STL Post Dispatch: Blues [players] get economics lesson
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11-13-2003, 03:51 PM
Join Date: Feb 2002
Originally Posted by
You really couldn't be more wrong. When a cap is agreed on, the CBA will determine what exactly is included in the revenues. The owners will be required to report these accurately and they will have to sign the CBA agreeing to do so. Not doing so will result in fraud.
I understand your argument, but before they determine what revenues to use, the NHLPA has to see what revenues HAVE BEEN used and then must decide how that must be adjusted. The point I wanted to make was that until the NHLPA sees complete financial disclosure of the numbers that HAVE BEEN used, they shouldn't even consider a salary cap because they will have nothing to compare future revenue calculations to. Right now, they don't know what sources of revenues all of the owners have, related to their teams, and how owners can disguise or manipulate them into other accounts that won't be included in "Defined Gross Revenues" or whatever other term they come up with. Without complete financial disclosure by all teams, the NHL has a significant negotiating advantage when determining what "Defined Gross Revenues" will include; "Defined Gross Revenues" must be defined to the T to try to avoid the numerous owner-favouring loopholes that will likely result if the owners have a significant advantage in the negotiations over the definition. Again, this advantage would come as a result of a significant difference in knowledge about teams' accounting standards and abilities.
Nonetheless, once a "Defined Gross Revenues" is agreed to, teams will have to make this completely available to the players. However, what kind of accounting loopholes will be present if the definition fails to include accounts or sources of revenue that the NHLPA had no knowledge of prior to negotiations? It is possible that teams could broaden the definitions of these particular of revenues to include revenues included under "DGR," thus decreasing "DGR." The players may have thought they had a certain type of revenue covered in "DGR," but it may turn out that this other unconsidered revenue account is more representative of the form of revenue. The NHLPA can't agree to a salary cap with this kind of risk.
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