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Forum posts for NHL

Please clarify.
Posted by mike on Dec 16, 2004
I am wondering why it is that the owners are douchebags?

Posted by Nerhael on Dec 16, 2004
The owners are morons because their reasoning to create the salary cap is to control their own spending, so they can't go out and buy more than they have to spend.

They basically want someone to enforce a budget on their spending habits. Which is moronic. An NHL team is a business; manage your business.

Posted by phduffy on Dec 16, 2004
They want a salary cap to be tied to their revenues, but they play all kinds of tricks to hide their revenue and lie about it.

So the players don't trust them, and nor should they.

I still don't get it.
Posted by mike on Dec 16, 2004
The owners are basically the same as any owner of any business. They have a product which they produce (games of hockey), and they have a raw material which is required to produce said product (the players). The owners want cost certainty of their raw product, but their supplier (the NHLPA) wants a free market system (where the raw material sells for the highest price the market can bear).

This is standard practice for a business (most commonly a manufacturing business) when the raw material costs are getting out of control. You must either shut down the business and walk away because another business offering a similar product made of a cheaper material will simply take over your market, or you will go broke. Or (as per the current lockout situation) you must negotiate a mutually beneficial cost arrangement with your raw material supplier.

To call the owners morons and doucebags for wanting to pay a fair market value for raw material extrapolates out to calling all owners of businesses morons and douchebags.

However, if people are not being honest regarding profits etc., then douchebags they are indeed.

In the end all I see is billionaires negotiating for more or less money with millionaires, and frankly I just don't give a damn.

Posted by Nerhael on Dec 16, 2004
They were willing to take an accross the board 25% pay cut. That's pretty generous.

Second, if something's too expensive, a player, DON'T PAY FOR HIM!!! There are thousands, upon thousands of people that play hockey.

Unless I'm raw, your analogy with raw materials assumes than any source of raw material anywhere is going to be inflated, so to be able to do anything, they lower prices. Well, there are lots of people out there that would love to get into the NHL that I'm sure would play for less.

Paul, does the NHL have like...standard salary rules beyond starting salary? Like, could the owners not conceivably start a player at the starting salary, nad never raise that salary? Like, the only reason they raise their salary is to keep them on the team right? So another team won't steal them? Is this any different than corporations poaching executives from one another? Offering high and higher salaries? Eventually, they're say the person just isn't worth it. Can owner's not draw this line as well? They need it fixed by law?

Is there this sense that once a hockey franchise has started, it cannot fail? And that everything possible should be done to save it? I know governments do this for business...and I don't agree with that. If you can run a business, tough shit, you should fail.

Posted by phduffy on Dec 16, 2004
Mike, your post is very contradictory,

The owners do not want to pay fair market value. At all. That's what the whole issue is.

The owners want to crush the 'fair market' system that exists in hockey. They couldn't be less interested in a fair market. In a fair market, you'd pay the players what they're worth, not some artificial cap.

Furthermore, the owners could certainly pay less than they do now. Teams like Calgary and Tampa Bay have team payrolls half of those of New York and Toronto and do just as well. So it's not a shut down issue.

Additionally, the owners have abandoned any pretense of negotiating in good faith (for which I think they'll get hammered by the Labour Relations committee). They don't want to discuss a mutually beneficial solution with the players, because the players offered that with their salary rollback and luxury tax system. The owners want the system that will screw the players the most. They want salaries tied to revenue, but the revenue numbers they report are all fictious accounting stuff.

I agree that it's billionaires and millionaires (although the median salary in the NHL is something like 400 grand). And I side with the millionaires, who are at least being honest, and are the ones that provide us with the product.

I'm not 100% sure how the NHL system works, but I think it's something like this:

You get drafted. For the next 5 years, your salary is controlled by where you were drafted. ie, the first overall pick gets a max of $1 million, 1.2, 1.4, 2, and 2.5 million over those five years. This decreases to where a 6th round pick is just guaranteed the NHL minimum for 5 years.

After that, the player's team still controls his rights. They can try to come to a conclusion on a new contract, and if not, it goes to arbritration.

Finally, if a player's between 29 and 31 and his contract expires, he's a free agent and can negotiate with anyone. The catch is that his old team can match the offer he gets and he has to play for them. Also, if he signs with a new team, his old team gets compensation, making him less attractive.

Finally, if a player's 32 or over and his contract expires he's a free agent and can sign with anyone.

no time
Posted by mike on Dec 16, 2004
This is why I had to stop posting, I just don't have the time to defend my opinion once I give it.

Few quick points:

I agreee with Nerhael in that the owners innability to work together is causing them a large problem where salaries are concerned. If they paid players what they were actually worth (MUCH less than they are currently getting paid) and didn't upstage one another to get players they want they would be in a better position financially.

I did not contradict myself. Fair market value can vary depending on who you talk to. Obviously you believe that players are worth more than what they are currently being paid, while I do not. That doesn't mean I contradicted myself.

The average salary of an NHL player is 1.8 million dollars. The league is only comfortable with an average salary of 1.3 million dollars. I am unaware of what median salary actually means, but I think that the average salary is more relavant.

I just cannot justify in my mind paying some dude to skate around and shoot a puck at a net (or prevent the same) and make 1.8 million dollars while the while the doctor who patches him up when he get levelled gets paid a fraction of that. I am aware that players have a limited time to make their money, but here's a thought... when you are done with hockey, get a real job.

Yes you did.
Posted by phduffy on Dec 16, 2004
Mike, you absolutely contradicted yourself.

You said that the owners want fair market value by restricting the ability of the palyers to make money. That's a contradiction. Fair market value isn't defined by what you think it is, it's defined by letting the market decide. Hence the fair market part.

I was thinking about this, and I think your analogy earlier about manufacturing and inputs was flawed.

It's more like this. You're a manufacturer. You can buy inputs from either me or Nerhael. Nerhael's inputs are better, but they cost more. More importantly, you can buy mine and still survive as a company.

But you keep buying Nerhael's, and he keeps raising his price, because you keep paying it. Then, you start losing money (although whether you're really losing money or just telling us is debateable). Anyways, you lose money, so you go to Nerhael and tell him that if he doens't lower what he charges you, you'll go out of business, while completely ignoring me.

meanwhile, had you just bought from me in the beginning, Nerhael's prices would be lower, because he'd have to compete with you, and you'd have more money. Even then, you could still just start buying from me instead of him.

As mentioned, the median is considerably less than the average. I don't have the number in front of me, but I think it's somewhere between 300 and 600 grand. I think this is much more relevant than the average, which is skewed by the very high paid players. The median is the point at which half the salaries are above and half are below.

I think your commment about the doctor and the hockey player is important. People want there to be a salary cap in sports because they're jealous of the amount of money these people get paid to play a game. It grates on their sense of fairness. Fair enough I guess, but welcome to a market economy.

Posted by Nerhael on Dec 16, 2004
All said and done, I just want them to play hockey again.

They need to kiss and make up before there will be no season.

I wanted to go see a game this year damnit.

one more thing..
Posted by jessie on Dec 17, 2004
Reading this is very interesting.
I think what is most important to me is that the owners don't make millions off the players without sharing.
Reality is there's lots of monies in hockey, and the players should get their fair chunk of it. They are the ones doing the work -- and it is hard work.
And if people are envious of their salaries, this is silly. It is not a big secret, and everyone is fully aware of this while choosing their career path. I can't skate, so I would assume I would suck at hockey -- but it is still an option.

Anyway the whole thing is silly, and the owners are cocks for taking away hockey.

Aww I wanted to respond
Posted by pudding on Dec 17, 2004
Please let me know if this thread is still alive.

I want to comment on mike's manufacturer/raw material analogy and talk about how the players and owners both wanting to make money.

I didn't read the article (it started playing some stupid cnn movie and i stopped it), but i would imagine the players union has flexed its muscle enough that the wages are inflated.

If you are reading this, please post and let me know before I write a mike-ish rant :)

Posted by phduffy on Dec 18, 2004
Yeah, it's still on.

Seriously, read the article.

Yeah, it sucks that you have to watch an ad first, but it'll be worth it.

My Response
Posted by pudding on Dec 18, 2004
Ok, well first off, the article was pretty one-sided. It attacked the 'evil' management but didn't mention anything about player wages which seems to be where management's problem lies.

It mentions the value of a franchise is growing by what.. 7% a year? But they are losing $4M average? to get there... average $163M tean * 7% appreciation - $3.2M operating loss (operating loss... ignores any possible debt and doesn'even return anything to the owner yet) = 5% return/yr BEST case. That's a pretty shitty return.

If the players can afford to drop their salaries 24% (note it did not tell us how much that would help the teams), isn't it fair to say that the Players Union may have pushed salaries into an inflated and untenable level (if you are the owner?)... to compare to Mike's example. the raw materials suppliers get together and force a price increase on the manufacturer. Normally the manufacturer would accepts it and pass it off to the customer (unknown how the teams make their mone yand would be pay this extra $$) and the average person is screwed.

And if it looks like the "Man"agement is not being flexible, sometimes you need to drop the hammer on your supplier and say "I can't make my business work at this level. You have to drop your price (and we each benefit) or I am gone (and you just lost that opportunity for profit)."

Lots of parties are involved in the business puzzle of hockey: the players get their salary, the arena gets its ticket sales, the team gets paid however that works... tv/arena/etc, the fans get hockey, the bar owners get $ from the fans. But to work everyone needs to make money. If one part doesn't then after a while it falls out things stop working. That's where we are.

Posted by phduffy on Dec 18, 2004
It was one sided because the only possible sensible outcome, after analyzing the facts, is to support the players. (Okay, I realize this isn't satisfactory and is kind of inflamatory, but it's what I believe. It boggles my mind that people look at this situation and support the owners).

Remember, those yearly losses by the teams are fiction. They're not based on reality, they're based on the owners hiding their revenues so they can call poor to the players.

Let's say you're a team, and you also own your stadium (if you live in Toronto you should be able to think of a very prominent example of this). What you do is set up your stadium as a seperate company, and then charge the team well in excess of market value for playing their games there. Or you don't share the concession and parking revenue, etc. (You can also do this if you own a tv network. That's what Rogers does with the Jays - they underpay them for the rights to their games, and then when they report the Jays revenues, they don't say how much the Jays get in TV revenues).

Forbes magazine did an article on the NHL and MLB, and found that their losses were wildy overstated. This led to a baseball player saying "Who I am going to believe, a magazine that spends 365 days a year on this stuff, or a guy with zero credibility?". Or something like that anyways. The point is, the losses are complete and utter fiction. The Leafs don't need a salary cap at all, they make tons of cash.

I'm curious how being able to cut their largest expense by 24% wouldn't help the teams.

Normally the manufacturer would accepts it and pass it off to the customer (unknown how the teams make their mone yand would be pay this extra $$) and the average person is screwed.

No, they wouldn't, and no, the average person wouldn't be screwed. This is somewhat true in the manufacturing sector, but even more so in sports - the costs have little affect on what you pay for a product. The Maple Leafs don't look at their costs every year and then figure out what they should charge - the charge whatever they think they can get. Sure, they'll tell you that they increase ticket prices because of added costs, but that's nonsense, they raised ticket prices because they know people will pay more, and they're a profit maximizing company. This analogy isn't perfect in manufacturing, because of the large amount of competition - if costs increase enough, some manufacturers will stop producing, decreasing available supply and leading to price increases. In contrast, the Maple Lears have 20,000 or so seats available for 41 home games available each and every year. This doens't change with their player costs.

Remember, the players are incapable of pushing up salaries.

I agree with the last thing you said. If one party won't work with the others the product suffers. And the owners are completely unwilling to work with the players association, because they're trying to break the union, and they plan on doing this by using scabs next fall.

Posted by pudding on Dec 19, 2004
Ok, so there are some weird revenue issues... but lots of companies use transfer pricing etc to shift around profits based on taxes, legal liability, and other very confusing reasons. That won't change.

So becasue of all the income shifting it's really hard to get a good idea at how much each segment earns (the team, the arena, the tv station), but at the end of the day the owners still need to make money. Yes it sounds bad when they are earning millions and millions of dollars, but you have to remmeber they had to invest like $150M in a team. That is a disgusting amount of money, so you need to make lots of millions to make it worth your while..

Until some hockey team or arena or whatever becomes public and everyone can see how everything flows through, there will be lots of speculation and guessing on how much they make, etc. The owners will continue to call poor to the players, but how can a player honestly say "I need $5M a year to support my lifestyle". Come on.

At a high level smoeone should say the nhl teams earned $X in revenue from these sources... they paid $Y in costs for player salaries blah blah blah. Then they say what the average player earns, how much the players are willing to drop their salaries and how much that will help. At that point we can sit back and say "Yeah, those players were pretty good guys for giving up $200,000 of their $0.8M annual paycheque"... but remember - they still get $0.6M to go to practice and sit on the bench!!!

Ok, going to the average person't won't be screwed... at the end of your paragraph you just contradicted your opening statement. If the Leafs have 20,000 seats at 41 games and they bump up prices $1/ticket (ostensibly to pay for higher wages or whatever), then the average person has a choice: pay the extra $1 or watch the game somewhere else. There is no substitute for a leafs game in toronto, so the little guy is stuck paying that excra $1 if he wants to see it at the arena and is getting screwed. The team won't just eat that cost if they think they can push it somewhere down the consumer chain. True there is a price point where people won't go, but we aren't there yet. Same with manufacturing etc... if the raw material prices increase, the finished goods prices increase (hopefully such that the increase is shared by all parties but i don't think there are that many "nice" companies out there - they are all profit-maximizing)

Any large union can force certain things on management... benefits, salaries, etc etc... so to say that the players can increase their salaries (maybe not now, but definately in the past?) just doesn't make sense.

One idea would be for the players to own the team they play for. They could also raise public capital (tonnes of people would probably be willing to buy in), keep everything transparent, and then there would be no conflict of interest. The players are the managers. It would give them some real incentive to do well, just like when the workers own part of the plant they work in. The only thing is they would have to sew some extra letters on their jerseys: Matts Sundin Captain and Chief Executive

The players
Posted by Nerhael on Dec 19, 2004
I think a lot of your argument seams fueled by the fact that it bothers you that players get paid amazing money to play a game.

I don't think that's relevant to the argument.

Iain, if a player says he needs 5 million a year to support his lifestyle, why does the owner require a league rule to tell the player he can't do that? retarded.

If the owners want to continue being kids spending all their allowance on the best trading cards, well, they just can't buy any candy that week.

Posted by phduffy on Dec 19, 2004
About the number of seats and the price of Leaf tickets.

The average guy gets screwed if the Leafs raise their ticket prices, yes. However, the Leafs raising their ticket prices has NOTHING to do with player salaries. That's my point. They raise or lower prices based solely on whether or not they think people will pay for the tickets, which is independent of player salaries. (Unless you think that if the Leafs give Mats Sundin an extra $2 million a year you'll be willing to pay more for tickets).

I have no problem with the owners making money. They made a huge investment, and are entitled to a return on that. However, even if the owners were to break even on operating costs and stuff, the price of their franchise increases each year at about 5 per cent. Secondly, if the owners are making money every year, but lying about it, what do we do? Like, how much should the owners make? Is there any limit? When it gets down to it, the money has to be split between the players and the owners, and I'd like to see as much as possible go to the players, the ones who give me the enjoyment in the game.

Your argument about lifestyles is silly. Because, the reverse of that is happening right now. The owners are saying "We can't support our lifestyle on only 75$ million a year, we need $100 million". That's not the issue. If the owners can't afford $75 million in players salaries... THEN DON'T SPEND THAT MUCH ON PLAYER SALARIES!

What bites my ass is that all these owners are these huge right wing capitalists, and now they want to destroy the free market in hockey so they can protect themselves from themselves. Now, I don't have a problem with some restrictions (luxury taxes or revenue sharing or rookie caps), but I find it ironic.

Okay, question: The solution the players have suggested involves a luxury tax. What's wrong with a luxury tax?

just business
Posted by mike on Dec 20, 2004
First of all, as people may or may not be aware, I am not really a big hockey fan, I watch some big games on occasion, I like the fights and so forth, but only really tune in at the end of the season for some Stanley cup stuff if at all. I much prefer Olympic hockey for some reason.

Anyway, I just wanted to say that the debate has been heated and great, but I worry that the issue is being taken too personally by hockey fans. As callous as it may sound... it is just business. Something that I think is being forgotten in this whole mess is that these types of situations happen all the time. The difference here is that they are attempting to negotiate tricky business dealings behind closed doors, but everything is being aired in the public arena.

Did anyone you know get all worried about the steel shortage? Doubtful. I kind of doubt that the general public was even aware of what a large problem it was (and still is to some degree). All of the dealings were done between various companies and governments without public knowledge because Johnny Average just didn’t care. Nobody idolized the little companies that got totally screwed and had to close up shop over it. I don’t recall a single person lamenting about how Mom and Pop Steel Roofing Ltd. was eating huge losses in order to just stay in business and ride out the storm.

This isn't politics (since it has been dragged into public view there is a political aspect due to all of the posturing and so forth to try to get the fans to take one side or the other), there is no specific need for transparency here. There is no need for the fans to get to know all of the intricate details of the business of hockey, the fans in this business relationship are just consumers. It is regrettable that the game of hockey is being held from the fans, but that is no reason to specifically blame the owners for all of the problems.

Although it is true that the owners initiated it all via lockout, they chose to do it because they don't think they are getting a proper return on their investment. Hockey is a business, it is not a non-profit organization to give people something get involved in. If the players felt that they were not getting enough money, you had best believe that the union would go on strike.

Think about this: The player salaries represent about 58% of the cost of running a team, the players are willing to give back 24% of their salaries. That doesn't mean that the owners suddenly have 24% more money to play with, the really only save13.9%. The problem is that the 13.9% that they save will only last for 1 or 2 years, it is not a sustainable savings to the owners due to the system of negotiating salaries that is currently in place. Do you really want to get a half assed season this year, a full season next year, and then another lockout the year after that? I am guessing that you don't. I am guessing that if you really sit down and think about it you want the players and the owners to sit down, take a good long look at things and come up with a profitable business arrangement that works for both sides. In that way you will be left with a sustainable game of hockey that will last uninterrupted for at least 5-10 seasons.

All of the proposals that the players have put forth are solutions. The will fix the problems. The problem is that they are short-term solutions, while the owners want long term and sustainable solutions. Screw this season. Screw it. Tell them that you don't even want to see hockey this season, tell that that you do want to see hockey for the next 25 years uninterrupted.

The luxury tax is not a business solution. The luxury tax is a solution that works for the players. It seems somewhat less short sighted that most of what I have heard, but it is still not a real business solution. Owners do not want to work together, they want to work to fill their own pockets (business is business). They don't want to be paying another owner a chunk of their profits when they are already have to pay crazy money to their players that they want. A large part of the problem is that the owners refuse to work together, but the last time I looked corporate collusion was a sketchy practice at best. I am not sure how the owners would feel about a type of luxury tax involving the draft. I am guessing that they would be more receptive to teams with ridiculously high payrolls getting less draft picks. I would think that if they are willing to pay such crazy salaries then they would have already built the teams that they want and wouldn’t really need to push as hard to get the best and brightest rookie players.

It is just an impression that I have (meaning that it is far from a fact and based on what I have been seeing and hearing), but it appears that in very general terms some people are getting very worked up over how their favorite hockey stars (whom they idolize and so forth) are being treated by management without considering the business aspect of the situation. It seems too easy to blame the big bad owners for wanting to line their pockets when the players (and especially the union portion of it) are looking to do the exact same thing. It is a two way street, everyone wants hockey back, both sides are looking at money, I am suggesting that people take a step back and think about the bigger picture here. Although I am willing to admit that it is entirely possible that the big picture that I am seeing is not completely accurate in the eyes of others. There is a lot of mud slinging coming from both sides. The owners need to make concessions, but I think that the largest concessions need to come from the players, and the entire system that is currently in place needs an overhaul.

As a final note please keep in mind that I have been writing this over and extended period of time and have had almost innumerable interruptions as well as several some breaks. My thought train may have become a little screwy leading to a bad read, but that is pretty normal for me I suppose.

But the rebutting just won't stop!
Posted by phduffy on Dec 20, 2004
Mike, I'm also not a hockey fan. I don't mind that the season's cancelled. I also prefer the Olympics are better.

I agree that it's a business. Which is why the owners should treat it as such, and stop being idiots. The owners are all billionaires, they know how to make money. They know not to spend too much money. So it's time for them to start acting like it.

The owners initiated the lockout because they think that they can break the union and bring in scabs.

The 14% that the players are willing to give back to the owners most certainly could last for years, as long as the owners act with the slightest bit of sense. No one forces them to spend money, certainly the union doens't.

Do you really want to get a half assed season this year, a full season next year, and then another lockout the year after that

That's not how it works. When the new deal is signed, it'll be for 4 to 6 years in length. The owners won't be in a legal lock out position until after that contract expires.
Of course, regardless of what happens, you can bet that owners will bitch and moan about not having enough money.

The interesting thing about this lockout is that unlike other sports that have looked for a cap, the NHL isn't saying that it needs a cap for competitive balance reasons, which is the nonsense that MLB throws out there. The NHL owners has convinced people that the current system (which they designed) doens't work, so that's why they need a cap. This was a smart plan by the NHL, since people are becoming wiser to the 'compeitive balance' BS.

The luxury tax is not a business solution.
This is nonsense. Seriously, what does that even mean? Of course it's a business solution, it's being proposed as a solution to the business problems. And the NBA uses it, so it's a solution that exists in other sports.

Owners don't pay other owners. If they exceed the tax threshold, the money will go to the league, and the league will distribute it as required. I'm not sure where you're going with collusion... yes, people look unfavourably on collusion...but i'm not sure where the owners are colluding. Are you saying that the Luxury Tax is collusion? Sorry, I'm just a little confused.

As for the luxury tax for the draft.... is that a new proposal you're suggesting? If so, that's actually a pretty interesting idea. Don't fine the teams money for exceeding a certain threshold, fine them draftpicks. The only problem I can see with that is that there's a limit to how many draft picks you can fine a team, while there's no limit to the dollars you can fine them. Still, it's an interesting idea. I haven't heard it suggested by either side yet though, so I don't think we're going to see it.

I most certainly do not, and never have, idolized any hockey stars.

It's a business, so the owners should start acting like Businessmen, and quit trying to get their Mommy (The NHL) to hold their hands.

The union is not, and never has, looked for more. Remember, the NHLPA isn't like a normal union, they don't negotiate a salary for everyone in the union. Their main goal is to ensure that they keep the right for the players to negotiate their own deals.

The largest concession needs to come from the players.... okay, well so far the owners haven't moved an inch, and the players have offered 7 different solutions, the last of which included cutting their paycheques by 24%!

I think that the biggest problem is that people don't like that the players make millions to play hockey, and there's an anti union sentiment, and people look to the NHLPA as the worst example of a union. By those powers combined, people are unable to look at the fact that all of the problems in the NHL were created by the owners.

Anyways, hopefully they all get together and have some hockey.

Get ready for it
Posted by pudding on Dec 20, 2004
Ok, I just read some stuff so I have an idea what is going on now...

First off, how can the owners bring in scabs? From where? Who would pay NHL prices to watch them play?

Salary Cap
To contradict Paul, the NHL has said that a salary cap would improve competition among the teams, especially the smaller teams that are at risk of going bankrupt (Calgary, Edmonton, etc) . A luxury tax is a step in the right direction, but at the end of the day, why shouldn't a salary cap be in place? You need to look at the gross margin a team earns... and if players are eating up 75% of revenues in salary alone there isn't much left for the owners (who have their own admin staffs, huge travel & living costs for teh teams, etc etc etc. Businesses want consistency... and if the players salaries would be reduced to only 60%, they would still make LOTS of money, but they would also share with the team and the league any benefits (they get paid more money - they earn a % of revenue, not an absolute maximum - if things are going well, and less if the team does crappy). Pete (and possibly Paul) will now say that the owners should control spending on thier own... but if you want a decent team to draw fans and win games (thus earning you money), you need to pay for the players, who demand insane salaries. Also, the NHLPA has increased salaries... I read somewhere the average salary rose from $1.3M to 1.8M. Can't find the site but somenoe find a chart showing the average player salary over the last 10 years. I'll be moving quicker than inflation I'd bet).

Luxury Tax
The luxury tax would help... it would essentially subsidize the poor teams but not fundamentallychange anything... probably just slow down the process of bankruptcy/sale. The owners were stupid for capitulating to player demands, but without all getting together to set "soft" caps (which would probably never work if anyone remember's the Prisoner's Dilemma) salaries WILL increase. So now they have gotten together to make some changes (I wouldn't necessarily call that having Mommy NHL hold their hands... the NHL is just bargaining on behalf of the teams as a whole.)

Blame and Implication
Ultimately, the blame lies with the league and the owners. They have expanded into too many areas that will not support a team, and they have allowed player salaries to inflate beyond what can be sustained.

When this happens there will be a correction. A few things may happen, and they all be needed to solve the problem: teams go bankrupt, player salaries will drop (and rise more slowly hereafter), and the owners will get together and set up some ceilings to keep things from getting out of hand. At the end of the day, I hope the fans are patient enough to see it through. On the bad side, Canada may a couple more teams if the players remain adamantly opposed to any sort of salary cap that would tie their salaries to team revenues.

Ready for what?
Posted by phduffy on Dec 20, 2004
The owners will bring in scabs from the American Hockey League, as well as NHLers who cross the line.
Have no doubt, this is what's happening. The NFL did it and people watched, and MLB tried it, before they reached an agreement with the players.

pudding, I love you, but with all due respect, everything your wrote in the Salary Cap section is fucking nonsense. You're swallowed the owners propaganda hook line and sinker.

Yes, the NHL needs to improve competition so that small market teams like Edmonton and Carolina and Calgary and Tampa Bay have a chance at winning, and so big markets like Montreal and New York don't always win.... what's that? That's what happens now? Shit, i guess they don't need a salary cap for that then!

I think I've gone through the reasoning against a salary cap before on this site. If the owners don't want to spend 75% of their revenue on salaries.... DON'T! The Salary Cap is also set up to give the players a certain percentage of the league's revenues... but since every team in the NHL lies about its revenue, it obviously won't work.

The NHLPA didn't cause average salaries to increase. OWNERS caused the salaries to increase by paying those salaries. I'm not disputing that salaries have gone up. If the billionaire owners were really losing all this money, would they really be spending all this much on players? And again, your argument that if you want a decent team you need to spend money is nonsense, as a cursory glance at the salaries and final standings of teams in the NHL will show you.

As I detailed before hand, the 3 bankrupcies that the NHL had were entirely the league's fault, and not the fault of players. Because I dont' think you read that thread, here's a recap:
Ottawa: Never should have been given a team in the first place, couldn't afford the franchise fees, and that's why they went bankrupt
Buffalo: Paying for their new stadium caused the bankruptcy. They can/should just move to Hamilton.
Pittsburgh: Normally you can't buy the team unless you have enough cash to operate things. This was waived because Mario Lemieux bought the team.

A luxury tax would fundamentally change things in that it's essentially a cap. Only three teams in the NBA exceed the tax, all other teams remain opposed to it. THE OWNERS HAVE NEVER CAPITULATED TO PLAYER'S DEMANDS! THE PLAYERS HAVE NEVER ASKED FOR ANYTHING! The owners don't have to get together and collude on soft caps. They can negotiate soft caps as part of the collective bargaining agreement and go with a luxury tax! (As an aside, baseball did this in the 80's: the teams colluded not to pay players above a certain amount, and they didn't. Then this came out and they got sued and lost).

On the bad side, Canada may a couple more teams if the players remain adamantly opposed to any sort of salary cap that would tie their salaries to team revenues.

Again, this is nonsense. If anything, this situation is going to lead to more teams in Canada. The teams that are talking about folding are the teams in the Southern states, and both Hamilton and Winnipeg are talking about getting one of those teams. The players are not opposed to tieing salaries to revenues: they've offered a luxury cap that does just that!

who demand insane salaries.
I just wanted to highlight this. I think this gets exactly to what Nerhael brought up before. There is nothing insane about the salaries the players get (But they play a gAME!!! Think of the ChildreNN!!!!)
The players get the salaries they get because that's how much revenue they bring in. I genuinely think that people opposed to the players just can't handle the amount of money they get. (Again, pudding, this is not personally directed at you.)

Posted by pudding on Dec 20, 2004
Firstly whether I buy the salary cap story or not, you are buying the opposing story, hook, line and sinker.

YES the owners made lots of stupid and greedy mistakes wrt salaries in the past and now it is coming back to bite them in the ass. Since they are not earning as much money as they need to they are going to fix the situation. And if that means no hockey or hockey with scabs or an across-the-board pay cut, that will happen. They own the teams and unless somenoe wants to buy them out they are calling the shots. Business is business.

A luxury tax doesn't tie salaries the same as a cap would (as I understand it - you know a lot more about this than me)... if salaries are capped at say 70% of revenues, the players still earn danm good money (will get into that later), and if their team does well due to their fantastic play then they will be bonused on that.

Because Paul knows so much about this (and I know so little) I always research a bit before I post anything, but I just read this:

It outlines what management did wrong. I am not denying these facts, but how can you honestly tell me that some guy who plays 5 minutes a game IF that deserves 500k/yr. I have no problem with paying professional well... they have a very unique talent. Do you think CEO's of huge corporations deserve their multimillion dollar compensation packages?

Anyways I'll let you have the last word on this. :)

This is good fun.
Posted by mike on Dec 21, 2004
Just to clarify, I saw the thing about using the draft pick instead of money for a luxury tax on TSN. I don't know enough about the specific workings of hockey to come up with anything all on my own.

I have to admit that it amuses me to no end to see all this debate. It is true that I don't see hockey players being worth even 10% of what they are being paid, that is just my opinion, I don't value sports stars that much. The fact is that there are those who do, lots and lots of them, so therefore hockey players do (I hesitate to say should, see previous) get humongous sums of money. Should they get more and more money, escalating at a seemingly exponential rate (don't take that to mean a large exponent, just a nice parabolic curve that eventually ends at infinity, perhaps an exponent like 1.1 or something). Should they keep getting more until the game is bankrupt? I just don't see the salaries as feasible for business to continue.

I keep hearing about how if the owners don't want to pay humongous salaries... THEY SHOULDN'T!!!!1111ExclamationHolyCrap. Then what are they doing now? They don't want to pay the inflated salaries. The players don't want to not get paid inflated salaries. That is one of the issues here. That is what is happening. The owners are saying that they will not be paying these large salaries anymore. Yes the owners did it to themselves. That is what management does. They make decisions, not all are good or correct, but when they see that they screwed up, they try to fix it. Business.

The thing that shocks me most is that the union is holding its ground so firmly. Unions appear to have lots of power in theory, but the fact is that management is holding ALL of the cards. The union oversteps its bounds in the eyes of management, and then refuse to give anything back, refuse to be checked and the owners can just pull out. No more jobs, seeya later. Start a new company and carry on with no union, or a more flexible union. The union can bitch and moan all it wants, if the owners don't get whatever they view is a fair deal, they can and will walk away. This is not specific comment on the NHL thing, just unions in general. I am aware that the NHLPA is at least trying to come to some sort of agreement.

The owners have obviously noticed that player salaries are becoming a run-away expense. How this just donned on them I cannot say, I suspect they have been weighing the option of a lockout for quite a while. As with any business, if an expense is getting out of control then steps must be taken to put it and keep it in check. They must figure out a way to keep player salaries from excalating much in excess of inflation, or else each and every year it will cost them more money relative to the previous year. Arbitration is a non issue as I recall, mostly due to it being crap and raising player salaries to crazy levels.

Also, I was wondering. If you buy a house for $100000 and live in it for 5 years only to find out that it is suddenly worth $150000, does that mean that you can immediately walk down the street and buy a $50000 car by explaining to the salesman what happened, shake his hand and drive away in the new car and park it in your garage? Or do you think that the salesman might prefer that you sell your $150000 house, buy another $100000 house and give him $50000 before you drive away in the car and park it in your new garage?

I hope hockey comes back, but I would like it to stay for a while.

P.S. The luxury tax is not collusion. If the owners all got together in a room and said we all formally agree that we will not pay a player more than a 5% increase in his salary per year when they want to get traded to a new team, or are up for free agency, or however that works, that is collusion and their asses would end up in court for circumventing the free market. However, if they work as a group through the NHL and have it written into the players contract, then it's not a problem. The owners don't want to have mommy NHL hold their hand, they don't really have a choice.

Okay, more.
Posted by phduffy on Dec 24, 2004
It outlines what management did wrong. I am not denying these facts, but how can you honestly tell me that some guy who plays 5 minutes a game IF that deserves 500k/yr.

Pudding, get over it. Get over the bench players, the salaries, etc.
You can't bring up a post without your jealous of these guys getting in the way.
How much the bench players make is irrelevant! It has no bearing on the issues we're talking about! Let it go.

Excellent question about the CEO's. I'm not sure I know enough about it, but it seems as though many are over compensated, if you accept the idea that there is other talent out there that will do the same job that they for less money. Which seems very possible to me. That's the difference between CEOs and hockey. No one can replace Mats Sundin. There are other people willing to do his job for less money, but no one that can do it as well as he can.

Amusingly, I think that you and I actually agree on most of this. The owners (and the NHL) fucked up big time, and should fix things. The difference is that you think that they should fix it by taking no responsibility for their actions, and by punishing the players for using a system that the owners agreed to. I think the owners should suck it up, stop lying to everyone, and show some common sense.

Mike, your valuation of sports stars doesn't matter. What matters is how society values them. And not how society values them in terms of a survey, where we ask people how much they value hockey players. But how society values them in terms of, how much are people willing to pay for hockey? That's the ultimate judge of how society values their worth. What's the average ticket to a Leafs game... somewhere around 100 bucks? Well, there's how we value it. Plus, how much we watch the games and buy the products advertised on the games.

I disagree with the premise behind your third paragraph. If the owners don't want to pay the salaries, then they should stop. End of discussion. That's not what they're doing now. They're currently trying to create a nanny to make sure that they don't spend too much. Well, welcome to busines... try operating on a budget... you know, like every business in history.

The thing that shocks me most is that the union is holding its ground so firmly. Unions appear to have lots of power in theory, but the fact is that management is holding ALL of the cards. The union oversteps its bounds in the eyes of management, and then refuse to give anything back, refuse to be checked and the owners can just pull out. No more jobs, seeya later. Start a new company and carry on with no union, or a more flexible union. The union can bitch and moan all it wants, if the owners don't get whatever they view is a fair deal, they can and will walk away. This is not specific comment on the NHL thing, just unions in general. I am aware that the NHLPA is at least trying to come to some sort of agreement.

Mike, I think that you need to read up a bit more on unions. A company most certainly cannot just shut down and re-open without a union. I have almost never heard of unions refusing to budge, it is almost always management that's inflexible. If management tries to shut down and re-open, they will get fucking hammered by the labour relations committee. Even in Ontario, after we had Mike Harris do everything he could to cut the balls away from the unions, companies are still legally required to negotiate in good faith, and if the workers go on strike, the company is legally required to take them back for the next 6 months.

Mike, I agree most of your 5th paragraph. Owners have spent too much... so the owners should take steps to control spending (although keep in mind that their losses are mostly fiction). They don't have to keep player salaries from increasing faster than inflation, they just need to make sure that their increases in revenues match these increased player salaries. As for arbitration, I think that both the owners and the players hate it, so maybe they'll figure that out.

I have no idea what your paragraph about the house is about. I don't see the relevance to our current discussion. I suspect that if you had a house valued at $150,000 and you only owed $80,000 on it, you could walk into your bank and have them increase your mortgage, which you could then use to purchase the new car.

I agree about the luxury tax. Sorry, I thought that you were saying that it was collusion. It appears that we were both trying to convine each other that the luxury tax isn't collusion.

you're all right
Posted by alltogethernow on Dec 24, 2004
this is a nice debate and as a Hockey FAN, and a former idolizer (word?) of hockey players here's my 2 cents....

just let me state that i am almost completely with paul on this one...
i completely agree with every point that he has made.. so just let me say that..


"Mike, I think that you need to read up a bit more on unions. A company most certainly cannot just shut down and re-open without a union. "


mcdonalds has done this for years.. in ontario and elsewhere... read up on it.. i'll find some links later but i am drunk now... so FUCK YAS ALL




Posted by phduffy on Dec 25, 2004
McDonalds does not close up to get rid of unions.

Companies can't do that, it's illegal.

What McDonalds does is close their store before the union is certified. This was the case in Quebec a number of years ago, where they had the certification vote, then McDonalds closed down, and the dude who owned it opened another McDonalds down the block like 3 months later.

read up on it.

Posted by phduffy on Jan 19, 2005
Here's another column by King Kaufman on the NHL.

This is somewhat different in tone, in that he doesn't really attack either sides ideas, instead, he sort of looks at their relationships with the fans.