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Bob McKenzie: NHL doesn't need max contract length

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11-12-2012, 12:53 AM
  #51
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Originally Posted by Devil Dancer View Post
The owners are fighting for the wrong things here. Why should they care how the 50% of HHR that the players will ultimately be paid under the new CBA is allocated? That's what they hire GMs to do. There's no logical reason to put any limitations on contracts in the new CBA if they're all subject to the 50-50 paradigm.

I say, the more DiPietro contracts the better. Let the poorly-run teams hang themselves out to dry.
I agree with you to quite some extent but Gary Bettman has been well known in hockey circles for hating those contracts. It's more of a PR thing, for example how do you feel Bettman feels about the long-term contracts which some GM's have been given recently including this summer? He absolutely hates it and he would for sure push/suggest the owners put a limit on. But I agree that this isn't that big of an issue and it shouldn't be part of talks, go to some balanced in-between like an 8 or 9 year max.

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11-12-2012, 03:55 AM
  #52
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I kind of feel like contracts that can't be insured shouldn't be allowed. Too much risk otherwise.

Another option would be for the NHL to insure contracts of a certain length / amount, and above that force teams to buy private insurance. Whatever they pay in private insurance per year gets added to the cap hit.

Take Ovechkin's contract. It's not considered a typical cheating contract, as his salary is roughly even over the 13 year length, but it will likely be a far better deal at the end than at the beginning, seeing as the cap will more than double over that time but his salary will remain the same.

Sure, it's not as egregious as other types of cap circumvention we've seen. But it is an issue. And we've seen competition between teams continually drive contract lengths to be longer and longer.

The NHL wants to decrease the overall risk factors in running a franchise, and in general, I agree with that goal. A really bad long contract or two could force a team into a situation where they can't afford a competitive roster. If it's in a strong market, the franchise will probably survive. If not, then the NHL has a problem on its hands.

Consider if Phoenix had $100m in bad long term contracts. It would render the franchise unsellable and unmovable. Likely, the only option would be to force the franchise into bankruptcy and then fold the team, losing all the bad contracts. That's a situation that both the NHL and NHLPA should want to avoid.

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11-12-2012, 04:42 AM
  #53
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Originally Posted by QuietCompany View Post
I agree with you to quite some extent but Gary Bettman has been well known in hockey circles for hating those contracts. It's more of a PR thing, for example how do you feel Bettman feels about the long-term contracts which some GM's have been given recently including this summer? He absolutely hates it and he would for sure push/suggest the owners put a limit on. But I agree that this isn't that big of an issue and it shouldn't be part of talks, go to some balanced in-between like an 8 or 9 year max.
Why stop there, why not reduce the amount the players can count against the teams cap. 20% to like 15%?

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11-12-2012, 06:20 AM
  #54
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Originally Posted by Ginu View Post
If we focus on the following:
-50/50 of HRR
-salary cap
-5% variance year to year on contracts
-honouring existing player contracts
-~$250M of revenue sharing to help small market teams

Three of those are in favour of the owners, the 4th is in favour of the players and the 5th benefits the league in general. The players would take that deal.

You fix these problems and it fixes the major problems with the game. And we play hockey.
Oh yea, 250 mil in revenue sharing is great. Especially considering thats the ENTIRE operating income of the top 10 teams in operating income in 2010. Or in revenue terms the top 10 teams in revenue in 2010 only generated 235 million in operating income, not even enough to cover.

That would be great for the league, take the entire profit from the top 10 teams to help the bottom 10. That way noone makes any money! You people really have no friggin clue about how little revenue the league makes comparatively to other sports and how little some teams make.



Its just like in this country. You can take 100% of the wealthiest's teams/peoples money and it still isn't enough to fix the problem. Massive cuts in spending are needed either way and the quicker people realize it the better off we'll all be, both in hockey and life.


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11-12-2012, 09:45 AM
  #55
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Originally Posted by Fugu View Post
As you know, since we've talked about before, the league's solution is to let Toronto keep even more of that money, asking the players to accept what the weakest can afford. In a way, this seems like the least fair solution to all sides.

To the point here though, as others have stated, a limit on the variance from year to year obviates the need for a term cap.
I've said numerous times that I have absolutely no issues with a massive increase in RS. I don't think it's the right answer, but I think it's a more realistic answer than the right answer (sadly). And I've never once proposed dropping the split to what the weakest can afford. Please don't insinuate otherwise.

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11-12-2012, 11:01 AM
  #56
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Originally Posted by Ginu View Post
That's incorrect. There is more than one major problem with this league. Recognize that. The league is focusing on the wrong issues.

Player contracts beyond prevent cap circumvention are completely irrelevant vs. revenue sharing and fixing small market teams.

The league should be focusing on Make Whole and revenue sharing and cap circumvention.

The NHL wasted everyone's time. The NHLPA is playing hardball. For me, understandably. I don't want to be back here in 7 years when the NHL realizes they still haven't fixed their league.
How is that incorrect? All proof shows that what he said IS CORRECT. Fehr Doesn't want a deal to be reached. He wants a ****storm to happen so he can ruin the cap and the whole system. Read mckenzie's blog. He mentions it.

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11-12-2012, 11:04 AM
  #57
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Originally Posted by Riptide View Post
I've said numerous times that I have absolutely no issues with a massive increase in RS. I don't think it's the right answer, but I think it's a more realistic answer than the right answer (sadly). And I've never once proposed dropping the split to what the weakest can afford. Please don't insinuate otherwise.
Just so my point is made to those asking for increased revenue sharing of 200-250 mil.

If you take the top 10 teams in operating income from 2010, the total for all 10 was roughly 250 mil. And operating income still has a few deductions before it becomes profit. So that number is probably around 200 mil in profit.

If you base it strictly on revenue the top 10 in 2010 had operating income of roughly 235-240 mil. Again that number is probably just below 200 mil in profit.

So in essence, as you push the 200 mil in revenue sharing threshold, let alone the 250 mil mark, youre essentially swiping the ENTIRE profits of the top 10 teams. Sure those numbers went up a bit in the past two years, but not enough to leave much for the owners.

IF they push RS toward 200 mil more than just the top 10 teams would probably need to pay, but as of 2010 only the top 12 teams made profit. So you could conceivably have a situation where teams 11-14 in revenue or op income have to pay into RS but are losing money. And the fact that big market owners will have the MAJORITY of their profit taken will only hurt the most successful teams.

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11-12-2012, 11:15 AM
  #58
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Originally Posted by Fugu View Post
As you know, since we've talked about before, the league's solution is to let Toronto keep even more of that money, asking the players to accept what the weakest can afford. In a way, this seems like the least fair solution to all sides.

To the point here though, as others have stated, a limit on the variance from year to year obviates the need for a term cap.
Disagree with the first part. Players should accept what the owners do to remain successful. If they don't like it then they can "get out" no one is forcing them to play in the NHL.

I agree with the second part. i would prefer the 5% rule and you can sign a contract for as long as you want. That being said, the cap hit should remain after the player retires or gets sent down.

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11-12-2012, 11:20 AM
  #59
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Originally Posted by jbeck5 View Post
Disagree with the first part. Players should accept what the owners do to remain successful. If they don't like it then they can "get out" no one is forcing them to play in the NHL.

I agree with the second part. i would prefer the 5% rule and you can sign a contract for as long as you want. That being said, the cap hit should remain after the player retires or gets sent down.

What about the owners who are massively successful as we speak?


There's this tendency to discount the successful teams, and to discount that their success is what makes a cap range system untenable for a reasonable portion of teams because IT IS a linked system.

When do you put the onus on the collective of owners to make better business decisions as well? The answer cannot always and only be to take it out of player costs, especially when some teams would just end up swimming in even more cash.

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11-12-2012, 11:21 AM
  #60
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Originally Posted by thinkwild View Post
So when Gary Bettman said we are paying our players too much, we want to pay them 50% of HRR, he knowingly proposed a system that would fail?

In fact that first offer, the one that everyone laughed off as just an opening gambit from the owners, not one meant to be taken seriously, is in fact meant to be taken seriously. And if bettman locks the players out in 6 years to get 43%, or as some are calling it - the median revenue amount, fans are saying today that they will completely understand poor Bettmans need to do that and support him a 4th time in locking out the players? Even though he is knowingly asking for a deal now that will fail.
Yes. Absolutely I will. One hundred percent.

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11-12-2012, 11:26 AM
  #61
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Originally Posted by Riptide View Post
I've said numerous times that I have absolutely no issues with a massive increase in RS. I don't think it's the right answer, but I think it's a more realistic answer than the right answer (sadly). And I've never once proposed dropping the split to what the weakest can afford. Please don't insinuate otherwise.

Hard to keep track of where people draw the line. So you're in the Median Revenue vs Mean Revenue camp? If yes, does this result in even more of a windfall for the top revenue teams than the current proposed system?

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11-12-2012, 11:28 AM
  #62
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Originally Posted by Fugu View Post
What about the owners who are massively successful as we speak?


There's this tendency to discount the successful teams, and to discount that their success is what makes a cap range system untenable for a reasonable portion of teams because IT IS a linked system.

When do you put the onus on the collective of owners to make better business decisions as well? The answer cannot always and only be to take it out of player costs, especially when some teams would just end up swimming in even more cash.
They are succesfull in their other business ventures because their other business ventures don't have a union demanding millions and wanting over 50% of Revenue. They aren't successful from their NHL teams.

The onus is on the owners. That's why they're trying to put a system in place that they think will allow them to be successful. The players aren't letting them. There already is revenue sharing. There has been all last CBA.Sure, you can increase it a bit, and i'm sure there will be even more revenue sharing then last CBA, but what the players are demanding is too much. I agree, take pocket change out of all the top owners and give it to the poor. But don't go in and take 2 of their houses, 4 cars, their pet dog, and the 80 inch screen. That's too much. They aren't an ex wife, they shouldn't be entitled to half lol.

The owners do need to add more revenue sharing. But the players do need to help keep salaries down for league health. A healthy league is better for the players. They don't realize it, but it's true. The problem is players aren't trying to keep salaries down so the league can be successful. They're thinking me,me,me even if teams go bankrupt,as long as they make their 2.6 million instead of 2.3 million.

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11-12-2012, 11:28 AM
  #63
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Originally Posted by sina220 View Post
Just so my point is made to those asking for increased revenue sharing of 200-250 mil.

If you take the top 10 teams in operating income from 2010, the total for all 10 was roughly 250 mil. And operating income still has a few deductions before it becomes profit. So that number is probably around 200 mil in profit.

If you base it strictly on revenue the top 10 in 2010 had operating income of roughly 235-240 mil. Again that number is probably just below 200 mil in profit.

So in essence, as you push the 200 mil in revenue sharing threshold, let alone the 250 mil mark, youre essentially swiping the ENTIRE profits of the top 10 teams. Sure those numbers went up a bit in the past two years, but not enough to leave much for the owners.

IF they push RS toward 200 mil more than just the top 10 teams would probably need to pay, but as of 2010 only the top 12 teams made profit. So you could conceivably have a situation where teams 11-14 in revenue or op income have to pay into RS but are losing money. And the fact that big market owners will have the MAJORITY of their profit taken will only hurt the most successful teams.
For now yes that's correct. However as you drop the split, it means more profits for those top teams. It has to go hand in hand otherwise it's pointless. I'd actually like to see the split even lower (or better yet determine HRR differently), and then have something like 50%+ in RS (think NFL style).

But remember... that every 1% is 33m (well at least until they started missing games). So dropping the split by 7% is ~200m right there (and that ratio will only go up as revenues go up). So yes it's coming heavily from the top teams, however as things get better, this will impact those teams less and less.

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11-12-2012, 11:31 AM
  #64
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Hard to keep track of where people draw the line. So you're in the Median Revenue vs Mean Revenue camp? If yes, does this result in even more of a windfall for the top revenue teams than the current proposed system?
Yes, median revenue with 4-5 times the RS they currently have. I think that's the most sustainable model going forward. Without the RS, it's just owners pocketing money.

That said I do not think we'll ever get to that point, and the best we'll ever see is lower splits, and increased RS.

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11-12-2012, 11:36 AM
  #65
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They in no way circumvent the cap - in letter or spirit!

Only if the players retire. And that isnt the way it usually works that players are looking forward for the first possible opportunity to retire and they have to be dragged back to the ice by GM's and teams to finish their contracts.

What makes you think players are going to want to retire? That isnt the history or the norm. And if it doesnt happen, the teams will lose all those savings in early years when they had a window for their later years when they dont. Seems like smart management you would want to reward to me.

How many players do you think wont play the last years of their contracts and because they are the ones that dont want to? Im thinking that might be one player a year. And we can easily penalize their teams for that so they completely lose any benefit from that without any changes to contract lengths.
When a team can exceed the 59 or 64 Million TEAM CAP because a player like Brad Richards is making 12 million in real dollars yet his cap hit is JUST 6.66 million, that is CAP CIRCUMVENTION.

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11-12-2012, 11:39 AM
  #66
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Accusing the players of doing something that they haven't done yet seems to be an odd approach to this. I question the likelihood that these contracts play out in their entirety but to accuse the players of signing with the intent of not honouring their contract seems unfair. It's not a cap circumvention strategy until a player actually retires to give a team the benefit. To me the real easy solution isn't to cap the length of contracts, or to limit the year-to-year variance in salary but to actually call these above 35 deals actual are. If a contract goes a few years past 35, call it a 35+ contract.

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11-12-2012, 11:49 AM
  #67
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we would be still where we are right now, fehr every time the nhl goes for the goal line with a concession the players wants, he moves the posts to something else.
The league has made zero concessions to date. Offering garbage initially and then gradually adding to the garbage is not a concession. The NHL did this as a PR move to make it look like they are giving something up. So far, every proposed offer is the players giving up a portion of their HRR, the league hasn't given a damn thing.

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11-12-2012, 12:06 PM
  #68
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Originally Posted by Devil Dancer View Post
The owners are fighting for the wrong things here. Why should they care how the 50% of HHR that the players will ultimately be paid under the new CBA is allocated? That's what they hire GMs to do. There's no logical reason to put any limitations on contracts in the new CBA if they're all subject to the 50-50 paradigm.

I say, the more DiPietro contracts the better. Let the poorly-run teams hang themselves out to dry.
They are doing it to control players, especially the young ones going for the second contracts. Five year contract length with the pushed back UFA age and teams being able to take players to arbitration gives players no leverage to get big deals like Stamkos and Doughty received. If the league gets their way players wont be making as much money until they are 29-30, keeps them from making as many mistakes.

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11-12-2012, 12:18 PM
  #69
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The league has made zero concessions to date. Offering garbage initially and then gradually adding to the garbage is not a concession. The NHL did this as a PR move to make it look like they are giving something up. So far, every proposed offer is the players giving up a portion of their HRR, the league hasn't given a damn thing.
-Conceded more money into revenue sharing (at the demand of the PA)
-Conceded more money put towards players in regards to upgrade in comfort, travel, lodging, secondary medical opinions, extra trainers on the road (at the demand of the PA)
-there is supposedly a list of 17 issues that the PA brought to the table regarding contracting issues and supposedly 14 of those issues have been agreed upon or made movement by the league towards the players

Maybe you should define what ZERO means because unless you're reinventing math, don't see how that adds to ZERO.

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11-12-2012, 12:23 PM
  #70
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Doesnt matter, it's all covered by escrow. If a player is getting more than his cap hit then in a cap system that money is coming from other players.
What? I assumed they used cap numbers and not real money for escrow. Are you sure about this?

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11-12-2012, 12:34 PM
  #71
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They are succesfull in their other business ventures because their other business ventures don't have a union demanding millions and wanting over 50% of Revenue. They aren't successful from their NHL teams.

The onus is on the owners. That's why they're trying to put a system in place that they think will allow them to be successful. The players aren't letting them. There already is revenue sharing. There has been all last CBA.Sure, you can increase it a bit, and i'm sure there will be even more revenue sharing then last CBA, but what the players are demanding is too much. I agree, take pocket change out of all the top owners and give it to the poor. But don't go in and take 2 of their houses, 4 cars, their pet dog, and the 80 inch screen. That's too much. They aren't an ex wife, they shouldn't be entitled to half lol.

The owners do need to add more revenue sharing. But the players do need to help keep salaries down for league health. A healthy league is better for the players. They don't realize it, but it's true. The problem is players aren't trying to keep salaries down so the league can be successful. They're thinking me,me,me even if teams go bankrupt,as long as they make their 2.6 million instead of 2.3 million.



They could care less about the other players in the league, much less the owners, or even the future of the league. It's about them, right here and right now. I don't mind that to tell you the truth, but what bothers me is how it's all about the brotherhood publicly when everyone knows it's about anything but.

Like I said earlier, I don't know how Craig Adams and Sidney Crosby can be sitting in the same room and believing that BOTH of their best interests are being met.

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11-12-2012, 12:36 PM
  #72
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What? I assumed they used cap numbers and not real money for escrow. Are you sure about this?
Absolutely. The players get a share of the revenue the cap is just a way to judge that. At the end of the year they calculate the actual $ figures, see what the league made in revenue versus what they spent on the players. They never look at the cap numbers in those calculations.

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11-12-2012, 12:49 PM
  #73
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Originally Posted by habsfanatics View Post
The league has made zero concessions to date. Offering garbage initially and then gradually adding to the garbage is not a concession. The NHL did this as a PR move to make it look like they are giving something up. So far, every proposed offer is the players giving up a portion of their HRR, the league hasn't given a damn thing.
other then minor things like hotel (huge expenses), mortgage (another huge expense), parents free on special occasions (more money spent).

what can the owners actually give up as a concession?

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11-12-2012, 01:02 PM
  #74
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Absolutely. The players get a share of the revenue the cap is just a way to judge that. At the end of the year they calculate the actual $ figures, see what the league made in revenue versus what they spent on the players. They never look at the cap numbers in those calculations.
Thanks. Haven't fully wrapped my brain around this yet, but initially this sounds like players paying players to me.

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11-12-2012, 01:35 PM
  #75
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Thanks. Haven't fully wrapped my brain around this yet, but initially this sounds like players paying players to me.
It isn't that players are paying players. The system is designed that each season the players as a whole get a defined % of HRR. When they tally up the final figures after the season if the players were overpaid then they all give back a portion of their salaries (proportional to their compensation that year). If they were underpaid then the owners have to kick in extra money so the players get that defined %, again received in proportion to each player's compensation that season.

Ultimately the players don't truly receive the face value of their contracts any more. They each receive a portion of the total player share of HRR in proportion to the size of their contract relative to the other player contracts. In an ideal situation the amount of the player contracts each year would perfectly match the % share of HRR, so players would receive exactly the face value of their contracts. In practice they're never going to be equal.

One of the impacts of the cap system is that it constrains how far the total amount of player contracts can diverge (positive or negative) from the PA's % share of HRR. Thus dampening how large of an escrow refund the players might have clawed back or how much extra the owners have to sweeten player compensation.

One of the effects of the front-loaded back diving contracts is that it allows teams to pay players higher compensation then they probably would otherwise under the constraints of the salary cap. Thus causing those few players that receive the contracts to get a proportionately higher % of the total player share of HRR at the expense of their fellow players who don't have such contracts.

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