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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.

Owners considering a new league...

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Old
08-30-2004, 02:16 PM
  #126
I in the Eye
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Quote:
Originally Posted by thinkwild
Its reasonable for them to assume all of this risk. They are the risktaking capitalists. The players are the employees.
As you know, whenever any two parties come together to transact business of any kind, one side is always asking the other (either consciously or otherwise) to assume more or all of the risk...

In this case, between the NHL and NHLPA parties, the NHLPA wants the NHL to assume all of the risk... The NHLPA wants the player compensation (salary) to be both high and guaranteed - regardless of how well the players actually perform... The NHLPA wants the players to receive high compensation while having no discourse if the players don't perform to the level expected... In other words, the NHLPA wants the players to assume no risk... The NHLPA wants the 'NHL economy' to continue down a path that does not hold the player responsible for their performance... Some will argue (including the NHLPA) that in a 'free market economy' it's up to the owners to decide how high (or low) the salaries will be... But IMO, and I think history backs me up, regardless of how nice and fair this system seems in theory, overall player salaries always increase... regardless of actual player performance...

Thus, IMO, the owner's budget (their fixed cost) that they assign to player salaries needs to be controlled - with an upper limit capped... IMO, if the players don't want to assume any of the risk, they have no 'fairness' argument here... They should simply accept what the owners decide to do (whatever it is)... IMO, if the owners are the ones expected to absorb all of the risk - then it is reasonable for the owners to absorb all of the reward... If this is the way the NHLPA wants it, then IMO, the NHLPA shouldn't concern themselves at all with what the owners make, what the NHL and specific teams generate in revenue, etc... If this is the way the NHLPA wants it, IMO, the NHLPA should simply accept the salary that the owners decide that the players will be paid (in any system the owners decide)... and that's it... If the owners are the ones expected to assume all of the risk, then the owners should be expected to reap all of the rewards - and decide to pay the players whatever the owners want - in any system the owners want... IMO, there is nothing more to negotiate and discuss... If the NHLPA doesn't budge on the risk allocation factor - then **** the NHLPA and the players... they are being totally unreasonable...

If the owners are taking on all of the risk, they should be making as much profit as they want (i.e. the owners should decide how much of a reward they will reap for their risk - the owners should be the only ones who decide what their risk is worth) - and pay the players a much lower salary than the players are getting now - but just high enough that the players don't decide to play in Europe, in the WHA, in the AHL, etc. Just high enough to keep the players in the NHL... The level of risk should be correlated to the level of reward... Do you agree?

Quote:
Originally Posted by thinkwild
Im still a little fuzzy on the distinction you are making between a variable cost and performance bonus.
It usually takes three rum and Cokes before I start to make sense

How player compensation works now is guaranteed base salary (fixed cost) + bonuses (fixed cost)... Bonuses imply that the player has done such a good job, that they deserve a 'bonus' above the base salary...

In my proposal, I break 'player compensation' down to guaranteed base salary (fixed cost) + a not guaranteed 'performance' salary (for lack of a better word) variable cost... This 'performance' salary component of compensation adjusts the player's overall salary depending on how well the player actually performed for the season - and how much money the franchise [I]actually [/I] made for the season... and because it is not a fixed cost, how much the player earns does not have an upper limit... The more revenue a franchise generates, the more salary the player has the potential to make... Yet, because this component of 'player compensation' is tied to revenue - this ensures that salaries don't escalate at a dangerous rate...

I don't like to use the word bonus, because to me, this implies 'gravy' and not 'meat and potatoes'... With a salary + bonus pay model, the base salary is high, and the bonus is lower (when compared to the base salary)... In my proposal, the 'performance' salary more accurately adjusts each players overall compensation based on how the players actually perform for the season... It's not a 'bonus' per se, but a 'salary adjuster' that takes each player's contribution (and the team's success) into account... In my proposal, the base salary (fixed cost) + the 'performance' salary (variable cost) = the players' meat and potatoes... and the 'team' performance (variable cost) = 'gravy'... In my proposal, players have lower base salaries (which are fixed costs) and much higher 'performance' salaries (which are variable costs - % of revenue generated)... and 'team performance' compensation (also a variable cost - % of revenue generated)...

I see the base salary as compensation for what the player has done in the past - as well as what the player has the potential to do... I see the 'performance' component of salary as compensation for what the player (and team) has ACTUALLY done... which is variable from year to year - and thus, the player compensation that pays players for their services rendered should also be variable from year to year... In good years - the players should be paid more... In bad years, the players should be paid less...

In my proposal, while the base fixed salary is 'capped' and lower (then salaries are now)... the player has the opportunity to make A LOT more money than they are now (IF the players and the team performs well - i.e. IF the players are willing to assume some of the risk!)... as the variable components are directly tied to actual performance AND team revenue... While the base salary component of player compensation is 'capped' and lower (and guaranteed)... the players overall earning potential is MUCH MUCH higher then it is even under the current system!

Quote:
Originally Posted by thinkwild
How will this variable cost be determined? Sounds like you are saying by a judgement of what its worth, except in terms of a % of revenues.
Damn work!... I don't have time right now to finish my thoughts, respond to your other good points, or proofread what I wrote above... If what I wrote above isn't clear or doesn't make sense... my apologies... I look forward to responding and discussing this with you further at a later time (and perhaps date)...

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Old
08-31-2004, 12:22 AM
  #127
thinkwild
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Quote:
Originally Posted by I in the Eye
If the owners are taking on all of the risk, they should be making as much profit as they want (i.e. the owners should decide how much of a reward they will reap for their risk - the owners should be the only ones who decide what their risk is worth) - and pay the players a much lower salary than the players are getting now - but just high enough that the players don't decide to play in Europe, in the WHA, in the AHL, etc. Just high enough to keep the players in the NHL... The level of risk should be correlated to the level of reward... Do you agree?
Feeling prolific today?

Well, I think. Isnt it that way now? When you say pay the players a much lower salary, you mean lower than the ones the owners thought they were worth when they signed them? Are all the players Phoenix signed this summer being paid what Phoenix thinks they are worth to them. Sure they would like to get them cheaper, but do they find it worth it?

If they later come to find that it wasnt worth it, it would seem to have been a bad risk in hindsight.

The owners probably project what reward they would like to reap from their risk. They may evaluate the reward and take the minimum risk necesary or they are comfortable with. I dont see why anybody would be allowed to make as much profit as they want. As much as they can, sure. You cant always get what you want as Mick would say.


Quote:
Originally Posted by I in the Eye
In my proposal, while the base fixed salary is 'capped' and lower (then salaries are now)... the player has the opportunity to make A LOT more money than they are now (IF the players and the team performs well - i.e. IF the players are willing to assume some of the risk!)... as the variable components are directly tied to actual performance AND team revenue...
Like we signed Hasek to a $2mil base with a huge bonus if we win the Cup.

Well one worry i might have with this is that player like Yashin may think he can make more money on a team like NYI, and decide to hold out until we traded him to a team where he was eligible to make more money. Or a player like Gleason would decide not to sign with us after 2 years from the draft and go to a team where he has better odds to make more money. Wait. But this would encourage UFAs to go to the rich teams who are doing well and winning and will be able to afford bigger bonuses. Wait.

Just fyi. Your proposal sounds a bit like the owners 2nd of 6 proposals, on Andres Stars page, except they didnt seem to suggest compensating depending on how much money the team made.

Quote:
Originally Posted by AndrewsStarsPage
http://www.andrewsstarspage.com/cba.htm
2.) A Performance-Based Salary System, in which a player's individual compensation would be based, in part, on negotiated objective criteria and, in part, on individual and team performance
Im not sure I completely understand what they are getting at. Or exactly what it helps. Say we had Bonk and he was only now worth 1.5mil with bonuses because he and the team did bad. We still dont want him.

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Old
08-31-2004, 02:45 AM
  #128
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Originally Posted by BlackRedGold
What startup expenses? The biggest expense for the NHL is the players.

If the players are on board with their own league, what startup expenses do they have? Arena leases can easily be covered by the PA's warchest. They can hire all the front office staff that the owners laid off.
They will have to commit to contracts that are quite significant if they want to get the arenas. They hire GMs and coaches, they will want contracts that are secured (just like the players want secured contracts). They could end up committing $200m-$300m across a 30 team league. It will be 25-30 team league, after all the lesser players will demand jobs too or they will veto the rich stars creating 6-10 teams and giving themselves jobs with cushy salaries while the lesser players queue for the dole.

Do you see Lidstrom or Brodeur throwing in their life savings to build up enough capitial to pay other players with a 50% chance of losing it all while other players bludge their butts off on the ice eating fat salaries (yashin, turgeon etc etc)? I don't. Solidarity will break down if Lidstrom see Yashin bludging away eating up the salary he put in to float the franchise.

What I find quite funny about the players league is that no player would put his money in without a guarantee of getting back. The players don't want to commit to a fixed income in the NHL but they would demand it in the NHPLA league. Those who chip in will want security and salaries based on performance of the franchises. Wow sounds like the NHL owners now

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Old
08-31-2004, 10:26 PM
  #129
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Originally Posted by WrightOn
GEEZ. Anything but actually solve the problem. Just make a new league and let it decay into sadness.
How doesn't it solve the problem??? The NHL restarts as a league with a $20 million (or less) salary cap and then the ticket prices are more reasonable for fans everywhere. Then they could expand to even more markets.

Sounds great to me!!

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08-31-2004, 10:28 PM
  #130
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Originally Posted by DownFromNJ
Another scare tactic. NHLPA says it will hold out for a year, owners say screw you we're going somewhere else, and a CBA is signed on September 14th.

NHLPA would never let this happen, because without the NHL the union is null.
Perfect. Let's wrap up a deal and we're done. Then we get to watch hockey in 35 days or so.

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08-31-2004, 10:39 PM
  #131
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Originally Posted by BlackRedGold
So the owners form their own new league and the players form their own new league. Which one has more appeal, the one whose biggest feature is that is owned by the same people who owned the NHL or the one whose biggest feature is that its players are the ones who played in the NHL?

Let them both start their own leagues. It would be the best thing for the fans to have two competitive major pro hockey leagues.
Yeah, let the 500+ NHLPA guys run their own league into the ground with their own salary demands. :lol :lol :lol

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08-31-2004, 11:09 PM
  #132
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Originally Posted by theBob
If it saves hockey and we keep the same team names, I could live with a new league run by owners. Just call it the NAHL for North American Hockey League. Because if you think about it, National Hockey League doesnt make sense for an international league like it is. Im really sick of the escalating contracts, if this new league gives players the option of continuing their current contracts but installs a cap and eliminates arbitration I will be very happy and the players would stay.
They would keep the same name wouldn't they? They own the rights to the name. So would owners keep their team names. They own the rights.

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08-31-2004, 11:43 PM
  #133
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Originally Posted by Lionel Hutz
And that, ladies and gentlemen, is the reason why the league cannot afford to have a lockout. Goodbye expansion markets and new fans.
And goodbye new fans and small market teams if the players in the NHL get their way.


Last edited by Licentia: 08-31-2004 at 11:48 PM.
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08-31-2004, 11:53 PM
  #134
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Originally Posted by Seven_Nation_Army
I hope the owners do start another league, when the CBA expires...just use the AHLers/young ones...I know a lot of people won't be too happy about it, but I'm sick and tired of these ridiculous arbitration rulings, and if this is the only way to get rid of these rulings, good for the owners/and even better for the league.
It's best for fans too, because the ticket prices can be reduced / BETTER BE REDUCED!!!

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08-31-2004, 11:54 PM
  #135
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Originally Posted by Vincent_TheGreat
no hockey fan should have to deal with this crap.
Of all the statements in this thread, this one is the most true.

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09-01-2004, 12:01 AM
  #136
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Originally Posted by sharksfanatic
I just recently returned from a cross-country road trip and discussed Hockey some with people not in Hockey markets (New Mexico, Oklahoma and such). Amazingly, the objection to hockey I heard most was that the rules were confusing and because of this they didn't understand what was going on (We all know how untrue that is, but obviously there is a need for some education). Next in line was that they had trouble following the puck, and I truely believe HD will eventually help with this aspect.
That's just Americans pulling excuses out their butts. The reality is that they don't like hockey because they didn't play it/see it when they were young. The NHL has to plant seeds of hockey in the youth of the American south. Then they will reap a fan harvest in 20-30 years.

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09-01-2004, 12:03 AM
  #137
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09-01-2004, 12:19 AM
  #138
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Quote:
Originally Posted by Stich
What startup costs? Do you know anything about business? Here's a list of the things that would have to be paid for before ever playing a game:

Lease for arena
Office Space
GM Salary
President Salary
Coaches
Marketing personnel or outsourcing
Customer Service Personnel
Scouts
Sales Personnel
Lawyers
Training of arena personnel
Marketing
Untilities
Uniforms
Web Development
Player signing bonuses
Computers, Printers, Copiers, Routers, etc.
Office Supplies

And that's just scratching the surface.
Yeah, I didn't understand his logic on how it would be cheaper for the players to start a league than the owners. The owners already have everything together. The players have nothing.

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09-01-2004, 12:24 AM
  #139
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Originally Posted by Chock Full Of Booger
They don't want to be paid under a cap because it limits how much they can be paid. Of course they care what they're paid.
:lol Yeah, let's let the NHL GMs start paying the players $50,000 contracts and see if they still don't care. :lol

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09-01-2004, 12:37 AM
  #140
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Quote:
Originally Posted by DementedReality
many players are taking paycuts and have in the past. they dont want a cap, but will agree to contracts that are less than todays market value. what choice do they have ? if an owner only offers than 1m and they used to make 2m, they either take the pay cut or find someone else to pay them the 2m.

a) if someone is willing to pay them the 2m, then why should they agree to a system that limits that.

b) if no one is willing to pay them 2m, then they will have to take a paycut, right ?

pretty simple and no cap is needed.

dr
That would be a great way for things to work if all 30 teams worked from the same budget. However they do not, therefore your system doesn't work. New York will always get the player for 2m because Calgary doesn't have 2m to spend. That is why hockey is dying in small markets. That is why the fans are hurting.

How any fan can support the players is beyond me.

And the other post just above yours explains even more the pressure on GMs to pay big contracts. Frankly they just don't always have a choice but to pay more.

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09-01-2004, 12:49 AM
  #141
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Originally Posted by DementedReality
its so simple its driving me mad. IF YOU DONT WANT TO PAY A PLAYER 3.5m THEN DONT ! but dont cry if he leaves becuase someone else CHOOSES to pay it to him.

dr
To: Small Market NHL team fans.

Please do not cry when a large market team takes your best player away.

Thanks for your continued support.

Signed: NHLPA

It's not about NOT wanting to pay a player 3.5m. It's about NOT being able to. That's the problem!! I'm sure the GMs in the league would be more than happy to hand out blank cheques to players and have them fill in what they want.

It's the fans who pay the biggest price for this sillyness.

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09-01-2004, 06:52 AM
  #142
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Originally Posted by Licentia
It's not about NOT wanting to pay a player 3.5m. It's about NOT being able to. That's the problem!!
It's not a problem at all. The Devils and Avalanche each traded away enough talent during their Cup-winning years to build another NHL team, and they are STILL competitive. Player personnel budgets are a reality for every team.

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09-01-2004, 07:42 AM
  #143
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Quote:
Originally Posted by Licentia
To: Small Market NHL team fans.

Please do not cry when a large market team takes your best player away.

Thanks for your continued support.

Signed: NHLPA

It's not about NOT wanting to pay a player 3.5m. It's about NOT being able to. That's the problem!! I'm sure the GMs in the league would be more than happy to hand out blank cheques to players and have them fill in what they want.

It's the fans who pay the biggest price for this sillyness.
sheeesh .... of course its the fans who pay, so why should the fans, in NYR for instance, pay for players in CRL ?

damn that large market in PHX stealing Brett Hull from the small market Red Wings.

damn that large market CGY stealing Chris Simon from that small market NYR at the deadline last year. NYR knew they couldnt afford to resign him, but CGY traded for him anyway knowing they could.

damn that large market in PIT stealing Mark Recchi from that small market in PHI.

i am curious brother simpleton, what team cant afford to pay a player what he is worth ?

dr

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09-02-2004, 12:27 AM
  #144
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Quote:
Originally Posted by DementedReality
sheeesh .... of course its the fans who pay, so why should the fans, in NYR for instance, pay for players in CRL ?

damn that large market in PHX stealing Brett Hull from the small market Red Wings.

damn that large market CGY stealing Chris Simon from that small market NYR at the deadline last year. NYR knew they couldnt afford to resign him, but CGY traded for him anyway knowing they could.

damn that large market in PIT stealing Mark Recchi from that small market in PHI.

i am curious brother simpleton, what team cant afford to pay a player what he is worth ?

dr
how do you judge a player's worth?... the simple answer to that could be stats on ice, however that's not the case, in this 'free market' of the nhl two teams get in a bidding war and no matter how many times you claim if you don't want to pay a player such an amount of money, it doesn't quite work like that if two or more teams want the player, they start by saying yeah we'll sign you this much this many years if that don't work they start adding money if that still don't work they add years. thus bringing us to the overpaid players of today being stuck with a team cause no other team will trade for that player with an outrageous contract, no matter how much you argue against this view, THIS is how it's been and THIS is what's gotta be controlled or stopped somehow someway

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09-02-2004, 01:20 AM
  #145
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Quote:
Originally Posted by DementedReality
damn that large market in PHX stealing Brett Hull from the small market Red Wings. damn that large market CGY stealing Chris Simon from that small market NYR at the deadline last year. NYR knew they couldnt afford to resign him, but CGY traded for him anyway knowing they could. damn that large market in PIT stealing Mark Recchi from that small market in PHI. i am curious brother simpleton, what team cant afford to pay a player what he is worth ?

dr
:lol

Brett Hull, Chris Simon, Mark Recchi. Those are real big names in today's NHL right? :lol Nobody else wanted Recchi or Hull. Simon is a nobody. Let's find some better examples, please.

Yep, NYR couldn't afford Chris Simon. :lol Only Calgary could pick up the big price tag on him. lol :lol

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09-02-2004, 08:53 AM
  #146
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Quote:
Originally Posted by Licentia
:lol

Brett Hull, Chris Simon, Mark Recchi. Those are real big names in today's NHL right? :lol Nobody else wanted Recchi or Hull. Simon is a nobody. Let's find some better examples, please.

Yep, NYR couldn't afford Chris Simon. :lol Only Calgary could pick up the big price tag on him. lol :lol
who cares, signing guys like Kovalev to huge deals is of no benefit to the team that signed him.

is team A better by paying Kovalev 8m per season or by not having him ? id say they are better by not having him. so why should we feel sorry for another team that cant afford to pay Kovalev 8m ?

dr

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09-02-2004, 08:55 AM
  #147
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Quote:
Originally Posted by garry1221
how do you judge a player's worth?... ..we'll sign you this much this many years
you answered your own question ...

dr

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09-02-2004, 12:43 PM
  #148
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Quote:
Originally Posted by DementedReality
you answered your own question ...

dr
you didn't answer the question.. i was posing a hypothetical situation that happens over and over again, using more money each time, thus driving salaries sky high, with what you quoted off my last post is simple if only one team is after that player, but many times there is more than one team vieing for that player's talent, and whether or not his stats show it the teams often try to outbid their oponents ( other teams ) for the player, thus often overpaying a player for a good many years and driving up salaries of other lpayers in the league when they look and say 'i've done more than him so i deserve more' which would be valid but the fact that the first player is overpaid makes it a moot point when it comes right down to it, no matter how much you say 'then they shouldn't offer it if they can't afford it' it doesn't work that way, try telling that to the 30 GM's in the league and you'll get a chorus of laughs and ppl telling you to go be a stand up comic, the present day cba is so skewed in the players' favor that the GM's have little power in these situations, the board needs to be bent so it's less warped and straightened out so both parties (nhl/nhlpa) can see past the bow in the board, right now it's too big to see over thus putting us where we are now...the stalemate of bettman and goodenow

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09-02-2004, 09:38 PM
  #149
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Quote:
Originally Posted by garry1221
.... but many times there is more than one team vieing for that player's talent,
so let me get this straight .. two (or more) teams are offering player similar money, yet you need me to tell you how a players value is determined ?

if he wasnt worth what he was asking, why would 2 (or more) teams be willing to pay it ?

a players value is determined by what an owner is willing to pay him. period.

dr

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09-03-2004, 12:19 AM
  #150
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Quote:
Originally Posted by DementedReality
so let me get this straight .. two (or more) teams are offering player similar money, yet you need me to tell you how a players value is determined ?

if he wasnt worth what he was asking, why would 2 (or more) teams be willing to pay it ?

a players value is determined by what an owner is willing to pay him. period.

dr
yet when a player underperforms then where does that leave his value when he's got a guaranteed contract for 3 or more years?... right in the overpayed/underachievers category that many players are put in, many players aren't worth what they're asking however they get it for the simple fact that owners don't want their best players playing elsewhere or an owner doesn't want another team getting a certain UFA so they overpay him where no one else would even think of offering a contract to that particular player, the player's value is determined by what an owner is willing to pay him holds some water, but not much, not enough to be considered valid IMO, would you play 9 mil/year for holik?, most GM's out there wouldn't, but sather wanted him that badly and he didn't want any competition, thus creating most of the overpayed/underachievers of today, not saying sather acted alone, many GM's have been known to do similar

bottom line, a player's value should be as a result of what he puts out on the ice, yes he should get payed something because any player in the nhl would be among the elite of the world, but value should be a result of what that player brings, and unless you're talking about lemieux or gretzky... maybe howe or orr, aint no player worth even close to 9 mil, salaries SHOULD be incentive laden based on production, base salary just for being among the best players in the world, but if you feel you're worth x number of dollars you better show you're worth that much, im sure many would agree aside from the few that feel players should make a mint while owners keep shelling out and never getting a thing back

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