboys paying their players a smaller percentage of their revenues than the Charlotte Bobcats is in anyway based on "fairness" or logic.

Or to put it another way, the NHL spent $1.873 billion on player salaries last season and the NHLPA proposed that number be INCREASED by 2 per cent in the coming season, 4 per cent in year two and 6 per cent in year three. So, basically, the NHLPA is proposing the actual dollars spent on player salaries to go UP at a time when the NHL fully expects they should go DOWN.

I see. So, in other words, one might even be INCLINED to say that on the issue of player compensation the owners and the players DISAGREE.

Because the NHLPA is offering to reduce its share of future "growth," the league feels there's an intangible quality to it. It could be "this" much ($465 million), it could be "that" much (more or less). It's a temporary, short-term (three-year) fix on a propsed four-year CBA, which isn't long enough. The NHL is not looking to increase the $1.873 billion it spent on salaries last season, it's looking to decrease it. And yet the NHLPA proposal calls for a real-dollar increases in each of the next three years and full return to status quo percentage of 57 in Year Four, a move which the NHL interprets as the players thinking they have an absolute "entitlement" to that magic number of 57.

So, the NHL interprets a proposal where under the first three years the players would be paid less than 57 percent of the leaguewide revenues as indicative that the players feel they're entitled to 57 percent of leaguewide revenues? Well, as reasonable as that is...

But at the end of the day, does it really matter what I think or who wins in the court of public opinion, who sides with whom? We're all pretty much just spectators here.

If ever there were a better epitaph for the grand old tradition of the fourth estate, I haven't read it.

But since it's an occasion when self-interest is paramount, I have but one request: Make the next CBA eight years long. I'll be in retirement by the time it expires and won't have to endure another...

As the great Bart Simpson once said, the ironing is delicious.
 
WhatIfGodWasALeaf said:
Omallley said:
Bob McKenzie weighs in with a very thorough look at the current situation. Worth the read: http://www.tsn.ca/blogs/bob_mckenzie/?id=404989

TL;DR? ;)

Excellent article.

The 32 million dollar increase of the salary floor over the past CBA is incredible, especially considering that those teams that should be concerned with operating close to a floor have seen nothing close to that type of rise in profits.

The floor should be determined by the bottom fifteen teams financial performance, it's nice to wax lyrical about financial parity, but it's not realistic as it stands.

Last time I sided with the owners because I felt that a cap should have been in place, this time I have sympathy with the players position, but they need to understand that having a 50/50 split is not the end of the world.

That is of course provided the definition of HRR remains the same.

Then the cap should be determined by the highest earning teams which would push it to an even higher level.  The salary floor was a concession.  The cap provides the owners with cost certainty, the floor provides the players with some earning certainty. 

The problems between the money teams and the non-money teams is not the players fault.  It is the fault of the NHL that thought it would be a good idea to put teams in Phoenix, Florida, Nashville and etc.
 
Rebel_1812 said:
Then the cap should be determined by the highest earning teams which would push it to an even higher level.  The salary floor was a concession.  The cap provides the owners with cost certainty, the floor provides the players with some earning certainty. 

The problems between the money teams and the non-money teams is not the players fault.  It is the fault of the NHL that thought it would be a good idea to put teams in Phoenix, Florida, Nashville and etc.

I don't disagree with any of what you say, was just spit-balling on the cap floor as that seems to be the part of the CBA that is causing some teams to slide into financial meltdown.

Real revenue sharing wouldn't hurt either, but I have a hard time believing the owners of the top teams would be willing to give up that amount of money, I mean how dare they be asked to take a smaller slice of the pie, don't people know that's the players job? ;)
 
Assuming some sort of agreement that players' compensation should be lower than 57%, would a descending percentage of HRR be a workable solution? (in simplistic terms.)

e.g. 56%, then 54, then 52. Since the percentage drops would be gradual and lower than the assumed increase in revenue, their salaries would actually go up, but more slowly than revenues.

Or is this essentially what the NHLPA had proposed?
 
Bullfrog said:
Assuming some sort of agreement that players' compensation should be lower than 57%, would a descending percentage of HRR be a workable solution? (in simplistic terms.)

e.g. 56%, then 54, then 52. Since the percentage drops would be gradual and lower than the assumed increase in revenue, their salaries would actually go up, but more slowly than revenues.

Or is this essentially what the NHLPA had proposed?

The way that I understand the PA's latest proposal is that they've proposed a system where it would somewhat resemble what you describe but only if the league continues to grow at the rate it's grown at the last few years. So essentially it's de-linking salaries from revenues by guaranteeing a certain dollar amount that, if those growth targets are met, would work out to declining percentages of leaguewide revenues as the league continued to grow.

According to ESPN's coverage of the latest offers:

Using projections generated by the league's average yearly growth in the past decade, the union estimates the players' share will be 54.3, 52.5, 52.0 and 52.0 in Years 1 through 4, respectively.

So from the player's perspective they're willing to take a smaller percentage but they want an actual dollar amount guaranteed. That seems to be a non-starter from the League's perspective.
 
Has anyone (Forbes?) done a report on the combined profitability of the league's teams? 

As long as we're talking about revenue sharing, shouldn't we really know how much needs to be spread around?

Also, the return on sales (or cost per dollar of revenue) would be needed to really know how much revenue is required to get these teams out of the hole. 
 
Frank E said:
Has anyone (Forbes?) done a report on the combined profitability of the league's teams? 

As long as we're talking about revenue sharing, shouldn't we really know how much needs to be spread around?

I just added up all of the numbers that Forbes had for the various teams operating incomes and the total came to being +114.3 million dollars. That said the top five teams(Toronto, NYR, Montreal, Vancouver and, surprisingly, Edmonton) added up to +211.7

edit: but I realize that may not be super helpful. If you just add up the combined operating losses from the teams in the red what you get is -127.1
 
Nik? said:
Bullfrog said:
Assuming some sort of agreement that players' compensation should be lower than 57%, would a descending percentage of HRR be a workable solution? (in simplistic terms.)

e.g. 56%, then 54, then 52. Since the percentage drops would be gradual and lower than the assumed increase in revenue, their salaries would actually go up, but more slowly than revenues.

Or is this essentially what the NHLPA had proposed?

The way that I understand the PA's latest proposal is that they've proposed a system where it would somewhat resemble what you describe but only if the league continues to grow at the rate it's grown at the last few years. So essentially it's de-linking salaries from revenues by guaranteeing a certain dollar amount that, if those growth targets are met, would work out to declining percentages of leaguewide revenues as the league continued to grow.

According to ESPN's coverage of the latest offers:

Using projections generated by the league's average yearly growth in the past decade, the union estimates the players' share will be 54.3, 52.5, 52.0 and 52.0 in Years 1 through 4, respectively.

So from the player's perspective they're willing to take a smaller percentage but they want an actual dollar amount guaranteed. That seems to be a non-starter from the League's perspective.

Ok, that's makes sense, thanks for clearing that up. Does it work the other way? That is, if the revenue growth jumps dramatically, it means the owners will essentially just pocket the extra? So essentially they're putting more potential risk and reward on the owners.
 
Bullfrog said:
Ok, that's makes sense, thanks for clearing that up. Does it work the other way? That is, if the revenue growth jumps dramatically, it means the owners will essentially just pocket the extra? So essentially they're putting more potential risk and reward on the owners.

That's my understanding of it.
 
Potvin29 said:
So are they actually going to spend any significant amount of time NEGOTIATING?

Seems like they just meet every number of days for a short period of time, exchange a new proposal or not, talk about why they rejected it to the media, then repeat it a few days or a week later.

Why don't they spend a significant amount of time actually trying to negotiate?  Or are they?

Gary Bettmen doesn't seem like the NEGOTIATING type.  He seems like the type that wants everything done his way and will raise hell until that happens, all the while claiming how generous or conciliatory he was.  This is his type:
napoleon-1.jpg
 
Nik? said:
So from the player's perspective they're willing to take a smaller percentage but they want an actual dollar amount guaranteed. That seems to be a non-starter from the League's perspective.

Which really should come as a surprise to no one. The League has been adamant about having salaries tied to revenues since before the last lockout, and, after getting that in the last CBA, why would the union think they'd be willing to give it up?
 
bustaheims said:
Nik? said:
So from the player's perspective they're willing to take a smaller percentage but they want an actual dollar amount guaranteed. That seems to be a non-starter from the League's perspective.

Which really should come as a surprise to no one. The League has been adamant about having salaries tied to revenues since before the last lockout, and, after getting that in the last CBA, why would the union think they'd be willing to give it up?

The league is in some kind of a business fantasy world where there are no fixed expenses.
 
Sidney Crosby...
We're showing we're willing to move and we're willing to sacrifice things with our proposal. With that, both sides have room to grow and continue to have success. I think if we're to look at their proposal it isn't the saIme kind of thing," said Crosby. "You look at hard numbers, and there aren't a lot of incentives for players. It doesn't seem to address the key issues that we hear are issues."

Donald Fehr...
"What's in it for the players?" NHLPA executive director Donald Fehr asked, echoing what he said was the players' most frequent question in their New York meetings.

"We have to have the salary concessions all over again, plus we have to go in the owners' direction on all contracting issues," he said.

"Less money, fewer rights. I think everybody understands why the owners would like that. Every employer would like that. I have a difficult time understanding why anyone would expect the players would make an agreement on that basis."

Fehr was clear: The NHL asks the players to give up money and contractual rights, but has yet to seem interested in controlling other costs.


http://ca.sports.yahoo.com/blogs/nhl-puck-daddy/sidney-crosby-great-nhl-players-sacrifice-191123869--nhl.html
 
Gary Bettman
"Listen, nobody wants to make a deal and play hockey more than I do, OK," the NHL commissioner told a news conference when asked what he might say to fans dreading the prospect of a lockout. "This is what I do. This is "Listen, nobody wants to make a deal and play hockey more than I do, OK," the NHL commissioner told a news conference when asked what he might say to fans dreading the prospect of a lockout. "This is what I do. This is what my life is about in terms of how I spend most of my waking hours.

"This is really hard. And so you only get involved in this situation when you understand what the issues are and you know you're doing the right thing for the long-term stability of our game and our sport.

"This is very hard and I feel terrible about it."what my life is about in terms of how I spend most of my waking hours.

"This is really hard. And so you only get involved in this situation when you understand what the issues are and you know you're doing the right thing for the long-term stability of our game and our sport.

"This is very hard and I feel terrible about it."


Donald Fehr
Fehr said the players made large concessions in bargaining last time. Since then, league revenue has risen dramatically.

He asked whether it was fair or equitable that the owners want more concessions.

Fehr says the players have made a responsible proposal, offering what he calls "shared sacrifice."

Under the league offer, the players' share would be reduced "only 17.5 per cent," said Fehr.

That equals $330 US million a year, he added.

"What would your reaction be in similar circumstances?" Fehr said.

nitially, owners sought to drop the percentage given to players to 43 per cent from the current 57 per cent. They have since amended that to a six-year proposal that starts at 49 per cent and drops to 47 per cent

The NHLPA is offering a package that starts at 54.3 per cent and ends at 52.7 per cent

"The perception we have sometimes is that all they're interested in is talking about salary reductions," Fehr said of the league.

"One of the questions that needs to be asked is, if indeed they lock out, if indeed they do do that, [whether] that is reasonably calculated to make a deal more likely or less likely?


Sidney Crosby
"I know in my case not playing for as long as I did the last year and a half, I obviously want to play," he said. "But I think you also have to realize that there's principles here and you have to understand what's right.

"And I think we believe that what we propose is in that right direction. If you look at both [proposals], yeah they're definitely different. But if you have a non-bias opinion, you look at the facts, I think our mindset and the direction we're going is one that seems like it's a little bit more fair for both sides."

http://www.cbc.ca/sports/hockey/nhl/story/2012/09/13/sp-hockey-nhl-nhlpa-labour-negotiations.html

 
Elliot Friedman
@FriedgeHNIC  NHL Players and teams know that if they want contracts approved by 5pm ET SAT (last day of CBA), must file by same time tomorrow...
 
Nik? said:
Frank E said:
Has anyone (Forbes?) done a report on the combined profitability of the league's teams? 

As long as we're talking about revenue sharing, shouldn't we really know how much needs to be spread around?

I just added up all of the numbers that Forbes had for the various teams operating incomes and the total came to being +114.3 million dollars. That said the top five teams(Toronto, NYR, Montreal, Vancouver and, surprisingly, Edmonton) added up to +211.7

edit: but I realize that may not be super helpful. If you just add up the combined operating losses from the teams in the red what you get is -127.1

Perhaps I'm misunderstanding something here, but does that suggest that the operating income of an NHL team, stricktly on average, is $3.81 million?

I really need to read the Forbes thing.
 
Frank E said:
Perhaps I'm misunderstanding something here, but does that suggest that the operating income of an NHL team, stricktly on average, is $3.81 million?

I really need to read the Forbes thing.

If I'm reading it correctly (and Nik's numbers are accurate), it would also mean that the bottom 25 earners average close to $4M in operating loss per season.
 
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