2012 CBA Negotiations Thread

[Joe S.]

Well the lockout has affected me personally, not that anyone will really care - but my wife's hours at work have been cut so that the hockey night in canada staff get some hours during the lockout... I understand that it's more fair to everyone this way, but seriously, this NHL is such a lame ass league.

 

[lamajama]

The longer this goes on the more apathetic I feel. I don't even want to
hear anything about the lockout until the settlement.

 

[Frank E]

Well, yes, the league would have to sacrifice something they have, that they like, to get what they want. The refusal to do so? The insistence on getting absolutely everything they want? That is exactly what some people might call greed.

Well as long as we're talking about 'absolutely everything they want", then I'm going to add paying players $500 a week, no guaranteed contracts, and while we're at it, the players can pay their own travel costs and never become unrestricted free agents. 

What I meant was maintaining the competitive balance while controling the expense to the point where more than 40% of the teams are making money.

Well, first of all, let's be clear. There's no need to round it. Saying 10 isn't any easier than saying 12. According to Forbes 12 of 30 teams made a profit. So it's 40%.

But anyway you would have a point if we were talking about your average business. We're not. We're talking about professional sports so there's no need to pretend we're talking about what someone needs to keep a corner store running. Teams will be better financially in some years than others because the quality of their product can swing wildly from year to year.  Some owners run professional sports teams at a loss because of their competitive nature and publicly state they don't care about making money. Some owners draw benefits from their ownership of a team in their other businesses. This isn't over-complicating the issue, it's recognizing that it is a complicated issue.

Owners are free to operate their business irresponsibly, within the league and CBA guidelines.  Suggesting that since a handful do, that this should then apply to all teams is bananas.  You can't run the league that way and expect it to thrive long term.  Yes, some may overspend short term, and some may treat their team like a play thing, but that doesn't make it a good business model to follow.  The league must have a proper business model with a proper expense structure in order to be viable and sustainable.  Right now, even the players are acknowledging as much, they just don't want to take 20% less of a cut of the HRR.  Their suggestion is that the league will grow out of the problem...my response to this is, why should the owners have to pay for it in the meantime?  And what if they don't grow?  What if the US economy takes a nosedive again?

That's a largely meaningless statement without saying what you mean by an average team. The Colorado Avalanche were profitable. They're in the bottom third of the league in revenues.

Again, the Forbes numbers are estimates and they're snapshots. The idea that the Devils "can't make a proper profit" because they didn't is like saying that Sidney Crosby can't win a scoring title because he didn't last year. The Devils have been profitable under the existing CBA. You say that the league needs an arrangement that gives teams shots at profitability and that's exactly what they have. The thing is though Frank, sometimes shots miss.

Great point on the Avs.  Did you check how much they spent on player salaries according the Forbes study? 

You made my point for me.

 

[Kin]

What I meant was maintaining the competitive balance while controling the expense to the point where more than 40% of the teams are making money.

Yes, I understand. They want to maintain control over expenses and player movement. Again, if they were serious about this being a critical financial problem for the league then they'd be willing to show some flexibility on that point. But they're not, henceforth the greed.

Owners are free to operate their business irresponsibly, within the league and CBA guidelines.  Suggesting that since a handful do, that this should then apply to all teams is bananas.

What, freedom? If a system exists that allows for a business to lose money if they so choose  that means its fundamentally broken? Well, then, gollee Frank you and me are wasting our time talking about hockey. We have to scrap the entirety of capitalism! Quick, to the Way Back Machine! We have to kill Adam Smith!

  You can't run the league that way and expect it to thrive long term.

This is only a halfway decent argument if you believe that the league as its currently constituted is so sacrosanct that any sort of rearrangement to better suit the actual economics of the game would some sort of catastrophic blow to people's enjoyment of the game but you and I both know that one of the reasons the league is where they are economically is that the NHL, making decisions about the league entirely on their own, have made some bad decisions that have weakened the product and dilute the business. Yes, the numbers do indicate that changes may need to be made but find me one hockey fan who wouldn't like to see fundamental changes in the league that don't revolve around cutting player salaries.

Again, I know that modern day capitalism holds that if a business gambles and loses that other people should bail them out but however effective that may have proven for Wall Street, it's not an intellectual argument that you can win. If you run your business poorly, you lose money. That's capitalism, nobody sympathizes with the people who buy swampland.

Great point on the Avs.  Did you check how much they spent on player salaries according the Forbes study? 

You made my point for me.

My bad. I didn't realize the point you were making was that not every team gets to be the Maple Leafs and so they should cry until they can.

 

[Kaberle15]

What do you think about the new rounds of negotiations ?

Spliting the non-monetary issues and start to close the little gaps, and then try to agree on around 50-50 split of the HRR ?

Little progress is better than no progress... or this is just a waist of time and they should be lock on a room and only left with a new CBA signed ?

 

[jdh1]

What do you think about the new rounds of negotiations ?

Spliting the non-monetary issues and start to close the little gaps, and then try to agree on around 50-50 split of the HRR ?

Little progress is better than no progress... or this is just a waist of time and they should be lock on a room and only left with a new CBA signed ?

I think the PA is going to stall untill later in December and make a offer that's going to be descent and hold to that.By doing so it will make the NHL either except or cancel the season.It looks like they don't want the ping pong type of negotiations as per Steve Fehr.

 

[Frank E]

Yes, I understand. They want to maintain control over expenses and player movement. Again, if they were serious about this being a critical financial problem for the league then they'd be willing to show some flexibility on that point. But they're not, henceforth the greed.

Neither of us really knows where the league is flexible in these negotiations. 

What, freedom? If a system exists that allows for a business to lose money if they so choose  that means its fundamentally broken? Well, then, gollee Frank you and me are wasting our time talking about hockey. We have to scrap the entirety of capitalism! Quick, to the Way Back Machine! We have to kill Adam Smith!

No, that's not what I said.  What I said was that there is a simple math problem here...the revenues left over after paying the players isn't enough to cover the bills for too many teams.  So they're addressing their expenses to fix that, and those taking a haircut don't want to, just like any other business.  Should they sack half their marketing departments and cut out free lunch Fridays as well?  Maybe, and maybe some already have.

As I've mentioned, I'm not convinced the cap, as it's currently agreed to by both players and owners, is the way to go.  But if they both agree on a cap with a % split of revenues, and the expenses per dollar of revenue are too high to be profitable, then the split is going to have to be addressed.  All the revenue sharing talk is just window dressing without a change in the expense structure since if you add up all the combined profit in the league and spread it around absolutely evenly, there still isn't enough profit given the investments and cash flow these businesses require.

This is only a halfway decent argument if you believe that the league as its currently constituted is so sacrosanct that any sort of rearrangement to better suit the actual economics of the game would some sort of catastrophic blow to people's enjoyment of the game but you and I both know that one of the reasons the league is where they are economically is that the NHL, making decisions about the league entirely on their own, have made some bad decisions that have weakened the product and dilute the business. Yes, the numbers do indicate that changes may need to be made but find me one hockey fan who wouldn't like to see fundamental changes in the league that don't revolve around cutting player salaries.

I agree with this statement to a certain extent, although I've yet to see anything that convinces me that a cut in player expense isn't inevitable in the short term to get far more of these teams into the black.  Like I mentioned before, the players acknowledge the problem, they just want the owners to suck it up until the revenues get higher.

Again, I know that modern day capitalism holds that if a business gambles and loses that other people should bail them out but however effective that may have proven for Wall Street, it's not an intellectual argument that you can win. If you run your business poorly, you lose money. That's capitalism, nobody sympathizes with the people who buy swampland.

You're way off on this one.

Nobody is asking for a bailout.  That's just simply confusing the issue again.  This is very simple:  the franchises are trying to adjust their expense structures given the amount of revenue they have coming in so that they can be profitable.  That's simple business. 

A bailout would occur if the just continued the path that they're on until they became insolvent and asked someone to bail them out of their accumulated losses, and infuse some cash so that they could continue operations. 

My bad. I didn't realize the point you were making was that not every team gets to be the Maple Leafs and so they should cry until they can.

Yeah, that's one of those strawmen that you so despise.

The Colorado situation was a terrible example for your argument, and you know it.

 

[Hampreacher]

I still think a two tier cap system might solve. Say do a 50-50 split then set cap. Any team making money can go over the cap by paying a luxury tax. Set upper cap at 70 million fixed until actual cap reaches 70 million. Luxury tax 10 or 20 percent.

 

[maplesyrup]

Huh, good for loops;

RT @JLupul Ok here it is folks. My writing debut for .@askmen -An honest perspective of my view on the lockout. Be gentle http://t.co/LvNKGlv9

 

[Bullfrog]

Secondly, it says to me that a lockout is the owners? choice form of negotiation and that they are 100% comfortable taking a lock-them-out-and-see-how-they-react approach.

he's bang on the money here and this is what frustrates me the most. It doesn't appear to me at all that the lockout is an unfortunate consequence of a CBA disputer; it seems to me that it's obvious the lockout is simply a negotiating tactic. And this is why we should all be pissed at the Owners. (we may still agree with their proposal, or not, but it's the tactics that are angering.)

 

[moon111]

The league puts teams in bad markets to attract a T.V. deal that never was going to happen.  Then they blame the loss of revenue on the players.  Then they lockout the players.  Personally, I think the NHL has steadily been eroding in quality for a long time.  I keep hearing they're making more revenue, but there are more teams as well.  My hunch, they're making less per fan then they once were.

 

[hockeyfan1]

Secondly, it says to me that a lockout is the owners? choice form of negotiation and that they are 100% comfortable taking a lock-them-out-and-see-how-they-react approach.

he's bang on the money here and this is what frustrates me the most. It doesn't appear to me at all that the lockout is an unfortunate consequence of a CBA disputer; it seems to me that it's obvious the lockout is simply a negotiating tactic. And this is why we should all be pissed at the Owners. (we may still agree with their proposal, or not, but it's the tactics that are angering.)

The last lockout, the players gave in.  Now, who's going to yield first -- the players (again) or the owners?

 

[bustaheims]

The last lockout, the players gave in.  Now, who's going to yield first -- the players (again) or the owners?

The players have a lot more to lose from an extended lockout than the owners do, so, yeah, likely the players, again.

 

[armche123]

Secondly, it says to me that a lockout is the owners? choice form of negotiation and that they are 100% comfortable taking a lock-them-out-and-see-how-they-react approach.

he's bang on the money here and this is what frustrates me the most. It doesn't appear to me at all that the lockout is an unfortunate consequence of a CBA disputer; it seems to me that it's obvious the lockout is simply a negotiating tactic. And this is why we should all be pissed at the Owners. (we may still agree with their proposal, or not, but it's the tactics that are angering.)

+1 Let's give Canadians their game back! Go Marlies

 

[Bullfrog]

The last lockout, the players gave in.  Now, who's going to yield first -- the players (again) or the owners?

The players have a lot more to lose from an extended lockout than the owners do, so, yeah, likely the players, again.

100% agreed.

 

[Rebel_1812]

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.

Yeah funny how some teams are doing so well the league as a whole has record revenues and other teams are doing so poorly they are losing money.  Its almost like many of those teams are not in hockey markets  . It the problem was player salaries being too high that would have been solved with the last cba.

 

[Kin]

Neither of us really knows where the league is flexible in these negotiations.

But we know what's been released to the public. The reason that public opinion is not solidly with the owners, as it typically is in CBA negotiations, is because what's been released has painted the owners in such an unreasonable light. If they wanted the public to recognize the sort of catastrophic financial circumstances you're painting it would behoove them to say "We really need to fix the economic structure of the game but to do so we're willing to give the players X, Y and Z in order to make taking a smaller cut more palatable"

As is, however, they've yet to go on record with being willing to make a single, solitary concession. That does not speak to someone in desperate circumstances. 

No, that's not what I said.  What I said was that there is a simple math problem here...the revenues left over after paying the players isn't enough to cover the bills for too many teams.

Right, I know. And what I've said to that is A) It's not simple because this is a business unlike any other and B) x - y  is a simple math problem if we have x and y. If we don't, and we don't we just have a Forbes estimate of one year, it's not a math problem at all. 

All the revenue sharing talk is just window dressing without a change in the expense structure since if you add up all the combined profit in the league and spread it around absolutely evenly, there still isn't enough profit given the investments and cash flow these businesses require.

Well, it's not just window dressing because it represents a pretty real issue here. Again, as I've said, one of the fundamental problems here is that the League is negotiating on the basis that everything needs to apply to every team equally but that just doesn't make sense when the economic realities of the various teams are so different.

Let's be fair there are two things we're talking about here that clash. There's philosophy and there's practical reality. Like I've said, in a hypothetical sense you'd be right in saying that a team like the LA Kings, losing 2 million dollars, are a business that fundamentally need to address their expense structure in order to continue. But reality-wise you and I both know that the LA Kings, owned by who they're owned by and what they mean to that person's other businesses, can lose 2 million dollars a year for a stretch of time roughly equal to the recorded period of human history and their owner would still be a billionaire several times over.

So when the league comes to the PA and tries to get a deal done to address the issues of the 18 money losers or whatever the number is and trying to get it to apply equally to the teams earning huge amounts I think the PA has a legitimate interest in saying that if they're going to negotiate with the league as if the solution has to apply to all 30 teams equally that all 30 teams are in a roughly equal financial position. If, as you say, the leagues profits were evenly distributed and the sum was judged to be insufficient then the league and the PA could haggle over what the percentage needed to be to have everyone fat and happy.

But the League isn't doing that. They want the solution to put the Coyotes-Blue Jackets-Islanders and the rest of the poorly run businesses on a solid footing but they also want the Maple Leafs, who are profitable to the extent of near nine figures per year or maybe above that, to get as much of a break in their expenses. Now I get why they're doing that, they don't want to create that schism in their league where the Leafs feel like they're pouring their money into the sinkholes that the league created but don't for a second pretend there's any intellectual honesty in being all for one and one for all when it comes to expenses and then "I got mine" when it comes to revenues.

Nobody is asking for a bailout.  That's just simply confusing the issue again.  This is very simple:  the franchises are trying to adjust their expense structures given the amount of revenue they have coming in so that they can be profitable.  That's simple business.

And this is not a simple business. You can repeat all you want but anyone looking at this issue with any objectivity is under no obligation to pretend that these are 30 George Bailey's trying to scrap and save so that they can keep the doors open on their bank just so your argument looks neater on a bumper sticker. These are 30 separate teams with 30 separate economic realities not all of which is entirely summed up by the operating income column on a Forbes article that, and please don't make me use bold and underlines for emphasis so that this at some point registers, is an estimate of one particular year.

If we can look at professional sports and in particular the four major professional sports leagues in the US/Canada that represent the pinnacles of their sports as an industry, what the NHL is looking for is anything but an industry standard. None of the other four leagues, all of which generate more revenues than the NHL, have a structure similar to what the NHL wants where there is a hard cap that prevents big market teams from setting a salary structure appropriate to the revenues they generate while at the same time not asking each team to share the majority of their revenues.

So why not take one of those tacts? Why not go after a more equitable split of revenues or some mechanism that allows the league's wealthier teams to gain some measure of competitive advantage by funneling money to the smaller market teams. The NHL, with it's steadfast refusal to adopt a model more like the ones employed by their far more successful rivals, has created this situation.

Again, the NHL could very well take a creative approach to this and look to get a solution that would ease the burden on, oh, the half a dozen teams in the league that, according to Forbes, are losing money but can't legitimately be accused of either being terribly managed or being put in a place that shouldn't have a NHL team. But they're not. I'm not going to pretend that this is just about those teams if they aren't.They aren't asking for a "bailout" but they are asking for the PA to negotiate with them on the basis that mismanagement is unrelated to their current woes and that the bottom five franchises, which account for a huge percentage of the red ink on the NHL's franchises, should simply be thrown into the vast totality of the league's financial situation as opposed to being specifically addressed and fixed on the league's side.

They're asking the PA to reduce their percentage to save their money-losing businesses regardless of how mismanaged those businesses are. You're really going to split hairs between that and a bailout?

Yeah, that's one of those strawmen that you so despise.

No, that was just a wisecrack. You said average NHL teams didn't have a shot at making money, they do. You were just wrong about that. The Avs didn't use black magic to get there.

 

[Chev-boyar-sky]

The Current had a decent panel of people discussing the lockout this morning. Bettman was somewhat raked across the coals for continuing to try and make the "Southern Strategy" a success. If anybody wants to listen:

http://www.cbc.ca/thecurrent/episode/2012/10/01/nhl-lockout-sparks-call-for-more-canadian-teams/

I'm at the point where I really hope the owners get taught a lesson over this. Forget an equitable split. If they continue to be unreasonable, I hope this costs the league (well I guess that would mean the players as well) a bunch of money on Phoenix, Columbus and others. Grrrrrrr...

 

[Kin]

The Current had a decent panel of people discussing the lockout this morning. Bettman was somewhat raked across the coals for continuing to try and make the "Southern Strategy" a success. If anybody wants to listen:

http://www.cbc.ca/thecurrent/episode/2012/10/01/nhl-lockout-sparks-call-for-more-canadian-teams/

I'm at the point where I really hope the owners get taught a lesson over this. Forget an equitable split. If they continue to be unreasonable, I hope this costs the league (well I guess that would mean the players as well) a bunch of money on Phoenix, Columbus and others. Grrrrrrr...

I took a listen and I'm not entirely sure it's fair to say Bettman got raked over the coals. I think that some pretty fair points were made that a lot of people forget about how the push to move teams south in the 90's existed pre-Bettman(the teams added under Bettman have been Columbus, Atlanta, Nashville and Minnesota) and I think Zimbalist, who was most critical of the strategy to expand throughout the US, did make a pretty embarrassing omission by not mentioning that the League now has a 2 billion dollar US tv deal.

That said, I do think they made some interesting points regarding where the league might grow in the future. I think it's important to point out that the general consensus seemed to be that putting teams in Canada wasn't a good move for long-term growth and that Europe is a far more lucrative option.

I think that's kind of important going forward for people to keep in mind. For all the talk about how the NHL would be so better off in Canada as opposed to the US, Forbes' numbers have the Jets as losing money last year and the Flames/Senators as being only barely profitable. The idea that some people put forth during the whole Balsillie mess that moving a team to Canada would be a terrific boon for both the league and that owner just doesn't seem to be true. Canada may very well be tapped out as a market.

 

[GhostofPotvin29]

From Adrian Dater, writes for the Denver Post:

adater ‏@adater

I was talking to a highly placed hockey source tonight who said...

Owners aren't budging off their HRR revenue take desires and neither are players. But only on the first year. After that, the revenue takes start to get closer to even. So essentially this whole NHL lockout is coming down to that first year of the revenue split. Would they really lose a whole year over a 3-4 point difference?