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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, and NHL revenues.

Spector: Don't get greedy, Gary (IOW if you get 50-50, give on contract details)

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Old
11-13-2012, 06:46 AM
  #51
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Elliotte Friedman wrote about this

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As one source said Saturday: "We're accepting 50/50. Our slice of the pie is going to get smaller. Why should it matter to the NHL how that money is divided?"

The answer to that question is the league has had enough with the Suter/Parise front-loaded contracts. That's why it's my belief that "the five per-cent rule" is going to be the NHL's cornerstone "want," but that opinion doesn't do anyone any good until this discussion begins.

There is one good reason for the majority of the NHLPA to agree with the NHL on this. While those front-loaded deals are cap-friendly for the teams, they are murder on player escrow.
http://www.cbc.ca/sports/hockey/opin...ay-update.html

Pierre LeBrun

Quote:
I wonder if this doesnít come down to the player contract issues once thereís an agreement on Make Whole and revenue sharing. The league will fight hard to get some "wins" there. The elimination of back-diving deals (front-loaded) is a must for the league, and I donít think the NHLPA will fight that one too much, but after that, I donít sense the union willing to give much more in this area. The league will want more.
http://espn.go.com/blog/nhl/post/_/i...r-day-of-talks

The PA is willing to work with the NHL on the dummy contracts. What's the problem? There is always something else. Bill Daly had said a month or so ago that the cheating contracts are 1A right next to HRR.

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Old
11-13-2012, 08:24 AM
  #52
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Originally Posted by Fugu View Post
Here we go again.

Dallas has no choice with a cap range system. Whether that money goes towards a Weber or some also-ran, or whatever liner..... they will have to spend between IN THE RANGE.

Are you actually suggesting that that wasn't happening during the most recent CBA? Brad Richards anyone?

Name one top free agent Dallas or any team not in the NE US/Canada quadrant, plus the traditional markets was able to attract.

One. Name.
http://www.nhl.com/ice/news.htm?id=636656

I think the South / non-traditional guys actually did better than most years this past season. This was not really an amazing free agent class though, I'll give you that, but it's not a stark black and white comparison.

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11-13-2012, 08:34 AM
  #53
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Originally Posted by Orrthebest View Post
This is my favorite part:


So he thinks it perfectly okay for Dallas to exist as a feeder team for the rest of the NHL.
The only solid ground I see your argument stand on is the need for contraction. I don't have faith in magical mathematician fairies that can find a briiliant solution that allows both successful and failing teams to reach full profit potential, while coexisting under a structure that needs to severely limit one, for the other to barely survive.

The only approach that I can think of that would meet this ideal, would be for the players to not be a profitable entity. To be convinced to play only for the love-of-the-game or like some communist work-force. If you strangle the talent and labor costs below their entitled market value, then I suppose the above scenario could be met.


Last edited by SlingshotVv: 11-13-2012 at 08:52 AM.
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Old
11-13-2012, 08:50 AM
  #54
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Yep, I hope the NHL doesn't die on this hill and I hope all of these reporters who are saying it is not a big deal don't have their yearly whine session about the idiocy of contract lengths and circumventingish contracts. Weirdly I think I might give higher odds to the NHL for these 2 hopes..

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Old
11-13-2012, 09:04 AM
  #55
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Originally Posted by Killion View Post
... ya but'ya see Fugu, that just makes too much sense & reverses the onus of responsibility on managerial recruiting & orginizational talents.
And it makes so much sense to think that the actions of a franchise have no effect on the others because then it justifies what you two believe even when it's clear that it just does not work that way.
Making the argument fit the conclusion is a slippery slope.

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11-13-2012, 09:34 AM
  #56
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Originally Posted by Fugu View Post
You know why it's one my favorite parts? Because it makes business sense that business control their OWN spending instead of being forced by a central planning committee to throw it away.
Fugu you just don't get it from a competitive aspect.

Not sure what type of business you think the NHL is but your comments definitely don't align with reality.

Once one team exposes a loophole or reaches outside their budget, other teams must follow suit to stay competitive. (you have to spend money to make money)

So only Toronto, NYR and Montreal should be able to sign players? We should do nothing to prevent that either? Just let them purge all the talent?

The restrictions are in place to creative a more competitive product, which in turns raises revenue league wide. Having 30 teams compete will create more revenue than 4 or 5... The money from those 4 to 5 teams will be there regardless. But if Columbus can compete for a Cup, or Dallas or Florida, then league wide revenues will rise.

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11-13-2012, 09:37 AM
  #57
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Originally Posted by SlingshotVv View Post
The only solid ground I see your argument stand on is the need for contraction. I don't have faith in magical mathematician fairies that can find a briiliant solution that allows both successful and failing teams to reach full profit potential, while coexisting under a structure that needs to severely limit one, for the other to barely survive.

The only approach that I can think of that would meet this ideal, would be for the players to not be a profitable entity. To be convinced to play only for the love-of-the-game or like some communist work-force. If you strangle the talent and labor costs below their entitled market value, then I suppose the above scenario could be met.

Or you know, close the loopholes that enable huge contracts for players past their prime...

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11-13-2012, 10:00 AM
  #58
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Originally Posted by Bourne Endeavor View Post
This quote amusing me. If the owners/GMs "saved themselves" by unanimously agreeing not to overpay during free agency. The players would be whining about collision.
Yep.

But some GMs do have the "self control" to manage their payroll (regardless of what the rules are). (And/or still in this day and age have a budget from their ownership they work to get the most bang for the $$ out of.)

They often do it (thinking of Sharks as an example) by having planned long term based on current roster (AND prospects on the depth chart) -- 3-5 years (or more) out.

Since the Sharks last missed the playoffs (2003), I think everyone would say that they have not overpaid players (based on $$s/term when contract was signed). (Now, they did have some fall offs -- thinking post double sports hernia injury of Cheechoo -- but they have managed to trade away those pieces -- including Bell, Heatley.) They have never signed a player to a deal more than five seasons.

The Sharks also have some salary benchmarks based on role/experience they try to stay within. IOW, the first post-ELC deal is not a cap-max deal. High flyers have been getting their first post-ELC deal around $4m/year.

But I'd say it comes down to planning (on the organization side) and on the player side a willingness to stay with the organization and accept less than one might get via offer sheet. The latter is earned through respect and growing a reputation as a quality organization.

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Old
11-13-2012, 10:04 AM
  #59
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I think the contract details might be a bigger deal than the 50-50 split here's why.

All of these issues the league is trying to control affect the salaries of the younger players. Pushing back the age of UFA, changes in arbitration rights, even the max contract length makes it hard for teams to buy much in the way of free agency years while players are young. This combination of changes makes it much harder for young players to have any leverage in negotiations. Steven Stamkos, Drew Doughty, they dont get the deals they did if they have that many years until UFA and a max contract length that prevents them from signing into UFA.

I think the idea is that if you can keep the best players cheaper while they are young then teams can hold onto the players they draft longer, field competitive teams for less and then not have to worry so much about revenue sharing since teams wont necessarily have to spend to the cap to be competitive. Of course it does almost take us back to the pre cap days where the richer teams will be scooping up all the best talent once it becomes available, it does allow for more teams to be in that rich category since the ceiling is limited.

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Old
11-13-2012, 10:27 AM
  #60
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Originally Posted by Halibut View Post
I think the contract details might be a bigger deal than the 50-50 split here's why.

All of these issues the league is trying to control affect the salaries of the younger players. Pushing back the age of UFA, changes in arbitration rights, even the max contract length makes it hard for teams to buy much in the way of free agency years while players are young. This combination of changes makes it much harder for young players to have any leverage in negotiations. Steven Stamkos, Drew Doughty, they dont get the deals they did if they have that many years until UFA and a max contract length that prevents them from signing into UFA.

I think the idea is that if you can keep the best players cheaper while they are young then teams can hold onto the players they draft longer, field competitive teams for less and then not have to worry so much about revenue sharing since teams wont necessarily have to spend to the cap to be competitive. Of course it does almost take us back to the pre cap days where the richer teams will be scooping up all the best talent once it becomes available, it does allow for more teams to be in that rich category since the ceiling is limited.
It might be more of the head office trying to control the NHL teams.....they get miffed at the teams that spend with either front loaded contracts or superlong contracts...Bettman getts angry at people using loopholes so hes trying to eliminate them.

do agree that teams would like more moderate contracts for the 2nd length...overall paying less till their UFA years

also part of that problem is teams bringing in players at 18 yrs old(granted they are that talented)...you used to bring them in at 22*23 and so UFA was at 30 or older
and you would get more "peak years on the cheaper contracts"

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Old
11-13-2012, 11:46 AM
  #61
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Originally Posted by Fugu View Post
Here we go again.

Dallas has no choice with a cap range system. Whether that money goes towards a Weber or some also-ran, or whatever liner..... they will have to spend between IN THE RANGE.

Are you actually suggesting that that wasn't happening during the most recent CBA? Brad Richards anyone?

Name one top free agent Dallas or any team not in the NE US/Canada quadrant, plus the traditional markets was able to attract.

One. Name.
Souray.

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Old
11-13-2012, 11:49 AM
  #62
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Originally Posted by Seedling View Post
Souray.
I'd say the way that Jagr played the past couple of years, Jagr is a good name too for Dallas.

I think Spector is 75% right with his article. The only asterisk I would put on it, is that yes he'll get his 50/50 split, but I feel that if they owners are going to be funding the "Make Whole" aspect, they should get some sort of contract concession. If it's the back-diving deals, then I think it's fair for the players to get to keep some of their contract rights that they gained by going to a cap system last time around.

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11-13-2012, 11:51 AM
  #63
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Originally Posted by Fugu View Post
You know why it's one my favorite parts? Because it makes business sense that business control their OWN spending instead of being forced by a central planning committee to throw it away.
My favorite part is people like you thinking the owners are not partners.

They have to control each other's spending in the CBA. It is the only way for them to do it legally, but you continue to ignore that fact.

But hey, wouldn't it be great if it was like the old days and the Red Wings could just trade for whatever player they need at the deadline, or sign Luc Robitaille to play on their 3rd line.

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Old
11-13-2012, 11:53 AM
  #64
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Originally Posted by tbcwpg View Post
I'd say the way that Jagr played the past couple of years, Jagr is a good name too for Dallas.

I think Spector is 75% right with his article. The only asterisk I would put on it, is that yes he'll get his 50/50 split, but I feel that if they owners are going to be funding the "Make Whole" aspect, they should get some sort of contract concession. If it's the back-diving deals, then I think it's fair for the players to get to keep some of their contract rights that they gained by going to a cap system last time around.
Yeah that seems reasonable. Nobody likes the Kovalchuk type contract, and there are many of them out there. A simple solution would be to make actual salary in a given year be the cap hit. Bam, GMs just became smarter with their offers.

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11-13-2012, 12:03 PM
  #65
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Originally Posted by Seedling View Post
Yeah that seems reasonable. Nobody likes the Kovalchuk type contract, and there are many of them out there. A simple solution would be to make actual salary in a given year be the cap hit. Bam, GMs just became smarter with their offers.
Actually not. Because teams then have the flexibility to severely front-load or back-load contracts to stack a given team. Now - that goes away if the year to year cash payments can only vary by 5%. At that point- not really that big of a deal.

My point is that given cash = cap hit increases by itself increases the games that GM's can play. Look at what PITT did in the early 90's (pre-cap - but the theory is sound). Mario deferred a ton of money to allow the team to bring in the other talent which put them over the top (Francis, Samuellson, etc). When it came time to actually pay Mario - the franchise was bankrupt and he basically got the franchise for what the deferred salary that was owed to him.

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11-13-2012, 12:17 PM
  #66
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Actually not. Because teams then have the flexibility to severely front-load or back-load contracts to stack a given team. Now - that goes away if the year to year cash payments can only vary by 5%. At that point- not really that big of a deal.

My point is that given cash = cap hit increases by itself increases the games that GM's can play. Look at what PITT did in the early 90's (pre-cap - but the theory is sound). Mario deferred a ton of money to allow the team to bring in the other talent which put them over the top (Francis, Samuellson, etc). When it came time to actually pay Mario - the franchise was bankrupt and he basically got the franchise for what the deferred salary that was owed to him.

Damn loopholes!

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Old
11-13-2012, 12:27 PM
  #67
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Hi, Duck DVM. I always like to see your posts here, btw.

Well.... okay. We found one player.

That said, I will point out that Teemu was only going to sign with the Ducks or not sign at all. This example is like saying Lidstrom signed with the Wings because they offered the highest dollar amount.


[Edit: That's only because Winnipeg hadn't gotten a team in time. ]
Ok smartie pants- Adam Foote

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11-13-2012, 12:39 PM
  #68
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Originally Posted by Seedling View Post
Yeah that seems reasonable. Nobody likes the Kovalchuk type contract, and there are many of them out there. A simple solution would be to make actual salary in a given year be the cap hit. Bam, GMs just became smarter with their offers.
That would actually make the deals worse. Imagine Kovalchuk at age 34 on your team for a cap hit of $1 million.

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Old
11-13-2012, 12:53 PM
  #69
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It can be a rational decision to spend more than your income, in fact it is almost inevitable especially in the establishing phase of your business but there is also the reality that in ordinary business it is an extremely risky process (one which hits many small businesses pretty severely, a disturbingly large % of restaurant owners never recoups their initial investment).

Meanwhile in the NHL and other pro sports we have business owners whose main pre-occupation is to skew the economics of the whole industry in such a way as to essentially remove entrepreneurial risk entirely. The NHL stands out as particularly craven because its economics are simply more dysfunctional than those of the other leagues. But you see this general push in arena financing and you see it in CBAs.

But then pro sports are a unique oddity in the world of business, not really comparable to any regular industry (not even entertainment, an industry it technically could be considered part of) or other franchise systems (McDonald's franchises have an entirely different position and outlook toward each other and HQ than sports franchises).

In a pure business sense the position of the league makes perfect sense within the odd sphere that is pro sport economics, but at the same time the more the economics are 'rigged' and collectively arranged in favor of a more stable and safer businss environment the further you move away from the ethos of sport itself. In fact, one might argue *why* play games when the best way of guaranteeing interest and financial reward for all participants would be fixed storylines making sure that success and failure are distributed equally or rather tailored toward each team's needs at a given time. Sure, the fans wouldn't have it, one might say but then we already accept various and ever-increasing measures to "fix" the playing field toward that end.

Personally, I just think it stinks. It goes against the principle that draws me to sport more than anything: competition. What's the point of winning a championship if you win it with full awareness that the league went through a series of rule changes and adjustments to make sure it happened, that in fact they sacrificed two entire seasons to get it? But that's not how it's perceived, is it? Every team is entitled to compete for a championship, after all why else bother with it? Isn't that the very attitude that threatens our society overall?

Some very good questions and points. In the attempt to sell hope in every market, sports leagues essentially are rigging the outcomes. They will prevent the changes that come about due to more astute drafting and management, in addition to culling the aggressive behavior from some owners.

The goal is legislated mediocrity, where no one is allowed to stand out. The championships as such will become mostly about getting good and bad bounces.

I agree that it may not be worth the price tag fans are willing to pay. (I know I personally felt this was the case after the last 2-3 years in my team's roster efforts. It was rather boring, grinding kind of hockey, tbh.)

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Originally Posted by tbcwpg View Post
That would actually make the deals worse. Imagine Kovalchuk at age 34 on your team for a cap hit of $1 million.

Well, if you had this rule, Kovalchuk wouldn't have signed that type of deal methinks. Without the averaged cap hit, the need to play these types of games with the cap would mostly disappear. There are legit reasons to allow variances greater than 5% though. I'm surprised that GMs (and thus teams) actually support this clause.

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Old
11-13-2012, 01:22 PM
  #70
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Back up a step. I'm just saying that you're portraying "teams need to spend to be competitive" as an emotional argument, which it isn't.
San Jose Sharks.
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Please give me an unemotional, rational reason why it makes business sense to fail at retaining and attracting talent to your organization.
There is never a rational reason for spending more than you can afford. If you find yourself in this situation too often, you're in the wrong business. Every single time this comes up, people want to ignore that the markets have spoken and that EVERY single economic issue the NHL faces has a single root cause: revenue disparity.



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Originally Posted by Hanklite View Post
Fugu you just don't get it from a competitive aspect.
Sure I do. It's the competition that's killing everyone.


Quote:
Not sure what type of business you think the NHL is but your comments definitely don't align with reality.

Once one team exposes a loophole or reaches outside their budget, other teams must follow suit to stay competitive. (you have to spend money to make money)

So only Toronto, NYR and Montreal should be able to sign players? We should do nothing to prevent that either? Just let them purge all the talent?
Please see LadyStanley's post below. Whenever people try to argue on this subject, they reference the outliers. We endured a yearlong lockout last time to get a CBA that prevented Toronto and NYR from overpaying 35 yr old geezers. Was it worth it?

The league is now realizing (and I'll get to that post) that having had the higher UFA age was better protection for smaller teams than their idiotic cap range system, which turned out to be even more inflationary with regard to the talent that everyone REALLY wanted.

Quote:
The restrictions are in place to creative a more competitive product, which in turns raises revenue league wide. Having 30 teams compete will create more revenue than 4 or 5... The money from those 4 to 5 teams will be there regardless. But if Columbus can compete for a Cup, or Dallas or Florida, then league wide revenues will rise.
If this is true, why has revenue mainly grown in the places where it's never been an issue in the first place?

Columbus winning a Cup will not increase league-wide revenues. Toronto winning a Cup would however put things through the roof.

See below:

Quote:
Originally Posted by LadyStanley View Post
Yep.

But some GMs do have the "self control" to manage their payroll (regardless of what the rules are). (And/or still in this day and age have a budget from their ownership they work to get the most bang for the $$ out of.)

They often do it (thinking of Sharks as an example) by having planned long term based on current roster (AND prospects on the depth chart) -- 3-5 years (or more) out.

Since the Sharks last missed the playoffs (2003), I think everyone would say that they have not overpaid players (based on $$s/term when contract was signed). (Now, they did have some fall offs -- thinking post double sports hernia injury of Cheechoo -- but they have managed to trade away those pieces -- including Bell, Heatley.) They have never signed a player to a deal more than five seasons.

The Sharks also have some salary benchmarks based on role/experience they try to stay within. IOW, the first post-ELC deal is not a cap-max deal. High flyers have been getting their first post-ELC deal around $4m/year.

But I'd say it comes down to planning (on the organization side) and on the player side a willingness to stay with the organization and accept less than one might get via offer sheet. The latter is earned through respect and growing a reputation as a quality organization.

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11-13-2012, 01:24 PM
  #71
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Originally Posted by KINGS17 View Post
My favorite part is people like you thinking the owners are not partners.

They have to control each other's spending in the CBA. It is the only way for them to do it legally, but you continue to ignore that fact.

But hey, wouldn't it be great if it was like the old days and the Red Wings could just trade for whatever player they need at the deadline, or sign Luc Robitaille to play on their 3rd line.
No, you continue to ignore how some teams actually have budgets and control spending based on their own parameters.


Collusion only becomes a viable case when teams that have money all somehow decide not to offer Crosby a spectacular contract if he were available. It would be difficult to prove that SJ owners were colluding if they could pull out their budgets and forecasts and point to how their buying decisions were influenced by sound business management practices.

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11-13-2012, 01:30 PM
  #72
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Originally Posted by Halibut View Post
I think the contract details might be a bigger deal than the 50-50 split here's why.

All of these issues the league is trying to control affect the salaries of the younger players. Pushing back the age of UFA, changes in arbitration rights, even the max contract length makes it hard for teams to buy much in the way of free agency years while players are young. This combination of changes makes it much harder for young players to have any leverage in negotiations. Steven Stamkos, Drew Doughty, they dont get the deals they did if they have that many years until UFA and a max contract length that prevents them from signing into UFA.

I think the idea is that if you can keep the best players cheaper while they are young then teams can hold onto the players they draft longer, field competitive teams for less and then not have to worry so much about revenue sharing since teams wont necessarily have to spend to the cap to be competitive. Of course it does almost take us back to the pre cap days where the richer teams will be scooping up all the best talent once it becomes available, it does allow for more teams to be in that rich category since the ceiling is limited.

Exactly. In some ways, this CBA is trying to reverse the damage from the last one. Get that third contract back in to the mix and prevent any of the bridging into UFA years, and voila, player movement and options are extremely stifled.

The problem though is linkage again. This will skew spending once again to the 'past their prime' set, and with linked spending having to be 50% of the HRR, it's potentially going to create a ridiculous gap in the pay scales for the majority of NHL players vs the 8+ yrs of service crowd.

It would be interesting to see, mathematically, how many players in the NHL right now have played 8+ yrs as well.


What this tells me is that UFA age has always been the best control or restriction on pay scales. Cap/linkage was an exercise in futility to find some blanket solution to a problem that didn't exist.

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11-13-2012, 02:07 PM
  #73
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And it makes so much sense to think that the actions of a franchise have no effect on the others because then it justifies what you two believe even when it's clear that it just does not work that way.
Making the argument fit the conclusion is a slippery slope.
Fugu and Killion have mastered that.

They argue all day long how each franchise is it's own business but never acknowledge the unique relationship they have with each other as it complicates their arguments.

This isn't Apple vs Microsoft going after some software developer or manager or setting a development budget.

There's 30 business's and only 16 can be considered successful on a year to year basis. Like it or not the fans don't want to see a loser.. even a profit making loser. They fail to acknowledge the risk of losing and it's effects on each market.

Rather Columbus only makes 20 million? Only spend 15 million on players. Finish last and can only afford 15 million next year because no one watches? Spend 10 million next year.
Rinse repeat. I'm not sure what happens when no one watches.......

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Old
11-13-2012, 02:40 PM
  #74
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Originally Posted by Fugu View Post
No, you continue to ignore how some teams actually have budgets and control spending based on their own parameters.


Collusion only becomes a viable case when teams that have money all somehow decide not to offer Crosby a spectacular contract if he were available. It would be difficult to prove that SJ owners were colluding if they could pull out their budgets and forecasts and point to how their buying decisions were influenced by sound business management practices.
You continue to ignore that for a team to be able to increase its revenue in a non-traditional market that it must remain competitive on the ice. In order to do this it must spend money to retain and attract new players.

The salary cap exists as a way to spread talent around the league. The well managed teams do well under the capped system, the poorly managed teams do not. I know you want the Red Wings to be able to buy whatever they want, but those days are over. Detroit will have to take their turn at the bottom of the standings in the not too distant future just like Nashville, Chicago, and St. Louis did.

I know it's a shame.

The average NHL franchise sells hope to its fans. Why do you think LA Kings fans put up with losing so long when Dean Lombardi came on board? We finally had a GM with a plan. He explained his plan and stuck with it and the fans were willing to be patient. Some fan bases seem to think they have a right to stay on top all the time.

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11-13-2012, 02:59 PM
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Fugu
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Originally Posted by KINGS17 View Post
You continue to ignore that for a team to be able to increase its revenue in a non-traditional market that it must remain competitive on the ice. In order to do this it must spend money to retain and attract new players.

The salary cap exists as a way to spread talent around the league. The well managed teams do well under the capped system, the poorly managed teams do not. I know you want the Red Wings to be able to buy whatever they want, but those days are over. Detroit will have to take their turn at the bottom of the standings in the not too distant future just like Nashville, Chicago, and St. Louis did.

I know it's a shame.

The average NHL franchise sells hope to its fans. Why do you think LA Kings fans put up with losing so long when Dean Lombardi came on board? We finally had a GM with a plan. He explained his plan and stuck with it and the fans were willing to be patient. Some fan bases seem to think they have a right to stay on top all the time.

Some nontraditional markets have adopted & supported their teams, while others have not. The problem with many of these arguments is that everyone thinks it's the same problem in all the markets.

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