Tuesday, September 2nd, 2014

Proteau Sees a Light

10

Adam Proteau at the Hockey News seems to regret the positions he took during the labour dispute in 2004, and vows to do better covering it this time around:

But this time around, fans and the hockey media who are supposed to represent them have reason to be much more skeptical than they were nearly eight years ago. This time, there is no overriding principle worthy of shuttering the league’s doors for a full season. This time, you believe what you hear at your own risk…

…Why do the players have to keep financing bad business decisions like the money pit in the Arizona desert when it’s Bettman and the owners who are responsible for that strategy? If the owners can’t control themselves, handing out contracts such as the first one Ilya Kovalchuk tried to sign with New Jersey, why should the players have to pay? If we want to talk about how many cars and mansions Sidney Crosby has, why aren’t we including Ted Leonsis’ personal lifestyle in the discussion?

These are the questions that should have been asked more often in 2004 and I take full responsibility for my role in the NHL’s disinformation campaign at that time. But you can learn your lesson and I believe I’ve learned mine, which is why I believe this next labor clash won’t be about making ticket prices affordable for working class families or giving a team like the New York Islanders a better chance at winning. It will be about the ultimate goal of the last lockout: increasing franchise values.

Some credit to Proteau for taking responsiblity (which means what exactly?) for his foolish coverage of the last CBA circus, and for promising to do better this time. Still, I doubt very much whether very many other hockey writers do anything other than line up reflexively behind Bettman again.

I also doubt very much whether Gary Bettman cares what Adam Proteau writes this time around. The NHL needed the media last time – because there was “an overriding principle” at stake – to parrot the lies that successfully convinced the fans that up was down. This time the dispute is merely about money and it is a dispute that Bettman has already won with the settlement in 2005. Proteau and the rest of the hockey media might have made a difference last time, but Bettman does not need them now. The press has been made irrelevant.

While Proteau correctly identifies that the ultimate goal last time was increasing franchise values, I don’t think he understands how easily Bettman turned him into a chump. Bettman convinced Proteau et al that he was really working on behalf of small markets and fans who were paying too much for tickets. He even blamed the dead puck era on small market teams that couldn’t afford to buy scorers. A new CBA was supposed to leave us with 30 healthy franchises in 30 vibrant markets.

In fact, Gary Bettman had two goals, both of which were realized in spades. First, he recognized that the only route to increased revenues (and therefore higher franchise values) was to drive the best players and best teams to the biggest markets. New York, Boston, Chicago and Los Angeles were basket cases in 2004. The strongest teams were in places like Ottawa, San Jose and Tampa.

So Bettman’s best trick was pretending he was protecting small markets while he demanded (and eventually) wrote a CBA that clearly tilts the playing field in precisely the opposite direction – toward the big markets. The results have been obvious: Boston, Chicago and LA have won Cups while the Rangers have gone from missing the playoffs every year to making them. Despite a CBA that was supposed to ensure poorer teams could compete for their stars, we’ve seen a steady exodus of players from the hinterlands to the big cities. Meanwhile, the problems among the have nots actually got worse with ownership blowups in Phoenix, Tampa, Atlanta, New Jersey, Dallas and Columbus.

The second goal was to force the players to accept a fixed percentage of an artifice called hockey related revenue. The teams no longer decide how much the players are paid. The CBA determines it. The player percentage of revenue used to be the result of adding up all the individual contracts. Now the average player salary is negotiated between the NHL and the NHLPA and individual contracts are forced to that average. A bottom up system was destroyed and a top down system was implemented.

Under the old system, players had a great deal of leverage when negotiating with teams looking to hire them. Under this system neither the NHLPA nor the players have any leverage. They can’t collectively get any more money and they can’t prevent the owners from forcing them to take less in every CBA negotiation. Bettman did not just win the labour dispute of 2004 – he won every future labour dispute, too.

Several years later, Adam Proteau realizes he – and his peers – were played for suckers? Gary thinks that is pretty funny. Proteau now sees the light and now believes the owners may be setting a new standard for avarice?

Gary laughs even harder.

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Comments

10 Responses to “Proteau Sees a Light”
  1. Gary says:

    The only difference is that Bettman no longer has a neutered PA chief in place of the guy he pushed out. He’s got a smart, tough, media savvy opponent who took the baseball owners to the woodshed once and will not hesitate to do the same for his cyrrent clientele. Every Bettman move will draw a counter, any attempt at a unilateral imposition will draw a lawsuit and Bettman may even have to circle the wagons to defend the salary cap. It may be spelled Fehr, but it’s pronounced “fear” and that’s what Bettman should be feeling. Welcome to the big leagues commissioner.

    • Tom says:

      I don’t think Fehr can do much under this system and I can’t see the players going to the mat to fight the 2004 battle all over again.

      Bettman can make a compelling argument to the players. Let’s imagine Joe Average, halfway through his career. He makes $2.7 MM. Here’s Gary’s case:

      “We want you to take the same split as basketball players. That means you get cut by about $250,000 next year. Thereafter, you will get a raise again every year as revenues go up. It won’t be as big of a raise that you would get with 57%, but it will still be a raise.”

      “The alternative? We lock you out. By Christmas you are out $1.35 MM and you have 4.5 years left to play in your career. No matter what the final settlement looks like, you will never be able to recover those games or that money. And I’m telling you that by Christmas, you will be out $1.35 MM and looking at exactly the same deal. We know the fans will come back.”

      “There are 30 of us looking to divide up an extra $2 billion over the next ten years. We can understand how that might piss you off but only a very tiny percentage of that money comes from you. Most of it will come from guys who aren’t even in the league yet. Play for the next five years and make $10 million. Or get locked out and lose $1.35 MM in a futile attempt to get $11 MM.”

      “This is arithmetic. Unless you are prepared to sacrifice games and money to protect the interests of future generations of players – ha-ha, remember when players were willing to do that? – then the best thing for the individual player is to look after your own interest. Do what is best for you and your family.”

      What does Fehr tell the players to get them to ignore their best interest? Would you vote for Bettman’s deal if you were Joe Average? The best Fehr can do is tell the players that they can’t let the league take the $2 billion. That if they don’t stand up several years down the road the players will be in the same situation and they will get cut again. They have to stand against their best interests for the youngest of players and for future players. They did that for a principle, but I don’t think they will do it for money.

      The system gives the NHL all the leverage forever. That – in large part – is what the 2004 dispute was all about.

  2. Fauxrumors says:

    1) Maybe a naive question, but how does the NHLPA benefit the players at this point? If they disband doesn’t that eliminate the league’s power to institute a salary cap? Each player negotiates as an individual contracted seperately from all others?

    • Tom says:

      I don’t think the NHLPA does benefit the players at all at this point, but I think it will be a real fight to decertify. The league will lock out the players anyway and then try to get the courts to declare that decertification is merely a negotiating ploy. How long will it take to convince the courts to force the league to resume play? How long to win an antitrust case once the labour issues are resolved?

      Will players give up a season to get out of the Union? That’s the threat that forced the NBAPA to give up after they decertified.

      • beingbobbyorr says:

        Who would be the combatants in a “fight” to decertify? What cadre of players thinks the NHLPA still holds value for them and what are those values (if, as you claim, percent of revenue will be chipped away in perpetuity)?

        What do the courts or the league have to say on the subject if the players vote to decertify, Fehr is pink-sliped, and a “Service Disconnected” message greets anyone calling the NHLPA?

        Post-decertification, why would anyone have to force the league to resume play? The NHL either hangs out “Help Wanted” ads for ~700 free-agent independent contractors (where all compensation is deuces-wild), or they shutter their doors.

        If my ancient (1998) car breaks down and the cost to repair it exceeds it’s blue-book value, it’s in my interest to abandon it (and pretend it was stolen if the police come knocking on my door). What are the complications in the NHL-NHLPA relationship that prevent either side from taking a cue from my absurdly simple analogy?

        • Tom says:

          Who would be the combatants in a “fight” to decertify?

          If the NHL followed the NBA model, the league would file a lawsuit against the NHLPA saying that decertification was an unfair bargaining tactic, a sham designed to bring antitrust issues into a labour negotiation. The NHLPA would insist that it was not a ploy and players would file antitrust actions.

          What cadre of players thinks the NHLPA still holds value for them and what are those values (if, as you claim, percent of revenue will be chipped away in perpetuity)?

          I think most players are pretty apathetic about the NHLPA. I’d guess that they see value in perpetuating a system that makes them rich. Decertification is chaos and uncertainty. They want to play and they’ll play for less money.

          or they shutter their doors.

          This is what they will do and we all wait for the courts to decide whether the decertification was legitimate and if so, whether the owners are illegally acting in concert when they all shutter their doors. The league shuts down indefinitely just like in a strike or a lockout while the lawyers go to work.

          The players either 1) recertify and sign a CBA that transfers more of the money to the owners or 2) they plan to sit for a year or so and if they win the court cases, the league is thrown into chaos. Both the NFLPA and the NBAPA chose option 1.

          I wish I could see a way for the players to get from here to there because I think the players, the fans and the game would be better off within a few years if the NHLPA disappeared. It is making the transition.

  3. Neil says:

    Tom I don’t think your assertions are a slam dunk. People are inherently irrational and the members of the NHLPA could be whipped into an anti-Bettman mood by Fehr. Further, people who already have money are less motivated by the thought of getting more. Those most motivated to keep working will be the fringe players. What does Luongo care if he gets 60 million or 55 million?

    I think it would amusing (if unlikely) if Fehr called a strike RIGHT NOW. As in before the draft.

    Steal the NHL’s spotlight, every media outlet would cover it: “We won’t negotiate with Bettman. He’s bad for the NHL and bad for hockey. So long as he’s in the driver’s seat, the NHL cares more about money thank hockey and it’s fans. Until he’s out, we’re not talking to anybody.”

    That would be awesome.

    • Tom says:

      Tom I don’t think your assertions are a slam dunk. People are inherently irrational and the members of the NHLPA could be whipped into an anti-Bettman mood by Fehr. Further, people who already have money are less motivated by the thought of getting more. Those most motivated to keep working will be the fringe players. What does Luongo care if he gets 60 million or 55 million?

      Luongo does not care. The Luongo’s have never cared. It was never about money for the players. It was always better financially for the players to cave. Bettman even talked about this last time and offered grudging admiration for a group that was taking actions against their personal best interests for the sake of preserving a system that worked for the players. They did it for future generations because past generations had done it for them.

      That ended in the spring of 2005. They can’t preserve anything for future generations. All they can do is cost themselves money and a chunk of a short career. Why wouldn’t they go for what’s best for them? They will still get paid a ton of money, far more than the minimum they would accept to play. Lots of them will play for next to nothing.

      The players already hate Bettman, but it will still come down to: What will this cost us? How much can we gain? I can’t see any answers besides “it costs a lot” and “we can’t gain much more than a little”. The owners don’t mind losing the first part of the season when tickets are tough to sell and baseball and football dominate the sports landscape.

      Bettman has all the cards. He won them when he raked in the pot in 2005. Donald Fehr is a lot smarter than I am so maybe he has a rabbit up his sleeve but I will be surprised.

      I would not mind Fehr taking some aggressive step either, but the rules say he has to bargain in good faith. Striking before bargaining or insisting on a veto over the employers choice for negotiator are both probably against the rules.

      • Rajeev says:

        Striking before bargaining or insisting on a veto over the employers choice for negotiator are both probably against the rules.

        Correct.

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