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11-04-2012, 12:59 PM
Do Make Say Think
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Originally Posted by MNNumbers View Post
So, mean it's like this:

I own some middle to bottom revenue team.
I can't spend to the cap, but I have a real problem if I end up with a few good players. I can't afford to spend to the cap to keep them, and if I let them go, then I risk losing more fans and more revenue.
So, I favor having control over my players. That way i can stay in the middle of the salary floor/cap, and still have a team with a chance to win, and I can keep my fans.

Is that how this would shake out?

Not sure the PA would like that. It sounds like the owners want a pass on paying the really good guys as much as they are worth. And, every player is going to think he is worth more than he really is....
It isn't that simple as "the owners don't wnt to pay true value". The way that the players were valued (they ended up taking 57% of the money made) under the past CBA ended up being unsustainable because of revenue disparity.
The NHL is bringing in lost of money but unevenly: the few teams at the top are responsible for most of the revenue growth the NHL as seen. So what this means is that a few teams are driving the cap up: about half the teams in the NHL are breaking even give or take. Since the cap is based on how much money the NHL (it's a bit more complicated than that but it remains true) makes the cap ended up not working the way it was meant to (the point of the cap is to even the playing field both financially and on the ice). A few teams drove the cap upwards for everybody so most teams ended up being unable to keep up with it; the reasons why the teams at the top drove revenues up so much is attributable to a lot of different factors.
So this is how the cap keeps rising and in turn this leads to player salaries rising: they make 57% of the revenues (which is all the money brought in without factoring in costs; once costs are factored in and susbtracted from the revnues you get profits which are rather inconsequential to the debate outside of revenue sharing) so the players keep taking more of everybody's money but only a few teams are able to handle it: the same teams that are driving up the cap are doing so by bringing in more money than all the other teams combined, so only a few teams are able to afford player costs because they were meant to be based on the overall financial health of the league according to what the previous CBA said it was (all hockey related revenue). Both parties, when the expired CBA was agreed upon in 2005 said: the amount of money the league brings in is how good things are going but as I explained this ended up being an inadequate measuring mechanism.

Now we end up in 2012 and the owners are telling the players that the way they agreed to look at things doesn't work them anymore: the way the money is split up is too heavily in the players favour and the way revenues are rising makes for a dysfunctional league on a financial level.
So now we see the owners problem: a few teams have all the money but everybody pays for it as if the money was spread evenly. They got there because of how everything was calculated and because that faulty premise lead to huge financial gains by players. The problem for the owners is two fold: they need to find a way to spread the wealth and to make sure player salary growth does not end up making a mess of things again.

The NHL has proposed ways to get to there and the NHLPA has worked off the principles you are invoking in the post I quoted: if there is so much money in the system then why don't just spread it evenly (through revenue sharing which both sides have agreed to and have offered rather similar, still lacking, numbers of around 225 million dollars) rather than do that AND take away our salary growth potential AND make the contracts you just signed worth less than what we both agreed to a few months ago?

You say the owners do not want to pay the true value of the players' worth. The fact of the matter is the market determines the value of something and the NHL market is compromised of owners, players and consumers (fans) and you need the owners on board to determine what the market will bare. If something costs too much make then no one is going to do invest it because it becomes a money hole: you lose money and that's it. The owners are saying the value of the contracts has been distorted and we need to do something about it and with this make whole we can do something about it and still give you almost 90% (someone made the calculations) of the current contracts and keep the total amount of money you guys make the same as last year going foward.

I'd say it's pretty good deal but the NHLPA is entirely within it's right to ask for more. The thing is they haven't, they've been asking for a completely different model that the owners have said no to; like I just said if the owners are not on board then you're not going anywhere.

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