[News] NHLPA rejects NHL's extension of CBA for Olympic participation offer

[Oil Stain]

Originally Posted by FlamesAddiction

There are examples, sure. Just like there are examples of players going broke. But I would bet that in those situations, there is a lot more going on behind the scenes.

One is more financially risky (but also potentially and usually more lucrative) and the other is riskier to the health and short earning duration.

The difference is that no player has ever gone broke from PLAYING hockey. Owners have gone broke trying to finance arenas/run teams.

Do you think the players should get a greater than 50% share of revenue because they risk injuries and have a shorter duration careers?

I think that's a choice they make and they shouldn't get extra compensation for it. There is nothing stopping them from continuing to work in the hockey industry after they retire.

[FlamesAddiction]

Originally Posted by Oil Stain

The difference is that no player has ever gone broke from PLAYING hockey. Owners have gone broke trying to finance arenas/run teams.

Do you think the players should get a greater than 50% share of revenue because they risk injuries and have a shorter duration careers?

I think that's a choice they make and they shouldn't get extra compensation for it. There is nothing stopping them from continuing to work in the hockey industry after they retire.

I don't think we will agree on this, but I respect your opinion.

[trublmaker]

Originally Posted by Oil Stain

The difference is that no player has ever gone broke from PLAYING hockey. Owners have gone broke trying to finance arenas/run teams.

Do you think the players should get a greater than 50% share of revenue because they risk injuries and have a shorter duration careers?

I think that's a choice they make and they shouldn't get extra compensation for it. There is nothing stopping them from continuing to work in the hockey industry after they retire.

did they go broke from running a team etc or from their other business interests ?

[FlamesAddiction]

Originally Posted by trublmaker

did they go broke from running a team etc or from their other business interests ?

It was both and I didn't feel sorry for them. While other contending small market teams like Calgary and Edmonton chose to sell off their high paid players to survive, the Pens kept spending like trailer trash winning the lottery. Jagr, Lemieux, Francis, Coffey, Stevens, Murphy, Mullen, Tocchet, etc... It was the pre-cap era, but they managed that team into the ground to the point that they owed Lemieux so much money, they had to make him an owner. And then after that, they cried poor and tanked until they won Crosby, then a new arena and a salary cap. It's impressive on one level that they pulled all that off, but I have trouble respecting that club.

[MarkGio]

Originally Posted by Resolute 14

Don Fehr was prepared to cancel the 2002 World Series. His players gave him a mandate to do so. Fortunately, the players also wanted to avoid repeating the mistakes of the past as much as the owners did.

The NHL will never know labour peace while someone like Don Fehr is head of the NHLPA because the NHL knows full well the damage MLB did to itself in 1994 and almost repeated in 2002. There will never be a season started without a CBA, and Don Fehr's entire history is one of brinksmanship. This is not a recipe for labour peace.

You obviously have no idea how unions work. No union is one man. The president represents the wants of his members, not the other way around. I could easily predict the mind set of every worker and employer on this planet:

Worker

"I want to be paid more money than anyone else and work the least. Somehow I deserve to have the company provide me with the most responsibility, benefits, training and work-life balance without me ever having to invest, dedicate myself or contribute to the organization at all"

Employer

"I want to generate the most amount of profits imaginable because I built this company and the workers would be nothing if it wasn't for me providing their family's with food on their table. They should get paid as little as possible and be satisfied they even have a job, and shouldn't complain about work conditions, benefits, hours or anything else that's none of their business, and leave the thinking to those who are capable"


Obviously not every person thinks like this all the time, but generally we all fall under the cake-and-eat-it-too paradox at some point in our lives

[iggy_oi]

They're not playing "for free". The owners are effectively paying for them to go as the league is shut down for two weeks.

The owners are effectively paying for them? How so? The league being shut down for two weeks doesn't cost them any revenue, it merely delays it. Funny how they don't seem to mind making the players wait for their money. I think there should be some changes to the current system, maybe they don't have to eliminate escrow all together, but there must be a better solution than this. The players have zero say in the league keeping a poor performing team in a bad market while that franchise loses money, why should they have to pay for it?

[FlamesAddiction]

Originally Posted by iggy_oi

. The players have zero say in the league keeping a poor performing team in a bad market while that franchise loses money, why should they have to pay for it?

That part is a big for me. They made an agreement in the partnership that the league would extensively pursue creative ways to increase hockey revenue, yet they prevent relocation of teams that are not bringing in revenue. It's not a 50/50 split when one side still has all the decision making power and are still only serving their own personal interests.

[iggy_oi]

Originally Posted by TheoFleury

I would be more on board with your argument if the NHLPA didn't invoke the escalator every year, helping increase the escrow they so despise. They are talking out of both sides of their mouth and it's annoying.

Or you could look at it as them cutting their losses on the escrow by using the escalator. Also do you how often the players have lost their escrow due to using the escalator? If the answer is never then I'm not sure what your issue is with them using it. I can't imagine anyone on here being happy with giving a percentage of their earnings to their employer as a safety net for their employer, what if that employer goes under because of their poor decisions regardless of your escrow payment? Would you not have preferred to have kept that money now that you are unemployed instead of investing in a company bankrupting itself?

[iggy_oi]

Originally Posted by FlamesAddiction

That part is a big for me. They made an agreement in the partnership that the league would extensively pursue creative ways to increase hockey revenue, yet they prevent relocation of teams that are not bringing in revenue. It's not a 50/50 split when one side still has all the decision making power and are still only serving their own personal interests.

The players don't cause the league it's business problems. Irresponsible owners/GMs do. Want to keep player salaries down? Stop giving out ridiculous contracts. At the end of the day, the players will only make what teams offer them. How people take the leagues word on these CBA matters as gospel when they can't even figure out how to discipline players with even the slightest degree of consistency is beyond me.

[nfotiu]

Originally Posted by FlamesAddiction

That part is a big for me. They made an agreement in the partnership that the league would extensively pursue creative ways to increase hockey revenue, yet they prevent relocation of teams that are not bringing in revenue. It's not a 50/50 split when one side still has all the decision making power and are still only serving their own personal interests.

There's a lot of truth in that post. The dynamic between sports leagues vs unions is very complicated since it is such a fine line between whether they are 30 individual employers competing for employees or one employer who can pay their employees whatever they want.

I'm sure the players would love it if it was 30 individual employers. The league would love it if they were a single employer with no other option for their employees. The truth is that it is somewhere in between, and the happy medium is both sides realizing that and having a CBA that is a compromise.

Bettman's NHL has always strove for being recognized as a single employer, but also one that strives to bring the costs low enough for the lowest revenue teams, but at no expense to the highest revenue teams.

The NHL wants to sell its players that 30 financially healthy teams is required for them to all have jobs, but never acknowledges that teams like Toronto need to have a financially healthy league to play in to keep their revenues coming in.

All of that is a recipe for continued labour strife that combined with an impending revenue downturn, will eventually ruin the league.

[Gaudfather]

The NHLPA don't realize that you don't try and get fois gras from the golden goose. And once you kill it, there's no bringing it back.

Viewership is already at risk in this A.D.D., smart phone society - so I wouldn't want to risk alienating your fan base any further.

[TheoFleury]

Originally Posted by iggy_oi

Or you could look at it as them cutting their losses on the escrow by using the escalator. Also do you how often the players have lost their escrow due to using the escalator? If the answer is never then I'm not sure what your issue is with them using it. I can't imagine anyone on here being happy with giving a percentage of their earnings to their employer as a safety net for their employer, what if that employer goes under because of their poor decisions regardless of your escrow payment? Would you not have preferred to have kept that money now that you are unemployed instead of investing in a company bankrupting itself?

It doesn't cut their losses at all, it ends up balancing out to a 50/50 split either way. The escalator ends up getting recouped by escrow each year. It just gives GMs more room to overpay players for the upcoming season before the numbers are finalized.

[iggy_oi]

Originally Posted by Gaudfather

The NHLPA don't realize that you don't try and get fois gras from the golden goose. And once you kill it, there's no bringing it back.

Viewership is already at risk in this A.D.D., smart phone society - so I wouldn't want to risk alienating your fan base any further.

The fact that the cap has continued to grow, even after 2 work stoppages doesn't support your argument.

[Oil Stain]

Originally Posted by FlamesAddiction

That part is a big for me. They made an agreement in the partnership that the league would extensively pursue creative ways to increase hockey revenue, yet they prevent relocation of teams that are not bringing in revenue. It's not a 50/50 split when one side still has all the decision making power and are still only serving their own personal interests.

I'm just curious what percentage of the revenue you think the players should get since you seem to think 50/50 isn't fair?

I also don't see why the players should be making business decisions as they are very unqualified for that task. If they provided half of the money to run the league out of their own pockets I think you'd have a point.

[Frequitude]

Either the NHLPA doesn't uderstand basic accounting or they're just using escrow as a proxy to crack a few more percent out of HRR. I suspect the latter. Otherwise their true fight lies within.

A question for the more cap savvy...is there a reverse escrow mechanism? ie if salaries somehow come in below 50% of HRR do the owners have to cut a cheque? I would hope so.

[nfotiu]

Originally Posted by Gaudfather

The NHLPA don't realize that you don't try and get fois gras from the golden goose. And once you kill it, there's no bringing it back.

Viewership is already at risk in this A.D.D., smart phone society - so I wouldn't want to risk alienating your fan base any further.

The owners aren't the golden goose though. The real long term golden goose is the general population of North America who has been unwittingly funding exorbitant owners' and players' wealth through subsidized stadiums and cable bills. Both those revenue streams are hanging on the brink due to the sports leagues and media conglomerates unrelenting greed and that is the golden goose who will die.

[GirlySports]

Originally Posted by Frequitude

Either the NHLPA doesn't uderstand basic accounting or they're just using escrow as a proxy to crack a few more percent out of HRR. I suspect the latter. Otherwise their true fight lies within.

A question for the more cap savvy...is there a reverse escrow mechanism? ie if salaries somehow come in below 50% of HRR do the owners have to cut a cheque? I would hope so.

I don't think that would be possible as the owners are withholding payment to the players to ensure that the players stay below 50% and then the escrow would be returned to make up the difference.

[iggy_oi]

Originally Posted by TheoFleury

It doesn't cut their losses at all, it ends up balancing out to a 50/50 split either way. The escalator ends up getting recouped by escrow each year. It just gives GMs more room to overpay players for the upcoming season before the numbers are finalized.

Do you have a link that shows the amount of money from escrow that was used to cover the added escalator costs?

Edit: and it cuts their short term losses by enabling free agents to have a higher earning potential. If you pay 20% in escrow and the escalator allows you to make an additional 10% in annual salary, then you will still make 8% more annually.

[getbak]

People keep bringing up the escalator, but the escalator isn't really the problem. The escalator pretty much works the way it's supposed to. The escalator is self-correcting because it's always applied to the previous season's actual HRR (as it's known at the end of June), so it's not throwing the whole system out of whack or anything. 5% was chosen because it's generally pretty accurate in projecting year-over-year revenue growth. Some years, it's high. Some years, it's low. But, that's the nature of any estimate.



Let's look at the real numbers...

This year's cap is $73M and the floor is $54M. That puts the midpoint at $63.5M. If we multiply that by 30, we get $1.905B for the total projected players' share of revenue for this season.

That number would have been calculated by adding the 5% escalator to last year's actual revenue. That means we can assume that the players' share of last year's actual HRR would have been $1.814B.

Last year's cap was $71.4M and the floor was $52.8M, with a midpoint of $62.1M. Multiply by 30 and last year's projected players' share of revenue was $1.863B.


So, this is what we can figure out from the known numbers: The projected players' share of total HRR for 2015-16 was $1.863B. The actual players' share of total HRR for 2015-16 was $1.814B. The projected number was high, but not outrageously so (2.7%). There have been a number of years since 2005 where the 5% escalator was too low.


If you look at last season's payroll numbers on the CapFriendly archive (https://www.capfriendly.com/archive), the combined total paid to the players last season was $2.047B. This is not necessarily an accurate number for the real dollars paid out because this is just cap hit and some players (like Pronger) have high cap hits with low actual payouts and others (like Weber) have high salaries with lower cap hits. Generally, those difference should cancel each other out, so the cap total should be close to the salary total... Close enough for this discussion, at least.

If the escalator hadn't been used to set last year's cap, it would have been about $68M, rather than $71.4M. However, a 5% reduction in the cap wouldn't necessarily mean a 5% reduction in the total salary payout because you still have to account for injury replacements and bonuses paid. Plus, a lot of teams were under $68M anyway, so they likely wouldn't have reduced much with a lower cap.

Even if a lower cap resulted in the total payout to the players dropping to $2B flat, that's still a 10% overpayment to the players. That's better than 12 or 13%, but it's still not great.


The problem with the system as it's set up right now is that it was designed with the assumption that the average team payroll would be around the midpoint of the salary range. Only a few teams were supposed to be anywhere near the cap (with a few teams near the floor to offset them). This has never been true. In fact, in most seasons, there are more teams over the cap at the end of the season than there are below the midpoint (never mind near the floor).

The current system gives teams an incentive to spend as much as possible because they know they'll get escrowed money returned.

The only way to fix this is to fix the way the cap is calculated. Until that happens, nothing significant will change, whether they use the escalator or not.

[getbak]

Originally Posted by Frequitude

A question for the more cap savvy...is there a reverse escrow mechanism? ie if salaries somehow come in below 50% of HRR do the owners have to cut a cheque? I would hope so.

Yes. If the total paid to the players is below the final players' share, they get all of their escrowed money returned (with interest) plus a bonus equal to whatever the underpayment was.

IIRC, since 2006, there have been a couple of seasons where the players received a bonus at the end of the year. There have also been a few years where the players have received almost all of their escrowed money back.