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Owners cannot legally 'control' themselves with contracts

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Old
10-29-2012, 11:46 AM
  #51
Kimota
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Originally Posted by Milliardo View Post
How the hell would that work?

Commish: "Sorry Nashville, you can't sign Weber, you don't have enough money"
Nashville Owner: "Yeah we do"
Commish: "No we don't"
Nashville Owner: "WTF, I think I know how much money I have"
Commish: "But I'm the commish"

Sorry, but that's just not gonny fly.
Have you seen all the time Nashville took to reach their decision? It was an important decision and they probably didn't make it "because they had the money" but more like they were afraid what it could do their franchise. We are in a CBA negotiation with owners who have just signed incredible deals saying they really could not afford it.

In a better system, with important decisions like these, the commish would approach both teams and act as mediator, maybe even going to Nashville and offering them an out. But not force the issue.

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And like Pensfansince1989 said, there's no way of telling if losing Weber actually hurts Nashville less.
It hurts so much by keeping him. They are a greatly small market for the NHL, they are not rolling in money, no big owners. Weber is not a show-stopper like freakin Sid here. They kept him just so they could keep their team structure, if you will.

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10-29-2012, 11:51 AM
  #52
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Originally Posted by Kimota View Post
Have you seen all the time Nashville took to reach their decision? It was an important decision and they probably didn't make it "because they had the money" but more like they were afraid what it could do their franchise. We are in a CBA negotiation with owners who have just signed incredible deals saying they really could not afford it.

In a better system, with important decisions like these, the commish would approach both teams and act as mediator, maybe even going to Nashville and offering them an out. But not force the issue.



It hurts so much by keeping him. They are a greatly small market for the NHL, they are not rolling in money, no big owners. Weber is not a show-stopper like freakin Sid here. They kept him just so they could keep their team structure, if you will.
It will never be like that, so there's really no point in discussing it. The owner will not have to open his private books to the commish to prove that he has the money.

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10-29-2012, 11:57 AM
  #53
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I think the individual owners who offered large contracts could afford them(or think they could afford them at least). No owner is going to hand out money he can't spend.

The league as a whole (meaning Bettman and the owners involved in negotiations) think they are paying too much in salaries, plus they want to close loopholes for cap circumvention.

You can agree or disagree all you want but there's a difference between the individual owners and what the NHL as a whole thinks.

The owners can't have a conference call on July 1st and tell Leipold to not sign Suter and Parise. He is free to do what he wants.

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10-29-2012, 12:16 PM
  #54
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Originally Posted by Milliardo View Post
It will never be like that, so there's really no point in discussing it. The owner will not have to open his private books to the commish to prove that he has the money.
There's not one place in what I proposed that would have the owner open his books. Are you kidding? I'm saying the commish phones the Pred:" hey guys need some help?". Have you even/acted as a mediator in life? The commish could phone and the Flyers and try to come up with an arrangement. Again it would have to be agreed upon in the CBA.

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10-29-2012, 12:27 PM
  #55
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I tend to agree with you. The idea that the owners should control themselves is very naive, and way too simplified. They have to be controlled as a group, otherwise individual owners will have the choice of controlling themselves and not competing - or competing, and continuing to accelerate the problem. Controlling themselves as a group takes CBA type measures.
As long as the Salary Cap and the Salary Floor are considered to be within range of each other so that any team spending within that range should have a decent chance of being competitive, then I don't see why teams should have to spend beyond the Salary Floor if they can't really afford to. It's not as if other teams can spend limitlessly and buy up all the good players. Now of course if there are only a couple of teams spending to the Floor, then that leaves lots of other teams to be grabbing up all of the good players. But if the League has about half of its teams losing money, then there should be about half the teams trying to spend near to the Salary Floor.

The problem is that as owners they're putting their financial limitations aside and trying to get the upperhand with each. The Salary Floor therefore becomes something almost meaningless, because very few teams keep themselves at that level.

Of course, the other possibility is that the difference between the Salary Floor and Ceiling is just too much, and those teams that only spend to the Floor simply can't be competitive. If this is the case, then there simply must be less difference between the two, and therefore we're not hear debating a realistic scenario.

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10-29-2012, 12:32 PM
  #56
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Originally Posted by Fugu View Post
Fans are interesting beasts. When owners don't spend, they get mad and want a winner. When players that can get you to a championship expect to be paid better than the average guys, then they're greedy.

I think the problem is that some owners aren't in it for the usual business reasons. They'll do whatever they can to win. Then the players are supposed to say no to the armored trucks that come to their driveways.


(I don't get fans is what I'm trying to say. )
More reasons to put a firm CBA in place, so fans like us can't demand owners spend more than their budget.

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10-29-2012, 12:49 PM
  #57
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Originally Posted by Master Shake View Post
My point is that the owners CANNOT legally hold back salaries. They cannot 'control themselves' because they can then be sued.

If the owners get together and the bulk of them says to the teams like say Philly " Hey you cannot hand out any more big contracts like that Weber deal", they have then broken the law and will get killed in court in damages.

THIS is what people need to understand. I see so many fans who do not understand CBA stuff say " its the owners fault they cant control themselves". This thread is for those people and there is sadly ALOT of them
This is all pretty much irrelevant under the last CBA. The players got 57% of revenues. Whether that's spent responsibly or foolishly, no more or less than that number goes out. If the owners got together and colluded to keep salaries down, the cap floor STILL forced them to spend to 57% of revenues. If there were an underage, the GMs would be docked escrow money which would be given to the players.

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10-29-2012, 01:04 PM
  #58
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So the Pens wouldn't necessarily have Crosby, Malkin, Fleury (and formerly, Staal)? It's probably guaranteed that under your system they might possibly have only one of them.

You'd support that?
If it operated like MLS, there's no reason they couldn't in this fantasy scenario

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10-29-2012, 01:40 PM
  #59
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Originally Posted by Master Shake View Post
So before you blame the owners for lack of self control with contracts you need to read this.
It explains why it is illegal and how they could and would get sued.

Please note the one common name all over those collusion suits. It should be a familiar name by now, because he is now involved in NHL CBA talks


http://en.wikipedia.org/wiki/Baseball_collusion
Of course they "control" themselves. It's called escrow.

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10-29-2012, 02:19 PM
  #60
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Originally Posted by Brodie View Post
If it operated like MLS, there's no reason they couldn't in this fantasy scenario

How does MLS operate? Random distribution, distributing by 'player rating' or maximizing revenues for the league overall?

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10-29-2012, 02:26 PM
  #61
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Quote:
Originally Posted by Master Shake View Post
My point is that the owners CANNOT legally hold back salaries. They cannot 'control themselves' because they can then be sued.

If the owners get together and the bulk of them says to the teams like say Philly " Hey you cannot hand out any more big contracts like that Weber deal", they have then broken the law and will get killed in court in damages.

THIS is what people need to understand. I see so many fans who do not understand CBA stuff say " its the owners fault they cant control themselves". This thread is for those people and there is sadly ALOT of them

Donald Fehr filed Collusion suits a few times against the owners of the last sport he worked for a PA
An individual owner can do whatever he wants to control his own salaries.

He can make the decision (like Burke has) that he won't sign these sorts of deals. He can make a decision to not give anyone a contract above $4 million / year or longer than 5 years.

There is absolutely nothing illegal or collusive about that.

Collusion comes in when a group of owners get together and say "Ok, none of us offer Crosby more than $5 million a year, that way he'll be forced to sign for that much"

Collusion, by definition, cannot apply to only 1 owners. It must apply to a group of owners working in concert.

NHL owners absolutely could keep salary down if each of them individually made a decision not to try and break the bank on every contract. Instead they choose to engage in a bidding war.

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10-29-2012, 02:42 PM
  #62
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Originally Posted by Fugu View Post
How does MLS operate? Random distribution, distributing by 'player rating' or maximizing revenues for the league overall?
MLS operates under the de-jure Single Entity ownership structure as opposed de-facto (NHL/NBA/MLB/NFL) team ownership. The league itself negotiates with & signs players along with revenues however a few years ago they altered it somewhat whereby the Owner's will get first pick of players who theyve' developed through their Academy Systems.... AEG at one time owned 6 clubs in the league. Believe only 2 (Seattle & Toronto) made any money last year.

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10-29-2012, 03:02 PM
  #63
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Originally Posted by Fugu View Post
How does MLS operate? Random distribution, distributing by 'player rating' or maximizing revenues for the league overall?
The most concise description I've seen of their operating model is in Judge Boudin's ruling in Fraser v MLS - which upheld MLS's Single Entity defense against anti trust challenge.

http://caselaw.findlaw.com/us-1st-circuit/1441684.html

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MLS has, to say the least, a unique structure, even for a sports league.   MLS retains significant centralized control over both league and individual team operations.   MLS owns all of the teams that play in the league (a total of 12 prior to the start of 2002), as well as all intellectual property rights, tickets, supplied equipment, and broadcast rights.   MLS sets the teams' schedules;  negotiates all stadium leases and assumes all related liabilities;  pays the salaries of referees and other league personnel;  and supplies certain equipment.

At issue in this case is MLS's control over player employment.   MLS has the “sole responsibility for negotiating and entering into agreements with, and for compensating, Players.”   In a nutshell, MLS recruits the players, negotiates their salaries, pays them from league funds, and, to a large extent, determines where each of them will play.   For example, to balance talent among teams, it decides, with the non-binding input of team operators, where certain of the league's “marquee” players will play.

However, MLS has also relinquished some control over team operations to certain investors.   MLS contracts with these investors to operate nine of the league's teams (the league runs the other three).   These investors are referred to as operator/investors and are the co-defendants in this action.   Each operator/investor has the “exclusive right and obligation to provide Management Services for a Team within its Home Territory” and is given some leeway in running the team and reaping the potential benefits therefrom.

Specifically, the operator/investors hire, at their own expense and discretion, local staff (including the general managers and coaches of their respective teams), and are responsible for local office expenses, local promotional costs for home games, and one-half the stadium rent (the same portion as MLS).   In addition, they license local broadcast rights, sell home tickets, and conduct all local marketing on behalf of MLS;  agreements regarding these matters do not require the prior approval of MLS. And they control a majority of the seats on MLS's board, the very same body which runs the league's operations.   Among other things, the board is responsible for hiring the commissioner and approving national television contracts and marketing decisions, league rules and policies (including team player budgets), and sales of interests.

The operator/investors also play a limited role in selecting players for their respective teams.   While the operating agreements provide that the operator/investors will not bid independently for players against MLS, they may trade players with other MLS teams and select players in the league's draft.   Such transactions, however, must follow strict rules established by the league.   Most importantly, no team may exceed the maximum player budget established by the management committee.

In return for the services of the operator/investors, MLS pays each of them a “management fee” that corresponds (in large part) to the performance of their respective team.   The management fee equals the sum of one-half of local ticket receipts and concessions;  the first $1,125,000 of local broadcast revenues, increasing annually by a percentage rate, plus a 30% share (declining to 10% by 2006) of any amount above the base amount;  all revenues from overseas tours;  a share of one-half the net revenues from the MLS Championship Game and a share of revenues from other exhibition games.

The remaining revenues of the league are distributed in equal portions to all investors.   Thus, while the investors qua investors share equally in the league's profits and losses, the individual team operators qua operators fare differently depending at least in part on the financial performance of their respective teams.   It bears mentioning, however, that neither the league nor, apparently, any of its teams has yet made a profit.

Although the league retains legal title to the teams, the operator/investors may transfer their operating rights, within certain limits, and retain much of the value created by their individual efforts and investments.   Investors may transfer their ownership stakes and operating rights to other current investors without obtaining prior consent;  transfers to outside investors, however, require a two-thirds majority vote of the board.   For its part, MLS may terminate any operating agreement on its own initiative if, by a two-thirds vote of the board, an operator/investor is determined to have failed to act in the best interests of the league.   If so, it must still pay such operator/investor fair market value for its operating rights and ownership interest.

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10-29-2012, 03:24 PM
  #64
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Originally Posted by Master Shake View Post
So before you blame the owners for lack of self control with contracts you need to read this.
It explains why it is illegal and how they could and would get sued.

Please note the one common name all over those collusion suits. It should be a familiar name by now, because he is now involved in NHL CBA talks


http://en.wikipedia.org/wiki/Baseball_collusion
I dont blame them for their lack of control necessarily, I blame them for leaving so many loopholes in their CBA it looks like swiss cheese. I would accuse them of being incompetent rather then lacking self control.

You guys really, really should have consulted your high priced lawyers/accountants before you okayed that thing.

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10-29-2012, 03:32 PM
  #65
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I believe Daly has said they anticipated the large front loaded and cap circumventing deals. The question is why were those allowed in the first place is a valid one but one that is likely to do with the internal workings of the NHL owners at the time. Trying to address that potential issue may not have had the necessary support at the time. The cap did and linkage did but going further may have been going too far too fast. That support for these further changes may currently be present given there are no some real examples of this practice that (arguably) hurt the integrity of the entire system. Teams that figured they'd be doing well are not doing as well as they hoped and fear getting exploited in a way Nashville nearly was exploited.

in short I don't think it's a case the NHL didn't see some of this coming but rather they didn't have the support to go in that direction at the time.

The one thing they've said they did not anticipate is the same things most companies didn't anticipate the last handful of year...the increasing costs of doing business even with increasing revenues. They likely also didn't anticipate the CAD dollar getting so strong, so fast and throwing things out of whack.

They've seen these things now and the owners have gotten a taste of the loopholes they knew they left. The CBA is done so now is the ONLY time they have to truly address these economic issues.

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10-29-2012, 03:42 PM
  #66
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If half the League owners could, individually, decide to spend to the Cap Ceiling, then why couldn't half the owners decide to spend to the Cap Floor if they felt it was necessary in order not to lose money or to lessen their losses? I'm sure nobody would be crying collusion with respect to the half that are spending the max.

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10-29-2012, 04:02 PM
  #67
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Originally Posted by MoreOrr View Post
If half the League owners could, individually, decide to spend to the Cap Ceiling, then why couldn't half the owners decide to spend to the Cap Floor if they felt it was necessary in order not to lose money or to lessen their losses? I'm sure nobody would be crying collusion with respect to the half that are spending the max.
...because those spending just to the cap floor would become pretty bad teams?

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10-29-2012, 05:38 PM
  #68
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Quote:
Originally Posted by thinkwild View Post
The owners are allowed to collude now to restrain salaries by having drafts, owning players rights, restricting free agency, capping the amount a player can make, a team can spend, and the league can spend overall. And the reason they are allowed to get away with such collusions that restrain players salaries is because the players union agreed to it.

Now thats a pretty big concession right off the bat. The PA doesnt have to agree to it. But they do, and it costs the players hundreds of millions of dollars a year.

Now you would think when approaching these partners, asking for even more concessions even though league revenues and overall profits are up, even though some teams are losing money but still being sold for $100 mil capital gains, you might try an approach that has advanced beyond those of 1930's mob syndicates through their consiglieres.
LOL @ all of that being a concession. The PA doesn't have to agree to anything...but then again...they don't have to play hockey ever again either. The reason they agree to it is because it makes them BILLIONS of dollars a year.

Even more concessions? The aforementioned things have to be concessions first.

You realize that in order to concede something, you have to have it first, right??? The league's revenues may be up...but it's lopsided in that a few teams are making the lions share.

The owners are the only reason the players make a check playing this game. Without owners, regardless of what league you're talking about, there are no professional sports leagues...there are no professional athletes. The players assume zero risk. When teams lose money, they pay no part of it. When they're injured, they still get paid. When they suck, they still get paid. They can't even be cut. When the exchange rate goes goofy, the players don't have to suffer any part of that burden. They dont' pay for flights. They don't pay for equipment. They don't pay for the medical or training staff. They don't pay for hotels or meals on the road. They don't pay for the arena or its upkeep. It sounds like the owners go out of their way to take care of the lions share of EVERYTHING so all these clowns have to do is keep in the gym and play a game.

When the players actually have anything material to give outside of the ability to play (which other people not currently in the PA are more than capable of doing), they might have a legitimate gripe. In the meantime, they're going to have to sit there and cry about being paltry millionaires who have to endure what seems to be SUCH an insufferable work environment.

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10-29-2012, 05:52 PM
  #69
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Originally Posted by MoreOrr View Post
If half the League owners could, individually, decide to spend to the Cap Ceiling, then why couldn't half the owners decide to spend to the Cap Floor if they felt it was necessary in order not to lose money or to lessen their losses? I'm sure nobody would be crying collusion with respect to the half that are spending the max.
Because they would all have to pay the players thru escrow if they all spend to the floor only. The players would get 57% of revenue (or at least last year).

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10-29-2012, 06:16 PM
  #70
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This is rubbish. The franchisees of McDonalds all pay basically minimum wage. The franchisees of the NHL are no different (slightly higher pay scale though). Why can one be subjected to "holding back" salaries but the other isn't? Just like ticket prices where the cost is set by what people are willing to pay. The cost of players to the owners should be what they are willing to pay as well then.

I'm a Teamster that works at UPS. A 20 year driver makes the same as a 5 year regardless of who delivers the most packages. Almost every other labor union does it the same way. Which is another thing that pisses me off. Our CBA is set to expire 7/13. Negotiations have been going on for over a year already. The NHL and NHLPA dragged their feet and this is the result.

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10-29-2012, 06:18 PM
  #71
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An individual owner can do whatever he wants to control his own salaries.

He can make the decision (like Burke has) that he won't sign these sorts of deals. He can make a decision to not give anyone a contract above $4 million / year or longer than 5 years.

There is absolutely nothing illegal or collusive about that.

Collusion comes in when a group of owners get together and say "Ok, none of us offer Crosby more than $5 million a year, that way he'll be forced to sign for that much"

Collusion, by definition, cannot apply to only 1 owners. It must apply to a group of owners working in concert

NHL owners absolutely could keep salary down if each of them individually made a decision not to try and break the bank on every contract. Instead they choose to engage in a bidding war.
Sure, A GM could make those decisions. And those decisions would result in that team losing all their star players to teams that can afford to pay players over $4 million. It would result in that GM's and Owner's team never making the playoffs losing fans and revenue. And unfortunately, most. Teams aren't like the Leafs that have a rabid fanbase regardless of the quality of the product on the ice. To expect owners to not engage in a bidding war, without some sort of agreement is completely unrealistic. There are teams that can afford those high salaries and it would be a disservice to that teams fans for those teams to not do whatever they can to better their team. Problem being, the teams that can afford it don't just raise prices for the rich teams, they raise them for everyone.

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10-29-2012, 08:46 PM
  #72
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...because those spending just to the cap floor would become pretty bad teams?
Then the Cap Floor is too low!!

I don't agree that a Cap Floor which isn't enough to have a team be competitive is sufficient. A Cap Floor needs to be the competitive minimum, anything less and it's essentially a slow death for the franchise.

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10-29-2012, 09:41 PM
  #73
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You are linking to an article listing the history of the collusive attempts of baseball owners to illegaly keep player salaries down and are attempting to use their losses in court cases for that as a sympathy generating factor for why they had no self control in signing contracts? And are also attempting to tar Fehr for his efforts to prevent these billionaires from restraining salaries illegally.

Ok, so before i blame the owners, i read this article listing all the ways they have colluded to illegaly hold down salaries in past and some of the court cases they lost from that. And now presumably i will start to feel sympathy for them? Is that where you were going with this?
No one has to attempt to tar Fehr. He's doing a fantastic job of that all on his own.

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10-29-2012, 09:58 PM
  #74
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This is rubbish. The franchisees of McDonalds all pay basically minimum wage. The franchisees of the NHL are no different (slightly higher pay scale though).
Yes they are different. All of this has been hashed out in court many times. The NHL is not McDonalds.

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Why can one be subjected to "holding back" salaries but the other isn't?
Because one operates under the auspices of the Sherman Act and US antitrust law, while the other does not.

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Just like ticket prices where the cost is set by what people are willing to pay. The cost of players to the owners should be what they are willing to pay as well then.
A free market system such as that would not allow the owners to collectively impose any restrictions on player salary or movement.

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I'm a Teamster that works at UPS. A 20 year driver makes the same as a 5 year regardless of who delivers the most packages. Almost every other labor union does it the same way. Which is another thing that pisses me off. Our CBA is set to expire 7/13. Negotiations have been going on for over a year already. The NHL and NHLPA dragged their feet and this is the result.
This comparison might be relevant if UPS, FedEx, and DHL tried to negotiate as joint entity with workers.

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10-29-2012, 10:56 PM
  #75
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Quote:
Originally Posted by tantalum View Post
I believe Daly has said they anticipated the large front loaded and cap circumventing deals. The question is why were those allowed in the first place is a valid one but one that is likely to do with the internal workings of the NHL owners at the time. Trying to address that potential issue may not have had the necessary support at the time. The cap did and linkage did but going further may have been going too far too fast. That support for these further changes may currently be present given there are no some real examples of this practice that (arguably) hurt the integrity of the entire system. Teams that figured they'd be doing well are not doing as well as they hoped and fear getting exploited in a way Nashville nearly was exploited.

in short I don't think it's a case the NHL didn't see some of this coming but rather they didn't have the support to go in that direction at the time.

The one thing they've said they did not anticipate is the same things most companies didn't anticipate the last handful of year...the increasing costs of doing business even with increasing revenues. They likely also didn't anticipate the CAD dollar getting so strong, so fast and throwing things out of whack.

They've seen these things now and the owners have gotten a taste of the loopholes they knew they left. The CBA is done so now is the ONLY time they have to truly address these economic issues.
The other thing they didn't anticipate (which some people did) was the effect of lowering the UFA age. The two CBAs ago, teams had far better protection with an UFA age of 31. Sure, they got their linkage but let go of something that helped the teams that needed help far more.

Quote:
Originally Posted by PensFanSince1989 View Post
Sure, A GM could make those decisions. And those decisions would result in that team losing all their star players to teams that can afford to pay players over $4 million. It would result in that GM's and Owner's team never making the playoffs losing fans and revenue. And unfortunately, most. Teams aren't like the Leafs that have a rabid fanbase regardless of the quality of the product on the ice. To expect owners to not engage in a bidding war, without some sort of agreement is completely unrealistic. There are teams that can afford those high salaries and it would be a disservice to that teams fans for those teams to not do whatever they can to better their team. Problem being, the teams that can afford it don't just raise prices for the rich teams, they raise them for everyone.

If the UFA age had remained at 31 and they weren't forced to pay mid and lower level guys too much, they could afford to keep their stars. Let NYR pay a 34 yo vet millions. Hooray. In the meantime, a smart GM was able to work through three contracts during the restricted years and thus keep the best players during their best years, which for forwards was well before 30.

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