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2012 Lockout Watch

cba lockout

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#421 haroldsnepsts

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Posted 23 August 2012 - 02:37 PM

I wish I knew what was being discussed in those meetings and which side was not being flexible. I don't even want to speculate at this point, having only heard the two initial proposals. One proposal from the owners was "Go f*** yourself" and the players proposal was "Lets rollback the salaries a little bit, but in two years, show me the money!" A deal CAN get done here, but both sides have to see the problem first. So far, neither side wants to even acknowledge the real problem.

What do you think is the real problem?

Because the union's offer addressed what is the biggest problem with revenue sharing. Their offer seemed basically like "we'll cut you guys a break for a few years and help you sort out these struggling franchises, then we'll revert back to the all the concessions we made 8 years ago." It didn't go far enough as I don't think reverting to the current CBA is a long term solution, but it was definitely acknowledging the problem, and is a solid starting point for negotiating.

#422 Nightfall

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Posted 23 August 2012 - 03:10 PM

Here are the problems, in my mind.

1. Cap floor is too high.
2. Teams spending too much
3. Contract lengths too high
4. As a result, some teams not able to break even

The players association suggestion was decent, but it didn't go far enough. As you said, good starting point, but not a solution to the problem. What they need is more of a luxury tax system, a slight salary rollback by the players, limit contract terms to 8 years or so, and keep the arbitration. I could go on and on here, but thats the gist of things.
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#423 drwscc

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Posted 23 August 2012 - 03:20 PM

Blog Here

There are no good guys in the NHL’s labor dispute

There is an incessant need to assign blame in the way we analyze situations. We love our dichotomies. There are good guys and bad guys. People who are at fault and people who are victims. Winners. Losers. So on. So forth.



More often than not though, this isn’t how things work. Rarely, in the grand scheme of things, do things break up so conveniently. It would be magnificent for those of us who have to write about things, but it’s simply not the case. When it is broken up that way, it’s largely fabricated.
I’m here to tell you NHL Labor Dispute 2012 ™ is not Gary Bettman’s fault. It’s not Donald Fehr’s fault. It’s not the owners’ fault. It’s not the players’ fault. It’s their collective fault.
They are all utterly terrible.


Gary Bettman
Gary Bettman is a slime ball, I know this, you know this, your mother who hasn’t watched hockey since Bobby Orr’s rookie season knows this. There’s something incredibly offputting about his demeanor and general approach to dealing with human beings that ignites the rage furnace lying within each of us.


He is the Kurtz of this novel and the NHL, the league we watch 10 months of the year, is his vile abyss. He plucks teams from their homes, he locks the doors on seasons, he conducts boos from center ice like a maniacal conductor playing to the audience.
He postures on how the NHL is working diligently to solve the problems that they have played a starring role in creating. They’ve been ready to negotiate for months apparently, they want to talk it out, it’s that damn NHLPA holding up the process.
We just want to work to get the game back for our fans.


No, he doesn’t. He has a job to do and he doesn’t give a damn about you, or me, or your mother who hasn’t watched since Bobby Orr’s rookie season. He is a mouthpiece, nothing more. A smug, infuriating mouthpiece. Yet, for all of his cons, this is not his fault. He’s playing his part, doing his job and his job is to get what his bosses need and get out.

Donald Fehr
Donald Fehr is a weasel. For those of you who don’t follow the baseball circuit, you didn’t know this when he was hired, but you will soon find out. He causes problems. He did in baseball and he will maintain his performance across sports. Bo Jackson, meet your union head equivalent.
To clear up his track record, he presided over an MLB lockout and lost World Series in 1994 which put a hefty portion of people off the sport. This came before a nice segue into the Steroid Era which brought fans back to the game with DINGERS and alienated them at the same time when the fallout came.
If you’re a player you love this guy and it’s pretty clear why. He doesn’t take crap from the league, Bettman or the media. You know he’s going to get you closer to what you demand. And you know he literally doesn’t care what you think about him.
If you’re going to guess how many damns Donald Fehr gives, set the line at one and take the under.
Again though, like Bettman, he is a mouthpiece, nothing more. He is there to butt heads with Gary Bettman because the players pay him to, and regardless of how much of a jerk he appears to be, it’s barely more than a charade. Everybody has a mortgage to pay, and his need to pay the bill requires an unsavouryness that we have and will come to know.

The Owners
The owners are totally insufferable, aren’t they? I mean seriously. You get coaxed into signing these players for a decade plus and hundreds of millions of dollars and then cry poor come negotiation time. You weren’t poor two weeks ago, how are you poor now?
If you want a league with a sustainable economic structure, perhaps you shouldn’t be handing out contracts to the Rick DiPietro’s of the world which put them on various Forbes lists for the world’s wealthiest people despite the fact he doesn’t work very much. Wouldn’t it be nice to have 82 paid sick days a year?
Obviously this is hyperbole, but still. Completely ridiculous.
Again though, this is ultimately what the fans want from their teams. To assemble a winner at all costs, financial or otherwise. What do we care anyways? They’re loaded, they can afford it. Who cares if we’re stuck with Rick DiPietro for another 332 years? Or Alexei Yashin for the rest of his life? I want titles dammit!
Yet, we don’t want this. Nobody wants this. We have created a monster.
Charles Wang, you have set a dangerous precedent that became much much worse once you made Ed Snider think you were on to something.

The Players
I understand that it’s tough for people to see how the players are at fault in this scenario, but it’s really not that tough to understand. You can’t blame these guys for signing outrageous contracts because that’s not how things work. I have a hard time believing any of us wouldn’t take all of the money for several years if we had the offers, but the rhetoric gets tiring.
Just so we’re clear on a couple of things here… players complaining about the way rules are enforced for safety reasons is a joke. You want to stop getting hit in the head or plowed from behind? Don’t hit anyone in the head or plow them from behind. A riveting concept, I know.
Also, this hockey brotherhood business is a little confusing. I know they’re all brothers and such when the camera is rolling, but the on-ice atmosphere is considerably different. It’s very cute seeing guys with a history of run-ins bro-hugging their way through union meetings.
Also, do overseas players count as part of the hockey brotherhood? Because I don’t think it’ll feel that way when NHLers hop overseas to take their jobs during a lockout. I wouldn’t do that to my brother. Well, unless he was a real jerk.
The players here are completely self-interested and self-absorbed, like every other party here, only they have less riding on this than anyone because they will be hired no matter what. The players are just as guilty of jobbing the fans as our previous three nutbar parties and you better not let them off the hook in the court of public opinion.

Conclusions
Everybody in this situation sucks. They are all flat out terrible. Bettman is a fink, Fehr is a rat, the owners are hypocrites who need to be saved from themselves, and the players don’t give a damn because they’re going to get paid no matter what, it’s just a matter of where and whose job they’re taking.
The lockout, forthcoming at that, is not as simple as being Bettman’s fault, Fehr’s fault, the owners’ fault or the players’ fault. Anyone who tells you to zero in on one is lying to you and probably has an agenda. It’s not black and white but it is that simple.
Collective bargaining means collective blame.

Edited by drwscc, 23 August 2012 - 03:20 PM.

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#424 haroldsnepsts

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Posted 23 August 2012 - 04:48 PM

Blog Here

There are no good guys in the NHL’s labor dispute

There is an incessant need to assign blame in the way we analyze situations. We love our dichotomies. There are good guys and bad guys. People who are at fault and people who are victims. Winners. Losers. So on. So forth.



There's a lot of flawed logic in this post, but I'll respond for now to the lowest hanging fruit, which is the players role in all of this.


The Players
I understand that it’s tough for people to see how the players are at fault in this scenario, but it’s really not that tough to understand. You can’t blame these guys for signing outrageous contracts because that’s not how things work. I have a hard time believing any of us wouldn’t take all of the money for several years if we had the offers, but the rhetoric gets tiring.
Just so we’re clear on a couple of things here… players complaining about the way rules are enforced for safety reasons is a joke. You want to stop getting hit in the head or plowed from behind? Don’t hit anyone in the head or plow them from behind. A riveting concept, I know.

Typically the players complaining about getting hit in the head aren't the ones who are headhunting. I don't remember Raffi Torres saying they need to protect players heads.

You're talking about hundreds upon hundreds of people here. They're not all going to speak with the same voice and play the game the same way. As long as headhunting and running at guys gets a 4th liner more minutes and an NHL contract, there'll be dirtbags willing to do it.

Also, this hockey brotherhood business is a little confusing. I know they’re all brothers and such when the camera is rolling, but the on-ice atmosphere is considerably different. It’s very cute seeing guys with a history of run-ins bro-hugging their way through union meetings.


That's pretty much how competition works. Most players want to do almost anything they can to win, but there's also a mutual respect (among most) as professional hockey players. Haven't you ever seen to guys drop the gloves and go at it, then pat each other on the back when the fight ends? There's a big difference between trying to win a game and dealing with your career and financial well being. In the latter they all have similar interests, the former they don't.

Also, do overseas players count as part of the hockey brotherhood? Because I don’t think it’ll feel that way when NHLers hop overseas to take their jobs during a lockout. I wouldn’t do that to my brother. Well, unless he was a real jerk.
The players here are completely self-interested and self-absorbed, like every other party here, only they have less riding on this than anyone because they will be hired no matter what. The players are just as guilty of jobbing the fans as our previous three nutbar parties and you better not let them off the hook in the court of public opinion.

How exactly are they self absorbed?? Are they too busy checking their reflection in a mirror or writing in their diaries to hear what Bettman is saying?

And I have no idea what playing overseas has to do with anything.

No one is portraying these guys to be saints, but the players are nowhere near as guilty as the other parties. They don't put a gun to anyones head when they're offered a contract. They made massive concessions in the last CBA. Not just the cap, but linking that cap to revenue while having absolutely zero say in how the team or league is run.


Yes of course they're self interested. They want their fair share of the pie. But in the list of culprits for a potential lockout, Bettman and most franchise owners are at the very top and the players are at the very bottom. Fehr and the union leadership are somewhere in the middle.

#425 Bring Back The Bruise Bros

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Posted 23 August 2012 - 06:42 PM

Haven't really been able to stay up-to-date with this situation. What is it looking like? Will there really be another lockout?
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#426 Pskov Wings Fan

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Posted 23 August 2012 - 08:05 PM

Maybe players should just start their own league. Without best hockey players on the planet NHL is nothing. On the other hand if all the owners got replaced with whole new lot I doubt any hockey fan would notice.

#427 Buppy

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Posted 24 August 2012 - 01:54 AM

Here are the problems, in my mind.

1. Cap floor is too high.
2. Teams spending too much
3. Contract lengths too high
4. As a result, some teams not able to break even

The players association suggestion was decent, but it didn't go far enough. As you said, good starting point, but not a solution to the problem. What they need is more of a luxury tax system, a slight salary rollback by the players, limit contract terms to 8 years or so, and keep the arbitration. I could go on and on here, but thats the gist of things.

Of that list, only the first is an issue that the players need to help resolve.

Players shouldn't be punished because some owners can't stick to a proper budget. Contract length has nothing to do with financials, and even the front-loading is more an owner-discipline and parity issue than one of financial viability.

And even on the cap level, I'm not so sure it's really that much of a problem. It's hard to say without being privy to last seasons revenue numbers, but going by the latest Forbes data it looks like there were 4-8 teams that might have had a problem even spending to the floor in that season. One of them was Atlanta, and that problem seems to be solved. One is Phoenix, which is just a failure, and the players shouldn't be punished for that. One is the Islanders, who either need to relocate, fold, or at least be made fully eligible for revenue sharing. Then you have some borderline teams: St. Louis, Columbus, Nashville, Florida, and Carolina. With some on-ice success, those teams should be able to be profitable if they properly manage their spending (Though Carolina did win a Cup not that long ago, and it didn't really help them at all...), and that's at the 57% players' share and without any increased revenue sharing.

On the other end, 9 teams should have been able to spend at or over the cap and still make a profit. Another 7-8 should have been able to spend at or slightly over the mid-point, and the remaining 5-6 a bit below. In my estimation 20-25 teams should have been able to make a profit had they spent more wisely.

For those who aren't aware, the target average team payroll spending is the midpoint. So if half the teams can do that or more, and most of the rest can at least come close, the deal is workable. In fact, if some teams spend over the midpoint, other teams have to spend an equal amount under (or all players lose money from escrow). Looking at the Forbes figures, and doing a little adjusting for the skewing at the top, the non-player expenses look to be around 40% of revenue for an average team, and the actual dollar range ($33M-43M for most teams) is such that lower-revenue teams shouldn't be unduly constrained. 57% for a players' share should work. 54% as proposed by the union (and also the number the owners started with in 05-06) almost certainly would for all but a few "problem" franchises.

Of course, the floor as currently set is ~$11M higher now, and it may be unlikely that all teams have increased revenue by enough to offset that (plus other rising costs). That's something we don't the information to judge. However, even if it does make the problem worse, I'd say it's more of a revenue sharing problem than a cap problem. Or they may just need to adjust total revenue calculations to remove the skewing caused by Toronto, Montreal, NY, etc. (though that effectively lowers the players' share anyway...)

In any event, I'm still finding very little reason to put any blame on the union. At least not with their initial offer already making concessions. The owners crying for more "save-me-from-myself" concessions, and anchors like Phoenix and the Isles, aren't winning any sympathy from me.

#428 cusimano_brothers

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Posted 24 August 2012 - 07:41 AM

Here are the problems, in my mind.

1. Cap floor is too high.
2. Teams spending too much
3. Contract lengths too high
4. As a result, some teams not able to break even


Items one through three are ownership issues. Number four is a result of the first three.
"Parity" doesn't seem to be working as well as it was it was purportedly claimed.
Once again, Uncle Gary shows that he wants to crush the PA.

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#429 Nightfall

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Posted 24 August 2012 - 08:55 AM

I like how one person says that only #1 is the issue that the players need to assist with while someone else says none of them are issues the players have to deal with. It really is a pretty simple economic problem. You have billions in revenue. The owners attitude about the salary cap is just depressing. Its quite obvious a revenue sharing with a luxury tax system would be the best. Does it destroy parity? Not really. Parity has been part of the sport for a long time. There hasn't been a back to back cup winner since 1997-1998.

The sticking points are easy to acknowledge.

Owners: Roll back salaries, limit contract terms. In short, restart the clock like back in 2006.
Players: Roll back our cut to 53% this year, then 55% next year. It goes back up to 57% in year 3.

Which proposal solves the problem? Neither one.

A deal can be made, but it will take concessions on both sides to get it done. So far, neither side is willing to concede jack s***.
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#430 F.Michael

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Posted 24 August 2012 - 10:42 AM

Personally I'm still a big fan of the "soft cap" with "luxury tax" idea.

Lower the cap floor; have a modest ceiling; limit the player contracts to a max of 4 years, and keep UFA at 27.

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#431 StormJH1

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Posted 24 August 2012 - 11:23 AM

I'm beginning to feel absolutely sick about this. The idea that we had a realighment plan that actually made sense, and an interesting offseason (well, outside of Detroit), plus an epic Winter Classic and Alumni Game set with players flying in from all over the world to take place....and it could be pissed away by another labor squabble. It's worse than how I felt in 2004 because at that point there wasn't even precedent for losing an entire year. I really think that Bettman and many of the owners feel like they'll do better in a new system, even if they miss games. For the bad franchises, they're saving money by NOT playing hockey.

But not only will Bettman have the precedent of the league bouncing back from the '04-05 lockout, but also the recent precedent of what happened in the NFL and NBA.

Except that I don't really think the league "bounced back" all the way from 2004-05...it just grew into something different, aiding largely by external circumstances (the growth of the Canadian dollar) and a few shot-in-the-arm gimmicks like the Winter Classic. I have friends that were HUGE NHL fans 10 years ago, and now they either don't care, or only care about their team. I think the TEAMS have many loyal fans, but the NHL has a very weak sense of a "league" compared to the NFL or MLB.

And if you do this to fans again....wow.

Edited by StormJH1, 24 August 2012 - 11:25 AM.


#432 Buppy

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Posted 24 August 2012 - 12:07 PM

I like how one person says that only #1 is the issue that the players need to assist with while someone else says none of them are issues the players have to deal with. It really is a pretty simple economic problem. You have billions in revenue. The owners attitude about the salary cap is just depressing. Its quite obvious a revenue sharing with a luxury tax system would be the best. Does it destroy parity? Not really. Parity has been part of the sport for a long time. There hasn't been a back to back cup winner since 1997-1998.

The sticking points are easy to acknowledge.

Owners: Roll back salaries, limit contract terms. In short, restart the clock like back in 2006.
Players: Roll back our cut to 53% this year, then 55% next year. It goes back up to 57% in year 3.

Which proposal solves the problem? Neither one.

A deal can be made, but it will take concessions on both sides to get it done. So far, neither side is willing to concede jack s***.

Different opinions do not mean both are wrong.

The players proposal does address the problem with the cap maybe being too high. And whether you want to admit it or not, it is a concession. They are willing to give up some of what they currently have. (And it seems we have some different information. From what I understand, the players offer was 3 years at 54%, then a 4th option year at 57%. As a starting point, it looks very generous to me.)

I'm sure both sides are willing to give some from their initial offer, the only question in my mind is whether the owners are willing to go to something at least reasonable.

Though if you have some argument as to why the players should concede anything to "solve" a problem with owners spending more than they can afford (and more than the current CBA says they have to), please share.

#433 cusimano_brothers

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Posted 24 August 2012 - 12:08 PM

Uncle Gary already knows who he can count on to get him out this mess:

"We recovered well last time because we have the world's best fans".


"Mess up tomorrow, don't mess up now".

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#434 Nightfall

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Posted 24 August 2012 - 01:09 PM

Different opinions do not mean both are wrong.

The players proposal does address the problem with the cap maybe being too high. And whether you want to admit it or not, it is a concession. They are willing to give up some of what they currently have. (And it seems we have some different information. From what I understand, the players offer was 3 years at 54%, then a 4th option year at 57%. As a starting point, it looks very generous to me.)

I'm sure both sides are willing to give some from their initial offer, the only question in my mind is whether the owners are willing to go to something at least reasonable.

Though if you have some argument as to why the players should concede anything to "solve" a problem with owners spending more than they can afford (and more than the current CBA says they have to), please share.

The players proposal just addresses a problem with the camp temporarily. It gives temporary relief to the owners, but it doesn't look in the long term.

The players shouldn't have to concede anything when it comes to the owners overspending. What they should be doing is working with the league to create a system where everyone can win. The league things this is with a salary cap rollback. The players think this is with a temporary concession. Both of which don't solve the problem. Rolling back salaries will just bring the same demons back in the light 3-4 years later. The players proposal, which you are behind, only gives the same relief for a couple years. There has been no attempt to look at the big problem and that is with a rising cap floor that is forcing teams to spend money they don't have.

Right now, the current deal is good for the players and the owners of lucrative teams. There are too many teams that cannot spend to the cap floor and still remain profitable. The Devils just broke even last season and they made it to the cup finals. 17 other teams aren't able to break even and are infact losing money.

Lowering the cap floor is going to bring forward a luxury tax system or a more stringent cap system. Neither will pass because Bettman is married to the cap system and the players want the cap floor higher because it brings up salaries.

Uncle Gary already knows who he can count on to get him out this mess:

He is right too. I know I will be back thats for sure.

Just don't count on me buying tickets to games or other merchandise.
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#435 Jedi

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Posted 24 August 2012 - 01:22 PM

Came across a copy of a New York Times story from 1993, when Bettman was named as Commish...

Bettman's mission is simple: Put a stop to labor unrest; sell the product in television's mainstream marketplace; change the violent image of the game; curb salary inflation; force enlightened self-interest on reluctant, old-fashioned owners; expand contacts with European developmental leagues and markets; settle the divisive issue of possible Olympic involvement, and help launch several new expansion teams.


Oops. Oh well, 6 out of 8 aint bad, right?

And...

He already has talked informally with Bob Goodenow, the head of the players union, and hopes to soon move the dialogue toward serious negotiation aimed at developing a true partnership before next season.


Oops again. That certainly worked out well, didn't it?

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#436 haroldsnepsts

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Posted 24 August 2012 - 01:42 PM

Came across a copy of a New York Times story from 1993, when Bettman was named as Commish...



Oops. Oh well, 6 out of 8 aint bad, right?

And...



Oops again. That certainly worked out well, didn't it?

I think you're being too generous.

I don't think Bettman has:

changed the violent image of the game - concussions anyone?
forced enlightened self-interest on the owners - another lockout looming greatly due to an absurdly unrealistic proposal by ownership
settled the divisive issue of Olympic involvement - isn't that up in the air too?

By my count he's actually done three of those. sell the product in more mainstream marketplace, expanded contact with European leagues and markets, and added expansion teams (one of which has already failed).

#437 Buppy

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Posted 24 August 2012 - 11:56 PM

The players proposal just addresses a problem with the camp temporarily. It gives temporary relief to the owners, but it doesn't look in the long term.

The players shouldn't have to concede anything when it comes to the owners overspending. What they should be doing is working with the league to create a system where everyone can win. The league things this is with a salary cap rollback. The players think this is with a temporary concession. Both of which don't solve the problem. Rolling back salaries will just bring the same demons back in the light 3-4 years later. The players proposal, which you are behind, only gives the same relief for a couple years. There has been no attempt to look at the big problem and that is with a rising cap floor that is forcing teams to spend money they don't have.

Right now, the current deal is good for the players and the owners of lucrative teams. There are too many teams that cannot spend to the cap floor and still remain profitable. The Devils just broke even last season and they made it to the cup finals. 17 other teams aren't able to break even and are infact losing money.

Lowering the cap floor is going to bring forward a luxury tax system or a more stringent cap system. Neither will pass because Bettman is married to the cap system and the players want the cap floor higher because it brings up salaries.
...

Yes, it's a CBA with a set term. Any proposal by either side will be temporary. Yes, the players proposal reverts back to the current rules in the 4th year, but to say that it won't work you'd have to know what the league financials will look like in 4 years. 57% should have worked in 10-11 (albeit, it doesn't leave a ton of profit), there's no reason to assume that it wouldn't work in 2015-16, especially when you consider that, according to the Forbes data, non-player costs have been rising slower than revenue. It should become easier for teams to afford to devote a higher percentage of revenue to player payroll.

The owners say 57% is too high, and the union is willing to concede on that (for 3 years at least). The numbers available to us strongly suggest that even 57% should work, so I'd have to see the recent numbers to believe the owners proposal is even in the same realm as reasonable.

You can't just look at "18 teams losing money" and conclude that the deal is untenable. You have to try to determine why they are losing money. You say 18 teams "aren't able" to make money, but that doesn't appear to be true. It's true that they didn't, but not that they weren't able to under the current rules.

Explaining why I say 57% should work is a little tedious, so feel free to skip this part if you want to take my word for it.
-----------------------------------------------------------------------------------------------------------------------------------------------------
First, I'll expand on my earlier post regarding the "midpoint". That is intended to match the "Players' share", and is what all teams, on average, have to spend. It's derived from total "Hockey Related Revenue (HRR)" using the "Applicable Percentage" (This is supposed to be what teams can afford to spend on players. Variable, but we don't need to go in to that. It's 57% whenever HRR is $2.7B or more.). "Total League-wide Player Compensation (TLPC)" is the sum of all salaries and bonuses paid to all NHL players, and can not be more or less than the calculated players' share. (Since the initial players' share is estimated, they periodically recalculate using actual season HRR, and an escrow account to correct any discrepancies.)

The players' share (and in turn, the salary cap) is calculated as follows:
HRR from the prior season multiplied by the Applicable Percentage. From that subtract estimated cost of preliminary player benefits (Pensions, insurance, etc. No idea what the actual values are, but it seems when the CBA was written they expected it to be less than $81M. The example in the CBA was $66M.) and then multiply by an estimated growth factor (5% growth by default, though the league and players can agree on a different amount). The result is the Players' share. Divide that by 30 to get the "Adjusted midpoint". Add or subtract $8M to get the salary cap or floor. (The cap and floor really aren't that meaningful, since cap spending is determined by average salary rather than actual, so it is possible to spend over or under the cap/floor. But I'll go by those numbers anyway.)

Non-player expenses in 2010-11 worked out to about 39% of revenue, league-wide. This number has been dropping, as revenues are increasing faster than these costs. However, I decided to use 40%, to adjust for skew.

So with 57% and 40%, we cover our expenses and we're left with 3% for profit. Of course, percentages alone mean nothing. We have to look at actual numbers.

The cap for 10-11 was $59.4M, midpoint $51.4M, and floor $43.4M. There is no cap/floor/midpoint for non-players, but 21 teams spent between $33.2M and $43.1M. Average was $40.2M. There's some skewing from the top spending teams, but $33.2 seems a good figure to call a floor. We'll call $40.2 the midpoint, and $47.2 the cap (5 teams spent over that cap, and 2 spent under the floor.).

From the Forbes revenue figures (which is after revenue sharing and 'Stadium Debt Service', whatever that is):
Taking 57% of each teams revenue for players:
  • 10 teams could afford to spend to the cap
  • 7 more could afford between the midpoint and cap
  • 10 more could afford between the floor and midpoint
  • Only 3 could not afford the floor. In aggregate, $13.9 below where they need to be.
  • The sum of all teams spending 57% (without going above or below the cap/floor) is $46.9M over the players share, meaning teams on average have to spend about $1.5M less than they can technically afford to.
Taking 40% for non-players:
  • 7 teams could afford the cap
  • 4 more the midpoint
  • 11 more the floor
  • 8 teams can't quite make the floor, but 5 of them could if taking from the 3% profit pool.
  • However, adjusting player spending to get the correct share, the 5 teams above can afford the floor without touching profits.
  • The other 3 teams (same 3 that couldn't afford players) just suck. Good thing one of them already moved. Aggregate $18M under.
In short, you had three problem teams, two now. The other 27 could all make a profit if they actually budgeted properly. Granted, teams won't be perfect in predicting revenue, and sometimes more spending may be required in order meet revenue expectations. So there's maybe another 7 teams at risk, though all are historically low revenue earners, and so should be budgeting as such to at least minimize any losses.

It's worth noting that Forbes revenue numbers don't jive with what the cap figures suggest the HRR was for that year. However, since we don't know the actual HRR, and it doesn't appear to be all that big a difference anyway (dirty estimate suggests around $4M/team average, I didn't bother trying to work it out. Probably pushed St.Louis out of the bubble, but not a substantial difference, big picture.

It's also worth noting that changing to 54% doesn't change much either, it just doubles the size of the profit pool/safety net.
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So in conclusion, in almost all cases, teams losing money are doing so because they are spending more than they should. Basically, it took only $76M in HRR for a team to break even. (For 11-12, that would be around $83M, and ~$91M with a cap of $70.2. With a $68.5 (going to 54% players share) cap it would be around $90M. 18 teams were at that in 10-11, several more close enough that they might be now.) With Atlanta moving to Winnipeg, it eliminated one problem team. Last season, they reportedly had around $100M in revenue and that was probably in the top 15. I'd guess around 24 teams should have the revenue to turn a profit.

Also, the players' proposal calls for a greater increase in revenue sharing. Reportedly around $50M more than the owners' proposal. That equates to over $3M more per eligible team. Maybe enough to make a few more teams profitable.

IMO, nothing short of relocation will help Phoenix or the Islanders, so nothing should done, except maybe make NY eligible for profit sharing. If their owners are willing to keep losing money, let them stay, but don't try to work the deal in order to compensate for them.

But I am curious what you think really needs to be done. How you think a luxury tax system would work and why it would be better. Seems to me just another way for teams to dig themselves a deeper hole, and makes it more possible for even the top earners to lose money. Prior to the cap, the Wings, Rangers, Flyers, Stars, and Avs were all among the top earners and all losing money. Boston barely making anything (though they're still not making much profit...). I don't think it would work.

#438 Pskov Wings Fan

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Posted 25 August 2012 - 01:15 AM

I very much prefer the way Mr. Abramovich approaches ownership of a sports team. I believe Chelsea F.C. have not been profitable since Abramovich has acquired the team but it does not appear to bother him. Owners should pad their egos by owning NHL team not their bottom line.

Also I do not see NHL players being at fault in this conflict in the slightest. Owners basically complain that they are losing money because they are spending too much. But how much a team spends is completely under owners control. If you spend money you don't have to buy stuff from a store and go bankrupt it is not stores fault.

#439 cusimano_brothers

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Posted 25 August 2012 - 06:52 AM

The owners want all of the money.
The players want some of the money.
Six years isn't a very long time.

"Mess up tomorrow, don't mess up now".

- Harry James Benson, CBE.


#440 Nightfall

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Posted 25 August 2012 - 07:08 PM

But I am curious what you think really needs to be done. How you think a luxury tax system would work and why it would be better. Seems to me just another way for teams to dig themselves a deeper hole, and makes it more possible for even the top earners to lose money. Prior to the cap, the Wings, Rangers, Flyers, Stars, and Avs were all among the top earners and all losing money. Boston barely making anything (though they're still not making much profit...). I don't think it would work.

Its quite obvious that the problem is two-fold. The first is the cap floor is too high. The second is the ownership can't budget or run a team. A combination of both is the real problem. I don't deny, in a perfect world, the current deal would work. This isn't a perfect world though. You point out specifics in your example that would be great in a perfect world, but the ownership in the NHL sucks a big one. Do i think the luxury tax system would work? I think it is worth investigating, because of the system in the MLB. You have rich teams and poor teams, and in the MLB there hasn't been a labor dispute in a long time. The small market teams can even compete in the MLB, and it has been determined that small market NHL teams can beat big market teams all the time.

Anyway, while you have the dumb ass owners who can't budget, you have smart owners who are forced to spend to the cap floor. The forced spend to the cap floor is a problem along with the ownership.
Christopher Brian Dudek
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