Sunday, November 23rd, 2014

Show Him the Money

5

Elliote Friedman has a couple of recent pieces on the CBA negotiations that are just beginning. One post explains why Friedman thinks the league and the NHLPA should find a way to solve this without another strike by the owners. The other sets out the issues. He begins with a warning:

“If Donald Fehr and Gary Bettman are here to make a deal, everything’s going to be ok. But, if even one of them is out to win the negotiation, the NHL is fucked.” – A high-ranking (non-NHL) sports executive on the upcoming CBA negotiations

With all due respect to Elliotte’s anonymous source, another lockout won’t hurt the league beyond the very short run. That’s the lesson Gary Bettman learned in 2005. The fans will not punish the league for delaying the season and they are likely to blame the ungrateful overpaid players for any disruption. The NHL is definitely out to win the negotiation, while the NHLPA desperately hopes to avoid losing it too badly. The fans don’t count.

The most interesting part of the two stories is the element that (so far) has been missing. We do know the position of the NHLPA going into the negotiations:

At their just-concluded meetings in Chicago, players pointed out they ate it for that plan eight years ago. A salary cap, the 24 per cent rollback, escrow payments — those were huge victories for the NHL. Meanwhile, Fehr suggested the possibility of playing through the Sept. 15 CBA expiration date if negotiations are going well…

…You can tell from his comments this week where Fehr is going — to tell the NHL the problem must be fixed through increased revenue-sharing. He may try to split the owners with that strategy.

What has not been enunciated by the league – or anyone else – is the “problem” that Fehr wants to fix with revenue sharing. We have not heard Gary Bettman say “We need a bigger share of the revenue because the zombie franchises we pretended we were trying to save in 2004 are still zombies. The players must give to save jobs. Phoenix, Dallas, New Jersey… blah, blah, blah.” We have heard – many, many times – that the owners want more, but we have not heard a peep about why the league needs a bigger share. We have heard how great business has been, and how great parity is, and how well the 2005 CBA has worked. We have heard no one from the NHL define a problem worth shutting down the game to address. We have not heard Gary mention that the problems that were used to justify a season long lockout in 2004 were not solved in the CBA of 2005. We have not heard these things partly because Bettman’s last CBA was supposed to fix all those problems, partly because everybody knows the zombie franchises have revenue problems, not cost problems, and partly because Fehr has a sensible response: “We ponied up last time and made the rich franchises much more profitable. It’s time for them to bite the bullet and do the bailing necessary to save the southern strategy. Canadian fans can provide even higher subsidies to further Bettman’s vision for the league.”

Some observers see the lack of a league rationale as a good sign. The rhetoric is much less strident and might be a sign the league is willing to take less to make a deal. I think it only signals that the strident rhetoric is unnecessary this time around, and any discussion of the zombie franchises raises embarassing questions about the efficacy of the 2005 CBA.

Friedman is hopeful but he does note one incident he finds disturbing:

It hasn’t always been peaceful, though. In view of several people, one owner made pointed comments about how he and his compatriots own the leverage to an NHLPA executive member last week in Las Vegas. This is going to be one of the things to watch during negotiations. During his baseball days, Fehr believed in having as many players as possible attending talks. He wants them all to know exactly what’s said.

Ah. The leverage. This is all the rationale Gary Bettman needs. He wants a bigger share of revenue because he wants a bigger share and there is nothing the players are willing to do to stop him. Period. Full stop. He does not want the revenue because the owners need it to be profitable or because he needs it to save threatened franchises or any reason other than it is there and he can force the players to give it to him.

In his discussion of the issues, Friedman seems to think that there are things the players can get in exchange for taking a smaller piece of the pie. This is certainly true, but none of those things mean anything. A higher (or lower) floor? What difference does that make to the individual players? Once revenues are (re)defined and the player split established, the average player salary is set for the life of the agreement subject only to changes in revenue. If one team is forced to spend less (or more) another team must pick up the slack. Escrow? If escrow is a problem for the players, it is easy to change the salary cap formula to make new contracts smaller and escrow payments very unlikely. As long as the players give Gary an extra $200 MM a year, Donald Fehr will find that Gary is very flexible on everything else.

Gary and his employers don’t need more money – and they are not even pretending to need it – but the money is there for the taking. Since it is there for the taking, a guy like Jeremy Jacobs has it counted and in his wallet. Gary’s negotiating position is the same words, repeated over and over:

“Show me the money. Issues? What issues? Give me my money.”

I wish there was a way for the players to get fair treatment, but they can’t win. Show him the money.

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Comments

5 Responses to “Show Him the Money”
  1. Gary says:

    The only difference this time is that opposing Gary Bettman is not a fractured PA with an Executive Director carrying powder puffs or pompoms in his hands. He’s facing the guy who took Major League Baseball to the woodshed and wears a pair of boxing gloves stuffed with horseshoes. If Bettman wants to lace them up and go a few rounds with Fehr, it’s gonna hurt.

    • Tom says:

      I don’t get this. I do get why the players were united for a year last time – they were fighting to avoid a system that would stick them with the short end indefinitely – but this time? Fehr took baseball to the woodshed because the players stayed united and prevented baseball from sticking them with a percentage of revenue.

      I don’t get where Fehr gets the boxing gloves and horseshoes.

      Gary: “You get 50% and we’ll go along with most everything else you want.”

      Fehr: “No way. We gave last time.”

      Gary: “And you’ll give again this time. Lockout. The first month of the season is cancelled. That costs the players $200 MM. Do they want to lose another month and another $200 MM or do they want to give us what we want?”

      Fehr: ????

    • beingbobbyorr says:

      . . . a pair of boxing gloves stuffed with horseshoes . . .

      I don’t get this, either. By this reasoning, Goodenow also had “a pair of boxing gloves stuffed with horseshoes” back in 2004-05, due to his success in the 1994-95 dispute that the NHLPA won.

      Should Bettman be scared because 1980′s-era-MLB-tamer Donald Fehr is walking into the boardroom like Gary Cooper in High Noon? Hardly. Like the investment disclosure reads “Past Performance is No Guarantee of Future Results.” If anything, Fehr should be crossing his fingers hoping nobody needles him about how far off the sports power grid he’s fallen to be working for hockey players.

      These kinds of battles aren’t won with superior debating/oratory skills. Goodenow/Fehr need(ed) something to give them real leverage. In 2004-05, I thought Goodenow had it: ice hockey is the one (“major”) sport where North American labor can go to Europe & earn some coin while keeping their skills sharp. But, not enough of them did it, and not enough of them listened to his advice (which I read in a direct quote in The Hockey News* during 2003-04) that the imminent labor dispute “…. might last 2 years, and the players should prepare for that.” (or words to that effect). If the NHLPA didn’t properly exploit Europe then, why/how are they going to do it now?

      * Yes, I hereby offer contrition for (and acknowledge the humiliation in admitting to) ever having read that rag.

      • Tom says:

        I think the player leverage largely came from the baseball experience. Ballplayers succeeded in protecting the idea that the player share of the revenue (and what even counts as revenue) would be determined by the teams in their individual negotiations with the individual players.

        The market wasn’t exactly free, but the market still decides how much the players get and how much the owners get. In the other three sports, the market doesn’t decide much of anything. What percentage should the players get? How should the peripheral revenues be factored into the equation? Who knows? If the owners were permitted to spend whatever furthered their own best interest, the share that would go to the players will be fair.

        Baseball players were willing to kill a World Series to keep the market setting their share, and for the most part, they have succeeded because each generation of players sacrificed so the next generation kept a market. Once players lose that market, they lose forever. The hockey negotiations are just about money and the players woiuld rather take less – it is smarter to take less – to avoid losing a piece of a very short, very lucrative career.

        The other important lesson from baseball was the reaction of the fans. They did not flood the ballparks once the play resumed. Fans punished the parties for shutting down the game.

        The NFL, NBA, and NHL have learned differently. If the dispute is properly marketed, the fans will return when play resumes. The owners aren’t afraid of shutting down the league this time. They know they would be losing the most unprofitable part of the year. It might actually help the bottom lines in the poorest markets. The big markets don’t like it so much, but it is peanuts relative to what they will make over the next ten years.

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  1. [...] CANUCKS CORNER: Tom Benjamin on what the NHL’s strategy will be in this round of CBA talks: squeezing the players for more money, whilst doing nothing to change the fate of the zombie franchises the current CBA was supposed to save. Wash, rinse, repeat. [...]



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