A Guaranteed Ending To The Labor Dispute

Today the NHLPA and NHL rejected each other’s plans to solve their labor dispute leaving the season basically in ruins for 2004-05. It could be argued that the two sides couldn’t be further apart philosophically.

The NHLPA offered a dramatic 24% cut to salaries and offered a luxury tax. The league came back with a more detailed salary rollback that is more kind to the players who make less and a salary cap. Both sides publicly said it will be our way or the highway. No new talks are scheduled.

In explaining the situation to my girlfriend in non-hockey speak I suggested this weekend as we were looking at a new car for her that the process could be summed up right in the dealership. “Imagine you walked into the dealer looking for a convertible. In fact you have been dreaming and saving you whole life to own a convertible and now is the day you might buy one. The salesman greets you and spends a few second qualifying you. Immediately, he start to sell you a station wagon with a big sunroof. He tells you it is 24% off and that is a great deal because you know cars have 5 to 7% profit margin in most every car sold today. BUT you came to the dealer for a convertible. What do you do?” She responds “I walk out of the dealer.” And she is right however with cars you have a fully elastic product. Where we live you can find another dealer right around the corner. With the NHLPA they don’t have anywhere to go. Europe – yes some will go but with average salaries in the 500k range – it ain’t the NHL…

The players and PA need to get something through their thick Jofas REAL SOON. Unless your name is Mario Lemieux, YOU DON’T OWN THE TEAMS! Period. You have no CBA and decreasingly no say in the deal. What you DO have is incredibly highly paid contracts that are on the verge of being flushed down the toilet when the NHL breaks the NHLPA union. Players like John LeClair stand to lose 18 million dollars over 2 years. Yahsin will lose even more. The players also have the responsibility of protecting the game they are blessed to play for future generations. Their in ability to negotiate a salary cap like the ones found in the FAR MORE SUCCESSFUL leagues known as the NFL and NBA is criminal.

Putting aside how Gary Bettman could have done his job better (that is an entirely different, yet equally frustrating topic) the reality is the NHLPA should be trying to hang on to whatever they can keep of their current contracts while negotiating as high a cap as they can get. This should include all sorts of changes to the game, arbitration, free agency and more.

A few predictions:

1. The NHL will go from a 2.1 billion dollar business to a 1 billion dollar business at BEST – by the time the puck drops next September.

2. The NHLPA will be broken if they do not accept a cap.

3. Players WILL return to play in the NHL at greatly reduced salaries. You will not see minor league teams dressed in NHL jerseys come next fall.

4. The NHLPA will most likely come back to the table and accept a cap at the last moment to try to save face next fall when they could have worked one now and save the business of the NHL.

5. If another auditor came it to redo Levitt’s numbers he would find the same results. Levitt is HIGHLY respectable, highly successful and have NO reason in the world to lie or cook the books as Goodenow suggest that he did.

I am no fan of Gary Bettman’s performance over the last 10 years but to see the NHLPA suggest that it is the owner’s fault completely that prices for players have skyrocketed is INSULTING to the fan. Have you ever met an agent? I have an entire floor of them in my office building and I can tell you they are a special breed. They will do ANYTHING to get their client their money which is their sole purpose. How does a big market team like Philly come back to their championship starved fans and say “We deiced to let 4 time 40 goal scoring John LeClair go because $9,000,000 a year for 4 years is too much money?” Their would be a revolt on Broad Street. Salary aribtration in the NHL as it currently stands is a joke and the agents use it against the teams to get the most for their players. With a cap, this problem is far less severe. Yes more players move from team to team but you don’t have the disparity between franchises.

In the end – the players will get what they deserve which is FAR less than a 24% roll back. They have NO other market to go to in order to get the money they lust for. Sadly, the player’s unwillingness to work inside of parameters that have proven HIGHLY successful for other leagues, will set the business of the NHL back 15 to 20 years leaving young, promising players out in the cold. Sadly, their lack of compromise and utter, disgusting greed will ruin the spirit of the game leaving it at best behind PGA golf, NASCAR and maybe even Arena Football in the hierarchy of pro sports.


74 Responses to A Guaranteed Ending To The Labor Dispute

  1. wingsrock34 says:

    even if u have a team of $8M team of rangers they would have a pretty good amount of money going to the tax so the teams that get the tax money could choose to pay the 8M if they wanted to and for a tax like the NHLPA wants you need some teams to over spend like the wings, rangers and stars

  2. wingsrock34 says:

    what?… you mean like janies got a gun?

  3. Aetherial says:

    Oh I see…

    So, the players hold out to the highest bidder, 99% of the time.

    when they don’t like their current contract they hold the owners, the fans, and their teammates hostage for more money.

    when they are drafted by a team they don’t like, they refuse to sign. If they are drafted by a team they do like they hold out for huge bonuses to cir*****vent the rookie salary cap.

    If the owners did not sign a couple key free agents because their agents were asking too much… then the league would be sued for collusion

    When a player and a team cannot come to an agreement.. the players have salary arbitration to give them a guaranteed 25-85% raise. (Arbitration was never supposed to be that one-sided by the way)…

    That of course sets the bar higher for the next player and salaries escalate.

    The we get people like YOU, and the players (who have reaped a fortune from these very same follish owners, telling the owners it is all THEIR fault and they need to fix this themselves.

    Think before you post.

  4. Aetherial says:

    Disagree with one thing…

    I think the owners would be happy to work with the NHLPA IF they accepted a cap.

    I think the owners would be just as happy however if this union was broken. They certainly won’t be shedding any tears and the ridiculous counter off they made this week is a sign they are playing hardball…

    Oh man, I hope they continue to stick it to the players.

  5. Aetherial says:

    Replacement players will not kill the game in any large market.

    Bottom line that the players have to realize is that…

    we cheer for the sweater NOT the players. How the hell can we be loyal to a player when 99% of them will just leave as soon as there is more money elsewhere.

  6. 19Yzerman says:

    It reminds me of that scene in Mr Deeds where the Jets QB storms into a corporate meeting demanding to renegotiate his contract.

    He (Jets QB) says, “I thought that if I played better this year we could renegotiate my contract and you would pay me more money.”

    Mr Deeds the Jets Owner (played by Adam Sandler) says, “If you play worse can I renegotiate your contract and pay you less?”

    QB answers, “No”

    Mr Deeds says, ” BYE”

    Mr Deeds!! If you haven’t seen this movie I am sorry to have spoiled that part for you. It was very funny and totally applies to arbitration though.

  7. guinsfan4life says:

    The reason you don’t know of any other company that forces the employees to ensure their bosses don’t make stupid mistakes is because most of those companies lay people off and fire people to cover up for the mistakes of higher management. It may not be black and white, but it definately is read all over.

    The players agreed to set the clock back because they knew they’d get the money back in the long run. Plain and simple. If you can’t see that, you are not only deaf and dumb, but blind.

    The problem with your thinking is you are judging each individual team on it’s own basis. Each team isn’t its’ own business, rather all of the teams encompass the National Hockey League and the business of professional hockey.

    Your will never come true. The WHA will not be able to afford the players salaries. And, if the players negotiate to play for less, well then that tells you what the owners are dealing with.

  8. guinsfan4life says:

    Your player cap would be worse than a hard cap on each team’s salaries. If you cap each team’s salary, they can spend what they want on each player’s salary, as long as they have enough money to play the other players.

    The hard cap with each team–would still give the players to make their money, as much as the team would give them.

  9. Flyers_Fan_In_LA says:

    The Flyers can take a core of Jeff Carter, Mike Richards, Stephan Ruzitka, Antero Nittimaki, Dennis Sidenberg, Joni Pitkanen, Ben Eager and RJ Umberger and make a team with other players that bail on the union.

    For one I have wanted for years is Brendan Shanihan. He is the most classy player in all of this. Proactive, smart and realistic. He is tuned into the real problem with the game of hockey and it isn’t a business model issue. Brendan – wanna wear an orange jersey?

  10. 19Yzerman says:

    It was tough for me to come to terms with the fact that Barry Sanders no longer wanted to play football. After a while I have noticed that I would like to see him play again so bad that I wouldn’t care if he was wearing a Green Bay uniform.

    I understand your sentimants on players moving. A CAP will cause movement of players simply to stay under the amount established.

    we cheer for the sweater NOT the players. This could be taken out of context and present questions like.

    All you need is a player to wear a sweater wth #99 on it and you have the great one.

    or

    All you need is a black Nascar with a silver #3 on it and you have a 7 time champ.

  11. 19Yzerman says:

    The Rich get Richer and the Poor get Poorer!!!

    That is the basis for a CAP.

    Its true and a CAP is a system used to keep teams from having an unfair skill advantage over others based on money.

    Players have always been skill for hire.

    Fredrick Arthur Stanley never said, “Any team that wishes to challange for the CUP shall not have spent more than X amount on its player to qualify”

  12. Aetherial says:

    Your rebuttal contains a brutal non sequitur that I won’t even attempt to correct.

    There are exceptions; of course!

    They true *stars* who eclipse the boundaries of team loyalty so that you enjoy seeing them play regardless, because they are that damn good…. Gretzky, Lemieux, Sanders, Jordan, Marino, Young, Orr…

    There is a very select list though.

  13. samcal17 says:

    The point is that in the normal corporate world companies are not allowed to establish monopolies in order to control either prices or the salaries of all potential employees. The NHL is attempting to operate under the guise of a group of competing companies when, in reality, they are acting in concert as a monopoly.

    For example, while an individual Bank is entitled to pay its tellers on the basis of its own profits, all Banks in the country are NOT allowed to collude in directly or indirectly setting an average salary for ALL tellers. I’m not an expert in the subject of anti monopoly legislation, as I suspect you are not, but this would clearly be a violation of the intent of such legislation and an infringment on the rights of the employees.

    As for the idea of equalizing the competetive ability of teams, it’s clear that if an owner is sufficiently rich or stupid as to locate a franchise in an inappropriate market he will not be competetive. To attempt to protect him at the expense of the ‘workers’ is unfair and absurd.

    The NHL has expanded recklessly and foolishly in order to fill the owners’ pockets with entry fee cash, they are dangerously close to destroying the entire sport by their greed. Now they are essentially asking the players to pay, not only for their past stupidity (which the players seem willing to do) but for any stupidity which they intend to practice in the future.

  14. samcal17 says:

    I agree entirely that the NHL is a single entity as opposed to a collection of individual businesses. Normally such a situation would be investigated and possibly corrected by anti monopoly agencies. If they were found to be using their monopolistic position to fix prices (or, I suspect, salaries) they would be in danger of being controlled by appropriate legislation.

    As for the players facing financial reality. How far can this be taken. If, in their wisdom, the NHL governors decide to award a franchise Mexico City and that team ends up with an annual income of about $1.95, are all of the NHL players supposed to accept the fact that their salaries will be adjusted so as to ensure that the ‘Mexican Marauders’ or whatever, can avoid losing money?

    The league is being destroyed by owners whose bank balances far outweigh their intelligence. If they are allowed to get themselves out of this mess at the expense of the players then there will be no ‘financial reality’ to prevent their continuing idiocy.

  15. cgolding says:

    I agree entirely that the NHL is a single entity as opposed to a collection of individual businesses. Normally such a situation would be investigated and possibly corrected by anti monopoly agencies. If they were found to be using their monopolistic position to fix prices (or, I suspect, salaries) they would be in danger of being controlled by appropriate legislation.

    the NHL isn’t a monopoly and the players are proving it right now by playing in other leagues… it is just the richest league. and once again a “company” is allowed to fix prices for its salary… otherwise i’d be making a crap load more cash. the players are living in a fantasy land at the moment that they are somehow entitled to dictate to these owners how they should run their own business. while i respect why they have the position they have, it is in the end one that has cost them about 600 million dollars this season already…

    As for the players facing financial reality. How far can this be taken. If, in their wisdom, the NHL governors decide to award a franchise Mexico City and that team ends up with an annual income of about $1.95, are all of the NHL players supposed to accept the fact that their salaries will be adjusted so as to ensure that the ‘Mexican Marauders’ or whatever, can avoid losing money?

    sure. what happens if your company makes a poor business decision and it blows up in their face? they downsize… people lose their jobs… salaries scale back to make up for losses. this is why the players deserve not an iota of respect for their position from everyone who lives in the real world. if you were working for a company that was losing massive amounts of cash, what happens to you? you get laid off.

    you seen any players get laid off? hell, the only way the union “loses” jobs is if they take this thing to the max and cause some teams to fold… which would just be funny.

    The league is being destroyed by owners whose bank balances far outweigh their intelligence. If they are allowed to get themselves out of this mess at the expense of the players then there will be no ‘financial reality’ to prevent their continuing idiocy.

    the league has made some poor decisions… that is a very true criticism. however, companies ALWAYS get out of messes at their employees expense. once again, this is the real world, they need to start living in it.

  16. cgolding says:

    I agree entirely that the NHL is a single entity as opposed to a collection of individual businesses. Normally such a situation would be investigated and possibly corrected by anti monopoly agencies. If they were found to be using their monopolistic position to fix prices (or, I suspect, salaries) they would be in danger of being controlled by appropriate legislation.

    the NHL isn’t a monopoly and the players are proving it right now by playing in other leagues… it is just the richest league. and once again a “company” is allowed to fix prices for its salary… otherwise i’d be making a crap load more cash. the players are living in a fantasy land at the moment that they are somehow entitled to dictate to these owners how they should run their own business. while i respect why they have the position they have, it is in the end one that has cost them about 600 million dollars this season already…

    As for the players facing financial reality. How far can this be taken. If, in their wisdom, the NHL governors decide to award a franchise Mexico City and that team ends up with an annual income of about $1.95, are all of the NHL players supposed to accept the fact that their salaries will be adjusted so as to ensure that the ‘Mexican Marauders’ or whatever, can avoid losing money?

    sure. what happens if your company makes a poor business decision and it blows up in their face? they downsize… people lose their jobs… salaries scale back to make up for losses. this is why the players deserve not an iota of respect for their position from everyone who lives in the real world. if you were working for a company that was losing massive amounts of cash, what happens to you? you get laid off.

    you seen any players get laid off? hell, the only way the union “loses” jobs is if they take this thing to the max and cause some teams to fold… which would just be funny.

    The league is being destroyed by owners whose bank balances far outweigh their intelligence. If they are allowed to get themselves out of this mess at the expense of the players then there will be no ‘financial reality’ to prevent their continuing idiocy.

    the league has made some poor decisions… that is a very true criticism. however, companies ALWAYS get out of messes at their employees expense. once again, this is the real world, they need to start living in it.

  17. cgolding says:

    a) you cannot destroy a sport. you can destroy a league… but hockey is still being played in a lot of places.

    b) as i noted… they are not a monopoly. they are poeple offering money to individuals to play a sport. monopolistic activity is when you are supplying something and making it impossible for another business to compete.

    like microsoft who was attempting to kill netscape — and other interesting attacks on software — by placing IE in its system and everything else. when i say i’m willing to PAY YOU to play a sport, i am not a monopoly. i’m an employer in that situation.

    now… how would the NHL be acting as a monopoly. say there was another league that was competing with the NHL directly and the NHL looked at them and said, we are going to make it impossible for you to survive — by any number of methods. THAT would be acting like a monopoly. you aren’t a monopoly when you are trying to control your own expenditures… you can’t force someone to spend money.

  18. cgolding says:

    a) you cannot destroy a sport. you can destroy a league… but hockey is still being played in a lot of places.

    b) as i noted… they are not a monopoly. they are poeple offering money to individuals to play a sport. monopolistic activity is when you are supplying something and making it impossible for another business to compete.

    like microsoft who was attempting to kill netscape — and other interesting attacks on software — by placing IE in its system and everything else. when i say i’m willing to PAY YOU to play a sport, i am not a monopoly. i’m an employer in that situation.

    now… how would the NHL be acting as a monopoly. say there was another league that was competing with the NHL directly and the NHL looked at them and said, we are going to make it impossible for you to survive — by any number of methods. THAT would be acting like a monopoly. you aren’t a monopoly when you are trying to control your own expenditures… you can’t force someone to spend money.

  19. brvtvs says:

    I’ll try to reply to both of your messages in this single post.

    First of all the NHL is most certainly a de facto monopoly. When IBM was facing a breakup in the 60s it was not because they controlled 100% of the computer industry, simply that they controlled a sufficiently large portion as to make the other participants negligible entities. The NHL does this at the moment.

    In a free market system, there are many reasons that monopolies are counter productive, not simply because they control prices and eliminate competition. Monopolies undermine the entire ‘free market’ philosophy, in labour negotiations as well as price setting.

    In the ‘real world’ there are a variety of mechanisms for ensuring that the managers of companies are not allowed to simply be as foolish as they wish to and then to pass along their mistakes to the employees. The most obvious of these is competition. If a company persists in making poor decisions and then passes along the consequences to the wrong people, it will, eventually, go out of business for the simple reason that other, less foolish companies will hire the effective, displaced employees and take the business away. This is the basis of the free market system. Not that no company is capable of idiocy, only that it must eventually pay for that idiocy. This is not the case in the NHL or in other monopolies.

    As a consequence, unless someone forces the owners to pay for their greed and stupidity, there is simply no reason for them to ever change.

    To simplify matters. At the moment there are teams which are losing money because they are in poor markets. This causes imbalance which can only be redressed by either getting rid of such teams (a viable option) or by giving them someone else’s money.

    This money can come from two sources. Either from the more successful teams in the form of a luxury tax, or from the players in the form of a salary cap. I happen to think that, since the owners got themselves into this mess they should damned well get themselves out of it. Not only is this fair but it’s the only method of preventing their making the same idiotic decisions in the future.

  20. cgolding says:

    sports are not a real world model really.

    in the real world they would simply cut and run from the “anchor” franchises. which would mean downsizing and loss of jobs for the players. the players should really be doing everything in their power to maintain all of the teams.

    this is business… there is no “fair.” it’s also capitalist action, where if you own something you maintain some amount of control… which is fair because owners also assume the most financial risk.

    there are other leagues throughout the world, and north america, that these players are capable of playing in if they want to. those leagues simply offer less money, which is why they want to play in the NHL. these players are under no constraint to take their skills and go play elsewhere at any time.

    while they do need to prop up some of these teams currently, they also can greatly increase their ability to compete and thus create more revenue (which will go to the players some under the owners proposal) by instituting a cap which allows them to play on the same financial field as the big boys. while i agree with the principal of the luxury tax, there are a multitude of reasons that it both is a good thing and a bad thing… so the owners aren’t completely wrong with wanting to avoid it.

    a rather ironic sidenote is the fact that if the players had negotiated a luxury tax system that worked in ’94/5 we may not be in this mess now. imagine if there had been control over the big clubs and some money flowing out to the smaller clubs all through the 90’s. fair chance we could be in a slightly better situation.

  21. beefer says:

    Here is where you are wrong. The players have the option of taking a pay cut and keeping their jobs. I was offered no such option. Not to mention they would still be getting paid plenty. And as I said before, my company is making huge profits, where as the NHL is losing boat loads. So they can still use their talents to make very lucrative incomes. Just slightly less lucrative.

  22. 19Yzerman says:

    I would be willing to bet that if the NHLPA took every demand the owners have announced and put them into a written CBA which they would present to the NHL.

    The NHL would take 3 days to read it and come back saying.

    This was the best offer the NHLPA has presented us with up to now (I can here Bettmans voice saying this too) However in the process of our evaluation we have discovered our needs have been extended to levels which exceed this offer. It was an unforeseen and unfortunate turn of events and I would like to offer our deepest regret to our fans.

    Thank You

    No Questions Please!

  23. brvtvs says:

    I agree that sport is not the ideal model for all businesses as, to some extent, a major league must be permitted to operate in a rather grey area between a normal business and a monopoly. The fact is that, except perhaps for baseball, a single organization will almost inevitably capture most of the public interest. The problems arise when the owners attempt to take advantage of that position, as I believe they are doing at the moment.

    I believe that the ‘correct’ solution to this whole mess is probably to cut out most of the losing teams. The reason the owners won’t do this, of course, is that they’ve already spent the franchise money. The players are also probably reluctant to see this happen as the less talented of them would end up in some Scandinavian co-ed pick-up league. Meanwhile the fans suffer.

    I’m not quite sure what you see as the negative aspects of a luxury tax. As is stands, if a salary cap is ever accepted, the solid franchises will be making money faster than even their owners can waste it. Maybe the best solution would be a ‘profit cap’ so that some of the money saved could go back to the long suffering fans. Don’t expect this in the near future.

    Unfortunately, while I believe that hockey is the greatest game on Earth, we have to accept the fact that it is never going to be a major sport in some locations and stop trying to force it on people who have never seen ice outside of a glass. This is especially true since the greed of the owners turned the playoffs into a summer sport.

    There are many villains in this sad story and very few heroes, but I truly consider almost all of the blame falls on the NHL owners and their hockey-challenged commissioner. If they are not forced to face reality now, at their own expense, nothing will stop them in their disastrous course. Eventually we’ll have a franchise in every town where a brainless millionaire thinks he can make a buck as long as the salary cap doesn’t exceed the money he can squeeze from a couple of hundred confused fans swilling overpriced beer.

    Clarence Campbell, where are you when we need you.

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