Tom Benjamin’s NHL Blog

Tallon’s Blunder

Per TSN:

Sources tell TSN the NHL and the NHLPA are investigating what might have been an enormous mistake by the Chicago Blackhawks.

Chicago general manager Dale Tallon says the qualifying offers were mailed to the players in time, on June 29th, but says because of the July 1 holiday, some of the players didn’t receive them in time.

If the player did not receive the offers in time, they did not receive them at all. If they did not receive them in time, they are unrestricted free agents. How can it be otherwise? If I represented Kris Versteeg and he had not received his qualifying offer by the deadline, I would immediately announce that my client was an unrestricted free agent and open the bidding for his services.

That we have not heard from any of the agents involved makes me wonder whether we have heard the entire story. This is a set of circumstances where the agent has to stand up for the player because nobody else is going to do it.

Both the NHL and NHLPA will prefer it if they can find a way to wink at Tallon’s blunder. Nobody wants to see the Hawks take this sort of blow just as they are set to become one of the league’s top revenue drivers. Paul Kelly in particular would like to kick Tallon in the balls because his interests in the matter are conflicted every which way. He wants Chicago revenues, too, and while Tallon’s mistake benefits a handful of players it is the rest of the players who pay the price. That egregious management errors are paid for by the players is the most distasteful part of the CBA.

What an incredible blunder. Tallon waited until June 29th to mail out offers that had to be in the player’s hands by July 1st? Inexcusable. I’d fire him for it no matter how this turns out.

Panther Marketing

Puck Daddy tips us off to a new Panther marketing campaign in Florida, a campaign that has the fans “hiring” an agent to negotiate lower ticket prices. In a later interview Panther’s president Michael Yormack declared that the ad campaign had nothing to do with the impending departure of Jay Bouwmeester:

“Normally, we would do our new business push right after the season,” said Yormark. “We decided to hold off on that because we didn’t want to come out too early; especially since we’re going to be investing significant dollars into our ad campaign. We felt July was a better time for us.”

While I do believe Yormack when he says the new marketing campaign has nothing to do with Jay Bouwmeester, this explanation is surely ridiculous. They didn’t want to come out too early? July is a better time to deliver up a marketing strategy that will surely reduce prices? I don’t think so. I think teams have their marketing strategies ready to go well before the season ends. If teams aren’t trying to get people to renew season tickets in February and March they are not competent. That’s when you decide the pricing structure, too. What will the Panthers do about fans who have already bought tickets after the agent successfully delivers lower prices? They will have to make refunds or they will make their most loyal customers very angry. We are supposed to believe the Panthers planned it this way?

To me, the new marketing signals that sales are not going well in Miami. Indeed they are going so poorly, the team decided to cut prices. The “agent bargaining for the fan” ruse is a clever way to present those price cuts as something other than a failure to generate sales.

But why else does a team ever cut the price?

Postscript: I don’t think anyone should be very surprised that season ticket sales are slow in Florida and not just because of Bouwmeester. There are consequences when you give away an enormous number of tickets. Would you buy a season ticket in Florida? Why? Why buy now when you can buy later at a price that is every bit as good? Better even.

Still Pretending

Eric Duhatscheck delivers up a post draft piece that begins with:

In the end, the NHL’s 2009 entry draft was more about smoke than fire, with only two prominent players changing teams and half-a-dozen others still on the board, awaiting word on their respective futures.

This slow-go development, which is becoming more pronounced every year, is tied inextricably to the upcoming free-agency period, and the uncertainty about how the market is about to unfold. If the dollars paid out this year are down from the ridiculous sums commanded by players over the past two years, then the trade dynamic will change as well.

I don’t know why hockey fans still get sucked in by all the trade talk in the period that leads up to the draft. I don’t know how hockey reporters can keep buying any of the trade whispers they hear. The fact is there are very few trades in this league. That should quash virtually all rumours as very unlikely, however logical they sound. Every year we hear about the big names who are about to move and every year nothing happens.

Furthermore, the trades that are made usually turn out to be inexplicable. I haven’t heard a good explanation for either of the two trades made last weekend. Here’s Eric on Pronger:

As GM after GM will tell you, the only real reason to make deals at the draft is if you’re after draft picks in return. The Anaheim Ducks received the equivalent of three first-round choices for defenceman Chris Pronger Friday night.

I can understand why the Flyers would like to have Chris Pronger and I can understand why the Ducks wanted to deal him. But why did he cost so much? It seems a crazy price to pay for one year of Chris Pronger. (On the other hand, the fact that Pronger is on an expiring contract could enhance his value.)

If that one seemed weird to me, the other “big” deal seems to be a waste of time. I don’t understand why Calgary bothered to send Florida a draft pick for Jay Bouwmeester a few days before Bouwmeester becomes a UFA, particularly since his agent made it clear he is going to test the free agent market.

Next up? Teams set their teams for next year by signing free agents while the media pretends – we all pretend – there will be some trades made in September or October.

Signing the Sedins

Iain McIntyre has a good story on the Sedin negotiations, quoting both Gillis and the Sedin’s agent, J.P. Barry. While neither would confirm the numbers, neither denied the reports of a 12 year, $63 MM suggestion from the Sedin camp.

Backed by a tonne of irrefutable statistical data placing the Sedins among the National Hockey League’s highest and most consistent scorers since the 2004-05 lockout, Barry figures his clients are worth closer to $7 million annually.

I don’t see what the statistical data has to do with anything. The Sedins are about to become free agents – after July 1st, they are worth whatever an NHL team is prepared to pay them. Emphasis on the word them. The ballpark here is not between $5 MM and $7 MM. It is between $10 MM and $14 MM. Gillis thinks – and I agree with him – that the pair should come a lot cheaper than individual players of similar quality. The Canucks are being asked to commit $126 MM and I think that’s way too much.

I don’t like these long term deals to lessen the cap hit and I’m happy Gillis doesn’t like them either. I expect that the next few years will be difficult ones for the league and the teams that maintain flexibility are the ones that will do best in that environment.

Gaborik as (part of) the replacement is fine by me.

Update: Michael Russo writes:

For instance, it certainly appears as if the Wild is about to lose Marian Gaborik for nothing. I ran into a million NHL types yesterday who asked me about Gaborik, and each one said the same thing — losing an asset like that for nothing back is the type of thing that takes years to recover from.

I don’t get this thinking at all. I don’t think the Canucks will take years to recover if they lose the Sedins or Mathias Ohlund and get nothing back. First, once players get within sniffing distance of free agency, they are not team assets. They are independent contractors. Players are only assets (or liabilities) when they have a contract. Second, losing these players creates cap space. If the Canucks “trade” the Sedins and Ohlund for Marian Gaborik and Jay Bouwmeester, have they lost anything?

Widows 1, Bettman 0

The NHL has been underfunding its players’ pension plans by millions of dollars, shortchanging widows over a number of decades, an Ontario Superior Court judge has found.

This is the second major pension battle the NHL has lost. In a 1993 decision, Ontario Judge George Adams found the league had appropriated surplus cash that should have remained in the pension fund. The league had to restore $50-million to the fund. – Globe and Mail

What are the odds that the NHL decides to appeal? When news of this lawsuit broke, I wrote:

The NHL had better have a very good case. How does it look if they lose? A bunch of billionaires have been ripping off widows and orphans for more than twenty years? That will be great for public relations. It can’t be a huge amount of money, can it?

I’ll never understand why the NHL lets itself get into this type of situation.

And I still don’t understand a level of greed that can trump everything including maintaining a good relationship with the NHLPA or protecting the NHL brand. For what? The chance that they will finally win a court case so they each save $1 MM? This was a PR loser even if they won their case. I just don’t get it.

I hope we eventually get to read the decision. I also hope somebody in the hockey media finds one of these widows and writes her story. Doug Wickenheiser is probably one of the players and the Wickenheisers are, of course, a famous hockey family. Wouldn’t that be a juicy one?

The Latest Headache

While the stories that came out yesterday about the Tampa Bay Lightning ownership squabble obviously represent bad news for the franchise, they don’t make any sense at all to me. Mirtle pointed me to this John Romano story that details differences between the two major owners. Oren Koules and Len Barrie met with Gary Bettman but it isn’t clear whether anything was really resolved.

Even accepting that the two partners have been going at it like cats and dogs, why on earth would Bettman get involved? Unless the league has money at risk what is the league interest? I don’t think we are hearing anything near the entire story here and it is entirely possible that the league is lending money to Tampa Bay as well as to the Coyotes.

Mirtle sees bad things on the horizon:

Yes, the Lightning had won the Stanley Cup in 2004 and that fueled their success, but even with the lockout, the franchise was one of the true success stories of the sunbelt, next to only the Stars in Texas as a sign that “untraditional” markets could not only remain viable, but flourish. Now?

Now the team’s ridiculous owners are headed to the principal’s office to sort out their differences, and the outcome of that business will determine the Lightning’s course in the near term. But you have to worry about the franchise’s financial health given we’ve heard so much about how underfunded it is even with both Koules and Barrie at the helm, and on the ice, there’s little reason for optimism depending on how free agency goes.

I don’t think you can blame all the woes in Tampa on the ownership group although I agree that this has been a circus from day one. I picked the Lightning to be Bettman’s next crisis because they have revenue problems as well as a squeezed ownership group.

I don’t buy the idea that Tampa ever demonstrated hockey could flourish in that market any more than the Panther rat run proved Miami is a good hockey market. Every market can sell the sport with a winner. Viability is determined by the financial performance when the team can’t win. A seaworthy boat survives the stormy seas. Smooth sailing when the sun is shining doesn’t prove anything.

The Lightning are a losing team with unstable ownership in a marginal market during hard economic times. All four of those factors are critical. None of them alone would be enough to sink the franchise. But add them up and Tampa Bay becomes Gary Bettman’s latest headache.

Fat Chance

Gary Bettman is attending an NHLPA meeting today and Robin Regehr is looking for some answers:

With the salary cap now tied directly to league revenues, players are looking around at struggling franchises and wondering if they should be moved. Regehr, for one, wants to ask Bettman about his sunbelt strategy.

“The TV contract got smaller and some of the teams are in serious financial trouble. So there’s going to be a lot of those questions offered to him tomorrow and I think he’s going to have to hopefully give us a straight-up, truthful answer.”

I love the way Regehr put that. Bettman is going to have to hopefully… Anyway, fat chance.

First, there is no evidence that Bettman has ever been introduced to a straight-up truthful answer. Second, Bettman knows that whatever he says today will make the papers tomorrow so he won’t say anything he wasn’t willing to say publicly yesterday.

The players may be able to get us some information from Bettman on this issue though:

Another important part of Saturday’s agenda will see the players vote on whether next year’s league revenues are projected using five per cent inflation – a decision that will affect where the salary cap is.

Bettman was quoted the other day that the league was concerned about an escrow figure that is getting out of hand. This was a lie, of course because Bettman – and the rest of the owners – care not about the escrow level. But they do want the players to waive the 5% inflator to keep the salary floor as low as possible to help the struggling franchises contain costs.

If I was a player, I’d like to hear Bettman’s forecast for revenues next year before I voted on the salary cap level. So far Bettman has insisted that the league is doing great despite the recession and he’s said that sales for next year are strong. If that is the truth, why wouldn’t players push up the cap? If revenues for next year are looking soft, Bettman should have to hopefully give them a straight-up, truthful answer.

Hopefully. The players can’t expect more than that.

Geno, Sidney and the Matchups

Dear Tom,

DL

Its a good question, one I thought about while watching the series. I think all Babcock’s choice really tells us, though, is that the matchup game is more complicated than we think. Perhaps Babcock does think Crosby is the bigger threat. However I think it is more likely that Mike thought – incorrectly as it turned out – that Detroit would win if they shut down either Crosby or Malkin.

The question he considered was not “Who is the best Penguin?” but rather “Which Penguin superstar is more likely to struggle against Zetterberg and Lidstrom?” I think that question is a lot easier than trying to decide which player is better.

I’ve said this before – and I will surely say it again – but I think Crosby is a Peter Forsberg clone. In his own end and through the neutral zone he is no better than good. Once he gets the puck down low, however, he is extremely dangerous because he can’t be knocked off the puck and he has the hands and vision to make great plays. Malkin is more like Mario, a guy capable of spectacular play in any zone.

The entire Detroit defensive scheme is designed to keep the puck in the right end of the rink and Zetterberg’s job was to make sure Crosby didn’t get the puck in his comfort zone very often. When Sidney did get the puck in a good spot, Lidstrom is the perfect type of defenseman to play him. He didn’t waste energy futilely trying to knock him down – he used his long reach and quick stick to poke the puck away from him.

I think Babcock decided that he could not prevent Malkin from getting the puck and doing his thing. He could, however, keep the puck away from Crosby and thereby limit his effectiveness. A Crosby fan can make a case that he’s the best player in the league, but I don’t think Babcock’s decision is necessarily good evidence of it.

What’s in a Word?

I suppose this is a really small thing in the grand scheme of things, but it drives me crazy when the NHL (or any other organization) manages to influence (even manipulate) public opinion by framing an issue with a single word. In this case, the word is concession. In the story, that word is used eleven times to describe what the city of Glendale is going to have to do to keep the Coyotes. What do they have to concede? Money. Lots of it. Between $14 and $20 MM a year.

The correct word – subsidy – is only used twice. The NHL has managed to get the media to use a misleading word, a word that implies that the city would merely be compromising in a negotiation. All the league’s spin doctors have to do is use the word themselves and use it often. The well trained media follows. The league knows the public is much more likely to go for a concession than agree to a subsidy.

How the debate is framed can turn on a single word and the media should not let the league get away with it.

(Not that the public is likely to go for a concession either, given that 72% of the population thinks the idea stinks no matter what they call it. Furthermore, the city probably can’t afford it anyway. Which small city can “concede” $20 MM a year for any purpose these days? The fact that all of Gary Bettman’s alternative – to Balsillie – buyers expect city subsidies, means he has no real alternative buyers.)

Postscript: In an unrelated Coyote comment Tyler Dellow points out how the difference between the value of a team in Phoenix and the value of a team in Hamilton – the court’s criteria for setting the relocation fee – could be zero.

I don’t know that it’s all that crazy to think that the value of the opportunity to the NHL may, in fact, not be worth that much, and that most of the value would consist of taking away rights from Buffalo and Toronto… If anything, you could argue that NHL owners are probably getting a windfall here – collectively, they would be getting the rights to the Phoenix market back if Balsillie were allowed to move the team.

I’m not sure that I buy the argument, but it does occur to me that if Balsillie is successful in moving the team to Southern Ontario, Phoenix probably becomes the most attractive “new” market for hockey in North America. What does that say about the state of the league?

Score One for Who?

According to the Globe and Mail headline, it was Bettman and the NHL who scored in the Phoenix courtroom.

I don’t think so. The judge did not make any ruling about anything but he did make it clear that he agreed with part of the NHL position. The league claimed the Balsillie offered to buy something that Moyes did not own and therefore did not have the right to sell. The market for NHL hockey in Hamiltion belonged to the league, not the Phoenix Coyotes.

Judge Baum seemed to accept that argument. However, instead of dismissing the Balsillie offer, Baum wants the league to put a price tag on the market for NHL hockey in Hamilton. He is implying that if Balsillie ponies up enough to compensate the league he can have the team and move it. The bankruptcy court may not be giving Balsillie the right to move his team to Hamilton, but the judge does seem inclined to force the NHL to sell that right.

The RIM billionaire may not be willing to pay a fair price – after all much of his profit in this venture in the difference between a fair price for the team in Phoenix and a fair price for the team in Hamilton. In that respect, the Globe is correct. Balsillie could balk and walk away from his offer to buy the Coyotes. In that case, Bettman would dodge a bullet and win.

On the other hand, the league does not want to sell – at almost any price – what the judge agrees they own. They do not want to put a price on the relocation themselves and they definitely don’t want the judge doing it for them. Either way, it gives Balsillie – not the league – the choice. If he is willing to pay the price, he gets the team in Ontario. If not, the team stays in Phoenix.

For the first time, I think there is a good chance Balsillie will be successful. The judge has put Bettman in a box. He’s going to have to attach a price to the legitimate NHL interest in the Ontario market. Instead of arguing about whether Balsillie has the right to buy and relocate the team, they will be arguing about how much Balsillie has to pay to acquire a right the NHL doesn’t want to sell.

It had to be a bad day in the courtroom for Gary Bettman.