STL Post Dispatch: Blues [players] get economics lesson
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11-13-2003, 08:30 AM
Join Date: Sep 2003
Originally Posted by
We've now seen a couple of sources report that this was the players offer, and nothing has been reported that it is false, from either side, so I am inclined to write-off option 3. The players are not likely to be scared off easily, so that write-offs option 4. That means that the owners have convinced the players that they are losing money.
Except the players aren't really making any significant concessions. A luxury tax is tied to revenue sharing and the players know the owners won't go for that. The big concession being made by the players is reducing the salary cap for rookies and appearing willing to negotiate around bonuses. Even this last is not that big of a deal because contrary to the claims of the owners, few players get these big bonuses.
The 5% pay cut is a stroke of genius. It looks great - and it is in a sense that it ratchets back wages - but we have to remember that the player's strategy is predicated on two beliefs:
1) The owners are completely untrustworthy and nothing they say about money can be accepted with a straight face.
2) The owners will pay what they can afford to pay under this CBA. No more and no less. As long as the structure says the same - there are no artificial spending controls - this will be the case.
The players think that the 5% pay cut will be very temporary. If Brian Burke's budget is $40 million and the players take a $2 million pay cut, Does he cut his budget or find a new way to spend the $2 million saving? The players are confident he will spend it because he can afford to spend it. Under their worldview, the market rules.
Of course, if the owners are telling the truth about money they will gratefully accept the cut and take the opportunity to avoid stupidity in the future. If the owners are doing their usual song and dance, they will immediately turn around and spend the money.
The players believe the market is setting salaries. If they are right, a 5% or 10% pay cut doesn't mean anything because the market will quickly correct itself. The owners claim the CBA is driving up salaries. If they are telling the truth, an across the board cut is a genuine concession.
If the owners are telling the truth, the combination of concessions is probably worth $200 million next year. The teams can get their financial houses in order and the league carries on. If the owners are not telling the truth, the combination of concessions is worth next to nothing.
Which is it? The NHLPA offer is designed to force the hand of the owners. If they are telling the truth, the players are willing to meet them halfway. If they are lying, the players get locked out.
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