Tuesday, November 25th, 2014

An Obscenity

12

Roy MacGregor begins a piece on the free agency sweepstakes with “Oh the obscenity, the obscenity.” Isn’t that clever? What do you suppose will follow that kind of opening? Could the reader possibly get a reasonable take on player salaries or the CBA negotiations? Is it remotely possible that a reader might actually learn anything?

Uh, no. We can expect a story Gary Bettman will love, and MacGregor does not disappoint.

It will be said, and has been said many times before, because it is true, that the owners have only themselves to blame for such foolishness. But given that the players are now partners in the NHL revenues and the fans still buy the tickets, there’s more than a bit of extra blame to go around.

I don’t really understand what MacGregor means by “extra blame” to go around because the players are “now partners in NHL revenues”. He blames the players because the Canadian dollar is so much stronger and the league is producing more revenue? That’s outrageous. The players have no control over league revenue except for the fact that the players generate every penny of it. Why is there even talk of blame? There is nobody to be blamed for the Parise and Suter contracts. The players earn their “obscene” sums because they have skills people will pay even more obscene sums to watch them play.

If anyone deserves blame for today’s contracts, it is Gary Bettman. The CBA is his baby and the owners are forced to spend “obscene” amounts. The player share is set by the collective agreement. All the negotiations between team and player do is decide how the player share is divided. If Zach Parise’s share was less obscene, another player or players must get a more obscene share. And as ridiculous as it may seem to MacGregor, the players would get a lot more money absent Bettman’s CBA.

The initial perception was that the players lost that battle [in 2004] and lost badly, though in retrospect it is hard to see exactly what players did lose.

No, it is not hard to see what the players lost, and if MacGregor finds it so, he is incompetent. He does not understand the business he covers. Instead of the market deciding what the teams spend on players, the CBA now sets salary levels. Not only has that cost the players a ton of money over the past several years, it strips them of all leverage going forward. They will give up even more money this time around. That, of course, will not make player salaries any less obscene to Roy MacGregor or to an awful lot of fans. But is MacGregor being fair?

The players generate the revenue. Nobody pays to watch Gary Bettman or Jeremy Jacobs push paper or collect money. What does Gary make? What does Jacobs pull down? Do they make obscene amounts? Where is the MacGregor story about their salaries? The fans pay that freight too. And the players don’t just generate revenues for the NHL. The players star on the most profitable television programming in Canada. Hockey players generate revenue for the CBC, TSN and Sportsnet. I can watch hockey on six different television channels. Does Don Cherry make an obscene amount? Or Bob MacKenzie? How much money would they make if the fans weren’t willing to watch players play, listen to nonsense rumours and argue about players?

Or how about the Globe and Mail? Does hockey and stories about hockey players produce revenue for the newspapers? What does Roy MacGregor make on the back of the players who make such obscene amounts? Hockey players feed Roy MacGregor’s family. Do the players think Roy MacGregor is a whiny ingrate who can go fuck himself? Probably.

Now that’s an obscenity.

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Comments

12 Responses to “An Obscenity”
  1. IAmJoe says:

    Well, that was the best wrap to a piece that I’ve read in a very long time.

  2. Gary says:

    Funny, but Roy MacGregor sounds like a senile old fart named Stan Fischler, whose purpose at this time is to remove his head out of Gary Bettman’s ass and spout his line. This one’s going to be different or, frankly, I’ll bail on the sport altogether and let all the owners fuck off.

  3. Gerald says:

    It should be no surprise that a hockey writer like McGregor is a business illiterate. Appearances would suggest that is more of a job requirement than impediment.

    It is, of course, true that salary negotiations in a capped salary league are simply over the distribution of the more-or-less fixed pot. I initially was thinking “what is it with this commotion about the Parise/Suter contracts?” until i shook my head and realized a truism: “obscene salary” stories are catnip to the hockey sportswriter, particularly when they are strapped for story choices during a hockey-free summer.

    That said, I could do without the equally cliched comments about how the players generate all the revenue, etc., etc. Well, cliched AND false, but whatever. Your overarching point is well made, without the extra yaddayadda.

  4. Kevin says:

    Tom,

    I thoroughly enjoy your writing style, opinions and analysis on the NHL. Thanks.

  5. snafu says:

    I only disagree with this point:
    “Instead of the market deciding what the teams spend on players, the CBA now sets salary levels.”

    There’s still a market deciding player value, hence the 20+ teams that bid obscenely on the likes of Suter and Parise. It’s just that in this market, because of artificial restraints like the cap, teams can’t really bid on players like they did last go-around. Trades are tougher to make because you have to consider the cap hit. Teams that wouldn’t really want to pay someone X, will do so to get to the cap floor. And as long as the cap rises, teams will keep spending more and more.

    I’m not sure if I’m making my point very clearly. Yes, the players as a group can only get 57% of HRR. That HRR figure has grown by 50% since the lockout. Each summer, the NHL re-sets the ‘market’ and you have distorted market values for the available players. I think if you didn’t have a cap, teams would be more likely to look to trades more frequently and to avoid longer contracts. The cap averaging system also hides the fact that Parise and Suter, for example, will receive $12 MM upfront for 2 (or is 3) initial years.

    There’s definitely a market system at play, just that the currency isn’t one that’s evident on the surface.

    • Tom says:

      There is a difference between a market setting the player value and a market deciding what teams spend on players. I agree that there is a market that divides up the player share.

      But under the pre-2005 CBA, the market decided the player percentage of the revenue. According to the NHL, the players got 74% of the revenue in the year before the last lockout. Whether that was exactly true or not, that percentage was set by the market. It was set by the negotiations between the individual teams and the individual players. The sum of all the contracts divided by revenues was the player share. Now? It works the other way. Contracts are amended (via escrow) to ensure the owners do not spend more than the negotiated percentage.

      This was the only real issue in the last labour dispute. The reason the dispute killed an entire season was because that market was so costly for the players to give up. I know I wrote at least one post about this during the lockout. It wasn’t just the money they lost with the first contract. It is that they lost the market forever and they would be forever arguing with the owners over that percentage.

  6. snafu says:

    Yes, I see that point. I suppose what bugs me is that all I see the teams doing is attempting to bypass the entire system because that’s what the market is dictating. In fact, I think this ‘market’ is costlier to the teams it’s supposed to be saving. Like we’ve said a few thousand times, who really cares if a handful of teams overspent on 31+ UFAs?

    If anything, the forced spending – in spite of revenue ‘sharing’ – is hastening the financial demise of certain franchises more than it’s helped them.

    • Tom says:

      Yes, I see that point. I suppose what bugs me is that all I see the teams doing is attempting to bypass the entire system because that’s what the market is dictating.

      Rich teams are finding different ways to spend more because of the restraints on player salaries. If unrestrained, these teams would spend much more. I don’t think they are trying to bypass the entire system though because I think the entire system is built on the fixed percentage for the players and escrow. Nobody can bypass that.

      In fact, I think this ‘market’ is costlier to the teams it’s supposed to be saving.

      It probably is harder for the teams it was supposed to be saving, but that does not mean it is a failure. The NHL was bullshitting about who it was trying to save. They were trying to drive the best players to the best markets. Remember how the Bruins, Hawks, Rangers and Kings were doing in the years prior to the CBA?

      I think Bettman got exactly what he was looking for out of the last CBA. And any CBA that helped the big boys has to have hurt the little guys. How many words did I waste trying to make that point clear during the lockout? The pre-2005 CBA was terrific for the small markets.

      Bettman deliberately set out to change that. He managed that feat while convincing fans in small markets he was working for them. Amazing trick, really. I don’t think it is fair to sneer at Gary as a failure for designing the system that was supposed to help the small markets but didn’t. I think he was wildly successful. We should sneer at him for being a dishonest guy who sold up as down to his customers. It isn’t hard for me to imagine Gary and Jeremy et al having a good laugh about it all.

      I don’t like any of that, but I’m a fan of a big market team and I don’t care any more that small market teams find it harder to compete on the ice and on the balance sheet. If those fans think this system helps them, I’m not arguing with them.

      • beingbobbyorr says:

        Remember how the Bruins, Hawks, Rangers and Kings were doing in the years prior to the CBA?

        The confounding variable in at least 2 of those cases is leadership . . . either getting rid of very bad management (CHI benefits when the Grim Reaper picks up Wirtz, Senior on waivers), or acquiring very good management (LAK hire Lombardi).

        Although it’s a matter of debate if you can call Orange County a big market, the Ducks were wildly blessed to have Brian Burke steering the ship, albeit for a short duration.

        Your case is helped by the Rangers, who’ve had Sather at the helm for ~12 years, wherein he looked like Mr. Hyde pre-lockout and Dr. Jekyl post-lockout.

        Wish I knew some Bruins fans who could elaborate on O’Connell vs. Chiarelli.

        I think Bettman got exactly what he was looking for out of the last CBA. And any CBA that helped the big boys has to have hurt the little guys.

        With only 7 post-lockout Cups presented so far, the sample size may not be adequate to declare a trend, not to mention that some of those Cups were clearly won with pre-lockout decisions/momentum.

        A gate-driven league, where hope is hard to sell in 29 losing markets of a 30-team league, and where American TV ratings are anemic even when 2 big markets make the final? I think what Gary really wants is to see the Cup passed around more or less evenly among all 30 franchises. The last thing he wants is the pseudo-dynasties of 1995-2003 — where 4 teams (NJ, COL, DAL, and DET) passed the Cup round-robin fashion — dis-ir-regardless of market size.

        • Tom says:

          The confounding variable in at least 2 of those cases is leadership . . . either getting rid of very bad management (CHI benefits when the Grim Reaper picks up Wirtz, Senior on waivers), or acquiring very good management (LAK hire Lombardi).

          There are certainly confounding variables. I don’t know how to set them aside and objectively determine whether the CBA favours one group of teams over any other. Suggestions welcome. I suppose I could be seeing what I want to see and disregard the rest.

          As soon as Bettman unveiled his demands during the labour dispute I declared that he was going for a big market CBA. He – not Goodenow – introduced the idea of early free agency, and the big American markets were marketing disasters. Boston, LA, Chicago and New York were terrible teams and (relatively) revenue disasters.

          Perhaps the results have been a coincidence, but I doubt it. Anecdotally, it also seems obvious to me that the trend – with a few exceptions, of course – is for good players in their primes leaving small markets and heading for the big ones. Briere, Chara, Kovalchuk, Hossa, Luongo, Gaborik, Hamhuis, Suter, Bouwmeister… Big markets don’t lose players they want to keep. Small markets do.

  7. snafu says:

    I know you’ve always held that his purpose was to drive the better players to the stronger markets sooner. Or in greater quantity.

    I think Gary believed the system would work to save the little guys. Why? He wanted cost certainty. I don’t believe he ever envisioned the kind of growth that the NHL has had, probably because much of that growth was Canadian-driven. He had a more static view of things.

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  1. [...] CANUCKS CORNERS: Tom Benjamin dismisses the suggestion the NHL players deserve their share of the blame for high salaries, putting it justifiably where it belongs: Gary Bettman’s CBA. [...]



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