The Business of HockeyDiscuss the financial and business aspects of the NHL. Franchise sales, valuations, TV contracts, ratings, expansion, relocation, the CBA and work stoppage discussion goes here.
New NHL proposal coming this week; NHL won't respond to counter unless salary cuts
Players have happily used the 5% inflator on the cap every chance they've had which has help create the increase in salaries relative to revenues. Players have also happily signed deals with large front loadings which play a role in how much is held back in escrow...something they hate.
The inflator has no effect. It's used to cover growth in revenue since the players get 57% of the final revenue numbers which are increasing every year. If they didnt use the inflator it would have just meant less escrow payments and possibly the league having to kick in to the escrow fund to cover the shortfall.
Guerin works for the Flyers now, funny how things change when you change sides.
His perspective has changed, but hes still right. It's not fair, but neither are a lot of things in life. In the grand scheme of things, the players have a pretty fair shake in life.
I hate to say 'you get paid millions for a child's game' because the demand for their product certainly justifies it, but their personal finances dictate they are better off taking the (a) deal, like it or not. Which is why the owners will always win this stand off in professional sports.
The top sixteen spending teams in 2011-12 ranged from $64.3M to $60.9M. Nine of these teams qualified for the playoffs or 60%.
The bottom fifteen ranged from $60.5M to $49.1M. From this set seven qualified for the playoffs or 47%.
This might seem to suggest spending brings a higher likelihood of a playoff appearance.
However the delta between top to bottom is only 2 and of the bottom spending teams only 1 occupied a lottery spot.
IMO spending alone correlates to nothing other than reduced profit or increased loss.
Using a big enough range in your analysis?
Since the NHL expanded to 30 teams, nearly 50% of the top 30 in spending missed the playoffs. Conversely, over 50% of the bottom 30 in spending made the playoffs!
Reality check: How does the current situation compare with 2004? Personally and from what I have seen in the media I don't think the two sides are as far apart.
There are obviously differences but they don't seem as big.
It would be interesting to see what would happen if both sides took their offers to mediation and arbitration.
I cant believe it but I think im actually on the owners side now. The owners at least seem to be connected to reality and are trying to negotiate based on their needs (even if they seem greedy). Theyre in it to make money, they've made huge investments, and they're right about the players needing to take less of the pie. The players seem to be lost somewhere in fantasyland.
I feel that the owners should have a high affinity to a fixed cap number, as it will really hurt the players the fact that the US dollar will continue to inflate. Owners can generate more revenue due to dollar devaluation, while player costs will remain stagnate, so not only will their salaries not be adjusted to inflation, they lose on their purchasing power as well.
I cant believe it but I think im actually on the owners side now. The owners at least seem to be connected to reality and are trying to negotiate based on their needs (even if they seem greedy). Theyre in it to make money, they've made huge investments, and they're right about the players needing to take less of the pie. The players seem to be lost somewhere in fantasyland.
It's up to both sides to make the best deal possible and posturing is a part of that process. That being said, I agree that the owners are now gaining the upper hand PR-wise.
There's still a few rounds to go before this is done.
I feel that the owners should have a high affinity to a fixed cap number, as it will really hurt the players the fact that the US dollar will continue to inflate. Owners can generate more revenue due to dollar devaluation, while player costs will remain stagnate, so not only will their salaries not be adjusted to inflation, they lose on their purchasing power as well.
I would agree with your analysis if the fixed cap was for 12 years, not 3 years. Dollar inflation is coming, but likely not within the next 3 years, and it should not hold up a potential CBA. If anything players should be happy that their salaries will be linked to revenues like that, albeit after 3 years, most of us will not be so fortunate.
Louis Jean @LouisJean_TVA
Talks towards a new CBA between the NHL and NHLPA to resume tomorrow morning in New York.
Let's just piss away a workweek day when we have just over 2 weeks left! #CBAtalkslogic.
I don't mind losing the day as long as something constructive is being done. If the players come back with a totally useless PR-driven counter offer then we could all be justifiably pissed.
I cant believe it but I think im actually on the owners side now. The owners at least seem to be connected to reality and are trying to negotiate based on their needs (even if they seem greedy). Theyre in it to make money, they've made huge investments, and they're right about the players needing to take less of the pie. The players seem to be lost somewhere in fantasyland.
The problem with that is the PA just brings up all the massive long deals signed this summer and wonders why the pie needs to be reduced as dramatically as the owners want.
The problem with that is the PA just brings up all the massive long deals signed this summer and wonders why the pie needs to be reduced as dramatically as the owners want.
Isn't it the players who demand these types of contracts ? Isn't it the players who demand huge signing bonuses ?
Are the NHL owners supposed to perform collusion and agree not to hand out such deals to anyone because Fehr would love to sue them for that if they did.
Louis Jean @LouisJean_TVA
Talks towards a new CBA between the NHL and NHLPA to resume tomorrow morning in New York.
Let's just piss away a workweek day when we have just over 2 weeks left! #CBAtalkslogic.
What in the world do you expect? These are massive proposals that must be completely digested before proceeding.
What is it that you want Bettman and Fehr to be doing today? Do you really think the two of them are sitting at home pissing away a day of work? Absolutely not. The NHLPA needs to regroup and design a counter proposal. You dont just lock Bettman and Fehr in a room and expect a deal to be made.
These posts reflect a serious lack of understanding regarding negotiation and collective bargaining.
The inflator has no effect. It's used to cover growth in revenue since the players get 57% of the final revenue numbers which are increasing every year. If they didnt use the inflator it would have just meant less escrow payments and possibly the league having to kick in to the escrow fund to cover the shortfall.
That is what I was trying to say. The players #1 public beef is escrow. They have contributed to their own escrow issues. I never meant to imply that the 5% escalator move the 57% number. I realize that the 57% stays the same. however, the escalator led to increased salary growth (on paper of course as teh 57% is the ultimate determining factor) and that salary growth CAN lead to increased escrow payments. i don't believe it did in the end move the escrow percentage taken from their cheques mostly because of the revenue increases.
To sum up...the issue they players SAY they have a problem with is escrow yet their own actions are a contributor to the problems they have with the system. Of course I believe this is just the PR cover story they are using in the attempt to remove the linkage to the players share. It's friendly for public consumption to talk about how they don't want 10-15% of their paycheque held back every two weeks (who would?). Not so friendly to say we really want to remove linkage so that if there is a downturn or even in good times our salaries can continue growing with one less check and balance.
What in the world do you expect? These are massive proposals that must be completely digested before proceeding.
What is it that you want Bettman and Fehr to be doing today? Do you really think the two of them are sitting at home pissing away a day of work? Absolutely not. The NHLPA needs to regroup and design a counter proposal. You dont just lock Bettman and Fehr in a room and expect a deal to be made.
These posts reflect a serious lack of understanding regarding negotiation and collective bargaining.
I disagree
I think most people around here understand completly what it takes for collective bargaining to be done
People around here are just getting pissed off that they are not burning the candle at both end to get this completed.
Maybe the PA should have started talks allot sooner
I disagree
I think most people around here understand completly what it takes for collective bargaining to be done
Suggesting that Bettman and Fehr should be meeting daily would say otherwise.
Quote:
People around here are just getting pissed off that they are not burning the candle at both end to get this completed.
You dont think Fehr and Bettman are working long hours? You realize that the 90 minute meetings are not the extent of Fehr and Bettman's work days, right?
I think you're proving my point right here.
Quote:
Maybe the PA should have started talks allot sooner
If only it were that simple. Neither parties are willing to make concessions until they reach the point where the alternative is too detrimental to proceed without giving in.
Had talks began in January, what do you think they would have looked like?
Bettman: We want X, Y, and Z
Fehr: No. We want A, B, and C
Bettman: You think it over; our offer will remain the same
The pressure of a lockout/strike is a necessary tool for both sides to reach a compromise. Both Bettman and Fehr are unwilling to give up any more than they have to. Unfortunately, neither side will bend until there is serious reason to do so. Lost wages, revenue, etc. are that reason.
I twice asked you to clarify the numbers you posted yesterday in this thread, you didn't comment.
The numbers you posted showed that salaries have grown faster than revenues.
I didn't check all the posts, my apologies.
The numbers I posted were an attempt to show that Bettman's claim that the salaries had doubled over the life of the agreement was somewhat misleading.
The numbers I used were rounded and not meant to be used for anything other than to show 100% player salary growth was an exaggeration.
So for the purists, for 2005/06 cap calculation purposes revenue was set arbitrarily at $1.8B, hence players salaries could not exceed $972M. Both of these numbers have no basis in reality.
The actual league revenue in 2003-04 was ~$2.1B, actual revenue for 2005/06 was ~$2.27B, therefore players salaries as defined by the CBA should have been in the $1.13B range. IMO calculating player salary growth or league revenue growth on anything but actuals is misleading.
As close as I can establish, NHL revenue has risen by 57% (actual growth rate) from 2004 or by 45% from 2006 to the fiscal end of 2012.
Now, depending on what number you wish to use, $972M or $1.13B, players salaries have risen by 70% or 68% (actual growth rate) to fiscal end of 2012.
It is important to remember, players salaries lag one year behind revenue, therefore the players haven't benefited from the revenue increase of 2011-12 and most likely never will.
One thing remains clear, players salaries are rising faster than revenue which is to be expected given over 50% of the total revenue is being directed to the players.
Hopefully this clears up any misconceptions I caused.
Last edited by Holdurbreathe: 08-30-2012 at 01:30 PM.
Rich guys arguing with rich guys. Just stop *****in and play the game.
That's the problem. Half of the owners are losing money while all of the players are making money (unless your name is Mike Modano but I digress...).
Players get % of the money and the only thing they have to pay is taxes (which they don't have to pay if they don't get any money).
Owners have to pay all the fixed expenses (travel, equipment, non-player personell etc) AFTER players take their cut. And in many cases they take a loss from hockey operations.
Players' position is really weak and that's why they will end up getting less of the HRR.
IMO calculating player salary growth or league revenue growth on anything but actuals is misleading.
As close as I can establish, NHL revenue has risen by 57% (actual growth rate) from 2003/04 or by 45% from 2005/06 to the fiscal end of 2012.
I don't think you can compare revenues from 03-04 to 11-12 because of the missed season which hurt the revenues. So the real comparison is between ACTUAL numbers from 05-06 to the end of 11-12.
