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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.

How far are you willing to see the owners push their agenda?

View Poll Results: How long are you willing to see the lockout last til the owners get their way?
3 seasons or more. 56 25.11%
2 full seasons. 17 7.62%
Extend the lockout halfway into next season if necessary. 36 16.14%
Just this season. 40 17.94%
The lockout should be over soon, the players' offer is reasonably close to what's needed. 48 21.52%
The lockout should end now, the players' offer is very generous. 17 7.62%
Until 3 months ago - the old cba was fine regardless of small market woes and owners losing money. 7 3.14%
Until 3 months ago - the owners are liars and have been making money all this time. 2 0.90%
Voters: 223. You may not vote on this poll

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Old
12-12-2004, 10:03 PM
  #76
Potatoe1
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Quote:
Originally Posted by djhn579
That was not the question. I answered about how long I was willing to wait.

Is it possible that some teams will fold if there is not hockey for 3 years? Of course. But so far as I know, no team has dipped into their $10M contingency fund yet (not that the will tell us anyway...), and most teams are owned by people with enough other business deals going that they can hold out a lot longer than the players can.

Think about it. There are teams that intentionally overspent to build and keep a winner. Those teams are okay for quite a while. There are many teams that have been in debt for many years already. I'm sure they can hold out a few more years, especially when they know that a much better system will be put in place, a system that will allow them to compete on a more financially even playing field.

I don't think it will take more than two years though, but we will see...


I think you seriously underestimate the amount of fixed expenses some of these teams have.

I also think you underestimate the large hit they will take on the revenue side after a 3-year layoff.

I am scared to imagine what the NHL would look like after 3-years with no hockey.

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Old
12-12-2004, 10:21 PM
  #77
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Quote:
Originally Posted by Potatoe
I think you seriously underestimate the amount of fixed expenses some of these teams have.
Could be $5M to $20M, possibly more (unlikely though) depending upon what kind of financing deal they have for the arenas. I'd assume the majority are under $10M, but I don't have any numbers or proof.

Quote:
Originally Posted by Potatoe
I also think you underestimate the large hit they will take on the revenue side after a 3-year layoff.
They could lose half of their fan base for the first year or two. I doubt they would lose more than that. Entertaining games and a huge marketing blitz will help. No way to tell for sure until we see. I also think that a lot of fans will come back quickly, considering that many are supporting the owners in this lockout, even after the NHLPA's last offer.

Quote:
Originally Posted by Potatoe
I am scared to imagine what the NHL would look like after 3-years with no hockey.
I'm not so much afraid of what it will look like after 3 years without hockey. I'm more afraid of what it will look like in 3 years if a new CBA is signed that does not fix the systemic problems of the current CBA. And, no, I don't think the players proposal goes far enough. Sure they give back 24% of existing contracts, but the NHLPA will still be using the SCORE system and dictating hold outs and which players go to arbitration to exploit the holes that would still exist.

I'm also fairly certain that most owners have seen this coming for quite some time and will be okay for at least 2 years. What difference does it make if your going to lose money whether you play or not?

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Old
12-12-2004, 10:24 PM
  #78
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*If* the owners screwed up and paid the players way too much that they cannot afford to sustain the NHL - and as far as I am concerned that is an *if* - the owners problems are solved by the players offer. If the owners are such incredible morons that given a chance for a do-over they cannot stop themselves from making the exact same mistake all over again then they deserve to lose money. These guys have been some of the most successful businessmen in North America. That is how they were abe to afford their teams in the first place. They didn't get to be successful businessmen in their fields by incredible overspending - so I am skeptical of claims that they cannot help themselves from overspending in hockey - but they can in the other fields where they make their money.

The best part of this NHLPA proposal is that it is good for the fan. It allows teams that drafted a good core to keep it together and win with that core instead of cutting it when they hit the hard salary cap and letting the teams that were too stupid to get a core through hard work usurp their success.

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Old
12-12-2004, 10:29 PM
  #79
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Quote:
Originally Posted by Potatoe
I think you seriously underestimate the amount of fixed expenses some of these teams have.
What expenses do they have? A rink lease and some office space are the only real fixed expenses a hockey franchise has.

Seriously, what other fixed expenses does an NHL franchise have?

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12-13-2004, 02:21 AM
  #80
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Quote:
Originally Posted by BlackRedGold
What expenses do they have? A rink lease and some office space are the only real fixed expenses a hockey franchise has.

Seriously, what other fixed expenses does an NHL franchise have?

GM, Scouts, Lease, Sales people, Management staff, training facilities, trainers, team doctors, Interest on Debt, Accountants, Lawyers,,,,,,

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12-13-2004, 03:01 AM
  #81
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Quote:
Originally Posted by CH
*If* the owners screwed up and paid the players way too much that they cannot afford to sustain the NHL - and as far as I am concerned that is an *if* - the owners problems are solved by the players offer. If the owners are such incredible morons that given a chance for a do-over they cannot stop themselves from making the exact same mistake all over again then they deserve to lose money.
What's the point of a do-over when the system is broken and we'll be in the same position 2-3 years from now? Do we want another work stoppage? Do we want a work stoppage every CBA?

Fix it now.
Quote:
Originally Posted by CH
These guys have been some of the most successful businessmen in North America. That is how they were abe to afford their teams in the first place. They didn't get to be successful businessmen in their fields by incredible overspending - so I am skeptical of claims that they cannot help themselves from overspending in hockey - but they can in the other fields where they make their money.
I don't think you understand the nature of a professional sports league. In a normal business, you want to make more profits than your competition - to drive them out of business. That's how you succeed. In the hockey world, teams naturally compete against each other in the league. The goal is to win the Cup, and to do that you need to get the best players you can afford, and deny your opponents these players if possible. So the teams with a bigger revenue base have a natural advantage, because they can offer more and lose less than the smaller revenue teams. Just by that, you have natural inflation in players' salaries. With the current system, that's just the way it is - high revenue teams will use their natural advantage. Why not? If you can spend an extra $10 million on a good player to make your chance at winning a Cup better, and to make it impossible for small revenue teams to even talk to him, why don't you do it? It's a natural decision to do in this CBA. And that's the problem with the system. And because of that you get high player salaries, leading to small revenue teams not being able to keep their stars. This in turn leads to league of "have" and "have not" teams, where the "have" teams are the ones who buy up all the stars when they reach UFA, and the "have not" teams are basically farm teams for them. Sound familiar? We need to fix it so spending that extra $10 million on a player just because others can't is not a natural decision.

Bottom line is, you can't compete in the NHL like you can in normal business. In the NHL, driving your opponents out of business (which is what the current system is doing) is bad for your team.

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Old
12-13-2004, 03:24 AM
  #82
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If the lockout lasts well into the 2005-06 season, expect a bunch of VERY wealthy businessmen to create a rival league (and Im not talking about the WHA). Canadians are starved for hockey after 3 months of a lockout. It will be impossible for fans across Canada and the USA to standby for 2 whole years, while the NHL and NHLPA settle their differences.

I predict that major investors, mainly from Canada, and the Northeast USA will create a pro hockey league that will challenge the NHL. perhaps by the 2006-07 season. If I were running the league, I would startup with 14 teams:

New York, NY
Chicago, IL
Toronto, ON
Montreal, QC
Vancouver, BC
Detroit, MI
Boston, MA
Philadelphia, PA
Minneapolis, MN
Los Angeles, CA
Calgary,AB
Edmonton,AB
Winnipeg,MB
Hoston,TX

If the league were to be sucessful in it's inaugural season, I would also place teams in:

Dallas, TX
Quebec City,QC
Hartford, CN
Denver, CO

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Old
12-13-2004, 06:48 AM
  #83
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Quote:
Originally Posted by Jets4Life
If the lockout lasts well into the 2005-06 season, expect a bunch of VERY wealthy businessmen to create a rival league (and Im not talking about the WHA). Canadians are starved for hockey after 3 months of a lockout. It will be impossible for fans across Canada and the USA to standby for 2 whole years, while the NHL and NHLPA settle their differences.
What payroll do you expect these teams to run and at which rinks?

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Old
12-13-2004, 08:25 AM
  #84
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Originally Posted by me2
What payroll do you expect these teams to run and at which rinks?
Exactly. A player run league, that should be interesting.

Let's hope they try it sooner than later. When it falls flat on its face, they'll be that much closer to crawling back.

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Old
12-13-2004, 09:00 AM
  #85
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Quote:
Originally Posted by Scheme
What's the point of a do-over when the system is broken and we'll be in the same position 2-3 years from now? Do we want another work stoppage? Do we want a work stoppage every CBA?
The *SYSTEM* is NOT broken. The current NHL Central Bargaining Agreement has nothing in it that is inherently inflationary. When it was agreed to, it was seen as a CBA that greatly favored the owners. It easily could be used in that way. Any player in his prime in the NHL is too young to have ever been a UFA so they should be affordable. There is no need to offer them $10 million a year.

Under the current CBA, the average payroll in the NHL has not increased in the that couple years. That shows this CBA clearly can be worked. Its NOT broken.

(If* the owners messed up this system that favors them they screwed up. Getting a do over should be all they need to fix the problem. They must be complete morons to make the same mistakes all over again. And their other business holdings show they are not complete morons.

Quote:
Originally Posted by Scheme

Bottom line is, you can't compete in the NHL like you can in normal business. In the NHL, driving your opponents out of business (which is what the current system is doing) is bad for your team.
There is no evidence whatsoever that any NHL team is being run out of business by the CBA. In fact, the last time the NHL lost a team it was 1978. Sure teams get sold. Sure teams move to other markets. Most of the time this happens at a large profit to the current owner. I fail to see why this would be a problem. This is business as usual.

I have no support whatsoever for a work stoppage based on problems that one might project (with questionable projections) to possibly begin in the future. We dont need to make up new problems to stop play and solve now - when it may happen that these problems wont exist anyway. This scare tactic that has been used by the NHL owners (support us or you may lose your NHL franchise) is dishonest. Its all about profits. Neither side has the best interests of the fans or hockey at heart.

At any rate how bad would it be if a couple of the weakest teams folded? Most people think the NHL has over-expanded as it is. So that would help to fix the problem. Its a much better solution to fix the problem by killing the weakest then by preventing anyone from getting strong so that the weak (while remaining weak) are not so weak that it is a given that they fail miserably.

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12-13-2004, 09:11 AM
  #86
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3 seasons or more. As long as it takes.

My addendum to that is that I expect results to go with the wait. I would be very disappointed if the owners did like last time, when they lost half a season to get it up the butt.

Luckily, the bloodsuckers are already proposing something much more sensible. So it's a start. I'd like to see the owners squeeze way more and if they do so I am willing to wait as long as it takes.

I like my NHL. But there's other hockey to keep me entertained. I don't care if it takes 2, 3, 4 years. I doubt the players would be willing to wait more than 2 and a half years. Unfortunately, I doubt the owners fully realize that.

We wouldn't be in this mess if the owners had acted like real men instead of a bunch of sissies a decade or so ago. I want this mess fixed and if they want to fix it, then why not wait as long as it takes?

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Old
12-13-2004, 04:57 PM
  #87
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Quote:
Originally Posted by CH
The *SYSTEM* is NOT broken. The current NHL Central Bargaining Agreement has nothing in it that is inherently inflationary. When it was agreed to, it was seen as a CBA that greatly favored the owners. It easily could be used in that way. Any player in his prime in the NHL is too young to have ever been a UFA so they should be affordable. There is no need to offer them $10 million a year.
Oh please. The Qualifying offer system is inflationary. The arbitration system is inflationary. Hell, even the entry draft compensation system is now inflationary, what with the rediculous bonus structures now.

Any system that *forces* a GM to offer a specific amount to a player, rather than what they want to offer is inflationary.

Quote:
Under the current CBA, the average payroll in the NHL has not increased in the that couple years. That shows this CBA clearly can be worked. Its NOT broken.
That is simply not true. At best, the salary explosion slowed down a little this past season. But it still grew slightly. And the only reason it slowed was because of teams preparing for this lockout.

Edit:
1990-91 $276,000
1991-92 $368,000
1992-93 $465,000
1993-94 $558,000
1994-95 $733,000
1995-96 $892,000
1996-97 $981,000
1997-98 $1,167,713
1998-99 $1,288,974
1999-00 $1,356,380
2000-01 $1,434,885
2001-02 $1,642,590
2002-03 $1,790,209
2003-04 $1.8 something

Quote:
There is no evidence whatsoever that any NHL team is being run out of business by the CBA. In fact, the last time the NHL lost a team it was 1978. Sure teams get sold. Sure teams move to other markets.
And why did they move? Because they couldn't make enough money to meet expenses in the old city. Winnipeg, and Hartford did get driven out of the business.

Really, we ought to start numbering these PA supporter claims. When someone yells "CBA isn't inflationary" or "Average League Salary hasn't climbed in the past few years" we can just respond "22" or "17".


Last edited by PecaFan: 12-13-2004 at 05:06 PM.
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Old
12-13-2004, 05:35 PM
  #88
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Quote:
Originally Posted by CH
Under the current CBA, the average payroll in the NHL has not increased in the last couple years. That shows this CBA clearly can be worked. Its NOT broken.
Quote:
Originally Posted by PecaFan
That is simply not true. At best, the salary explosion slowed down a little this past season. But it still grew slightly. And the only reason it slowed was because of teams preparing for this lockout.

Edit:
1990-91 $276,000
1991-92 $368,000
1992-93 $465,000
1993-94 $558,000
1994-95 $733,000
1995-96 $892,000
1996-97 $981,000
1997-98 $1,167,713
1998-99 $1,288,974
1999-00 $1,356,380
2000-01 $1,434,885
2001-02 $1,642,590
2002-03 $1,790,209
2003-04 $1.8 something

I believe that my statement agrees with your numbers. Although you must first understand that your numbers ARE misleading. The NHL average salary is negotiated by the NHL and the NHLPA - there is no mathematical formula to determine it. In ther NHL, probably 80% of the roster of each team is made up of "NHL regulars" at any given time. These guys are proven NHL players and are for the most part relatively well paid. The other 20% of the roster is filled by a series of low paid barely NHL players. Most do not last in the NHL for any long period of time. The number of players who fill these 20% of the roster spot is usually a larger number than the number of regulars who fill the 80% of the other spots.

The average salary will be quite low if we include all of the barely NHLers who make relatively little money and dont stay in the NHL very long. It will be relatively high if we do not include many of them. Since the exact number of them included is different from year to year you are not truly comparing apples to apples even if you compare the negotiated average salary in the NHL from year to year. Its more fruitful to compare the payrolls of (for example) 25 players per team from year to year or to look at the contracts doled out in the off season. For every player getting a raise there is another player who winds up retiring (thus having his contract completely fall off the books) or signs for a pay cut.

Its not nearly as cut and dry as the misleading average salary numbers the NHL presents each season, but since 2002 or so (last couple years) the average salary in the NHL ahs been roughly constant. And that is using the current CBA. That is evidence it is not broken.

Quote:
Originally Posted by CH

The *SYSTEM* is NOT broken. The current NHL Central Bargaining Agreement has nothing in it that is inherently inflationary. When it was agreed to, it was seen as a CBA that greatly favored the owners. It easily could be used in that way. Any player in his prime in the NHL is too young to have ever been a UFA so they should be affordable. There is no need to offer them $10 million a year.
Quote:
Originally Posted by PecaFan

Oh please. The Qualifying offer system is inflationary. The arbitration system is inflationary. Hell, even the entry draft compensation system is now inflationary, what with the rediculous bonus structures now.
True some players get raises under the current CBA. Some players would get raises under any workable CBA. Thats different from the CBA being inflationary.

Players who go into salary arbitration are typically young players who have increased in value to their team since they signed their last contract. Thus they get raises. That is how the system is set up. There needs to be some check to prevent a team from drafting a kid in teh mid-round of a draft and signing him to the NHL minimum then giving him minimum legal raises per year - when that kid has developed into a superstar. Thats what salary arbitration offers.

For every player who gets a raise there is another player who retires or signs for a pay cut. Many of the players retiring are older UFAs. Those are the most overpaid players in the NHL. They are past their prime and getting paid the best money of their careers. Teams that have tried to build around them have failed. That is the beauty of the current CBA. Even if their is a financial difference between teams, it keeps the competitive balance difference to a minimum.

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Old
12-13-2004, 05:44 PM
  #89
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1990-91 $276,000
2003-04 $1.8 something

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12-13-2004, 05:55 PM
  #90
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Quote:
Originally Posted by Thunderstruck
1990-91 $276,000
2003-04 $1.8 something

And how much have franchise values increased during that same time period ???

2004 Flyers - $262 million
1998 Flyers - $187 million

1995 Detroit - $126 million
2004 Detroit - $266 million

1995 Dallas - $53 million
2004 Dallas - $254 million

Atlanta, Columbus, Nashville and Minnesota were purchased for $80 million a piece and are now worth an average of $130 million

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12-13-2004, 06:06 PM
  #91
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Quote:
Originally Posted by CH
I believe that my statement agrees with your numbers. Although you must first understand that your numbers ARE misleading.
GMAFB. The actual facts are misleading.

The highest salaries are rising each year, the lowest salaries are rising each year, and the medium salaries are rising each year. All your other stuff is just fluff, a constant. It's always been negotiated. Players are always retiring. Players are always coming into the league.

The 276,000 figure includes every "average skewing" highly paid player making 2 million dollars, just like this years average contains average skewers making 10 million.

You're wrong. Just admit it.

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12-13-2004, 06:17 PM
  #92
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Quote:
Originally Posted by PecaFan
The 276,000 figure (or any other salary figure) includes every "average skewing" highly paid player making 2 million dollars, just like this years average contains average skewers making 10 million.
The problem is the salary numbers include different numbers of low paid players who were only in the NHL for a cup of tea. These players greatly outnumber the highly paid player. The more you include in a season, the lower your negotiated average salary will be.

The numbers for average salary (like much of the information about the NHL finances) is misleading. The value in a single year can change by a significant percentage merely by chosing which players are included in the calculation.

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12-13-2004, 06:44 PM
  #93
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Quote:
Originally Posted by CH
The problem is the salary numbers include different numbers of low paid players who were only in the NHL for a cup of tea. These players greatly outnumber the highly paid player. The more you include in a season, the lower your negotiated average salary will be.

The numbers for average salary (like much of the information about the NHL finances) is misleading. The value in a single year can change by a significant percentage merely by chosing which players are included in the calculation.
Can you offer any proof that the NHL and PA have significantly changed the definition during the years in question?

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12-13-2004, 07:42 PM
  #94
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Quote:
Originally Posted by PecaFan
Oh please. The Qualifying offer system is inflationary. The arbitration system is inflationary. Hell, even the entry draft compensation system is now inflationary, what with the rediculous bonus structures now.

Any system that *forces* a GM to offer a specific amount to a player, rather than what they want to offer is inflationary.



That is simply not true. At best, the salary explosion slowed down a little this past season. But it still grew slightly. And the only reason it slowed was because of teams preparing for this lockout.
True, but teams going broke and running out of money is probably as much or more of drag than the CBA actually slowing anything down.

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12-13-2004, 07:44 PM
  #95
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Quote:
Originally Posted by CH
The *SYSTEM* is NOT broken. The current NHL Central Bargaining Agreement has nothing in it that is inherently inflationary. When it was agreed to, it was seen as a CBA that greatly favored the owners. It easily could be used in that way. Any player in his prime in the NHL is too young to have ever been a UFA so they should be affordable. There is no need to offer them $10 million a year.
So you can't think of a single contract offered to a RFA in the $9-11m range? Try harder.

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12-13-2004, 07:55 PM
  #96
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Quote:
Originally Posted by Thunderstruck
Can you offer any proof that the NHL and PA have significantly changed the definition during the years in question?
The problem with this question is that there has been no attempt by the NHL or NHLPA to come up with any definition for how the average salary is calculated.

This was the first serious problem encountered under the CBA. Murray Craven of the Vancouver Canucks believed he was a free agent because he had been in the NHL for 10 years and made less than the NHL average salary - or what the NHLPA believed was the average salary. The Vancouver Canucks disagreed. They thought he made more than the average salary. The NHL (and Canucks) claimed the salary should be determined (basically) by adding up the money paid out in salary to all players in the NHL last year and dividing by the number of players who dressed for one or more games. The NHLPA said its not reasonable to say that the 5 guys who filled out the last roster spot on a given team's roster counted as five players when in fact they only filled one roster spot - each one filled it for a month or so of the season. They went to arbitration and the arbitrator compromised on a number that was roughyl the average of the two claims and that number was high enough to make Murray Craven a free agent.

There was no attempt to mathematically define the average salary. This was a mistake in my opinion. It was soon realized that within a range of maybe 15% or so, the average salary could be whatever you wanted it to be. The NHL wanted it on the low side, since this lead to less 10% raises as less players were below the NHL average salary and this lead to less players becoming "10 year" free agents. The NHLPA wanted it high for the opposite reasons. Of course very few NHL players salary actually depended upon this negotation as almost all players in the NHL make well less than the average salary except for the few stars who were paid far more than the average salary. This made the negotiation mostly a formality. No really hard disagreements in the negotiation were encountered.

A couple years ago, the NHL decided it better made their case for a lockout if the negotiated average salary was allowed to be in the top part of the range that could be mathematically justified. The NHLPA happily agreed since this made for a couple more 10% raises of RFAs each year.

This is why the reported climb in the average NHL salary over the last couple years is a claim that is one that cannot be taken at face value.

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12-13-2004, 08:18 PM
  #97
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Quote:
Originally Posted by CH
The *SYSTEM* is NOT broken. The current NHL Central Bargaining Agreement has nothing in it that is inherently inflationary. When it was agreed to, it was seen as a CBA that greatly favored the owners. It easily could be used in that way. Any player in his prime in the NHL is too young to have ever been a UFA so they should be affordable. There is no need to offer them $10 million a year.
Quote:
Originally Posted by me2
So you can't think of a single contract offered to a RFA in the $9-11m range? Try harder.
Obviously I can think of some. Some have existed. What is I said is: "Any player in his prime in the NHL is too young to have ever been a UFA so they should be affordable. There is no need to offer them $10 million a year."

A player such as Jerome Iginla is arguably the best player in the NHL today. As a RFA he isnt getting $10 million a year. If he isn't there is no reason anyone else needs to be offered one.


Last edited by CH: 12-13-2004 at 11:05 PM.
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12-13-2004, 10:33 PM
  #98
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The players are so confusing, They don't want a cap so they say no. They want a luxury tax system yet they the system they put forth is so pathetic it's not even worth stating. I know it's part of bargaining, they have to start off low. If the owners come back with a stiff tax they won't like that either. They would probably oppose a 75 cent tax on 35 or 40 million.....How can anyone say that they don't want the status qou? Also, I don't know how any PA supporter can say that the 24% rollback wasn't a ploy to sway public opinion. They obviously knew the owners wouldn't accept that proposal outright. Instead of the rollback they could have increased the other proposals and made a meaningful argument on their behalf.

No the QO and arbitration proposals were junk too for anyone that is wanting to bring up other concessions besides the rollback.

 
Old
12-13-2004, 10:49 PM
  #99
me2
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Originally Posted by CH
Obviously I can think of some. Some have existed. What is I said is: "Any player in his prime in the NHL is too young to have ever been a UFA so they should be affordable. There is no need to offer them $10 million a year."

A player such as Jerome Iginla is arguably the best player in the NHL today. As a UFA he isnt getting $10 million a year. If he isn't there is no reason anyone else needs to be offered one.

But there is nothing stopping Igilna from asking for $10m in arbitration. If he's one of the best players and previous best players got $10m it stands to reason the NHLPA would make sure he'd ask for it in arbitration.

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Old
12-13-2004, 10:54 PM
  #100
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Originally Posted by me2
But there is nothing stopping Igilna from asking for $10m in arbitration. If he's one of the best players and previous best players got $10m it stands to reason the NHLPA would make sure he'd ask for it in arbitration.
He could ask for $100 million in arbitration, and Calgary could offer $500K ... doesn't mean he's going to get it.

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