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2012 CBA Negotiations Thread

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This is a war about money, only money.

I've said this before, the owners are only interested in a rollback on money, a rollback on the huge deals that they manage to sign by passing the old CBA.

They don't care about the teams that are in the red end of the balance sheet.

Every single proposal made by the NHL cares about the money distribution, while the players proposals try to address the teams without big pockets, and maybe try new solution to markets like Phoenix, NYI, Columbus survive.

And yes, ironicly, one of the deepest pockets in the NHL don't have a 10+ year contract to rollback 17%.
I'm totally against a rollback of anykind on the players contracts. The owners digged their own graves on this.

 
A glimpse into the world of Gary Bettman..."The Instigator": How Gary Bettman Remade the League, and Changed the Game Forever" by journalist Jonathan Gatehouse...

http://www.thestar.com/sports/hockey/nhl/article/1256968--nhl-lockout-what-drives-gary-bettman
 
Red Wings fined (250k) after senior VP Jim Devellano's 'cattle' comments

Read more: http://www.vancouversun.com/sports/Wings+fined+after+senior+Devellano+cattle+comments/7286955/story.html#ixzz27P333N6f

"The owners can basically be viewed as the Ranch, and the players, and me included, are the cattle," said Devellano. "The owners own the Ranch and allow the players to eat there. That's the way its always been and that the way it will be forever. And the owners simply aren't going to let a union push them around. It's not going to happen."

"The owners can basically be viewed as the Ranch, and the players, and me included, are the cattle," said Devellano. "The owners own the Ranch and allow the players to eat there. That's the way its always been and that the way it will be forever. And the owners simply aren't going to let a union push them around. It's not going to happen."
 
Both sides too meet next Friday. In the last lockout, they took 3 months to restart negotiations.
The twist is that they will focus on the nom monetary issues of the next cba.
 
Gretz pipes up:

As for the lockout, Gretzky said it is difficult for ex-players to comment because they are not privy to the details of the on-going negotiations. The Great One did admit that the financial issues separating the owners and players are tangible.

"The realization is, probably 10 teams make money, 10 teams break even, and 10 teams lose money," Gretzky said, adding that the franchises that are bleeding cash are doing it at a drastic rate.


http://slam.canoe.ca/Slam/Hockey/NHL/Edmonton/2012/09/25/20232616.html

The thing is that some may think that there's greed involved on the ownership side...it just doesn't seem that way to me.  This NHL is a business, and business must be profitable to be sustainable.
 
Frank E said:
Gretz pipes up:

As for the lockout, Gretzky said it is difficult for ex-players to comment because they are not privy to the details of the on-going negotiations. The Great One did admit that the financial issues separating the owners and players are tangible.

"The realization is, probably 10 teams make money, 10 teams break even, and 10 teams lose money," Gretzky said, adding that the franchises that are bleeding cash are doing it at a drastic rate.


http://slam.canoe.ca/Slam/Hockey/NHL/Edmonton/2012/09/25/20232616.html

The thing is that some may think that there's greed involved on the ownership side...it just doesn't seem that way to me.  This NHL is a business, and business must be profitable to be sustainable.

But given that, how do you argue that you need to cut player costs and then continue to run crippled franchises expecting to make said profit?  Sure, if the league had no costs whatsoever, Phoenix could be profitable.  But they supposedly lost at least 20 million dollars last year.  Who know how much additional cash was offset by current sweetheart deals between the NHL/Glendale. 

If you can't get people to come out and watch the games live, you certainly aren't getting the network benefit of having them partially on TV (sometimes).
 
L K said:
Frank E said:
Gretz pipes up:

As for the lockout, Gretzky said it is difficult for ex-players to comment because they are not privy to the details of the on-going negotiations. The Great One did admit that the financial issues separating the owners and players are tangible.

"The realization is, probably 10 teams make money, 10 teams break even, and 10 teams lose money," Gretzky said, adding that the franchises that are bleeding cash are doing it at a drastic rate.


http://slam.canoe.ca/Slam/Hockey/NHL/Edmonton/2012/09/25/20232616.html

The thing is that some may think that there's greed involved on the ownership side...it just doesn't seem that way to me.  This NHL is a business, and business must be profitable to be sustainable.

But given that, how do you argue that you need to cut player costs and then continue to run crippled franchises expecting to make said profit?  Sure, if the league had no costs whatsoever, Phoenix could be profitable.  But they supposedly lost at least 20 million dollars last year.  Who know how much additional cash was offset by current sweetheart deals between the NHL/Glendale. 

If you can't get people to come out and watch the games live, you certainly aren't getting the network benefit of having them partially on TV (sometimes).

Great point LK. Knock 7% off the Coyotes salaries and add the extra money they would get in revenue sharing and they're still not turning a profit.
 
L K said:
Frank E said:
Gretz pipes up:

As for the lockout, Gretzky said it is difficult for ex-players to comment because they are not privy to the details of the on-going negotiations. The Great One did admit that the financial issues separating the owners and players are tangible.

"The realization is, probably 10 teams make money, 10 teams break even, and 10 teams lose money," Gretzky said, adding that the franchises that are bleeding cash are doing it at a drastic rate.


http://slam.canoe.ca/Slam/Hockey/NHL/Edmonton/2012/09/25/20232616.html

The thing is that some may think that there's greed involved on the ownership side...it just doesn't seem that way to me.  This NHL is a business, and business must be profitable to be sustainable.

But given that, how do you argue that you need to cut player costs and then continue to run crippled franchises expecting to make said profit?  Sure, if the league had no costs whatsoever, Phoenix could be profitable.  But they supposedly lost at least 20 million dollars last year.  Who know how much additional cash was offset by current sweetheart deals between the NHL/Glendale. 

If you can't get people to come out and watch the games live, you certainly aren't getting the network benefit of having them partially on TV (sometimes).

Well I'd suggest that Phoenix is a tough example, given the reported losses.  You're right to suggest that dealing with player costs alone would not solve the problem.  They need to draw, and draw at ticket prices that can help them get into the black.

What I'm pointing out is that if the player costs come into line around 47% of HRR (just for the sake of this example), that would represent close to a 20% savings in player costs.  That's significant given it represents around $12 million in yearly cap reduction. 
 
dm_for_pm said:
L K said:
Frank E said:
Gretz pipes up:

As for the lockout, Gretzky said it is difficult for ex-players to comment because they are not privy to the details of the on-going negotiations. The Great One did admit that the financial issues separating the owners and players are tangible.

"The realization is, probably 10 teams make money, 10 teams break even, and 10 teams lose money," Gretzky said, adding that the franchises that are bleeding cash are doing it at a drastic rate.


http://slam.canoe.ca/Slam/Hockey/NHL/Edmonton/2012/09/25/20232616.html

The thing is that some may think that there's greed involved on the ownership side...it just doesn't seem that way to me.  This NHL is a business, and business must be profitable to be sustainable.

But given that, how do you argue that you need to cut player costs and then continue to run crippled franchises expecting to make said profit?  Sure, if the league had no costs whatsoever, Phoenix could be profitable.  But they supposedly lost at least 20 million dollars last year.  Who know how much additional cash was offset by current sweetheart deals between the NHL/Glendale. 

If you can't get people to come out and watch the games live, you certainly aren't getting the network benefit of having them partially on TV (sometimes).

Great point LK. Knock 7% off the Coyotes salaries and add the extra money they would get in revenue sharing and they're still not turning a profit.

It's probably going to be closer to 20% if the league gets their way, say the deal ends up around 15-20% in player cost savings.  As I mentioned to LK, that's a pretty significant cut in expense.

We really don't know the extent of the revenue sharing initiatives being proposed, but I read that the league and the players are not far from agreement on this issue.
 
L K said:
But given that, how do you argue that you need to cut player costs and then continue to run crippled franchises expecting to make said profit?  Sure, if the league had no costs whatsoever, Phoenix could be profitable.  But they supposedly lost at least 20 million dollars last year.  Who know how much additional cash was offset by current sweetheart deals between the NHL/Glendale. 

If you can't get people to come out and watch the games live, you certainly aren't getting the network benefit of having them partially on TV (sometimes).

I don't think the owners are expecting to achieve a deal where no teams lose money, just one where maybe only a handful of teams do, and, for the most part, they're not significantly in the red. Right now, based on reports, 18 of 30 teams are operating at a loss. That's just absurd and unsustainable. Clearly, there's a league-wide need to cut expenses and player salaries are every team's largest expense.

My guess is the league would be happy with a deal that cut Phoenix's losses to around $5M per season, because, they know they can probably find buyers at that amount. Sports teams in general are bad investments, as they generally don't represent a significant ROI in the short-term and are generally have a smaller long-term ROI than alternate investments. The people who are buying them know that. A loss of ~$5M per season for an investors that has revenues in the hundreds of millions is A) negligible and B) a tax write-off. A loss of $20M+, on the other hand, is a major turn off for what is already a poor investment.

The owners have over-played their hand so far. I won't argue with that. But, it's not really even about profit for them. For the most part, the money made by the team does not make a significant impact on their owner's bottom line. It's really just about finding a level that makes sense so that they're not dumping too much money into a failed investment.
 
dm_for_pm said:
Great point LK. Knock 7% off the Coyotes salaries and add the extra money they would get in revenue sharing and they're still not turning a profit.

I would suggest that no matter what they do - within reason - there will always be a few teams who are not making money.  Some increased revenue sharing can help add a little more balance as well. 

The problem I have with the player's stance is that virtually all the financial risk in this business is on the owners side.  These guys shell out huge money to buy in, take all the risk of being another Phoenix or Florida, often take $20+ mil losses each year... and you have a deal where 57% of your income is gone before you've paid a dime of any other expense. 

The only real financial risk the players (as a whole) take is if revenues drop they lose their escrow.  That has never happened in 7 years and probably won't happen unless they really really botch this thing and kill another season. 

So either more of the risk is shared or the revenue percentage needs to shift to the reward being on the side of the owners, who bear the most risk.
 
Frank E said:
This NHL is a business, and business must be profitable to be sustainable.

But I think this sentence highlights the problem with the stance you're taking. If the NHL is a business then the business is profitable. Right? By Forbes' estimates they're more than a hundred million in the black. But, of course, the NHL isn't a business. It's a league of 30 largely separate businesses that collectively bargain as an industry.

And it's because these are 30 largely separate businesses that there's little to no justification for the owner's stance. Remember, the idea that one of those 30 individual businesses can't cut their own expenses in players costs as they see fit is an entirely artificial mechanism of cost control that was insisted upon by the league. There are lots of positions the NHL could take to address the fundamental imbalance that tying individual team expenses to leaguewide revenues creates that wouldn't have caused a labour dispute. They could be in there negotiating a deal that has a large gap between the cap floor and cap ceiling. They could be negotiating a deal where each team has their own separate cap tied to their individual revenues. If we're going to pretend that the owner's stance is largely centred around addressing the problems of that bottom third then we can't pretend that the only recourse they have is a leaguewide cut in player costs. That would be like having a doctor telling you that your finger is broken and recommending that he put your whole arm in a cast just in case.

That's the "Greed" of it. The Maple Leafs don't need cuts in player costs. The Rangers didn't need a lockout to become a sustainable business. The teams losing money at a drastic rate are pretty neatly counterbalanced by the teams that are making money at a pretty drastic rate. That the league is so hellbent on having a CBA that doesn't address the differences in revenue between the Rangers and the Blue Jackets doesn't mean that the PA should go into their negotiations pretending that they're only negotiating with the Blue Jackets.

The issue here isn't whether or not a business needs to be profitable to be sustainable, it's whether or not an industry should have a CBA with their employees on the basis that none of the businesses can ever be unsustainable. There has to be some measure of Darwinism here.

Corn Flake said:
The problem I have with the player's stance is that virtually all the financial risk in this business is on the owners side.  These guys shell out huge money to buy in, take all the risk of being another Phoenix or Florida, often take $20+ mil losses each year... and you have a deal where 57% of your income is gone before you've paid a dime of any other expense.

Well, first and foremost, that's not strictly true. Players get 57% of HRR but HRR doesn't encompass the entirety of the league's revenue. So the things that fall outside of HRR is money that the team takes as income that does go to their other expenses. That includes a pretty significant chunk of things like concessions and merchandise sales. 

But secondly, while I think there's a good argument to be made that the league would be better served by having more of a partnership between the owners and the players that change couldn't just be about the players assuming a share of the risk. Partnership would mean risk, yes, but it would also have to mean some measure of control or say in the way the business runs. I mean, I'm assuming you wouldn't buy 20% of a company and not want a vote, right?

So I think that's kind of a non-starter for the owners way more than it is for the players. I mean, like you say, the owners run the risk of being another Phoenix or Miami(and, significantly for the point I'm making, that's probably better described as Glendale, Arizona and Sunrise, Florida) but the owners are also the ones who get to decide whether there is a Phoenix or a Florida. I'd love for the players to have a voice in things like Franchise moves or whether or not they should have taken less TV money from ESPN. I'd love for there to be a Commissioner of the sport who had to answer to players and owners about the state of the game.

But, and this is just my read of things, I'm guessing that if you asked NHL owners if they'd rather have shared risk or total control it'd be pretty near universal in favour of total control.

bustaheims said:
I don't think the owners are expecting to achieve a deal where no teams lose money, just one where maybe only a handful of teams do, and, for the most part, they're not significantly in the red. Right now, based on reports, 18 of 30 teams are operating at a loss. That's just absurd and unsustainable. Clearly, there's a league-wide need to cut expenses and player salaries are every team's largest expense.

Well, let's be fair. It's anything but clear to you or I what the actual, nuts and bolts financial situation is of individual clubs. I'm going to guess that the majority of the "reports" you refer to are people making reference to the Forbes list and, while I think that it's as good a piece of information as we have to work with and can be the basis for an argument, I think we should probably resist using it as the basis for any definitive statements about what the league does or doesn't need.

Remember that there are two inherent problems with the Forbes list. The first is obvious in that it's an estimate and could be off significantly in either direction. Corn Flake refers to teams "often" taking 20 million dollars in losses because that's chatter but according to Forbes, as best as I can tell, the only team to have taken on losses that even approach that number is Phoenix.

But the second problem, less significant from a details perspective but probably more so from a philosophical perspective, is that the Forbes list is also just a snapshot. It's what happened in a given year, not a statement about the carved in stone financial future of the league. According to the Forbes list the Penguins were in the red by 200,000 bucks last year. Now, I think you'd agree, that's a small enough sum that for the Penguins to be profitable does not require a change to the CBA. If they had better playoff goaltending or a healthy Sid Crosby for most of the year they're almost certainly profitable.

If you're right and the owners aren't after a situation where no teams lose money than the issue shouldn't be what teams are or aren't profitable but rather what teams can and can not be profitable. Again, this is the problem with taking the snapshot and just saying that it is the league's financial situation. The 2012 Forbes list had the Devils losing 6.1 million. Their 2010 list had the Devils making 6.9 million. Things swing, it's the nature of sports.

The Forbes list, as you say, contends that 18 of 30 teams are losing money but as we dug into a while back that's outweighed by quite a bit by the 12 that are making money. That's because most of them, again according to Forbes, aren't losing that much money. If we use your figure of 5 million as an acceptable loss than we have 20 out of 30 teams profitable or losing less than 6 million dollars. Only 2 of the 30 teams are in the double digits in losses, compared to 6 teams being at double digit profits.

So how much would the league have to trim things to get every team other than Phoenix and Columbus to a state where the most they could lose is five million or so, provided the increased owners share was evenly distributed? Well, again using Forbes' numbers they'd probably have to reduce player share from 57% to around 54.5%. Something tells me that if that's all they were after this deal would be done.

Again, it's kind of like I said to Frank, if there's one slow gazelle in the herd, it gets eaten, the herd doesn't try and negotiate with the lions to run slower. The sort of equilibrium you're talking about where teams are either profitable or are running a fairly insignificant loss is essentially where the league is or at least would be with pretty minor tweaks in terms of player compensation and revenue sharing.

Except, of course, Phoenix. But I think you'd agree that it'd be pretty myopic if the only team we looked at, and whose needs the CBA was specifically designed to address, were the Phoenix Coyotes.
 
Please ignore my ignorance as I haven't read the this whole thread and I know my questions below are basic and possibly stupid but I need some clarification:

1) If Bettman is in charge of the NHL and represents the owners, why was an executive from Detroit fined for speaking his mind? Why woud Bettman fine him when he (Bettman) represents them?

2) If owners are against high salaries, why are they agreeing to these massive contracts especially this summer? I mean, where is the logic? You are agreeing to something that you are essentially locking the players out for.

3) What will happen to the teams in the southern belt of the US? You know teams we all know are losing a boat of cash when there is a season, so what will happen to them when there is no season? I know that the owners are not paying salaries but they still pay rent and they still have employees right? Also, havent they thought what this will do to those fan bases?
 
mc said:
Please ignore my ignorance as I haven't read the this whole thread and I know my questions below are basic and possibly stupid but I need some clarification:

1) If Bettman is in charge of the NHL and represents the owners, why was an executive from Detroit fined for speaking his mind? Why woud Bettman fine him when he (Bettman) represents them?

Bettman didn't fine him, the league did - in other words, Bettman's bosses did - because what he said was, well, stupid.

mc said:
2) If owners are against high salaries, why are they agreeing to these massive contracts especially this summer? I mean, where is the logic? You are agreeing to something that you are essentially locking the players out for.

You have to play within the rules until they're changed. If the 30 owners had agreed to not sign any big money, long-term deals this summer, the PA could have very well had grounds to pursue legal action for collusion.

mc said:
3) What will happen to the teams in the southern belt of the US? You know teams we all know are losing a boat of cash when there is a season, so what will happen to them when there is no season? I know that the owners are not paying salaries but they still pay rent and they still have employees right? Also, havent they thought what this will do to those fan bases?

In some cases, not having to pay the players will actually mean the team's losses are lower, as player salaries could outweigh revenue (though, I suspect this is only potentially true of Phoenix and their absurd lease agreement). The lockout is going to hurt Southern US teams the most, there's no doubt about that, but, only if it's an extended one. If the league is back by, let's say, US Thanksgiving, my guess is the long-term damage will be minimal. As for the fans, a number of those fan bases came back bigger and stronger after the last lockout, so, predicting what they'll do here is difficult.
 
Nik? said:
Corn Flake said:
The problem I have with the player's stance is that virtually all the financial risk in this business is on the owners side.  These guys shell out huge money to buy in, take all the risk of being another Phoenix or Florida, often take $20+ mil losses each year... and you have a deal where 57% of your income is gone before you've paid a dime of any other expense.

Well, first and foremost, that's not strictly true. Players get 57% of HRR but HRR doesn't encompass the entirety of the league's revenue. So the things that fall outside of HRR is money that the team takes as income that does go to their other expenses. That includes a pretty significant chunk of things like concessions and merchandise sales. 

Concessions for sure, but I think the PA gets a cut of Merch if I'm not mistaken.. but anyway I see your point. There are other sources of revenue for owners to take from that the players don't get a cut of.  Still, Ticket sales and TV revenue make up the bulk of the incoming cash.

But secondly, while I think there's a good argument to be made that the league would be better served by having more of a partnership between the owners and the players that change couldn't just be about the players assuming a share of the risk. Partnership would mean risk, yes, but it would also have to mean some measure of control or say in the way the business runs. I mean, I'm assuming you wouldn't buy 20% of a company and not want a vote, right?

So I think that's kind of a non-starter for the owners way more than it is for the players. I mean, like you say, the owners run the risk of being another Phoenix or Miami(and, significantly for the point I'm making, that's probably better described as Glendale, Arizona and Sunrise, Florida) but the owners are also the ones who get to decide whether there is a Phoenix or a Florida. I'd love for the players to have a voice in things like Franchise moves or whether or not they should have taken less TV money from ESPN. I'd love for there to be a Commissioner of the sport who had to answer to players and owners about the state of the game.

But, and this is just my read of things, I'm guessing that if you asked NHL owners if they'd rather have shared risk or total control it'd be pretty near universal in favour of total control.

Absolutely it would make sense for both to share in the expenses but also share in the control of major franchise decisions.  Like you said, it's not going to happen.

Maybe the players will at least attempt to try and get a toe hold in that area once they all get past the basic share of HRR.  If the players give back a few more percentage points (they will at some point) but the league won't budge on revenue sharing, the next step would be to push for some say in the never-ending Coyotes saga, other losing teams sitting on their hands, etc. etc.  Players would be better off gaining a voice in that area than seeing increased revenue sharing.  In the end they probably don't get much say at all, but you never know.  Maybe they get a seat in the room, which would be a start.

 
Corn Flake said:
Concessions for sure, but I think the PA gets a cut of Merch if I'm not mistaken.. but anyway I see your point.

Well, the PA gets a cut of both but chunks of both are exempt from the HRR calculaton .

What is or isn't HRR is in Aricle 50 of the CBA if anyone's interested

http://www.nhlfa.com/CBA/2005-CBA.pdf


Corn Flake said:
Absolutely it would make sense for both to share in the expenses but also share in the control of major franchise decisions.  Like you said, it's not going to happen.

Exactly. It's a non-starter. So I think the argument about risk is kind of moot. You can't on the one hand demand all of the control and the risk that goes with it and then complain about what happens when your own decisions box you into a corner.
 
bustaheims said:
You have to play within the rules until they're changed. If the 30 owners had agreed to not sign any big money, long-term deals this summer, the PA could have very well had grounds to pursue legal action for collusion.

The only way the PA could get a judgement on collusion in their favor is if it there was actual collaboration but actual collaboration isn't necessary for no teams to sign those deals. If 30 individual teams decided that these deals were bad ideas there's no credible charge there.

Let's be real, the answer to why those deals were signed is very simple. Owners thought the benefits outweighed their costs. That's largely it.
 
Since it's come up, the recently expired CBA defined HRR as including (in a non-exhaustive list):

NHL regular season and playoff gate receipts,
Pre-season gate receipts,
Special games,
NHL National, International and digital broadcasts,
NHL Networks,
Local cable television broadcasts,
Local over-the-air television broadcasts,
Local PPV, Satellite & Other broadcasts,
Local radio broadcasts,
Club Internet,
Publications,
In-Arena novelty sales,
Non-Arena novelty sales,
Concessions,
Luxury Boxes/Suites,
Club/Premium seats,
Fixed signage/arena sponsorship,
Temporary signage and Club sponsorship,
Dasherboards,
Parking,
and Miscellaneous "Other revenues" - which includes money that comes in from basically anything with the team's/league's name or logo attached to it and the sale of alcohol serving rights at team/league events
 
Nik? said:
Let's be real, the answer to why those deals were signed is very simple. Owners thought the benefits outweighed their costs. That's largely it.

Sure, but one of the reasons there wasn't a unanimous agreement between them was definitely collusion, especially with that particular box having already been opened.
 
Nik? said:
Well, the PA gets a cut of both but chunks of both are exempt from the HRR calculaton .

The calculations get a little more complicated when a team share its arena with an NBA team, but, the exemptions for both represent the expense the team has already laid out to acquire 3rd party merchandise in order to repurposed and sold. Basically, the exemptions here are so that the teams don't get dinged twice for a single expense.
 
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