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Lockout IV: One likes to believe in the freedom of hockey (Moderated: see post #2)

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12-11-2012, 03:59 PM
  #351
haseoke39
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Originally Posted by Captain Bob View Post
How in the hell is letting market work "Marxist" rhetoric???
Hey, serious question in search of a constructive dialogue: are you familiar with the idea of collective action problems?

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12-11-2012, 03:59 PM
  #352
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And people think this is fair.
No one said anything about anything being fair. We called it reality.

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12-11-2012, 04:00 PM
  #353
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How is it anti busines for him to see the wings take money they made and put it back into the wings. There is no law anywhere saying salary caps are essential to make a league work. Frankly, it funny you have the nerve to call Bob a marxist while support redistribution of profits from NY, Toronto, Philly, Chicago to other cities. I guess these words have no meaning anymore.
See my previous post. The sports leagues are a business. Their teams are franchises of that business. They are business partners OFF the field/court/ice.

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12-11-2012, 04:01 PM
  #354
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No, because the Rangers paying their players whatever they want hurts the ability of smaller franchises to ice a competitive team, thereby causing them to lose revenue.

The NHL is a single business operating 30 franchises. What is good for the smaller franchises must be considered in the equation.

The owners (the NHL) offers prices at what the market will bear in any given location (ever see the price of a Big Mac in Paris?).

As partners the owners have banded together to control labor costs and the NHLPA has willingly agreed to this arrangement.
What if the NY Islanders chose only to spend 30 million and make a profit? The only part that would support your argument is that it hurts the game by intentionally cheaping out, which is not illegal.

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12-11-2012, 04:01 PM
  #355
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Originally Posted by Melrose Munch View Post
How is it anti busines for him to see the wings take money they made and put it back into the wings. There is no law anywhere saying salary caps are essential to make a league work. Frankly, it funny you have the nerve to call Bob a marxist while support redistribution of profits from NY, Toronto, Philly, Chicago to other cities. I guess these words have no meaning anymore.
The Red Wings, Rangers, Leafs, etc. are not single business entities. Some of their profits go back into the NHL to support new market teams.

Re-distribution of profits cannot occur when the money is being invested back into the business. All profits are distributed within the NHL. What you fail to understand is that the NHL is a single business entity.

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What if the NY Islanders chose only to spend 30 million and make a profit? The only part that would support your argument is that it hurts the game by intentionally cheaping out, which is not illegal.
This is why there is a floor as well as a ceiling. A team spending $30M in today's market will not be profitable for long. They will lose gate receipts, and since the NHL doesn't have a mega-dollar TV deal it will make them unprofitable until they finally shut down.

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12-11-2012, 04:02 PM
  #356
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Originally Posted by haseoke39 View Post
Hey, serious question in search of a constructive dialogue: are you familiar with the idea of collective action problems?
Not really. If someone broke it down I'd probably be familiar with the concepts but I've never studied it.

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12-11-2012, 04:02 PM
  #357
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Salary caps became popular when free agency was instituted in the NFL and NBA. The two go hand in hand.
Wrong. Salary Caps are a recent development on both sides. Both leagues have had FA for 20+ years.

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12-11-2012, 04:04 PM
  #358
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Wrong. Salary Caps are a recent development on both sides. Both leagues have had FA for 20+ years.
There was a salary cap in the NBA in the 1980s: Right after the players were granted free-agency. NFL players got unrestricted free-agency in the early 1990s: Shock, a salary cap came in right afterwards.

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12-11-2012, 04:07 PM
  #359
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Originally Posted by SaintPatrick33 View Post
There was a salary cap in the NBA in the 1980s: Right after the players were granted free-agency. NFL players got unrestricted free-agency in the early 1990s: Shock, a salary cap came in right afterwards.
Soft cap. We both know that's not real. NFL got a hard cap after free agency. The NHL did not get one until 2004 and we all saw how that worked.

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12-11-2012, 04:08 PM
  #360
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Soft cap. We both know that's not real. NFL got a hard cap after free agency. The NHL did not get one until 2004 and we all saw how that worked.
That just proves that the NHL has been way behind the times and the cap was LONG overdue.

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12-11-2012, 04:09 PM
  #361
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That just proves that the NHL has been way behind the times and the cap was LONG overdue.
No it proves the NHL tried to correct a mistake from expanding too fast just to catch up. Over expansion created too many jobs too fast and revenues only rose in some markets ergo the salary cap to bring costs under control.

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12-11-2012, 04:28 PM
  #362
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And I think if the Rangers owners want to pay to their players what they can afford, they should

And if Nashville doesn't want to pay their 3rd liners $4M a year, they should stop offering those contracts.

Once again, it's okay for you if owners benefit from the free market. But not the players.
And if the Leafs, Rangers, and Habs owners decide it would be better not to 'pay what they can afford', and instead 'pay what makes for a healthier league with more parity'?

I'm not sure what you're arguing for. On one hand it's almost like you are pushing for owner freedom; owners should spend as much as they like. But then you chastise them if what 'they like' is to collectively spend less on players.

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12-11-2012, 04:44 PM
  #363
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Originally Posted by Melrose Munch View Post
No it proves the NHL tried to correct a mistake from expanding too fast just to catch up. Over expansion created too many jobs too fast and revenues only rose in some markets ergo the salary cap to bring costs under control.
You need to back up, the NHL wanted but did not get the cap in 94. It is the result of free agency and part of a cyclical shift in power. The players power peaked in 04 and has come down as measured by percentage of revenue. I still think the players power as measured by percent of revenue will be further reduced on this round.

Killion,
The shift by Daly was the PR war with the PA. Fehr said close, Daly doesn't think so. The mediators gave him ammunition for "far apart" last time. IMO, the whole mediator thing may be on a separate thread itself. They may be looking for ammunition for an impasse. Does a mediator's opinion hold weight with the courts?

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12-11-2012, 04:47 PM
  #364
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You need to back up, the NHL wanted but did not get the cap in 94. It is the result of free agency and part of a cyclical shift in power. The players power peaked in 04 and has come down as measured by percentage of revenue. I still think the players power as measured by percent of revenue will be further reduced on this round.

Killion,
The shift by Daly was the PR war with the PA. Fehr said close, Daly doesn't think so. The mediators gave him ammunition for "far apart" last time. IMO, the whole mediator thing may be on a separate thread itself. They may be looking for ammunition for an impasse. Does a mediator's opinion hold weight with the courts?
I would assume it does, they are professionals after all.

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12-11-2012, 04:54 PM
  #365
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Both of you leave yourselfs open. This can't happen with 21 or 24 teams?
I don't get the contraction argument. All you manage to do with that is move the bottom end. Instead of having PHO, CBS, NYI bleeding money it's MIN, WPG, EDM. That's ALL it would do. And you greatly hurt your longterm potential as a league. Pointless. Why do we need to "protect our game" so much? I want to spread the game of hockey as much as possible. I would love if hockey was as popular as soccer. Sure Canada would no longer be the #1 team, but more people would get to enjoy hockey. How is that a bad thing?

The key is always to share the revenue and make a level playing field for all. It drives profits. Every team can win every year. That's what people want. Overly dominant teams and doormat teams both suffer in attendance. You need a competitive league to drive prices in Toronto/New York, so you need the salary cap and the revenue sharing to help level the playing field for places like Winnipeg and Phoenix. It will also drive prices up in Winnipeg and Phoenix. Look at the Atlanta Braves. They were so good for so many years it ended up hurting them at the gate since nobody wanted to show up. By the opposite end, you have Pittsburgh Pirates. That is not a healthy league, it is one who is losing fans and falling further behind every year. Sure right now the owners are happy cashing revenue sharing checks, but long term the future is bleak for the MLB, that's what happens when only a few teams compete and you don't have a competitive system. It's that simple.

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12-11-2012, 05:03 PM
  #366
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Contraction doesn't solve anything. I'll just post this quote from KevFu that shows that the expansion isn't the problem.

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I don't understand how someone could possibly think this.

Let's just suppose for a second that every team would make the same amount of revenues they do now if all the new markets since 1991 didn't exist.

Right now, with this 2006-2011 CBA, using 2011 dollars:
You have 12 of 30 teams who can't hit the cap floor by spending exactly 57% of HRR on payroll; 8 who are comfy to the cap, and 10 in the payroll range.

Eliminate SJ, DAL, TB, ANA, COL, NAS, CAR, FLA, CBJ, PHX (That's nine of the bottom 12 teams, plus #17 SJ).
Wild instead of North Stars, Jets 2.0 instead of Jets 1.0; Ottawa instead of Quebec; Hartford removed completely.

The midpoint skyrockets.
9 of 20 teams can't hit the cap floor by spending exactly 57% of HRR on payroll (35% of teams instead of 33%)
4 of 20 can spend to the cap comfortably (same 40% as now)
7 of 20 teams are in the payroll range (20% instead of 27%)

In other words: The financially unstable situation with a large disparity between competent owners and franchises and those on the opposite end IS EXACTLY THE FREAKING SAME.

The only difference is that without the 90s expansion/relocation teams, instead of people saying "Hey, we should move PHX, FLA, CBJ, NASH to Hamilton, Quebec and Markham" it would be OTT, NJ, MIN, EDM, WIN, BUF, STL and NYI (the bottom revenue teams in this 20-team league) in these bad financial situations. They'd be exploring relocation… you know, virtually the exact same teams that explored relocation IN THE 1990s!

MIN moved to DAL, WIN moved to PHX; NJ almost moved to Nashville, EDM almost moved to Houston;
OTT could fill the role of QUE, who moved to COL.
BUF could fill the role of HART, who moved to CAR.
The Islanders would have needed a new arena the entire time; and now they're moving to Brooklyn.
STL had the Saskatoon thing and a bankruptcy saga; OTT and BUF also had bankruptcies in the 90s.

Can we stop scapegoating "Expansion/Southern" teams as a CAUSE for this? The current [foul]ed up system isn't the byproduct of expansion/southern markets. It's a [foul]ed up system. Period. Regardless of who's in the league.

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12-11-2012, 05:03 PM
  #367
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Does a mediator's opinion hold weight with the courts?
That's an interesting question.

I would say in most cases they might not because mediations (and the negotiations during them) are confidential. I know in the personal injury field you can't disclose the gist of the negotiations or the proposed settlement offers/demands during mediation and use them at a subsequent trial if the mediation is unsuccessful. In other words, a plaintiff's attorney can't tell the jury that the defendant offered $X to settle in mediation so they should award damages for no less than that. At least, that's how it is in Florida.

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12-11-2012, 05:08 PM
  #368
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Not really. If someone broke it down I'd probably be familiar with the concepts but I've never studied it.
The classic example of collective action problems is a grazing field where there are too many farmers using it. If each farmer just does what's in his own self-interest, they'll take out ten livestock to graze each day, and soon the field will be overgrazed, collapse, and take years to recover, hurting everyone. If, however, each farmer takes out only 8 livestock per day, the field will be useful in perpetuity. The problem is that each farmer knows that each other farmer will want to take out ten, so their utility maximizing position is just to take out ten as well, and have a short-lived plenty. This is because no other farmer trusts any other farmer to just take out 8 livestock, so they figure the field will collapse no matter what they do. They call this variation a "tragedy of the commons," and it plays out in numerous situations, financial markets, etc - wherever each party is incentivized to act in a way that hurts the group. The solution, of course, is simply for the farmers to create a set of rules that prohibits any one of them from taking out more than 8 livestock a day.

NHL labor negotiations are a perfect corollary. For each team to be healthy, they need the league as a whole to be healthy, which means they need their brethren to be able to turn a profit. That means allowing them to be cost competitive and only paying players at a level where each team can be competitive in the labor market. However, in a market with no rules, each team finds its utility maximizing position is to bid as high as possible, exacerbating the problem for the weaker teams. So a set of rules that restricts teams to spending what the league as a whole can afford is a benefit to all.

The problem, of course, is that no team can be an island. "Free markets" only work where financial competition is an asset, and financial competition is an evil in the world of pro sports. Teams don't exist to steal each other's customers, and they all benefit by having healthy partners. The product they are selling is a network of competitive franchises, not just the best franchise. If free markets were allowed to reign in sports, the end game would be one team left - whichever team assembled the best talent at the lowest cost. Of course, there would be no league.

I just wonder how many folks who rely on "free markets" to argue that owners should be in pure financial competition with each other are familiar with the concept of collective action problems, or how many have thought about what it means for the NHL to be in "competition" with itself. When someone says "the problem is just that owners don't have self-control," that's a perfect example of misunderstanding how collective action problems work. Every rational farmer in the tragedy of the commons knows that, unless rules are in place to stop his neighbors from pillaging the field, the best thing he can do for himself is try to take his piece of the pie and exacerbate the problem. As an econ grad and someone who studies markets in my day to day work, it just seems like folks are latching onto an underdeveloped idea there.

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12-11-2012, 05:15 PM
  #369
Morgoth Bauglir
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The classic example of collective action problems is a grazing field where there are too many farmers using it. If each farmer just does what's in his own self-interest, they'll take out ten livestock to graze each day, and soon the field will be overgrazed, collapse, and take years to recover, hurting everyone. If, however, each farmer takes out only 8 livestock per day, the field will be useful in perpetuity. The problem is that each farmer knows that each other farmer will want to take out ten, so their utility maximizing position is just to take out ten as well, and have a short-lived plenty. This is because no other farmer trusts any other farmer to just take out 8 livestock, so they figure the field will collapse no matter what they do. They call this variation a "tragedy of the commons," and it plays out in numerous situations, financial markets, etc - wherever each party is incentivized to act in a way that hurts the group. The solution, of course, is simply for the farmers to create a set of rules that prohibits any one of them from taking out more than 8 livestock a day.

NHL labor negotiations are a perfect corollary. For each team to be healthy, they need the league as a whole to be healthy, which means they need their brethren to be able to turn a profit. That means allowing them to be cost competitive and only paying players at a level where each team can be competitive in the labor market. However, in a market with no rules, each team finds its utility maximizing position is to bid as high as possible, exacerbating the problem for the weaker teams. So a set of rules that restricts teams to spending what the league as a whole can afford is a benefit to all.

The problem, of course, is that no team can be an island. "Free markets" only work where financial competition is an asset, and financial competition is an evil in the world of pro sports. Teams don't exist to steal each other's customers, and they all benefit by having healthy partners. The product they are selling is a network of competitive franchises, not just the best franchise. If free markets were allowed to reign in sports, the end game would be one team left - whichever team assembled the best talent at the lowest cost. Of course, there would be no league.

I just wonder how many folks who rely on "free markets" to argue that owners should be in pure financial competition with each other are familiar with the concept of collective action problems, or how many have thought about what it means for the NHL to be in "competition" with itself. When someone says "the problem is just that owners don't have self-control," that's a perfect example of misunderstanding how collective action problems work. Every rational farmer in the tragedy of the commons knows that, unless rules are in place to stop his neighbors from pillaging the field, the best thing he can do for himself is try to take his piece of the pie and exacerbate the problem. As an econ grad and someone who studies markets in my day to day work, it just seems like folks are latching onto an underdeveloped idea there.
Ok, those are in fact things I'm familiar with from basic economics courses. I was unaware they went under the rubric of "collective action problems" which is what threw me off. You've got a big edge on me with that sort of thing: My degree was in Lit

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12-11-2012, 06:00 PM
  #370
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The classic example of collective action problems is a grazing field where there are too many farmers using it. If each farmer just does what's in his own self-interest, they'll take out ten livestock to graze each day, and soon the field will be overgrazed, collapse, and take years to recover, hurting everyone. If, however, each farmer takes out only 8 livestock per day, the field will be useful in perpetuity. The problem is that each farmer knows that each other farmer will want to take out ten, so their utility maximizing position is just to take out ten as well, and have a short-lived plenty. This is because no other farmer trusts any other farmer to just take out 8 livestock, so they figure the field will collapse no matter what they do. They call this variation a "tragedy of the commons," and it plays out in numerous situations, financial markets, etc - wherever each party is incentivized to act in a way that hurts the group. The solution, of course, is simply for the farmers to create a set of rules that prohibits any one of them from taking out more than 8 livestock a day.

NHL labor negotiations are a perfect corollary. For each team to be healthy, they need the league as a whole to be healthy, which means they need their brethren to be able to turn a profit. That means allowing them to be cost competitive and only paying players at a level where each team can be competitive in the labor market. However, in a market with no rules, each team finds its utility maximizing position is to bid as high as possible, exacerbating the problem for the weaker teams. So a set of rules that restricts teams to spending what the league as a whole can afford is a benefit to all.

The problem, of course, is that no team can be an island. "Free markets" only work where financial competition is an asset, and financial competition is an evil in the world of pro sports. Teams don't exist to steal each other's customers, and they all benefit by having healthy partners. The product they are selling is a network of competitive franchises, not just the best franchise. If free markets were allowed to reign in sports, the end game would be one team left - whichever team assembled the best talent at the lowest cost. Of course, there would be no league.

I just wonder how many folks who rely on "free markets" to argue that owners should be in pure financial competition with each other are familiar with the concept of collective action problems, or how many have thought about what it means for the NHL to be in "competition" with itself. When someone says "the problem is just that owners don't have self-control," that's a perfect example of misunderstanding how collective action problems work. Every rational farmer in the tragedy of the commons knows that, unless rules are in place to stop his neighbors from pillaging the field, the best thing he can do for himself is try to take his piece of the pie and exacerbate the problem. As an econ grad and someone who studies markets in my day to day work, it just seems like folks are latching onto an underdeveloped idea there.

And what did you do with your econ degree? Go to law school? (Nicely done piece, by the way, to further one argument, not to expand this to an academic or analytical approach of what would be the most efficient market-- the hallmark of the legal mind. )

My first question is to ask you if you believe in market protection (e.g, French farmers, Japanese rice farmers)? Those societies make a trade-off from market efficiency to protecting a way of life, for example.

You bound this argument nicely by making us believe that the ideal situation is the one piece of land and that we're stuck with the same number of farmers and their ten cows in perpetuity. It's interesting that you also bounded it by saying that there simply were too many farmers x cows for the land in question. Food for thought.

A market system would find that equilibrium naturally, and systems or approaches like yours do what any artificial economy perpetuates-- it ensures that the best guys at farming cows won't be able to get ahead because they have to share with those who aren't as good or as hard-working. Just because something is good for one collective of people doesn't not mean it's also the best thing for that marketplace, or in our case, the customers.

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12-11-2012, 06:12 PM
  #371
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If teams dont feel giving contracts over 5 years is bad for business they dont have to do it. no one is screaming collision because the Leafs and others dont give out back diving contracts. If it's truly thay bad for business there would be 80 plus contracts over 5 years. Just my opinion

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12-11-2012, 06:15 PM
  #372
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If teams dont feel giving contracts over 5 years is bad for business they dont have to do it. no one is screaming collision because the Leafs and others dont give out back diving contracts. If it's truly thay bad for business there would be 80 plus contracts over 5 years. Just my opinion
The issue is that it's not bad for Philly or Minny to do this (or at least they don't feel it's bad enough not to offer the contracts), but it's bad for the league as a whole.

And while no one is screaming collusion that Burke refuses to hand one of these contracts out, you can be damn sure that after an attempt to get 5 years in a CBA, that if every GM suddenly stopped handing out 5 yr deals regardless of what's in the CBA, the PA would be suing them in short order.

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12-11-2012, 06:18 PM
  #373
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I don't get the contraction argument. All you manage to do with that is move the bottom end. Instead of having PHO, CBS, NYI bleeding money it's MIN, WPG, EDM. That's ALL it would do. And you greatly hurt your longterm potential as a league. Pointless. Why do we need to "protect our game" so much? I want to spread the game of hockey as much as possible. I would love if hockey was as popular as soccer. Sure Canada would no longer be the #1 team, but more people would get to enjoy hockey. How is that a bad thing?

The key is always to share the revenue and make a level playing field for all. It drives profits. Every team can win every year. That's what people want. Overly dominant teams and doormat teams both suffer in attendance. You need a competitive league to drive prices in Toronto/New York, so you need the salary cap and the revenue sharing to help level the playing field for places like Winnipeg and Phoenix. It will also drive prices up in Winnipeg and Phoenix. Look at the Atlanta Braves. They were so good for so many years it ended up hurting them at the gate since nobody wanted to show up. By the opposite end, you have Pittsburgh Pirates. That is not a healthy league, it is one who is losing fans and falling further behind every year. Sure right now the owners are happy cashing revenue sharing checks, but long term the future is bleak for the MLB, that's what happens when only a few teams compete and you don't have a competitive system. It's that simple.
Thing is if contraction plus the elimination of the floor would push a lot of teams into the black. The floor above all the stuff we are arguing is why so many teams are in the red. Or we can even keep the 30 teams and eliminate the floor. If I am an owner, I go with contraction + no floor or no floor. They pay the bills so that is the best way to create a safety net

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12-11-2012, 06:21 PM
  #374
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Originally Posted by SJeasy View Post
You need to back up, the NHL wanted but did not get the cap in 94. It is the result of free agency and part of a cyclical shift in power. The players power peaked in 04 and has come down as measured by percentage of revenue. I still think the players power as measured by percent of revenue will be further reduced on this round.

Killion,
The shift by Daly was the PR war with the PA. Fehr said close, Daly doesn't think so. The mediators gave him ammunition for "far apart" last time. IMO, the whole mediator thing may be on a separate thread itself. They may be looking for ammunition for an impasse. Does a mediator's opinion hold weight with the courts?
I partially agree, but the cap is in place because so many teams could not afford all these overpaid players

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12-11-2012, 06:25 PM
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Originally Posted by haseoke39 View Post
The classic example of collective action problems is a grazing field where there are too many farmers using it. If each farmer just does what's in his own self-interest, they'll take out ten livestock to graze each day, and soon the field will be overgrazed, collapse, and take years to recover, hurting everyone. If, however, each farmer takes out only 8 livestock per day, the field will be useful in perpetuity. The problem is that each farmer knows that each other farmer will want to take out ten, so their utility maximizing position is just to take out ten as well, and have a short-lived plenty. This is because no other farmer trusts any other farmer to just take out 8 livestock, so they figure the field will collapse no matter what they do. They call this variation a "tragedy of the commons," and it plays out in numerous situations, financial markets, etc - wherever each party is incentivized to act in a way that hurts the group. The solution, of course, is simply for the farmers to create a set of rules that prohibits any one of them from taking out more than 8 livestock a day.

NHL labor negotiations are a perfect corollary. For each team to be healthy, they need the league as a whole to be healthy, which means they need their brethren to be able to turn a profit. That means allowing them to be cost competitive and only paying players at a level where each team can be competitive in the labor market. However, in a market with no rules, each team finds its utility maximizing position is to bid as high as possible, exacerbating the problem for the weaker teams. So a set of rules that restricts teams to spending what the league as a whole can afford is a benefit to all.

The problem, of course, is that no team can be an island. "Free markets" only work where financial competition is an asset, and financial competition is an evil in the world of pro sports. Teams don't exist to steal each other's customers, and they all benefit by having healthy partners. The product they are selling is a network of competitive franchises, not just the best franchise. If free markets were allowed to reign in sports, the end game would be one team left - whichever team assembled the best talent at the lowest cost. Of course, there would be no league.

I just wonder how many folks who rely on "free markets" to argue that owners should be in pure financial competition with each other are familiar with the concept of collective action problems, or how many have thought about what it means for the NHL to be in "competition" with itself. When someone says "the problem is just that owners don't have self-control," that's a perfect example of misunderstanding how collective action problems work. Every rational farmer in the tragedy of the commons knows that, unless rules are in place to stop his neighbors from pillaging the field, the best thing he can do for himself is try to take his piece of the pie and exacerbate the problem. As an econ grad and someone who studies markets in my day to day work, it just seems like folks are latching onto an underdeveloped idea there.
Quote:
Originally Posted by SaintPatrick33 View Post
Ok, those are in fact things I'm familiar with from basic economics courses. I was unaware they went under the rubric of "collective action problems" which is what threw me off. You've got a big edge on me with that sort of thing: My degree was in Lit
This is nicely written. My problem with this is that it justifies incompetence on the part of the teams. And any one can use this to justify not have a cap as well, as the ultimate point is to win.

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