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NHL and NHLPA having problems

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Old
10-15-2011, 08:17 PM
  #1
viper0220
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NHL and NHLPA having problems

Just watching CBC hotstove and they were saying that the NHL and NHLPA are having problems with escrow.

http://aol.sportingnews.com/nhl/stor...w-from-players

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10-15-2011, 08:36 PM
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specifically the 25m glendale gives to the NHL for running the Coyotes. The NHLPA feels this is general league revenue and hence should count, while the league counters that this money is for running the 'yotes and shouldn't count.....

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10-15-2011, 09:16 PM
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As they were saying on Hotstove, I think the biggest thing to take away from this is that it could be a glimpse into how Fehr will lead the union and the difficulty of the next CBA.

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10-15-2011, 09:33 PM
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Quote:
Originally Posted by hatterson View Post
As they were saying on Hotstove, I think the biggest thing to take away from this is that it could be a glimpse into how Fehr will lead the union and the difficulty of the next CBA.
Actually, what could be nearly as big is the effect on the Phoenix situation. The NHL is believed to have been adding losses in operating the team to the asking price for the franchise. The money from Glendale is supposed to be used to subsidize the franchise's losses and if used for something else, it would likely further drive up the already high price of the Coyotes. No doubt this would make it more difficult for the league to unload the team.

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10-15-2011, 09:46 PM
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Quote:
Originally Posted by hatterson View Post
As they were saying on Hotstove, I think the biggest thing to take away from this is that it could be a glimpse into how Fehr will lead the union and the difficulty of the next CBA.

Why do you think it's an indication of how Fehr would run things? If anything is spent on players, it counts against their share. If the league receives money to run a team, why isn't that considered as money on their plus side of the column?


According the cited article, the NHL is holding up the disbursement of refunds for last year since the accounting cannot be closed--- per Daly's reference to the CBA that it must be closed before disbursement can happen.

I don't see Fehr really being out of line.

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10-15-2011, 10:00 PM
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Originally Posted by htpwn View Post
Actually, what could be nearly as big is the effect on the Phoenix situation. The NHL is believed to have been adding losses in operating the team to the asking price for the franchise. The money from Glendale is supposed to be used to subsidize the franchise's losses and if used for something else, it would likely further drive up the already high price of the Coyotes. No doubt this would make it more difficult for the league to unload the team.
The money from Glendale is and will be used to subsidize the 'Yotes' loses.

It is not that specific money that the NHLPA has a claim on. The NHLPA just wants that money included in HRR which would increase the 57% Players Share by $14M which would result in an increase in the amount of Escrow Funds returned to the NHLPA/Players (and a reduction in the amount of excess escrow held/distributed by the League). This money would come at the expense of other recipients of the excess escrow $$$ - Revenue Sharing, Final Escrow Distribution to teams with an Actual Club Salary below the cap mid point, and finally the equal 30-way disbursement of any remaining funds.

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10-15-2011, 10:12 PM
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Quote:
Originally Posted by kdb209 View Post
The money from Glendale is and will be used to subsidize the 'Yotes' loses.

It is not that specific money that the NHLPA has a claim on. The NHLPA just wants that money included in HRR which would increase the 57% Players Share by $14M which would result in an increase in the amount of Escrow Funds returned to the NHLPA/Players (and a reduction in the amount of excess escrow held/distributed by the League). This money would come at the expense of other recipients of the excess escrow $$$ - Revenue Sharing, Final Escrow Distribution to teams with an Actual Club Salary below the cap mid point, and finally the equal 30-way disbursement of any remaining funds.
If that's what the two parties agreed to do, then it either comes 'at the expense of' the players or the teams who have to make up the difference.

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10-15-2011, 10:46 PM
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Originally Posted by Fugu View Post
If that's what the two parties agreed to do, then it either comes 'at the expense of' the players or the teams who have to make up the difference.
AIUI, the issue at hand - to be determined by an arbiter - is whether the $25M CoG subsidy is included in HRR.

If it's not - then it does not come at the expense of the Players, since they had no rights to it in the first place.

If it is - then it will come at the expense of those teams who would have received that excess escrow $$$ under the terms of the CBA. It is quite possible that this will come entirely at the expense of the teams which can least afford it - those below midpoint teams receiving the first part of the Final Escrow distribution.

Looking at Article 50 - it seems that the NHLPA may have a valid claim. Subsidies from local gov't are not enumerated in those revenues included in HRR, but they are explicitly not included in revenues excluded from HRR if they are designed to cover operating expenses (as opposed to capital improvements). The illustrations seem to imply that such a subsidy for reimbursing operating expenses should be included in HRR.

Quote:
Originally Posted by CBA Article 50.1(b)
(b) Notwithstanding anything to the contrary in Section 50.1(a) above, HRR
shall not include the following non-exhaustive list of revenues:

...

(xvi) Any thing of value that induced or is intended to induce a Club
either to
locate or to relocate (e.g., amounts paid to enable a Club
to buy-out its lease obligations or enable it to pay any relocation
fee) or remain in a particular geographic location such that it will
enable the Club or its Club Affiliated Entity to enhance categories
or revenue streams constituting HRR, so long as such things of
value or other revenues are not reimbursements for operating
expenses of the Club
;

Illustration #1: A Club leases the arena for its home games from a
public authority. The lease provides that the public authority will
construct or improve luxury suites in the arena. In lieu of making
the physical improvements required by the lease, the public
authority makes specific guaranteed annual payments to the Club.
Such payments would be included in HRR.

Illustration #2: In order to induce a Club to stay in its current
location, a public authority pays the Club a lump sum payment in
the form of a loan (e.g., $20 million), part of which (e.g., $10
million) is to reimburse the Club for improvements to the locker
room, construction of a practice facility and suite improvements,
and part of which (e.g., $10 million) is paid to the Club to induce it
to stay at the location over a stated period of time (e.g., twenty (20)
years). Each year 1/20th of the loan is forgiven by the public
authority so long as the Club remains in the arena and uses the
latter portion of funds loaned for operation of the Club. Should the
team relocate, any unpaid balance of the loan must be repaid to the
public authority. The $10 million portion of the loan devoted to
physical improvements of the arena and for the practice facility is
excluded from HRR. The remaining portion of the loan is included
in HRR (at $500,000 per year) because the funds are used for
operating revenues of the Club.

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10-16-2011, 02:49 PM
  #9
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Good to see the players keep the league on it's toes here. Although one must wonder what is going through the minds of the hundredaires and thousandaires in Glendale when they see millionaires and billionaires carve up their money like this.

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10-16-2011, 03:28 PM
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Quote:
Originally Posted by Fehr Time View Post
Good to see the players keep the league on it's toes here. Although one must wonder what is going through the minds of the hundredaires and thousandaires in Glendale when they see millionaires and billionaires carve up their money like this.
The "hundredaires and thousandaires" could care less. For hockey fans in the valley ownership is the only thing that counts. Many could care less. Others saw the job loss in Atlanta and know that Glendale could ill afford to take that hit. Others don't like the money paid out by the city, considering the ethical distaste of government subsidy is more important than the financial loss of the city should they have an arena with no anchor team.

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10-16-2011, 03:31 PM
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IIRC, the carve out this year has been one of the lowest since the strike year. It is my hope that the sides can get an equitable agreement on the more important issues than the Glendale money and avoid a bitter dispute, and certainly hope that they can avoid a strike. There is enough money to go around, and both the owners and players get paid quite well compared to most of us.

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10-16-2011, 03:37 PM
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This could end the CoG gravy train.

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10-16-2011, 06:44 PM
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I am finding it hard to see why the NHLPA would not have a pretty good case here. Money to operate the Yotes seems like HRR to me but I guess the devil really is in the details.

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10-16-2011, 07:06 PM
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I am finding it hard to see why the NHLPA would not have a pretty good case here. Money to operate the Yotes seems like HRR to me but I guess the devil really is in the details.
Thats for sure. According to kdb's post above and article 50.1 (b) of the CBA those funds would indeed be HRR, the very matter of subsidies clearly addressed. The thing is though, those funds, all of it, are used to manage the job, run the team, cover losses. If its applied to the escrow on paper alone then those funds have to come from somewhere else, likely the revenue sharing pot, meaning the teams who can least afford it will see their subsidies decrease, and thats just not healthy for the league as a whole. Perhaps the league will argue that the $25M, paid to its Delaware registered arena management holding company is not in fact HRR & thus exempt from the article?....

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10-16-2011, 07:12 PM
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I hope and feel the $25M should be part of the revenue pot and the NHLPA should be entitled to their share.

Look at it this way...

If this team was moved somewhere where charity/a handout wasn't required (Quebec City, Hamilton, Toronto) the players would share/benefit. Why should the players lose because the NHL has not done the right/smart thing?


Last edited by OttawaRoughRiderFan: 10-16-2011 at 07:21 PM.
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10-16-2011, 07:48 PM
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Quote:
Originally Posted by Scottrocks58 View Post
IIRC, the carve out this year has been one of the lowest since the strike year. It is my hope that the sides can get an equitable agreement on the more important issues than the Glendale money and avoid a bitter dispute, and certainly hope that they can avoid a strike. There is enough money to go around, and both the owners and players get paid quite well compared to most of us.
More important things than the Glendale money? The source is irrelevant. What counts is HRR. If the NHL can nickel and dime to death the players side with what constitutes player costs, why should the players be the guys subsidizing this folly?


When a guy is injured so his replacement counts along with his pay; furthermore, the league suggesting through Daly or Bettman that the players banished from the NHL to other leagues should count too (a la Redden) if they're still getting paid by said cap mismanaging and evading team...

I see very little here open to interpretation if there's even a clause in the CBA about city subsidies.

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10-16-2011, 07:58 PM
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Originally Posted by KevyD View Post
I hope and feel the $25M should be part of the revenue pot and the NHLPA should be entitled to their share.... If this team was moved somewhere where charity/a handout wasn't required (Quebec City, Hamilton, Toronto) the players would share/benefit. Why should the players lose because the NHL has not done the right/smart thing?
While I disagree with the first part of your post but respect your opinion & the sentiment, the second part of your post I believe is really what this is all about, and could well have come from the mind & desk of none other than Richard Rodier, Consultant to the NHLPA. Its just the tip of the Iceberg... You are quite correct in pointing out that it raises a fundamental question, and to me signals, despite Fehrs' protestations to the reverse, that we could well be headed into some pretty choppy waters over the CBA negotiations next year. Why should the players, as the leagues "partners" lose because the NHL refuses to either relocate or expand to markets dying for teams while propping up franchises on life support elsewhere?. The NHL has a substantial arsenal with which to reply of course, but it sure looks & sounds like a first shot being fired to me...

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10-16-2011, 08:01 PM
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Quote:
Originally Posted by Killion View Post
While I disagree with the first part of your post but respect your opinion & the sentiment, the second part of your post I believe is really what this is all about, and could well have come from the mind & desk of none other than Richard Rodier, Consultant to the NHLPA. Its just the tip of the Iceberg... You are quite correct in pointing out that it raises a fundamental question, and to me signals, despite Fehrs' protestations to the reverse, that we could well be headed into some pretty choppy waters over the CBA negotiations next year. Why should the players, as the leagues "partners" lose because the NHL refuses to either relocate or expand to markets dying for teams while propping up franchises on life support elsewhere?. The NHL has a substantial arsenal with which to reply of course, but it sure looks & sounds like a first shot being fired to me...
Hi Killion :

From the player's perspective...

It would be like asking a good looking, popular friend to take out your dim witted, ugly cousin - as an act of kindness.

If the friend is kind enough to take her out you better cover his costs.


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10-16-2011, 08:13 PM
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Originally Posted by Fugu View Post
I see very little here open to interpretation if there's even a clause in the CBA about city subsidies.
The only issue I see is differentiating monies paid to the team for team expenses and money paid to the arena operator for arena expenses.

If the CoG subsidy were truly just for reimbursement of arena operating costs, the NHL might have an argument - however, IIRC, the $25M subsidy agreement defined reimbursable expenses very broadly, including some costs directly related to the teams operation. The NHL could have an argument, though, that out of the $25 subsidy only a portion went to team operations which would be included in HRR - and that the balance which legitimately went to arena expenses should be excluded.

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10-16-2011, 08:14 PM
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if this money is counted as HHR how does it affect the sale of the team. I'm sure some owners aren't happy covering the loses beyond the 25 million already, add in another 14 million or so i would think they'd wanna wash their hands of this mess

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10-16-2011, 08:49 PM
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Quote:
Originally Posted by KevyD View Post
Hi Killion :
Yepp. Hi KevyD

Quote:
Originally Posted by kdb209 View Post
The only issue I see is differentiating monies paid to the team for team expenses and money paid to the arena operator for arena expenses.
Thats' how I would argue it if I was the NHL. Its' an "Arena Management Fee" paid to the NHL's "Arena Newco" LLC & is therefore not subject nor part of HRR's, though a small portion was used to off-set team expences & losses. Look to have it completely exempted or at worst minimize it to about $3M, and Bobs' your Uncle.

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10-16-2011, 09:22 PM
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Originally Posted by kdb209 View Post
The only issue I see is differentiating monies paid to the team for team expenses and money paid to the arena operator for arena expenses.

If the CoG subsidy were truly just for reimbursement of arena operating costs, the NHL might have an argument - however, IIRC, the $25M subsidy agreement defined reimbursable expenses very broadly, including some costs directly related to the teams operation. The NHL could have an argument, though, that out of the $25 subsidy only a portion went to team operations which would be included in HRR - and that the balance which legitimately went to arena expenses should be excluded.
So are they haggling over the entire sum, as it seemed the NHL felt none of the money should count or is it an attempt to decide exactly which portion.

Didn't the NHLPA hire a forensic accountant, before they brought in Rodier for his special projects work? This would appear to be the kind of thing that type of professional just may find intriguing. I think there might be some historical basis as well for the arena operations outside of operating the team. The NHL may have outsmarted itself by demanding $25 million to cover their costs in keeping the team there. It was possible for them to find someone else to operate the arena, I believe if the old Moyes contracts were terminated. They have used the team as the bargaining chip all along.

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10-16-2011, 09:54 PM
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I have no problem with a strike if it is necessary.

I want to see the NHLPA put pressure on the BoG to back teams in areas where they are wanted and where they will produce revenue to benefit BOTH sides instead of the crazy dream of U.S. southern expansion.


Last edited by OttawaRoughRiderFan: 10-16-2011 at 11:08 PM.
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10-16-2011, 09:58 PM
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So are they haggling over the entire sum, as it seemed the NHL felt none of the money should count or is it an attempt to decide exactly which portion... Didn't the NHLPA hire a forensic accountant, before they brought in Rodier for his special projects work? This would appear to be the kind of thing that type of professional just may find intriguing.
Yes, it would appear they are haggling over the entire sum, the NHL telling the PA its' exempt from article 50.1 altogether... As for the latter, I think you might be referring to Bob Lindquist who was hired by Paul Kelly in 2008 and who then resigned in 2009 after Kelly was ousted. Lindquist has been referred to as "The Godfather of Forensic Accounting" having done extensive work on both sides of the border in sniffing out fraud. He was of course hired to scrutinize all 30 teams financials to make sure the PA was getting the straight dope and a fair shake, however, to the best of my knowledge, no one of his caliber possessing that particular set of skills has been found to replace him, or even if a search is on to do so. I would certainly assume so though. Rather a critical element.... Hows your math Fugu?.

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10-16-2011, 11:26 PM
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Yes, it would appear they are haggling over the entire sum, the NHL telling the PA its' exempt from article 50.1 altogether... As for the latter, I think you might be referring to Bob Lindquist who was hired by Paul Kelly in 2008 and who then resigned in 2009 after Kelly was ousted. Lindquist has been referred to as "The Godfather of Forensic Accounting" having done extensive work on both sides of the border in sniffing out fraud. He was of course hired to scrutinize all 30 teams financials to make sure the PA was getting the straight dope and a fair shake, however, to the best of my knowledge, no one of his caliber possessing that particular set of skills has been found to replace him, or even if a search is on to do so. I would certainly assume so though. Rather a critical element.... Hows your math Fugu?.
Real math or the funny bean-counting kinda math?

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