Saturday, August 23rd, 2014

Legacies

16

All of the recent decertification talk was enough to rouse me from my blogging lethargy. Unfortunately for me, Tyler Dellow wrote everything I wanted to say on the subject. I agree with him on every single point:

1) So far at least, the decertification noise sounds less like an effort to blow up the Union and more like an attempt to improve their negotiating position.

2) If the season goes, I hope the players do blow it up. The fans will be better off.

3) I think the players will be better off without a CBA too, but decertification means chaos and uncertainty, while collapsing and signing Gary Bettman’s CBA means billions in the player’s pockets.

4) If the players do not fight now, they will face the same situation again and again. Even if the threat of decertification marginally improves the owner offer, a marginally improved offer still represents a big financial hit for the players.

This is the worst outcome, the outcome that the players simply had to avoid. People like me will be able to correctly say: “They should have taken Bettman’s final offer to save the season. They would be much better off today.”

The question still remains: What will the players do? What will Don Fehr do?

Donald Fehr took the job for a reason and I don’t think it was to meekly follow the NBAPA and NFLPA playbooks into the CBA Gary Bettman wants. Is he herding the players over the decertification cliff? What if Donald Fehr now believes that collective bargaining in sports is a process that has outlived it’s usefulness?

It would change sports entertainment in North America. That would be quite the legacy for Donald Fehr.

And for Gary Bettman.

Postscript: As usual this fan is torn. Do I want to see a deal that salvages some kind of a season even though that would mean the same administration doing the same things leading to the same outcomes? Or am I willing to see this season crash as the price to pay for a vastly different NHL next year?

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Comments

16 Responses to “Legacies”
  1. beingbobbyorr says:

    I’m anxious to see decertification just to find out what a real free market looks like (vs. the claims of classical economics), and a sports league is a harmless-enough test case that, if the free market “fails”, it creates the least amount of net social damage.

    Entry draft disappears?
    All-Star game disappears?
    Medical coverage becomes an individually-negotiated bargaining chip?
    Olympic participation becomes an individually-negotiated bargaining chip?
    NHL relationships with minor leagues become attenuated, perhaps non-existent?
    Prospect camps & pre-training-camp rookie tournaments (which were going by the wayside from 2005-2012 anyway due to the lower UFA age) disappear?
    Do roster sizes expand (to cover injuries that can’t be offset with minor-league call-ups anymore; i.e., the way college hockey teams carry 30 bodies) or contract (“Who needs that damned 4th line or 3rd D-pair anymore? There’s labor dollars to be saved by dressing just 15 players.”)?
    etc., etc.,

    How does the PHPA — professional hockey players association, that covers AHL (and ECHL and lower minor leagues?) players — get affected?

    Does any sort of free market exist already wrt the European leagues (and what can we learn from that to anticipate a deuces-wild NHL)? i.e., We never hear about the KHL/SEL/DEL players associations.

    As to the 2012-13 NHL season, I’d like to see it completely turfed, just as all of 2004-05 was lost. That would provide an interesting experiment (same input stimulus to the lab rats) to see if Gary’s assumption (the fans are so die-hard they can be taken for granted) remains true. Hypothesis: Is consumer behavior for major-league hockey entertainment linear or nonlinear? Sadly, the overall economic difference between 2012 vs. 2005 would remain a substantial confounding variable.

  2. Almo89 says:

    I think it is just sabre rattling at this point from the NHLPA. Their recent offer to the owners officially conceded defeat to the league. It is not good enough for the league of course (nothing is) and Bettman is going to squeeze them even more before this is a done deal. The league is still holdin g the line on contracting rights because they will not give that to the players until the players accept the owners economic proposal. The league does not care about contract stuff as nearly as much as the money of course.

    I think a deal gets done within the next 10 days. The players will accept the owners $211 million in their make whole provision or something very close to that as opposed to the extra $182 million the players recently asked for, and the league will relent on the contracting rights. The little provision the players included in their recent offer that states the players share can never drop from year to year after Year 2 is also something that gets left on the cuttting room floor. Perhaps it is something the players can try to use as a bargaining chip in the horsetrading that is going to go on pretty soon here. I see at least a 6 year agreement with a players’ option for year 7 instead of the 5 year agreement the players proposed as well.

    The players want a deal more than they want a fight as it stands now. I just think they want to be able to save some face (as any of us would) after basically being taken to the cleaners by the owners again here. I think for sure there are militants in the NHLPA that would like to fight the 04/05 battle over again, but they are a minority no matter how loud they shout. You are right Tom that the players may as well have just cut a deal in October with the league. It would have been better than what they are going to get now. A player with one year left on their contract heading in to this season has not only had about a 25% rollback on their salary so far this year, but will get squeezed again next year becasue the players now reduced share of the revenue pie will be smaller than it otherwise would have been with a full season. Talk about a double whammy.

    It makes one wonder why Fehr was hired for this gig in the first place to be honest. Why hire a fighter when you are not willing to fight yourself? The players could have hired a lawyer by the hour to negotiate the deal they are going to get and could have avoided any lost paychecks while they were at it.

  3. snafu says:

    “As usual this fan is torn. Do I want to see a deal that salvages some kind of a season even though that would mean the same administration doing the same things leading to the same outcomes? Or am I willing to see this season crash as the price to pay for a vastly different NHL next year?”

    This fan would have more respect for him/herself if I could come back to a new NHL. I begin to dislike myself when I consider that, as a diehard, I too would capitulate and just come back when the owners’ exact their pound of flesh. I don’t like their strategies, their leadership, and their values. I love NHL hockey though, and they’ve hijacked it, and I still watch even though I don’t like many aspects of the current product. (I only say that as a fan who first tuned in around 1970.)

    I do feel I would happily come back if the players came up with the conclusion the academics are now bandying about– player associations offer a greater utility to owners than their constituents — and then did something about it.

    • Tom says:

      I agree with everything you write here, Snafu. I felt lousy coming back after 2005 and if Bettman et al come out on top again, can I stay a fan and still look at myself in the mirror? The only good thing anybody ever says about Bettman is that NHL revenues have skyrocketed under his tenure and I can’\ see how that has been good for me. It has been bad for me:

      1) Prices that are five times as high,

      2) Expansion

      3) Billions from taxpayers for arena subsidies

      4) Billions more in tax expenditures so corporations can write off sponsorships, luxury boxes and tickets. Rich people schmoozing on the taxpayer.

      5) An artificial parity that reduces the sport to the equivalent of a coin flip.

      The only benefit that can see is that I have the opportunity to see every game. Even that has had the effect of making the experience of watching it less enjoyable. Saturday Night hockey was an event no fan dared miss. Now it is usually just another nearly meaningless game.

      I am really, really tired of these guys. I’d feel better about being exploited if they were not such whiners and complainers.

      I do feel I would happily come back if the players came up with the conclusion the academics are now bandying about– player associations offer a greater utility to owners than their constituents — and then did something about it.

      Academics? I must have missed the reports. As you know this was a song I was singing pretty much solo in 2004.

  4. James Mirtle says:

    Tom,

    My sense is Fehr would fight the fight you’re talking about – to change pro sports in North America – but he can only do so with backing from the players.

    Decertification does function to better their negotiating position – until the season is cancelled. Once that happens, then it well could be full steam ahead to try and permanently end this labour silliness by using the courts.

    Fehr has no qualms about doing that. The players? They’d rather get a half season in – so that’s what I expect happens.

    • Tom says:

      Fehr has no qualms about doing that. The players? They’d rather get a half season in – so that’s what I expect happens.

      I don’t know what the players are thinking. If the players are unwilling to go over the cliff, they should have signed a deal to save the season. They have to be all in at this stage of the game, don’t they? This moment was predictable. Fehr may be able to walk them right into the abyss if that’s where he wants to go. He managed to get baseball players to go on strike late in a season.

      Still, I won’t be surprised if you turn out to be right.

      • James Mirtle says:

        My read on this is that the players are pretty conservative overall. Some, like Ryan Miller, see what you’re saying and are in for the long play. Others are gun shy about wiping out another season. The players are unified right now, but the question of nuking a whole season really has the potential to disunite them (depending on what’s on the table).

        It the owners don’t put a better offer on the table, ever, then, yes, the players will go the more extreme route. But if they up their offer… I believe this gets done.

        There’s a split among the NHLPA over degrees of militancy and it’s hard to read if they’ve got the numbers to do what you’re saying. But if they call for it, Fehr will lead the way.

        • Tom says:

          I agree with everything you say James. I think the players are conservative, too, and to a man they want to play. It does depend on what is on the table, but can you see it being good enough to produce anything that can be defined as anything except another humiliating defeat for the Union?

          The players will choose, but the choice will be framed as capitulation or decertification.

  5. Rajeev says:

    If Fehr took the job in order to dissolve the union and end the restrictions on player salary that collective bargaining in the sports context has produced, then he should have filed for decertification relatively shortly after being hired. This would have negated the applicability of the 8th Circuit’s reasoning that decertification was a bargaining tactic, and there would be no lockout to be deemed legal. He could have allowed the decertification process to continue while the old CBA was in effect (with any SPC’s likely remaining in force post-decertification), and the antitrust lawsuit could have been initiated during the course of last season, allowing him time to prepare the players for the resulting uncertainty and potentially minimize the amount of time they would be out of work.

    I think it’s more likely that he took the job because being the head of a union and representing players is what he knows how to do and it’s what he likes to do. And it pays very well. During his career, collective bargaining, including the use of a strike as a economic weapon in the collective bargaining process, has been the fundamental mechanism by which he does his job. Eliminating the union and eliminating collective bargaining would create a pretty foreign context for him to do his job, and while I don’t think he’s necessarily afraid of it, I think there’s probably some hesitation to do something that traditionally has been outside of if not completely antithetical to his job description. It’s possible that he ultimately sees no other recourse but to go that way, but it doesn’t see that that was his preference from the beginning. If it was, why on earth wait until we are where we are now? He should have decertified long, long ago, at least well before collective bargaining began.

    • beingbobbyorr says:

      . . . . his job description

      Hopefully Fehr sees his job description as “helping labor” (vs. management), using whatever tools he needs in a given era (heading a union & collective bargaining in 20th century; _________ in 21st).

      What I find perplexing is the vitriol (toward Bettman & the BoG) that is seeping out of the players side, when surely Fehr has briefed them that, given . . . .

      – the cap/floor/escrow framework that fell out of 2005

      – the owner’s deep pockets

      – the player’s shallow pockets & short playing careers

      . . . . . every post-2005 CBA negotiation was guaranteed to result in a racheting-down of player share of revenue, and that the ONLY question the players needed to contemplate was where their threshold of pain (___% reduction) passed their fears over the uncertainty of the Brave New World of Decertification. Even if Fehr hasn’t conducted that briefing, surely every player agent has had an equivalent Facts-of-Life talk with their clients. And, now that I think of it, don’t the player agents have an enormous interest in seeing Decertification . . . . .

      – everything is now negotiable

      – every contract (incoming & existing players) initializes with 30 potential bidders

      – no ‘authorization’ of player agents (hang out your shingle without, well, doing whatever it takes now to become an authorized PA); course that means increased competition in the PA business (no such thing as a free lunch)

      . . . . . come to fruition?

  6. Tom says:

    If Fehr took the job in order to dissolve the union and end the restrictions on player salary that collective bargaining in the sports context has produced, then he should have filed for decertification relatively shortly after being hired.

    He couldn’t. No way he had the votes.

    Let’s imagine that Fehr indeed has decided that collective bargaining in the NFL, NBA, and NHL has outlived its usefulness and he honestly believes they will be better off without a union. (Perhaps not baseball, given their anti-trust exemption.) How would he go about it? How would he herd the players off a cliff into the unknown?

    Pretty much the way it has unfolded, I think. He just has to keep the current dance going until the season goes. He can get the process going as part of the “decertification as negotiating ploy” gambit (with the players going for it overwhemingly in that context) but once the season goes, Fehr stops talking and lets the lawsuits work. Nothing short of undoing the 2005 CBA brings him back to the table.

    If that is really where Fehr is going he’s playing it perfectly, I’d say.

  7. Rajeev says:

    He couldn’t. No way he had the votes.

    Are you suggesting that if Fehr, whom the players aggressively courted after firing Kelly (their third head in five years) in the middle of the night, had met with the players over the first half of 2011 and engaged in a comprehensive education process as to why collective bargaining doesn’t work for them anymore, how the lockout is such a powerful tool when players’ careers are so short and the owners for the most part can easily withstand the cash flow interruptions, and had essentially but very thoughtfully and forcefully told the players that this is the playbook the owners have and they will continue to chip away at your salaries and rights for the duration of your careers, and bona fide decertification is the only way to shift the balance of power, are you suggesting the players would have not supported him? When they were still a year away from the expiration of the CBA and the threat of missed games?

    Maybe, but I don’t think so. It look about 6 months of targeted and widespread propaganda campaign to convince a US public that had previously widely believed a country had nothing to do with 9/11 and had no WMD’s should be invaded and turned into what is essentially a US embassy. It look a few years of a similarly targeted and widespread propaganda campaign by big business to dramatically alter the public’s views on climate science in the US. Propaganda and education are pretty powerful tools. Fehr would have had a couple big points in his favor: the facts and common sense are on his side, and the players already distrust the owners.

    If you’re a player that saw the owners barely blink at losing a whole year to a lockout, and the great Donald Fehr sits you down and explains how this isn’t going to stop unless collective bargaining ends, and explains that your extremely rare and profitable skill set provides you with bargaining leverage that makes collective bargaining unnecessary, and then you watch the NFL and NBA lockouts play out just like he says, I dunno, wouldn’t you be ready to blow it all up? Maybe the players would have been that dumb, but it seems unfathomable to me. Also, wouldn’t have Fehr been making rumblings about decertification all along to test the waters and to get the idea gestating among them? We never heard anything of it, except from you Tom, actually. Even now, Ryan Miller seems to still not understand the issue, as he’s arguing for it as a tactic rather than an end.

    Sure, all things being equal, it makes sense to galvanize the players via the frustrating “bargaining” process, to let them see just how bloodthirsty the owners are, and then to decertify when there’s no other recourse, which is the path Fehr’s on now. But legally, decertification during a lockout seems a much trickier proposition, and those complications could have been avoided if the radicalization started 2 years ago.

  8. Tom says:

    Sure, all things being equal, it makes sense to galvanize the players via the frustrating “bargaining” process, to let them see just how bloodthirsty the owners are, and then to decertify when there’s no other recourse, which is the path Fehr’s on now. But legally, decertification during a lockout seems a much trickier proposition, and those complications could have been avoided if the radicalization started 2 years ago.

    No, I don’t think the players would have gone for it. I knew – and they knew – Gary was going to come after a whack of cash, but it is easy for me to imagine a deal if you assume a lockout was against everyone’s interest. If the NHL had put “We freeze the cap until we get to 50/50 and then we stay there…” they are playing. Fehr could not promise them that that deal was impossible.

    Legally it is trickier now, but the trick is simply about whether or not it is a negotiating ploy. If decertification is real, the fact that the NHL can’t get the NHLPA on the phone will render any legal ruling on the issue meaningless. The players don’t care whether the lockout is lifted or not for several months. They don’t even have to bother to sue until the league – or individual teams – decide what to do. They just have to say “The Union is no more” and stick to it.

    I don’t know whether the players will capitulate, or whether the owners will pony up enough to prevent the loss of the season. But if that happens, I think Fehr will really start playing hardball. “The players are better off with no CBA than a CBA with linkage and a salary cap.”

  9. Rajeev says:

    If the NHL had put “We freeze the cap until we get to 50/50 and then we stay there…” they are playing. Fehr could not promise them that that deal was impossible.

    That’s a very fair point. That Bettman refuses to take that deal makes me think that he’s actually pushing for a decertification attempt that he knows will go nowhere, and he’s trying to crush the efficacy of the union while maintaining its form as a unit to extract future gains from. It’s almost as if Bettman is goading the players into a decertification attempt, which is pretty interesting considering just how many briefs and internal memoranda Proskauer must have written regarding decertification in the last few years.

    But if that happens, I think Fehr will really start playing hardball.

    Well, yea. That was one of the tragedies of the last lockout – the players capitulated at the exact time that the relative leverage of the parties was beginning to shift towards them.

    • Tom says:

      That Bettman refuses to take that deal makes me think that he’s actually pushing for a decertification attempt that he knows will go nowhere, and he’s trying to crush the efficacy of the union while maintaining its form as a unit to extract future gains from. It’s almost as if Bettman is goading the players into a decertification attempt, which is pretty interesting considering just how many briefs and internal memoranda Proskauer must have written regarding decertification in the last few years.

      I think he refused that deal because he miscalculated the resolve of the players. He honestly expected the players to do the arithmetic. It was far cheaper tor the players to fold. They are losing huge chunks of money holding out and it is money they can never ever get back. In Bettman’s bubble, this is insanity. His worst case was an NBA result after a short lockout.

      I agree about the leverage. To this point, it has all been on the players. But real damage is being done to the brand, now. When guys like Schneider and Crosby are talking about Europe, they are signalling another lost season. Pressure has to be mounting on Bettman.

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