2012 CBA Negotiations Thread

[Kin]

Factually, that isn't what they did. The top revenue teams contribute to the bottom revenue teams. The Leafs contribute the most to revenue sharing. So there is a variable scale. As well, there is a cap floor which allows smaller market teams to spend less. Therefore, the percentages vary with each team.

You and I both know that the revenue sharing in the NHL is so minimal as to barely register as meaningful.

And the cap floor is a perfect example of my point. The same salary constraints both at the bottom end and the top apply to the Leafs and the Coyotes. That is just nonsensical considering the revenues both organizations have at their disposal.

But here's a real problem I think the players will have trying to pitch your position: NBA revenues are about 43% higher than the NHL. NFL revenues are over 300% of the NHL's. Why should the NHL player be entitled to a bigger % of the revenue pie than the NBA or NFL players when he isn't drawing nearly as much revenue for his sport and therefore, the fixed costs per revenue dollar are very likely higher for the NHL? The Leafs and Habs may be making out like bandits but most NHL teams are not. It's not the Leafs nor Habs responsibility to exclusively carry the league.

Well, just right away, I'm not entirely sure that's true. In the NBA owners took huge chunks of money off the top of revenue before any split was calculated, I think in the area of 500 million or more. Factored in to the equation I'm not sure where that would put the players and I have no idea if Basketball Related Income and HRR are calculated in the exact same way. I know that during the NBA lockout what did or didn't constitute BRI was a major sticking point between the two parties.

But really, the problem there is the way you phrased it. I don't think the NHL players should be entitled to one red penny. I think they should have the freedom to negotiate the best deal for themselves they can individually. I'm not in favour of any artificially imposed cap or floor on player salaries outside of minimum wage laws. 

If we're just accepting that nonsense as a given then we've already thrown the should of the matter out the window. Then it's just about whatever they can bargain for themselves. There is no right or wrong in that equation.

When so many teams are having problems with their bottom lines in spite of respectable revenue growth, although significantly improved from the 2004 CBA, how can someone say "well keep your hands off 57% of the expense problem" with a straight face? It's not going to happen or if it does, there will be another lockout.

Well, you can say it with a straight face provided you believe that a system that allows for teams to lose money is not a system that is fundamentally broken. Provided you don't think that significant profitability is a guaranteed right of professional sports owners then you'd have to allow that poor management, bad luck and a fundamental disconnect between the aims of the sport(winning games) and the aims of a business(making money) contribue to how these teams bottom lines look.

Are the teams losing money spending to the cap every year? Are their uncapped expenses being properly and proportionately spent? Are the teams in locations where having professional hockey franchises makes sense?

All of those things are absolutely relevant to the issue of whether or not the system is a fair one. Just the fact that teams are losing money does not make for an unfair system anymore than a coin flip is fundamentally unfair because there are two different outcomes.

Beyond the dollars in a given year, the mantra of the players wanting to do what is best for their players in the future should consider what will happen to the sport if they get these smaller franchises on a better financial footing: they'll grow the sport and the league revenues longer term more than if they let the current situation persist.

I don't think that's true at all. I think, as the player mentions in that article, that the players very much believe that a degree of economic Darwinism very much helps their long term revenue situation.

I certainly don't think you can sell anyone that their rolling over again would be in the interest of any future players.

 

[hockeyfan1]

The starting point in this negotiation rests on the history of what happened in the lockout of 2004...The League argued that the economic system at the time was untenable, particularly for the small market (and some Canadian) teams. A salary cap was needed to give clubs "cost certainty" ? to level the playing field for all teams ? and help control ticket prices.

Bettman claimed League-wide losses of around $300 million. On the other side, the players wanted to work in a free market system, not artificially constrained by a salary cap. We contended that salaries had only risen to a level that owners and GMs had been willing to pay ? a level they felt they could afford. We felt that it wasn't only competitive balance the League was seeking but, more importantly, to improve the bottom lines of the clubs and increase the value of the franchises.

Ultimately the owners won, and they won big. Or so it seemed at the time.

Players would receive 54 percent of HRR, and this number would be used to calculate the mid-point of the salary cap. The hard cap would be $8 million above that mid-point and the salary floor would be $8 million below it. To get to this artificially low number, the players took a 24-percent rollback on all existing contracts. In addition, the NHL and the NHLPA bargained for a revenue sharing system to help transfer money from the haves to the have-nots.

That agreement was ratified by the players in the summer of 2005; that season, the League played with a cap of $39 million and a floor of $23 million.

That was then...this is now...

...the players' growing share (now 57 percent) of growing revenues (about $3.3 billion) meant that the cap had risen to approximately $64 million. Which means that the salary floor was $48 million, or $11 million (28 percent) more than the upper limit had been seven years earlier.

...the NHL had seven straight seasons of record revenues.

...for some teams, is that the increases in revenue haven't been evenly distributed, making it increasingly difficult for them to spend even to the floor.

In 2003-2004, the final season before the lockout, players' salaries ate up about 74 percent of all the revenue generated by the NHL. In that year, the business was worth about $2 billion.

....in 2011-2012 players received 57 percent of the revenues, which are believed to be in the neighborhood of $3.3 billion. So, over the course of that time revenues have increased by over 50 percent while player costs have only increased by about 15 percent.

In real terms, the amount of money that the owners have "saved" since 2004 ? that is the difference between paying the players three quarters of revenues vs. 57 percent of revenues ? is in excess of $3 billion.

If the League asks us to reduce our share to a straight 50/50 split, thus lowering the cap via what amounts to a 12.3-percent rollback, our question will be, "Why?"

One could predict that the NHL will concede that while some teams are doing well, others are barely hanging on.

...simply re-setting salaries once again will neither be palatable to the players nor will it really fix the problem. Not in the long term. History has shown us that.

Clearly the system, as it exists now, does not work for everyone. If we simply roll back salaries again, who's to say we won't find ourselves in the same position five or seven years from now?

Once reset, the cap (and the floor) will simply rise again over time as revenues rise.

How do we get there, and who is ultimately responsible for getting us there?

...the revenue sharing we have now doesn't work. The system is so convoluted that some clubs can't reasonably predict how much money they will receive from, or pay into, the pot.

Unpredictable factors include: The final escrow return, whether or not your team makes the playoffs, your final attendance numbers and whether you end up above or below the median in terms of revenue determine your revenue sharing fate.

...revenue sharing needs to be much simpler, much more predictable, and more meaningful. If, collectively, we need to support some of the struggling franchises, then the League needs to take on a greater share of the responsibility. It can not all be left up to the players once more.

The players don't want a lockout...owners don't want one either.

...we believe we deserve a significant share of what the future will bring. Salaries continue to rise at a healthy rate every season.  ...they have only done so because revenues have done the same.

The stakes, this time around, have risen considerably. The pie has grown, and the pieces have become more valuable.

http://sports.yahoo.com/blogs/nhl-puck-daddy/player-really-stake-nhlpa-collective-bargaining-nhl-141923225--nhl.html

 

[Corn Flake]

Can we please just post a link with a small excerpt of the article?  I believe that is one of the guidelines of the board. 

Also, your link is broken.

 

[hockeyfan1]

Can we please just post a link with a small excerpt of the article?  I believe that is one of the guidelines of the board. 

Also, your link is broken.

Sorry about surpassing the guidelines, CF.  A small portion of the article, accompanied by a link (now fixed) for those wishing to red the rest of it, would have been more appropriate.  Will do, next time.

 

[Corn Flake]

According to this guy, the NHL played part of their hand to the PA today at the meetings. And they put a pretty heavy duty list of demands on the table:

@RenLavoieRDS
NHL proposal to players: 1-reduce players hockey related revenues to 46% from 57 %. 2-10 seasons in NHL before being UFA.

@RenLavoieRDS
3-contracts limites to 5 years 4-no more salary arbitration. 5- entry-level contract 5 years instead of 3.

 

[CarltonTheBear]

According to this guy, the NHL played part of their hand to the PA today at the meetings. And they put a pretty heavy duty list of demands on the table:

@RenLavoieRDS
NHL proposal to players: 1-reduce players hockey related revenues to 46% from 57 %. 2-10 seasons in NHL before being UFA.

@RenLavoieRDS
3-contracts limites to 5 years 4-no more salary arbitration. 5- entry-level contract 5 years instead of 3.

I get that you start high and work to a middle point in negotiations, but that's just insulting.

 

[bustaheims]

According to this guy, the NHL played part of their hand to the PA today at the meetings. And they put a pretty heavy duty list of demands on the table:

@RenLavoieRDS
NHL proposal to players: 1-reduce players hockey related revenues to 46% from 57 %. 2-10 seasons in NHL before being UFA.

@RenLavoieRDS
3-contracts limites to 5 years 4-no more salary arbitration. 5- entry-level contract 5 years instead of 3.

I get that you start high and work to a middle point in negotiations, but that's just insulting.

It's a big set of demands (if they're accurate), but there are a couple give away demands there - owners will cave on the 10 year UFA thing and settle with what's there now, same with the 5 year ELC. They'll find a middle ground on arbitration - they know eliminating it is a no-go for the PA, but, it's an area where they'll "give-in" in order to get close to what they're looking for in terms of % of HRR and contract limits.

 

[Kin]

It's a big set of demands (if they're accurate), but there are a couple give away demands there - owners will cave on the 10 year UFA thing and settle with what's there now, same with the 5 year ELC. They'll find a middle ground on arbitration - they know eliminating it is a no-go for the PA, but, it's an area where they'll "give-in" in order to get close to what they're looking for in terms of % of HRR and contract limits.

So the concessions they're willing to make will be on things they don't have?

 

[Kin]

So I had this idea recently for something that could come out of the CBA that could benefit both players and owners and I think I've kind of come up with something.

What if they got rid of compensation for RFA's? What if the only thing restricted about it was that the team that owned a player's rights could match the contract and retain the player's services?

I know the gut reaction is to see this as a major win for the players and would lead to crazy bidding but I think that by adopting a more NBA-like approach to the matter it would actually be a pretty effective cost control.

Let's do it point by point:

1) As it is, Restricted Free Agency is a joke. The costs in signing any decent RFA are so monumental in terms of draft picks that it's essentially killed the market dead. It's a pointless mechanism that solves nothing.

2) One of the biggest salary escalators with the NHL right now is the number of good FA's hitting the market. It's low. Ridiculously low. Now it's pretty simple stuff to figure that when supplies are low, demand is high and costs increase.

3) Because of the strict cost control of the hard cap and escrow, this wouldn't impact how much money goes into the hands of players as a whole, it would just redistribute them from going to the best of a bad FA market(Jason Garrison) and opening it up to actually reflecting the value of players in the NHL.

4) It provides real incentive for teams to stay below the cap. If a team is within a million dollars of the cap and someone comes along and offers a promising RFA three million then that team would be in a pickle. The smart teams would be the ones who gave themselves the room to keep the RFA's they wanted.

5. What we've seen in the NBA is that this doesn't lead to what UFA does, which is good young players leaving their small-market teams for big market dollars, but actually what it does is take talented players off of big market teams pressed up against the cap and have them go to teams with cap dollars to spend. It's the redistribution of talent around the league for parity's sake which, last time I checked with the NHL Politburo, was good.

See, I know this is doomed because what it fundamentally relies on are the owners relinquishing some control and the players redistributing wealth to the younger players in the league but I really think it's the kind of idea that you could sell to both parties. It would be a cost control for the owners that wouldn't just be about them crying to the players that they don't know how to operate their teams and it would be more freedom for the players that wasn't just about getting the biggest contract possible.

It's wouldn't solve everything but if you went to slightly longer ELC's and messed around with the way cap hits are figured...I think it'd really be a good development.

 

[BlueWhiteBlood]

There would be lots of grey filler in there, but I would be open to that idea. I mean, as fans we probably don't care too much, parity is good for us, but I could see a real learning curve for most GM's.

Could we get one year contracts also? I think the game would benefit from that, as all the players would be playing for the next contract, all the time. That would be awesome.

 

[L K]

I'd like to offer my own suggestions for CBA re-workings

1 - No free agency
2 - Players must do lawn work around the owners homes in the offseason

Those owner offers are a joke.  I'm glad that they wanted to start things off nice and inflammatory to make sure we struggle to avoid a lockout.

 

[CarltonTheBear]

Love the idea Nik.

 

[maplesyrup]

Sure, why not?

 

[Frank E]

I'd like to offer my own suggestions for CBA re-workings

1 - No free agency
2 - Players must do lawn work around the owners homes in the offseason

Those owner offers are a joke.  I'm glad that they wanted to start things off nice and inflammatory to make sure we struggle to avoid a lockout.

Pure posturing and negotiating LK...they don't expect to get it all.

Remember, it is their league, and they can demand whatever they want.  The players can certainly make a proposal of their own, or simply tell the league to go back to the drawing board and can refuse to negotiate given the framework.

Someone had to get the ball rolling, so put yourself in their shoes...

 

[groundskeeper willie]

I'd like to offer my own suggestions for CBA re-workings

1 - No free agency
2 - Players must do lawn work around the owners homes in the offseason

Those owner offers are a joke.  I'm glad that they wanted to start things off nice and inflammatory to make sure we struggle to avoid a lockout.

Worst case the season is cancelled, they hold a draft lottery again and the Leafs are one of the few teams with the best odds of getting the #1 pick and drafting the next Crosby.

 

[Rebel_1812]

interesting piece from the player's point of view:

http://sports.yahoo.com/blogs/nhl-puck-daddy/player-really-stake-nhlpa-collective-bargaining-nhl-141923225--nhl.html?utm_source=twitterfeed&utm_medium=twitter

I'm sort of surprised they think the threat of another rollback is real. I don't see that happening at all, but hey what do I know.

I can see a rollback of shared revenue between the league and players going down to 54%-50% range. (I think the League will push for a 50-50 revenue split)

Whether that translates to an actual rollback in salaries already on the books, I'm not sure about that.

I assume escrow will be a thing of the past since revenue never dropped during the last CBA.

That is why it is kind of hard for the owners to cry poor.  They keep making more money they just don't want the players to share in it. 

 

[bustaheims]

That is why it is kind of hard for the owners to cry poor.  They keep making more money they just don't want the players to share in it.

Revenues have increased, but that doesn't necessarily mean profits have, since expenses have increased right along with them. There are still a number of teams that are losing money/barely breaking even.

 

[Corn Flake]

interesting piece from the player's point of view:

http://sports.yahoo.com/blogs/nhl-puck-daddy/player-really-stake-nhlpa-collective-bargaining-nhl-141923225--nhl.html?utm_source=twitterfeed&utm_medium=twitter

I'm sort of surprised they think the threat of another rollback is real. I don't see that happening at all, but hey what do I know.

I can see a rollback of shared revenue between the league and players going down to 54%-50% range. (I think the League will push for a 50-50 revenue split)

Whether that translates to an actual rollback in salaries already on the books, I'm not sure about that.

I assume escrow will be a thing of the past since revenue never dropped during the last CBA.

That is why it is kind of hard for the owners to cry poor.  They keep making more money they just don't want the players to share in it.

The owners aren't crying poor this time, at least I haven't heard anything to that effect.. yet.  I've seen some media suggesting they have/will and some players think the same thing as that article showed, but really they are asking for an even split of the huge revenues they are all generating together. 

Yes they want the players to drop to 46% but really the golden number will be 50% or close to it.  That 7% decrease is worth $210 million, so not chump change.

 

[Kin]

I think the difference between crying poor and threatening to shut down the league because of the current conditions is pretty razor thin.

 

[Corn Flake]

I think the difference between crying poor and threatening to shut down the league because of the current conditions is pretty razor thin.

Except there really hasn't been a threat to shut down because of current conditions.

Unless of course the "executive speaking on condition of anonymity" is now an iron clad source.