A Deal!

[Cranky]

mrbozo said:

Should the NHLPA have Accepted an Earlier League Offer?

Far too many assumptions by the author. No one really knows the entire text of any of the CBA offers and yet this writer is building a case based on hearsay.

Is he a lawyer?

[Cranky]

seventeen said:

I think that's pretty well it. Human nature. You get used to a level of work and a standard of living and you believe that's normal and a base. To have someone suggest you should accept less and work harder is hard to stomach and usually the only way you accept it is to experience a worse situation.

Absolutely true.

In winter, I have people applying for work and asking for $25 an hour because that is what they earned in the summer time in construction. They refuse to work for anything less even though they do NOT have a job and NOT likely to have a a job for 7 months of the year.

Worse yet....

When the NDP was running Ontario, they brought up the welfare payments to such a degree that people would not even look for employment unless the employer paid them $15 an hour. We are not talking about skilled workers here, we are talking about unskilled people on WELFARE. That did not matter, they felt they were ENTITLED to that pay level. Harris changed that attitude inside two months.........

Hunger has a strange way of clarifying expectations and entitlements......

[M. Beaux-Eaux]

habsaddict said:

mrbozo said:

Should the NHLPA have Accepted an Earlier League Offer?

Far too many assumptions by the author. No one really knows the entire text of any of the CBA offers and yet this writer is building a case based on hearsay.

Is he a lawyer?

He is writng based on what was actually reported. No rabbits were pulled out of hats.

The entire texts of the proposals are avaiable via hyperlinks within the article if you're interested in reading them—as well as other material direct from the NHL and the NHLPA. It is a very well researched, written, and annotated article.

Btw, both the NHL and NHLPA Web sites contain a wealth of CBA negotiation related material.

NHLPA:

nhlpa.com/CBA/index.asp

nhlpa.com/MediaReleases/


NHL:

www.nhlcbanews.com/

P.S. The CBA negotiations are largely based on assumptions—of revenues, value, and worth.

[M. Beaux-Eaux]

habit said:

habsfaninla said:

Wanted: Bus Drivers for Montreal Transit Commission.

Salary $15.00 to $23.00 per hour. 15% of salary deposited into escrow account, if MUCTC loses money for the year escrow funds are forfited. If ridership exceeds 275,000 passengers per day, salary cap is set at $17.75 per hour. All drivers roll back their current salaries 24% from 2003 earnings. All rookie drivers are frozen at $8.00 per hour for three years. Drivers can bid to drive metro at age 30, dropping to age 28 in three years. Getting silly. Drop the damn puck!

Let's see... what is a players take home pay?

Jagr: 2003/2004 salary: $11,000,000

$11M - 24% = $8,360,000 but...

20% of Cap = $7,500,000

-15 % in Escrow = $6,375,000

- 3% to Agent = $6,150,000

- 7.7% NY Income tax = $5,572,500

I think even Modano's dog might be able to live on that.

There could be a whole lot of nutrients to come in that chow:

A team-by-team salary cap set for next season of between $37-million and $39-million (U.S.) at the upper limit, with a minimum of between $21-million and $24-million.

Player salaries cannot take up, on a league-wide basis, more than 54 per cent of revenue; next season's cap is based on the projection of between $1.7-billion to $1.8-billion in revenue for the season, down from $2.1-billion in 2003-04. In ensuing years, the cap levels will be decided by the previous year's revenue. This can cut two ways: If revenue grows in future years, the cap would move upward in the players' favour, perhaps much higher than the $42.5-million hard cap offered by the league before the season was cancelled; but if the NHL gets hammered by fallout from the lockout, the cap could be even lower than $37-million for the 2006-07 season.

- tinyurl.com/9xgtm

Boy, did Evil Bob Badenough ever get "creamed", eh?

[M. Beaux-Eaux]

franko said:

Still waiting for the definition of "revenue".

It is easier for an NHL owner to hide revenue than it is for a camel to enter Heaven.

[Doc Holliday]

pth said:

Goodenow didn't give himself much of a chance; for 2 years now the NHL has wanted to talk, and Goodenow refused to discuss a new CBA. It was clear that the new CBA was going to be a major change, and by waiting it out he made the situation worse. Examining the Levitt report in depth, he could have proposed models that might have been good enough for the owners to choose them over sacrificing a season. It's as if Goodenow didn't want to believe that teams were losing money and thought that the owners would cave in - he gambled and lost, and by not having discussed seriously ahead of time, he'd raised the stakes and wound up losing even more.

If Goodenow examined the Levitt report, told the players that some changes might be needed rather than tell them to prepare for a fight, etc.... who knows.

Still, maybe there was nothing he could do - maybe it took a hard stance (from the players) for the rich teams to accept that revenue sharing was a required element for a cap to be put in place. Otherwise, the Bettman-proposed 30-million cap might have been adopted without revenue sharing, which would be the worst possible outcome for players, since they'd be paid according to what Edmonton could afford, but the owners would be collecting from New York, Toronto, LA, etc.

Goodenow made many mistakes, but maybe there just was no other way than to lose a season, to get a decent CBA, given that:
-owners don't like revenue sharing (especially the rich, influential ones)
-players don't like caps (especially the rich, influential ones)

I think that summarize it well. Goodenow went for all or nothing strategy and ended up "losing" at pretty much every level. What could he have gotten if he had negotiated earlier will remain a mystery but one thing is for sure, the CAP and the floor would have been much higher. BC is right that Goodenow couldn't tell the players from the get go that he was gonna give up on everything like it seems he does now but IMO he wouldn't have had to give up so much if the market hadn't been hurt so much by his own chicken game.

Goodenow could have told the players that a cap was unavoidable but that he was gonna try to win a lot of the other issues.

I remain convinced that Goodenow's ultimate ace, in his mind, was that 24% rollback. I am certain that he felt this was gonna break the owners resolve and he played that card perfectly timed to save the season and the playoffs. When that offer got busted and exposed as the short time bandaid that it was, I think Bob had no other plan other than to wait... The uncertain results of the waiting game (multiple team banckupties, market collapse, heavy contraction, etc...) were in Bob's mind better than to admit defeat it seems. Luckily it appears that players felt that the kind of salaries they could put their hands own in a cap world were not exactly at poverty level and it was worth saving the day.

I won't claim that Bettman is a genius, nor that owners are 100% pure as snow or that players should take all the blame. But Goodenow's work in this hasn't been good for anyone.

[PTH]

docholliday said:

Goodenow went for all or nothing strategy and ended up "losing" at pretty much every level. What could he have gotten if he had negotiated earlier will remain a mystery but one thing is for sure, the CAP and the floor would have been much higher.....
Goodenow could have told the players that a cap was unavoidable but that he was gonna try to win a lot of the other issues.

Yup. Still, he did win one, and I'm curious what the final deal will look like concerning revenue sharing and linkage. I think Goodenow and the players would have much better press if they stated they would accept a cap with revenue sharing and linkage. Because really, the three issues are linked. A cap without revenue sharing would mean either:
a) killing off the smaller teams (who can't follow a 50 million cap) or
b) an extremely low cap (30 or even less ) and big teams make a killing.

Neither outcome was acceptable. Linkage was inevitable once the season was cancelled, because revenue after the lockout was too uncertain, but even then, long-term it would be needed. Say hockey exploded over the next 5 years, the players would have to fight to get a new cap, and could complain that owners were making much more than their hsare, whereas now the system should re-adjust itself well enough. I just hope that there aren't any NFL/NBA type loopholes, either for players to make more or for owners to benefit from more revenue without having to declare it.

I remain convinced that Goodenow's ultimate ace, in his mind, was that 24% rollback. I am certain that he felt this was gonna break the owners resolve and he played that card perfectly timed to save the season and the playoffs. When that offer got busted and exposed as the short time bandaid that it was, I think Bob had no other plan other than to wait...

Well, it's a sad strategy, but I think you're right, that was his short-term plan. I actually think that he had anoter idea, if that plan didn't catch on. Think long-term: a 2-year lockout kills off smaller teams (or they become totally irrelevant, like PIT and EDM sometimes seem on the verge of doing already), no cap, and the remaining big-city teams spend as much as they please. This leads to a higher total payroll but with fewer teams and fewer players. It's the kind of thing a union leader can aim for when his main goal in life is to maximise total player revenue.

The uncertain results of the waiting game (multiple team banckupties, market collapse, heavy contraction, etc...) were in Bob's mind better than to admit defeat it seems. Luckily it appears that players felt that the kind of salaries they could put their hands own in a cap world were not exactly at poverty level and it was worth saving the day.

I actually think that those uncertain results were what he was banking on. Thank heavens he didn't have enough power to stall the whole process even longer.

[seventeen]

pth said:

docholliday said:

Well, it's a sad strategy, but I think you're right, that was his short-term plan. I actually think that he had anoter idea, if that plan didn't catch on. Think long-term: a 2-year lockout kills off smaller teams (or they become totally irrelevant, like PIT and EDM sometimes seem on the verge of doing already), no cap, and the remaining big-city teams spend as much as they please. This leads to a higher total payroll but with fewer teams and fewer players. It's the kind of thing a union leader can aim for when his main goal in life is to maximise total player revenue.

I don't think that would work. Fewer teams = more players available = greater supply = lower supply costs = lower salaries. Less in union dues too. No, his goal had to be damage minimisation and making the owners think they were getting a deal when they weren't (the 24% cut).

[PTH]

seventeen said:

pth said:

I don't think that would work. Fewer teams = more players available = greater supply = lower supply costs = lower salaries. Less in union dues too.

In the short term, sure. But in a smaller league pretty soon you'd have the same stratification as we have now, with NHLers and AHLers. The smaller league would only have the larger cities, so the pressure to keep salaries low would be more to the PA's liking. It would be better to keep salaries low, but in the end no GM will let go a player simply because he's making too much money. I think Goodenow wanted to continue the inflationnary trend he's had for the past 10 years; sacrificing the 25 million each that the 5 smaller teams pay out is a small price to pay for keeping access to all of TO, LA and NY's potential budget increases.
(this scenario of mine assumes that Goodenow was thinking that hockey would become a huge growth industry once again, like in the early 90s.)

No, his goal had to be damage minimisation and making the owners think they were getting a deal when they weren't (the 24% cut).

Maybe it was his plan, if so, it was a poor one and really, didn't have much of a plan B to back it up.

That 24% should have been offered over the summer of '04, as a way of keeping the league open while they negotiated a new CBA though. Offer it in June, or even better September, as an interim measure to keep the league going while the lawyers talk, just before camp opens, and suddenly the owners are looking the union-breakers some think they are, and the PA might have had a bit more leverage.

---

I gotta say, I wonder what would have happened had the PA taken up the league on its 42 million cap offer, with no linkage and no revenue sharing, that kind of cap could have become quite a problem - both for small teams that could never reach the cap and for the players in the big markets who'd see the owners lining their pockets. And depending on how well the league did, one of those 2 groups would be getting more and more ticked.

---

I think the deal as described in the media is a pretty fair one, but I think it could have been reached without losing a season if everyone had stopped acting like 5 year olds.

[M. Beaux-Eaux]

Just a confirmation of what Hall of Fame hockey writer Helene Elliott of the LA Times told us a couple of weeks ago:

The general consensus among the league's executives was that there were no real surprises in the deal.

"Most of the things that were discussed in some way or form has already seeped into the media available for us to see," Montreal Canadiens GM Bob Gainey told TSN on Monday.

The details expected in the six-year agreement include:

- A 24 per cent salary rollback on all existing contracts.

- The upper limit on the salary cap for 2005-06 will be $39 million US while the minimum floor will be at $21.5 million, based on projected revenues of $1.7 billion.

- Players salaries cannot - on a league-wide basis - take up more than 54 per cent of revenues next season; In ensuing years, that percentage may increase depending on how high revenues get.

- A percentage of salaries will be put into escrow until the new salary cap can be calculated at the end of each season.

- No player can earn more than 20 per cent of the team cap.

- As of 2007-08, players - regardless of age - can become unrestricted free agents after seven years in the NHL, with the 2004-05 wiped-out season counting in the service time. That means any player who began his career in the NHL at the age of 18 can qualify for unrestricted free agency at 25. In the meantime, the age of unrestricted free agency will remain 31 this summer but will gradually be brought down to 27 by the end of 2007-2008 season.

- League-wide minimum salary bumped up to $450,000 from $185,000. The minimum goes up to $500,000 in the sixth year of the deal.

- Revenue-sharing where the top 10 money-making clubs donate to a fund shared by the bottom 15 teams - anywhere from $3 million to $8 million per club.

- The entry-level system will limit those players to $850,000 a year in salary (which it was 10 years ago) with bonuses not as easily reachable as the previous deal. The maximum possible amount in bonuses is $4.5 million although it's unrealistic for almost anyone to reach all the lofty targets.

- Two-way salary arbitration. Both players and owners can select to go to arbitration, whereas only players had those rights in the previous deal. This will allow owners to downgrade underperforming players.

- The ability for teams to buy players out of their contracts at two thirds of their value at no cost towards the salary cap within 10 days after the CBA officially takes effect. This is meant to help teams fit under the cap but the clubs won't be able to re-sign those players.

- Teams will not be allowed to re-structure existing player contracts in an attempt to fit a big salary under the cap.

- Stiff drug-testing policy: minimum of two drug tests a year with no advance warning. A player will earn a 20-game suspension for a first-time offence, a 60-game ban for a second offence and a permanent suspension from the NHL after a third violation.

- Participation in the February 2006 Olympics in Turin, Italy

- www.tsn.ca/nhl/news_story.asp?ID=130747&hubName=nhl.