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The Business of Hockey Discuss the financial and business aspects of the NHL. Topics may include the CBA, work stoppages, broadcast contracts, franchise sales, expansion and relocation, and NHL revenues.

Goodenow Statement

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09-21-2004, 06:41 PM
  #76
me2
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Quote:
Originally Posted by habitual_hab
true market price? To a very large extent, the owners themselves determine what a player's fair market value is.

A good case in point is the Bobby Holik by the New York Rangers.

Holik insisted on getting a contract worth $9 million per season. Yes, it was an extravagent demand by a player and his agent, but what's overlooked is the fact that the Rangers, Maple Leafs and Holik's former club the Devils got into a bidding war for his services.

Rather than laugh off Holik's salary demands and tell him to come back when he was willing to be more reasonable, all three teams fell over each other trying to land him. The Leafs and Devils offered up $8 mil per season before the Rangers got him by agreeing to his demand for $9 mil per season.

Did Holik and his agent hold a gun to the collective heads of Glen Sather, Pat Quinn and Lou Lamoriello? Of course not. They floated a figure and those three, rather than telling Holik to take a hike, were willing to pony up exactly what he wanted, because they wanted him that badly. Holik knew there would be teams crazy enough to overpay him.


Holik got what three teams had determined to be fair market value. If the number is extravagant, so be it, but it's still fair market value.
But that is not a true market price. Holik's price was artificially inflated by the fact he was a UFA and there weren't many around that year. If every RFA was a UFA that year we would have seen Holik's true market value. Joe Thornton is more valuable than Holik and should be paid more. This isn't a true free market.

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09-21-2004, 06:50 PM
  #77
habitual_hab
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Quote:
Originally Posted by me2
This isn't a true free market.
But nobody's saying it's a free market. What Goodenow is saying is that it's fair market value as determined by the teams involved in negotiating for (a player's) services.

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09-21-2004, 07:04 PM
  #78
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All RFAs have had their leverage to negotiate their market value removed. They should all be getting less than market value. You could consider it a cap. Except it works much better, because you arent limited to how much talent you can have, you are limited to how much old expensive talent you can have.

Who cares if Holik gets $12mil? Boston doesnt. They have Thornton for less. Will Boston be better off if Thornton gets $7 mil and Holik $2? Why would they care. If i was Boston, I would hope that NYR signs another Holik for just as much. WOuldnt affect me

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09-21-2004, 07:35 PM
  #79
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Quote:
Originally Posted by habitual_hab
Logically, this idea of the NHL declaring an impasse, use best last best/last just won't work because the NHLPA will most likely decertify and, like you said: "no caps, no restrictions on free agency, no drafts..."

So the owner-backing dreamers figure that since the NHLPA is decertified, players will jump back to the NHL, form a submissive PA that capitulates to the NHL's version of a CBA and everything will be fine. Jesus wept.
I don't understand all the legalities of the lockout and what could happen with the lockout, nor do I care. The NHL understands all of that, and the Owners are going to do whatever they can to get a system that is financially fair for all 30 teams.

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09-21-2004, 07:37 PM
  #80
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Quote:
Originally Posted by thinkwild
All RFAs have had their leverage to negotiate their market value removed. They should all be getting less than market value. You could consider it a cap. Except it works much better, because you arent limited to how much talent you can have, you are limited to how much old expensive talent you can have.

Who cares if Holik gets $12mil? Boston doesnt. They have Thornton for less. Will Boston be better off if Thornton gets $7 mil and Holik $2? Why would they care. If i was Boston, I would hope that NYR signs another Holik for just as much. WOuldnt affect me
It does affect you. If your opposition signs talented players because they can afford to and you can't, then your team is going to have a much harder time competing against that opponent.

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09-21-2004, 07:44 PM
  #81
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Quote:
Originally Posted by habitual_hab
But nobody's saying it's a free market. What Goodenow is saying is that it's fair market value as determined by the teams involved in negotiating for (a player's) services.

Not fair for the younger players is it.



This current CBA has inflated prices beyond the point they would have been with no CBA and no salary cap. Its that bad. Here is how the NHL will look without a cap/cba (according to me).

NYR, Detroit, Leafs and Flyers are maxed at salary, arguably losing money in some cases. I doubt if we removed RFA status/draft and made all players/prospects UFAs that their team salary would radically increase. It might even come down via salary deflation at the lower end of the market. The only difference is these teams would be loading up on LeCavaliers, Thorntons and Reghers not Amonte's, Holik's and Devries types. Those old guys would sign for 20% of what they make now with some nobody team. Playoffs are guaranteed, the only competition is the other 4 or 5 big clubs and a couple of midlevel clubs (Note to self: poach their talent). There is no reason to overspend to buy a contender, with their budget its a safe bet, so they will run the team for profit as well.

With these big spenders completely dominating the competition, the $30m-45m dollar teams wouldn't stand a chance. This means most of those teams would not spend more than their budget, why would they if it won't help their chanced on the ice. They might as well try and make a profit if they can't win the cup.

The weakest teams would become nothing more than feeder clubs, they would have no reason at all to overspend, they'll still stuck. These teams will be a mish mash of geriatrics waiting for retirement and rookies waiting for NYR to offer then a better contract. Assuming 10 teams don't close, the Penguins of the world will try and run under budget because thre is no pressure to retain players since they are all UFAs and they know they will be massively outbid. They don't have the slightest hope without doubling salary, not going to happen, so there is no pressure to get better players. Fans have nothing to get excited about and stop coming until teams lower ticket prices, lower ticket prices mean a lower payroll and this flows through to the players.

--------------------------------------------------------------

I can't see the players averaging more money than the do now in this scenario. The current CBA maintains higher prices by offering hope in the form of prospects to lower value clubs. These clubs feel obliged to try and keep these prospects even when they can afford them, after all the alternative is worse (UFAs). Meanwhile the NYR & friends will spend their salary space, which under this CBA is on grossly overpriced UFAs and casts offs other teams can't afford.

So its good to the players as it keep prices high, its good for the fans as their teams try and build, its bad for the economics of the NHL as it encourages teams to overspend.


Last edited by me2: 09-21-2004 at 07:47 PM.
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Old
09-21-2004, 08:30 PM
  #82
19Yzerman19
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Quote:
Originally Posted by habitual_hab
Along with a salary cap, one could impose a "talent tax" on teams with better offensive, defensive and overall records. This would help bring about mediocrity at a faster pace.

This already exists it's called the Neutral Zone Trap!!


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