Exposing the NHLPA Proposal
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12-11-2004, 11:52 AM
Join Date: Feb 2002
Location: Ranger fan in Philly
Originally Posted by
The problem is the performance incentives.
A player could earn $850,000 for "Individual A Bonuses" which have a maximum payable bonus of $212,500 for each category so expect the NHLPA to force players and agents to demand the most attainable statistics and for the maximum. This would be fine but then the union wants to reward players for league wide rankings in those categories and any awards in the section called "Individual B Bonuses". These incentives are unlimited and would continue the Thornton Model in a new style that would be harmful for the NHL. If the NHLPA would agree to an $850,000 cap for type B incentives, a successful entry-level player could receive $2,762,500 annually and $11,050,000 over the four years of his contract.
Look at pages 93 and 94 of the proposal. It sets out clearly what type B incentives are. A player can't cash in under type B incentives unless he voted in the top 10 for most trophies (top 5 for Selke, Lady Byng and Calder--and the Calder incentive is capped at $212,500) or in the top 15 in goals, assists, points, points/game, +/-, game winners, hits, or blocked shots. Those are the uncapped incentives because if a player hits those levels, he deserves to be paid. Ilya Kovalchuk was tied for first in goals and second in points this year, and he was on the last year of his rookie contract. Doesn't he deserved to get paid well for playing at that level?
The next issue to tackle is the qualifying offer detailed by the NHLPA.
- players making over $1,000,000 must receive 100% QO's
- players making less than $660,000 must receive 110% QO's
- players between $660,000 and $1,000,000 must receive 105% QO's
NHL has stated the current 110% rewards players who have declined in skills or don't deserve the same prior salary to continue making money beyond their performance capability. It is almost certain the NHL will come back with a vastly different multiplier around 80% for all players since all player salary levels have history a of under-performing.
The NHL's problem with the 110% qualifier was that it grew to apply to so many players. With the league average at $1.8 mil, a team would have to qualify a player making $1.5 mil at 110%, and that adds up quickly for small market teams. But how many players make less than $660k? And at less than $660k, a 110% qualifier is not much. It would take a player from $660k to $726k. It's not the small change players that teams care about cutting the salaries on. It's the players making a hefty amount that just aren't playing up to par.
All the talk about changing the arbitration system to allow the team some fairness was nothing but window-dressing by the union.
If a team believes a player making $1.5 million or more has a lower market value, the team does not have to make a qualifying offer, must announce the election by June 30, player selects the term (one or two year deal), player can only be subjected to a club-elected arbitration once in his career, and a team can not select more than one per year or twice in any consecutive three-year period.
Now for high-level players, teams don't want to lose and have for the start of the season, teams must make the required QO and announce that it is reserving the right to elect arbitration. If the players declines to sign the QO or file arbitration, then the team has 48-hours to select the arbitration. The team must offer his prior salary and player selects the term.
This doesn't allow for a team to keep a quality but declining player because the QO and arbitration offer will be 100% of his prior salary so very few teams if any will use this tool. As for the players in the first method, since they only have to be subjected to the process once, they will only select a 1-year deal and then hope for the best that season giving them all the leverage again. This will force teams to be very careful on the player they select for arbitration.
You're treating the two issues like they're mutually exclusive. If a team wants to keep the "quality but declining player" then they announce that they are taking him to arbitration for less by June 30. The second tool is not a salary controlling device. It is designed to end lengthy holdouts by core players.
As for arbitration for less, I think it's substantial. Using your example (though I doubt a team would use it on a player making $1.5 mil), if the arbitrator decides that he's worth $1.1 mil, then that's what he gets for his deal. When his deal is up, then his qualifier is $1.1 mil and he has to work from there. Clubs really shouldn't need the opportunity to exercise this more than once on a player, because if they took the $1.5 mil player to arbitration because he's making too much, get $1.1 mil, then give $1.5 mil again once his deal is up, then the team has no one to blame but themselves.
On the next issue of revenue-sharing, NHLPA wants $189 million or more in the system but for whatever crazy reason, NHL owners and Bettman are refusing to have meaningful revenue-sharing, something that will become a hot topic of fans against the league for many of the lower revenue teams.
Before the nuclear issue, NHLPA did a great job to try and hide some very significant changes to the expired CBA at the end of their proposal.
- eliminate Group IV free agents but adjust draft choice compensation procedures and levels
- change no-trade provisions and increase the minimum salary to $250,000
- adjustments to the waivers system
- reduce length of training camp and exhibition games
- to discuss number of regular season NHL games, lenght of season, and playoff seeding
- increase the per diem
- increase number of tickets available to NHLPA for purchase and clarify seating location
- increase pension plan
- eliminate Exhibit 3 - the entry draft opt-in form
- change Exhibit 4 - lottery system and draft
- eliminate Exhibit 15 - compensatory draft system
- eliminate Exhibit 16 - transition rules
- eliminate Exhibit 17 - pro rata adjustments
The NHLPA did not try to "hide" anything. They knew that the owners were going over the proposal with a fine-toothed comb. The fact is that these provisions are small potatoes, and it would be pointless to make an issue out of these until the new financial system is agreed upon or almost agreed upon. You need to solve the big issue before you can worry about all the little details.
Finally, the luxury tax system.
Gary Bettman has been very clear about his dislike and unwillingness to accept any form of a luxury tax system, so it is no surprise the NHLPA offered a weak and unsubstantial luxury tax system.
Here's the breakdown...
$45,000,000 to $49,999,999 receives 20% tax for 1st year, 25% for 2nd consecutive year, and 30% for 3rd consecutive year
$50,000,000 to $59,999,999 receives 50% tax for 1st year, 55% for 2nd consecutive year, and 60% for 3rd consecutive year
$60,000,000 and beyond receives 60% tax for 1st year, 65% for 2nd consecutive year, and 70% for 3rd consecutive year
This means only three teams would pay a tax on the currently signed contracts after the 24% rollack and generate $1.6 million for revenue-sharing among the low-revenue clubs. New Jersey would pay $264k, Philadelphia $1.023 million, and Toronto $321k.
This means that only three teams BASED ON CURRENTLY HELD CONTRACTS would be over the tax threshold. Remember that many teams only have half their roster (if that) under contract. It would be difficult to project full payrolls because many teams are in transition right now and new contracts would be based on the new market value set by the rollback. Besides that, the luxury tax is NOT the only means of revenue sharing. Please read Section 4 of the NHLPA's proposal. It details how the top 10 teams in terms of revenue would share with the rest of the teams that sell 80%+ of their seats.
I'm not saying that the NHLPA made a great proposal, but you have misrepresented the entire thing. I think you need to sit and read the entire proposal more carefully if you don't think that there are many significant concessions.
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