Burke has a working solution

During tonight’s telecast of the World Cup final, Brian Burke offered a 15-point(?) operating agreement that he believes will resolve the league’s labour impasse. It’s also posted on the CBC website

http://www.cbc.ca/story/sports/national/2004/09/14/Sports/burke040914.html

Here’s the 15(?) points.

1. Phase in agreement over two years

2. Commit to a 12-year contract

3. Escrow:

Seven per cent of player payroll

Ten per cent of designated hockey revenue (DHR)

Arena construction fund

4. Agree to share revenues of $200 million with $75 million coming from playoff pool

5. Avoid luxury tax by establishing a payroll threshold at $38 million and payroll minimum of $33 million

6. Set overage fees at:

1st million = $0.50 on the dollar

2nd million = $1 per dollar

3rd million = $2 per dollar

4th million = $3 per dollar

5th million or more = $5 per dollar

7. Reward good business behaviour by charging fees to repeat offenders

8. Guarantee players 55 per cent of DHR

9. Build trust with joint audit controls:

1st offence = $1 million fine

2nd offence = $5 million fine

10. Establish four-year entry-level system with a maximum $250,000 in rookie bonuses

11. Allow unrestricted free agency at age 29

12. Amend qualifying offers to:

75 per cent for players over 26 years old

50 per cent for players 26 years old and under

13. Reduce regular-season games from 82 to 70

14. Revise salary arbitration by:

Adopting baseball’s hi/low system

Allowing clubs to bring a player to arbitration

Permitting a team or player to file only once every 3 years

15. Set a drop-dead date for player signings

Technically, he says “avoid luxury tax,” but then comes out with “overage fees” for teams that go over a “payroll threshold.” I believe that this is legalese for “luxury tax.”

Anyway, there’s only two things I don’t understand about this proposal.

First, the arena construction fund. This would primarily be used in Canada, seeing as how just about every arena in the US is publicly funded. Mario could use the help in Pittsburgh though. But aside from the Islanders, Rangers, Oilers, Flames and Red Wings, aren’t all the team either in relatively new arenas, have ones under construction, or in the planning phase? And the Oilers and Flames aren’t really looking to build anew, at least not in their markets.

The second is the matter of the minimum payroll. I still don’t understand how this is supposed to work exactly. If I have a young, rebuilding club with a lot of my own draft picks on their entry-level contracts, those very contracts could and would limit my ability to reach a minimum payroll level.

I will say, to be positive, that there really isn’t anything in the proposal I don’t like. I especially like the luxury tax – oops, “overage fees.” They do penalize the teams who just don’t give a shyte about the impact their spending has on other teams, while still allowing teams to get players that would help their teams.


24 Responses to Burke has a working solution

  1. Bishop7979 says:

    First off, when they say revenue sharing, where is this money coming from? I mean basically does this mean that each team will recieve 6.66 million from the league or what?

    Second, the whole luxary tax thing. you do bring up a good point, if there is a minimum of 33 mil set up what does that do for teams that are working at a far less level? I mean Pittsburgh, Washington, Chicago all three of them probably wouldnt break 25mil next year if the season started under the current system. The Wild are below 33 mil, right? Buffalo, Florida all below 33 mil. what does that mean, that these teams will have to beef up their payroll by by 10-12 mil over the next 2 years?

    And what of the “overage fees”? Are these split between the teams that stay within the 33-38 mil range? or do they go to teh league?

    I love number 6. the more a team overspends the more they are taxed. And you know teams like the wings, the leafs and the aves would be more than willing to shell out an extra 5 mil a year just to keep their 45-50 mil payrolls intact, they can afford it.

    I guess i can live with 12 less games a season.

    But I dont understand what you mean by a drop dead date to sign players by.

    I like the change in qualifying offers, and the if I understand what you mean by bringing players to arbitration, I like it. first up to bat, John Leclair!

  2. slugger says:

    I don’t understand alot of what burke or nhlpa is saying. All I know is players have to give in and maybe go with a soft cap of 40 to 44 mill.

    What Gary bett is saying about having 31 mill cap is also not going to work. 31 mill cap That’s carzy !

  3. Boozer says:

    Well say what you want about the Leafs (and others) overspending habits but the Leafs, with their 60mil+ payroll still made money hand over fist last year. What the luxary tax will do is protect the owners from themselves.

    The players to not sign themselves to 10mil/year contracts the owners (well GM’s) do.

    Now if I run a business, say McDonalds, do I go and offer my players $30/h or maybe something I can afford to pay without losing money?

    I certainly like some of the proposals (10-14, put forth but a luxury tax I do not.

    Now maybe with a cheap luxury tax system it might be workable… .50 on the doller or even 1:1 but forcing a team who would like a $45 million payroll (7 mil over the cap) to pay 66 million seems a little extreme with the numbers above.

    And where does this extra 21 million in ‘overage fees’ go to?

  4. habswinthecup-again says:

    The drop dead date means that a player has specific time to sign with a team (i.e Oct. 1st) if the player does not sign then he does not play for the whole year. The NFL has this rule and it works pretty good.

  5. StuWild says:

    Absolutely love this DROP DEAD DATE idea but you think the NHLPA would ever agree to it?

  6. cgolding says:

    as the above post noted, the major issue with the whole thing that is going on right now is that the owners want to protect themselves from the other owners, ie. the Leafs, Flyers, Rangers, Wings, etc… that are willing to dish out major cash to be competitive. it simply isn’t a fair competitive market, this is bolstered by the fact that a dude did a mathematical study of pro-sports which specifically linked winning to spending… which sorta ends the NHLPA ability to say look at the Bolts, it’s a statistical fact that born out over time a team with money and good decision making(not the Rangers) is going to be consistently better than those without.

    so…

    add to the above the fact that apparently Bettman negotiated in his last re-up the ability to do what he wants as long as he gets 8 votes from the pool of owners. there are DEFINITELY 8 cheap owners out there who are sick and tired of having these teams with monstrous payrolls running around the league, think about Wirtz for a secon and the Boston management group. for those thinking that no form of tax/cap is going to get laid down, this is basically a death nell for that belief. there are 8 owners out there for sure willing to back Bettman in forcing the system down the union’s throat.

    as for burke’s proposal, i’m not sure that Bettman has any interest in looking at it, but i think it makes a lot of sense. personally i would think phasing it in over more than two-years would make a lot more sense, if you remember what i put down a couple weeks ago, i thought something on the order of five-years with real teeth starting to bite down at the three year mark would work for everyone because it would allow 3-year contracts signed a year ago the opportunity to clear before it got uber-punitive to those teams that hadn’t really done anything wrong.

    this tax would absolutely keep teams in line with the 38 million. using the modern world where you have a 60 million dollar team, those guys would be paying 148 million dollars for those contracts under this system… you see owners really willing to jump all over that?

    for those saying the leafs are making “fistfulls” of cash, i am pretty sure you are exagerating. they are obviously making cash, but not a ton… not that they don’t have a ton of money floating behind them that has nothing to do with the leafs specifically… just no teams are really in the dough like you have in the NFL.

    as for questions regarding the “minimum” salary for teams. this is an absolute necessity for this system, and it is something that baseball failed miserably in creating in their last negotiation. if you are going to have serious revenue sharing, meaning the big markets like Philly, Detroit, NY, Toronto, etc… are diverging some of their locally generated funds to the league, you have to force the small market teams to use that money for their salary to be competitive, not pocket it.

    Philly alone has an absolute ton of revenue, especially for a US market, that is going to get sucked into such a system. the fact that they own their TV station, thus get all the ad money that goes with the Flyers(who get the strongest tv rating outside of the eagles in philly), strong radio returns, clothing sales, the skatezones all over the place, etc… they will be giving a ton of cash to a team like Tampa that doesn’t have that revenue. if the owners are pocketing it on the other end, the big market teams are going to flip out, thus you make a minimum salary agreement.

    the NHL needs to consider a soft-cap system in order to get any negotiations going, that is the middle ground from an open market to a cap. they are never going to create the “impasse” they seem to want in order to break the union if they don’t at least appear to be compromising, which they haven’t done as of yet. this luxury tax is a cap for all intent and purpose, they should look at something this punitive as a deal to work off of.

    nevermind the bullox,

    chris

  7. cgolding says:

    earlier UFA status should get them to make a lot of concessions because that is a HUGE plus for their members…

    if the NHL is willing to negotiate, i think they could work off of this.

  8. cgolding says:

    it’s extreme specifically because the idea is to make it act like a salary cap… the idea is to stop that spending.

    and the owners understand the fact that they are the ones giving the contracts out… they also understand that there are have’s(leafs, flyers, etc…) and have not’s(oilers, pens, etc..) and they are sick of it… the reason for the cap has nothing to do with anything the players have done, and everything to do with what the big market teams have done.

  9. ThunderBall says:

    Why don’t they just meet halfways? The owners will loose, the players will loose, the fans will loose and most of all the sport of icehockey will loose in case of a lockout! Icehockey is in the shadows of basketball, baseball and american football and will perhaps not survive a long lockout??? But I live in Sweden so I don’t complain, it will be a very fun season with many stars to see for us!

  10. Aetherial says:

    The Luxury tax is severe… it amounts to a salary cap.

    The players will call it a cap in disguise and rejectit immediately.

    The reduction in games will reduce revenues and the owners will reject this as not doing enough for them on that basis.

  11. habsoverserver says:

    I am saddened at the prospect of so many hockey related people losing their income as a result of the lockout.

    However, I don’t care if hockey does not come back this season or ever. The game is no longer entertaining. The NHL died when the Devils won their strike season shortened cup. Since the last labor disruption, the NHL gave us 10 years of concussion syndrome hockey that drove the greatest players away from they game they love.

    It doesn’t matter what the salary cap is. People are not going to pay to watch a sport that robs its participants of their ability to display their skills. NHL teams are coached to not allow anyone on either side of the puck to do anything creative.

    The NHL is dead. It’s time for ESPN to carry some decent hockey. Maybe the Finnish or Swedish leagues are worth watching.

  12. cgolding says:

    supposedly both sides have already agreed to a 72 game schedule.

  13. hockeyhead says:

    you know what (i agree)

    but you also gave me any idea. i don’t know about sweden but a lot of european teams have advertising on the uniforms.

    why doesnt the nhl do that for marketing and extra cash?

  14. nordiques100 says:

    i dont mean to be such a pessimist but even though those solutions by burke sound really good and workable, the players will outright refuse almost every one of those points and would never accept any deal constructed like that.

    1. i think the players and owners would actually find common ground on this item. there definitely needs to be some time given to phase everything in.

    2. depends on what type of deal it is. if there is a cap the players wont want that for 12 years and would want something to opt out of. if the deal is much like what it is now with some changes, then 12 years wont matter to them. but you have to think the players will get sick of so many work stoppages.

    3. escrow is fine but the players certainly would want to be affected as little as possible. they did offer like rollbacks but alot of conditions were tied to it so it wasnt a full rollback of salary. this is why fans think the players are greedy.

    4. revenue sharing is ok to the players. doesnt matter who they are getting paid by, they just want the money. so if teams like the rangers and leafs are going to share with the pens and sabres that is fine, as long as those lesser teams are willing to fork over the big contracts.

    5. that threshold is much too low for the players liking i’d imagine. they would want it to be around the 50 million range to guarantee several big spending teams. and they would love a minimum so that would make owners spend more.

    6. the overage fees are fine to the players but much too high for their liking. it would act too much like a hard cap and be too much of a deterrent on spending. they want spending to continue but would accept some restraints as a concession to the owners, but not like this. if teams like the leafs stop spending big, that doesnt help the players.

    7. the players certainly dont want a repeat offender fee. the would feel that the overage fees would be enough. they dont want this many deterrents to spending.

    8. the players wouldnt mind a guaranteed amount of DHR. but it would have to be at least 55 percent with great potential to rise to a much higher amount. tehy certainly dont want this amount to be fixed. that would mean cost certainty which is a no no to hte NHLPA.

    9. i really like this point and the players would too in order to build trust between parties but i feel in some way the players will still dispute the numbers if losses are reported. as long as it looks like the owners are making money then the players will accept those results. if losses then the owners are allegedly lying.

    10. the players will conceed on this item. they are willing to let the rookies take the hit as a concession but dont think they would limit bonuses. for sure tehy wouldnt mind a small decrease in guaranteed money to the rookies but they like the inflationary pressure the bonuses put on salaries so they would be more inclined to keep bonuses from being limited.

    11. the more the age goes down the more the players like. but this wouldnt be something that the players would get in exchange for a concession on their part. they would want this to happen regardless. perhaps to age 28.

    12. another thing the players would hate. they for sure want to keep the qualifying offers exactly the same to ensure they still get paid good money even for subpar seasons.

    13. yes a lower number of games is great for the players but they would do it if it meant no reduction in pay. they would not want salary levels to go down with less games. they would want it to remain the same.

    14. no way would the players want to veer off from the current arbitration process. status quo is the best for the players as it is greatly to their advantage.

    15. the players would not want this date as holding out is one of their biggest cards they can play in negotiations.

    i think with burke’s workable solution among some other changes like perhaps contraction and definitely some on ice rule changes, the league would flourish. however the players greed and the egos of those involved will prevent anything fair and workable and useful from coming about.

  15. IceyCup says:

    You don’t know what the NHLPA is saying but all you know is that the players have to give in…

    Gary Bettman’s proposal will never be met by the players. A soft cap was never even on the table. A hard cap is the only thing Bettman is after. A soft cap won’t bring about the change needed where the last proposal by the NHPLA (5% rollback, luxury tax etc) would, in comparison. A soft cap represents less change than the last proposal by the NHPLA over the long run. Soft caps have a way of being cir*****vented.

  16. IceyCup says:

    damn good point.

    there are also adverts on soccer jerseys.

    maybe purists will laugh at the idea but SOMETHINGS gotta change.

  17. habsoverserver says:

    b/c the only time hockey gets nat’l exposure is when somoeone swings a stick to maim another player. not great to be an advertiser on the uniform of a guy being arrested for assualt.

    on another note, hockeyhead how is it that your man Thornton could be all over Koivu in the world cup but in the playoffs Koivu treated him like a ragdoll?

  18. Bishop7979 says:

    Personally I feel that the NFL has a great system set up. Between the salary cap, cut off date for signing players, and the abilty for a team to cut players mid contract, the NFL has put a product on the field that allows any team a chance to win the super bowl in any given year.

    This helps create a fan base the returns year in and year out because there is this sence that their team can win it all. And if they dont, their team has the ability to dismantle and rebuild at a quicker rate.

    So to this end, I say we lock the main players in the NHLPA in a cold dark room with a set up jumper cables attached to their testicles and keep cranking up the juice till they agree to the following:

    A soft cap with a high luxary tax that is directly tied to total league revenue. Set the min cap at 31 the max at 45 with a 2 dollar for every 1 dollar spent over 45 mil. Both the Min and the Max would be adjusted each year based on the leagues earnings. As the league grows so does the salary cap.

    Set up the league as one large entity. All revenues are shared equally among all teams. this means evey team is tied to each other, all for one, one for all mentality. You want the league to be stable then make the redwings care about and depend on the viability of the oilers. every owner gets an equal share of the profits, every owner takes and equal hit when they lose money.

    Lower the age of UFA to 27. In a system where everyone is locked into a similar budget player movement becomes more about winning and the team than about money. If team hasnt won a players respect by 27 then he should be free to move on, end of story. This also ties into the “every team has a chance to win every year” mentality.

    Rebuild the rookie contract structure so that no rookie can make more than 1.5 mil ayear. The thornton clause no longer is exceptable.

    Make players feel they have to work for their jobs. Lower the penalty for buyouts to 1/4th the total value of the contract, and have that money count towards the years cap.

    Move the trade deadline up to Jan 15.

    Reduce the number of games from 82 to 70 (I like that).

    Revise salary arbitration by:

    Adopting baseball’s hi/low system

    Allowing clubs to bring a player to arbitration

    Permitting a team or player to file only once every 3 years

    (I also like that)

    Make changes that will improve the games flow and scoring. Remove the redline. Make the nets wider and allow them to be open targets to physical play behind the goal line. Call the game tighter, especially in the clutching and grabbing department. set up a system of fines for refs who get multiple complaints filed against them by teams (who can back up their complaints with video)

    anyways, I’m sure many will disagree with my ideas. there will be many leafs wings and aves fans jumping on the cap, lux tax and total revenue sharing ideas right away. But the idea of every team for themselves has passed, the NHL has to be stable and viable every year.

  19. rojoke says:

    I think under the NFL’s revenue sharing scheme, the home team keeps 75% of the gate. The NFL doesn’t have local TV deals, so that’s a revenue stream they don’t have to deal with. But I would guess that local TV contracts in the NHL would be included in there.

    If that were so, would the Leafs have to cough up money from their cable channel? If the Leafs are using money from LeafsTV to operate the hockey club, and I am guessing they are, then that would make it fair game.

  20. rojoke says:

    If you want to use a minimum salary and relate it to revenue sharing, then that I could understand, trying to discourage teams from just leeching of the rest of the league. But if you’re going to have a minimum, and penalize teams for not meeting it thru fines or draft picks, that’s not really being fair to teams who may have legitimate reasons why they don’t meet the minimum.

  21. hockeyhead says:

    1. don’t be so negative. not everyone is an animal. hockey is the same everywhere. why not put ads on shirts. like red bull or something “extreme”.

    2. should i respond about the former no. 1 pick. yes, he was hurt. he has more experiece. he was playing for his country against the best with the best. and he had pat quinn coaching him. could of been the best thing for joe (if there is hockey again)

    one last point…..joe was the checking line center (even tho they put up 12 points in the tourney: 6 by joe) he knew his role.

    hope that clears things up on jumbo joe.

  22. shortcat1 says:

    I can’t say that I understand everything involved in Mr. Burke’s proposal.

    One thing that I do understand is that both sides are in the wrong.

    The players, on one hand, have salaries that are ridiculously high (just like they are in most other ‘pop’ sports – baseball, basketball, etc.) and they need to be made more reasonable.

    Yet, the owners are just as, if not more, responsible for this state of affairs than the players are. If they had been more fiscally responsible and ‘long-term’ responsible, this situation would not be upon us. To have participated in the bidding wars for ‘stars’ to hopefully bring them over the top in the matter of success and to present a more attractive product to their markets has shown itself to be, for the most part, a failure. They have helped to create this high salary base in a sport where it has never been altogether that very popular below the Canada/US border (except in areas where it is well entrenched or is a natural part of the population’s psyche – northern US?) Also, their perceived need to expand, expand, expand and expand the league has brought in huge weaknesses in the league’s financial foundation and, for those who understand the game, a serious dilution in talent with a resulting mediocrity of product. (By the way, there’s a bit of the wonder of hindsight here.)

    So, all I can propose is that the PLAYERS accept that there be some sort of salary cap (most of us in the average working world live with that). The OWNERS must develop some sort of effective self-policing system which will prevent some of them (St. Louis Blues and New Jersey Devils, most recently) from initiating further rounds of self-destructive bidding wars. (The problem with this is that is may smell like collusion which may cause problems.)

    In any case, the longer this lock-out/strike remains in place, the likelier it will be that small market US teams will be forced to fold. I don’t think, in the long run, that Canadian teams will massively lose out (maybe Ottawa) but, look for teams where hockey is not a natural or is too new (Anaheim, San Jose, Phoenix, Tampa Bay, Florida, Nashville, Columbus) to suffer severe blows that could very likely lead to bankruptcy and closure (not necessarily a bad thing in itself.)

  23. cgolding says:

    the minimum stems purely from the revenue sharing aspect of any agreement.

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