Tuesday, September 30th, 2014

Player Choices

12

I wonder if it has dawned on most of the players that the principle they lost in the 2004-05 dispute – linkage between player salaries and revenues – was pretty damned important to them. I suspect so. Losing that dispute put them in their current position and the leverage being what it is, it will put the players in this position every time they sit down to negotiate a contract. Bettman will extract as much as he can from the players every time he “negotiates” a CBA.

With linkage in place, the players seem to have only three options:

1) Fold and ratify the CBA Gary is going to insist they sign. This is almost certainly the best decision for each player as an individual. It is better financially for most players to take another big cut than it is to miss games. It doesn’t make sense for most players if they lose $900 MM in salary over half a season to save $200 MM a year. They will make lots of money – even after the owners stick them up – and they want to play.

The league will want a very long contract – threatening a lockout more than once a decade might alienate the customer – and the players should want to go along with a ten year deal like basketball and football players did. That leaves the next cut to the next generation of players.

To cave to an insulting and unfair offer would be galling, but I don’t think Bettman will go as far as to force them all to tug their forelocks and say, “Yes Guv. Anything you say, sir” so it won’t be too humiliating.

2) Fight the labour battle of 2004-05 all over again. This choice might work best for the players collectively in the long run but it means that the individual player has to be reconciled to losing at least the entire year and they have to be prepared to inflict real economic damage on the league.

If the players do choose this option, they had best be very clear among themselves about what they are doing and why. Players should look for work in Europe and plan to be there for the year. No half measures. No coming back for a slightly less insulting or unfair offer. If the players are eventually going to cave and take less money in this same system, they should save themselves and the fans a lot of grief by giving up right now.

3) Legitimately decertify the union. The players will likely lose the year under this option too because the league will still impose the lockout and fight the decertification effort. The courts are not likely to make any decisions quickly. (That the league would fight to keep the Union says a lot about whether Gary Bettman or Sidney Crosby gets the most value from the NHLPA.)

Again, the players have to be very clear about the choice they would be making. In the long run, they – and the fans in my opinion – would be much better off, but the players have to realize that in the short run, it probably means a year off and it probably means blowing up the league.

I can’t say what Donald Fehr and the players are going to do. As a fan who wants to see the season start as scheduled, I hope they give up and give up quickly. As a human being who hates pretty much everything greedy plutocrats like Ed Snider, Jeremy Jacobs and Gary Bettman stand for, I won’t blame the players if they decide to blow up the league. In fact, I’ll cheer them on. The only thing I absolutely positively do not want to see is for the players to miss games before giving up and signing a slighlty better version of Bettman’s contract.

If anybody – including Donald Fehr – has a better option for the players, I want to hear it.

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Comments

12 Responses to “Player Choices”
  1. snafu says:

    Completely agree with the summary and only three options available.

    On point number one, if the players are convinced the owners won’t budge no matter how long they sit out, this is the most logical option. They must however make it a very long CBA, at least ten years with no league option to re-open the CBA. What I believe will happen is that the zombies will continue their downward spiral after about 2-3 yrs and absent any chance to rewrite the CBA, a few teams will relocate/fold/disappear.

    Now that I think about it, this may be the best option for the diehard fans as well. Sometimes you have to see it to believe it. Linkage and this system cannot save the zombie franchises, and this may be the only way the owners accept it. Furthermore, Bettman will be retired by then (hopefully), and we’ll have turned over another generation of owners.

    Maybe they will think outside the box and come up with a league size and system that actually works for the NHL (or whatever remains of the NHL in ten years).

    Of course, as a matter of principle, I would prefer the second outcome and that the owners actually consider what seems to be a reasonable solution to the NHL’s revenue distribution problems. I’m just so jaded and disgusted by the assholes who run the league that I cannot envision them accepting that they got it all wrong and that they’d actually finally focus on revenue distribution inequities as the core problem.

  2. Tom says:

    They must however make it a very long CBA, at least ten years with no league option to re-open the CBA.

    Yes, but I think this term works for the owners, too. Threatening a lockout to get more money out of the players is something that will work every ten years or so. Even with a large cut in share of revenue today will have the players earning much more a decade from now. It will be a lot less than it would be absent this whacking, but it will still be more. And it will be mostly different players. They’ll be ripe for another harvest.

    Where we disagree is that I don’t think the problem of the zombies matters in the equation. The NFL played the same game without any financial problems. This represents a huge whack of money in the big markets and they are taking it because they can take it. These big market teams would rather see a team fold than give them real money.

    • snafu says:

      I agree that they don’t care, but at the same time the image of constant problems (teams in bankruptcy, relocation, etc.) may not help them in attracting new owners. I think Bettman et al. are still worried about franchise values of the bottom half. Certainly, the large revenue generators values will sky rocket, but most of those owners aren’t trying to sell (now that Teachers and its fund have cashed in).

      In other words, that growth in revenue will happen mainly in the healthy markets. Lowering the players’ share isn’t going to turn Phoenix or Miami into an NHL hot spot (in terms of desirability of owning a franchise), so you get a repetition of this cycle in far less than ten years. My guesstimate would be that it’s more of a 4-5 yr cycle where the cap range system starts to make it very difficult for the weaker teams after each re-set.

      We know the incentive to a potential owner of a well-heeled team, but what incentive is there for any one to buy a weaker team? If the Phoenix, Tampa and St. Louis sales (or lack thereof for Phoenix) taught us anything is that $100-130 MM is about the best you can hope for given the current revenue potential. What exactly can happen in Tampa that vaults that franchise’s value any higher? The TV/media money is just not there, and ticket prices were never very high. The league contribution is locked in for quite some time thanks to the term of the NBC contract. They may get some more money out of the Canadian broadcasters, but nothing that resembles what the MLB, NFL and NBA get nationally.

      There’s only so much money there, and most of it is concentrated with the top 9-12 teams (the latter 3-4 of those go up and down with their own on-ice fortunes, e.g., LA).

      • Tom says:

        I agree that they don’t care, but at the same time the image of constant problems (teams in bankruptcy, relocation, etc.) may not help them in attracting new owners. I think Bettman et al. are still worried about franchise values of the bottom half.

        I see the problems the same way, but I don’t think they care. I am sure Gary Bettman would have a much easier life without a few teams lurching this way or that, staving off bankruptcy or actually going through it, but it goes with the job. The NHL was this way for a long time, pretty much all the time since the first expansion coughed up the California Seals.

        Everybody knew they were bleeding money because they were terrible and they weren’t drawing but nobody felt any responsibility to do anything about it (except up here to complain about the decision to put a team in Oakland instead of in Vancouver.) Cleveland and the Kansas City-Colorado-New Jersey Devils. The league never cared. That’s the way it is in a gate driven league with 90% of the revenues generated locally.

        The “players have to take a pay cut because a few franchises are bleeding money and we have to save them” only became an argument when Eagleson was gone and the players had a real union. History tells me the league really doesn’t care about these teams. When they were conspiring with Eagleson to hold down player costs, NHL owners were on their own as far as survival was concerned. I think they still are, but they have become the poster boy for NHL demands in contract negotiation.

        My guesstimate would be that it’s more of a 4-5 yr cycle where the cap range system starts to make it very difficult for the weaker teams after each re-set.

        Probably so, but that’s okay. Gary has to jump around and lend out some money. Or maybe he has to take over a franchise. A bankruptcy or two and someone gets a team at a firesale price. Voila! We have the poster boys for the lockout of 2022.

  3. Resolute says:

    “The only thing I absolutely positively do not want to see is for the players to miss games before giving up and signing a slighlty better version of Bettman’s contract.”

    And yet, they seem intent on doing something just that stupid. The NHL is not going to waver on a linked cap, and the union knows it. Yet their proposal pretty much tries to remove the linkage. Dumb, dumb, dumb. They also have to know their percentage share is going down. They aren’t going to win a fight to stay at 57% (or even 54%) when everyone else is at 46-48. They are on the right track with revenue sharing though. So go into the boardroom, breathe as much fire as you can. Grudgingly agree to a 50-50 share, but only on the condition of no rollback. Let their share fall over a couple years so that naturally expiring contracts allow the system to equalize. Fight to retain as many other aspects of the current deal they can. Fight to at least retain the current definition of HRR. And most importantly, fight to ensure that the 20ish middle teams find a happy place between the salary cuts and enhanced revenue sharing. Demonize Bettman all you want – he’s paid play the villain – but your path to labour peace is to put that majority of the league in a position where they don’t see any great benefit in another round of strife.

    The players’ offer showed signs of realizing this, but delinking the cap was its fatal flaw.

    • Tom says:

      They aren’t going to win a fight to stay at 57% (or even 54%) when everyone else is at 46-48.

      I agree that the players cannot win this fight, but let’s not buy this Bettman bullshit about the NBA and NFL. If the leagues all measured revenue the same way – including the costs used to reduce revenue – there could be a point here, but they don’t. Maybe if they measured it the same way, the NHL is already at 50-50. That’s what Fehr claims. I don’t know whether that is true or not, but I do know Bettman is a master of disingenuity. I know his claims are always bullshit.

      [The] path to labour peace is to put that majority of the league in a position where they don’t see any great benefit in another round of strife.

      I don’t think this is possible. The entire league always benefits by cutting the players by 15% every single time the CBA expires. This go round is going to transfer about $3 billion from the players to the owners over the next decade.

      Under what set of circumstances will the owners ever choose labour peace over that type of money?

      That’s why I think the players will try to get a poison pill put in this agreement along the lines of their proposal. As the deal expires, the players get an option of a year where their share of the revenue is so high the cost of a lockout – paying far more than they have to for a year before they can shut down the game – outweighs what they can gain by stomping on the players again.

  4. Gary says:

    Gotta love the owners’ selective amnesia. After the CBA is in place they market the hell out of the players so that fans will open their wallets and pour money into the game, but now when they want to shear the players like sheep, the forget that without the players they don’t have a dime of HRR. Therein lies the rub of Bettman’s bull****.

  5. snafu says:

    Interesting to note that their counter is 6 yrs for a new CBA.

  6. Smoo says:

    Hockey fans Unite! If not for love of the game…have some fun. While the owners are ok with giving up hockey revenue for a short time and roll the dice that all will be well post lockout do you think they would accept having thier daily business income affected? How about 20 fans infront of all the Rexall drug stores with signs saying “support the hockey fans”. I asked my wife what she would do her answer “avoid the hassle and go to Shoppers”. So, 100 shoppers go to Shoppers…those sales are lost and Katz knows exactly what percentage of those 100 won’t come back. Melnyk in Ottawa has drug stores….boycott Molsons for a day…they will notice! Loss of immediate sales and loss of ongoing sales…big dollars. That gets the shareholders involved. Just the press of some of these boycotts could upset a few stock prices. Now…one of you smart guys create a website with all the businesses and someone organize the boycotts.

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