Wednesday, July 25, 2012

Pre-flight paperwork

I will admit to being afraid of what might occur when the NHLPA hired Donald Fehr as it’s Executive Director. I didn’t like his confrontational attitude when he was in the same position for MLBs players, nor his unwillingness to get drug-testing into the game. Inflexible would have been my one word summary.

If that opinion were fact, however, the NHL and team owners would have never had to have made the absolutely laughable offer they did make to open the bargaining. The league could have waited for Fehr to make outrageous demands on behalf of the players, and then laugh at him, Instead, they take the lead in the laugh-a-thon and request a reduction in what counts as “hockey-related revenue”, a roll back on the percentage of revenue that players get, an increase to entry level contract length, and a longer waiting period until a player becomes an unrestricted free agent. Players would be facing an estimated 24% rollback on their wages. This is after a similar rollback in 2005. The NHL is asking for the farm - and the people on it, too.

If the league was still struggling as it was during the last negotiations, I could see why they would ask for this. Players aren’t on the hook for arena leases, contracts, and all the other costs associated with running a team. The NHL is not in the same position, though. Far from it. League evenues have jumped by about 50% from $2.1 billion in 2003-04 to $3.3 billion for the 2011-12 season. Here is the bargaining summed up in a nutshell:

In 2004 - “We are losing money. Players need to take a pay cut.”
In 2012 - “We are making lots of money. Players need to take a pay cut.”

In 2004, I supported the owners. A cap works for the league, and (mostly) keeps the playing field level. Yes, there are issues about the cap hits of contracts and “unlikely years”, but as shown by the consistently increasing revenues, the system in place is proving successful. The league is making money, the players are making money. The only people not making money are teams that are either 1. in non-traditional markets or 2. having multiple losing (non-playoff) seasons. People love a winner. In 2011, Forbes estimated that the bottom 5 were Phoenix, Atlanta, New York Islanders, St. Louis, and and Columbus. The first two are teams in non-traditional markets who have (or had, in Atlanta’s case) major ownership issues. The last three were steady non-playoff teams (and only St. Louis has changed that in the past season).

This tells us that if a team isn’t making money right now, it isn’t because the players are taking it all. It becomes an ownership issue - they put a team in the wrong area, or are handling it wrong in their particular market. (Phoenix, it should be noted, is still under NHL ownership.) Or they just aren’t winning. In some cases, it is both.

It is also why I’m backing the players on this round of CBA talks. Last time, they gave the owners the cost-certainty the owners felt they needed. They took payc uts. Top stars reduced their earning power in a capped system. The league is now better for that sacrifice. It just makes the owners look greedy, and ot of touch by asking for such drastic cuts when the league is showing strong growth. The players didn’t offer front-loaded contracts with tacked-on
cheap years to get around the cap. That hangs on ownership. If it is causing financial problems, look to close the loophole. Going after the players wallets for the owners lack of foresight is idiocy in its finest form.

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