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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, NHL revenues, relocation and expansion.

I really don't understand how...

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Old
12-17-2004, 02:56 PM
  #1
Tawnos
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I really don't understand how...

...the owners can claim that salaries will rise at the same rate as they did in the past under the old CBA. Can anyone explain that to me?

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Old
12-17-2004, 03:39 PM
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Quote:
Originally Posted by Tawnos
...the owners can claim that salaries will rise at the same rate as they did in the past under the old CBA. Can anyone explain that to me?
What makes salaries rise?

Arbitration. Holdouts. Qualifying offers that must be 100% or higher. Owners in one market setting the market by signing players for salaries that make sense for them, but not for other owners. Model entry contracts, that establish that young players are already making $4 million in their first couple of seasons.

All those elements would still exist under the NHLPA's CBA offer. Therefore, the same results would follow.

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Old
12-17-2004, 03:49 PM
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Quote:
Originally Posted by Tawnos
...the owners can claim that salaries will rise at the same rate as they did in the past under the old CBA. Can anyone explain that to me?
Keep in mind also that many of the same teams who helped to increase the player salaries across the league, still favor a similar situation for the CBA. I'm sure that Toronto and New York would be perfectly willing to keep things the way they are, as would some other teams like Philly, Detroit, etc.

Things are not balanced in the prior CBA. If you have some teams making multiple times the profits of other teams, you will have teams spending multiple times the payroll of other teams as well.

I'm anti-hard-cap, but I think you have to set a competitive level and make sure that everyone competes at that level. You don't want teams in the league that can't afford competitive salaries, and you don't want teams to spend considerably above average either. There has to be a common ground, and there wasn't one in the prior CBA.

Unfortunately, unless things get really strict in the NHL, it probably won't change. There is no golden goose, and the one that actually exists is not going to be exposed.

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12-17-2004, 03:49 PM
  #4
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Quote:
Originally Posted by Tawnos
...the owners can claim that salaries will rise at the same rate as they did in the past under the old CBA. Can anyone explain that to me?
I'll try not to make any comments about the owners/GMs ineptitude.

The idea is that, without a cap and other proposed changes, there is no mechanism to ensure that salaries won't rise back to today's levels. See, while the 24 percent rebate is a nice giveback, owners believe that as soon as the players give that back, the Rangers, WIngs, Colorado, Leafs, and Flyers will start dishing out big contracts, raising the salary demands of players all across the league, and pushing small-market teams to go over their budgets if they want to keep their star players.
The League is basically saying that the GMs can not control themselves (although, a look at the UFA market over the 16 months would suggest otherwise. Spending on new contracts was not nearly as high as it would have been without the threat of a cap.)
SO while owners showed us they can cut back without a salary cap, they apparently believe they can only control themselves with a cap, or the threat of a salary cap.

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12-17-2004, 04:12 PM
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Quote:
Originally Posted by Newsguyone
SO while owners showed us they can cut back without a salary cap, they apparently believe they can only control themselves with a cap, or the threat of a salary cap.
Perhaps the solution then is to constantly threaten that there will be a hard salary cap, without actually having to implement it...

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12-17-2004, 04:17 PM
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Originally Posted by I in the Eye
Perhaps the solution then is to constantly threaten that there will be a hard salary cap, without actually having to implement it...
A 24 percent rebate in a three year deal is actually such a threat.

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12-17-2004, 04:18 PM
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I think that the main reason salaries exploded was not because of the CBA, but because revenues were exploding. When revenues tailed off in the last 5 years, salaries started tailing off. If they are projecting the same rate of salary growth, they must be projecting the same rate of revenue growth occurring. Which might be true with a massive new revenue source of the players 24% rollback.

But attributing all the salary growth to the CBA seems very disingenuous to me. Its kinf of like saying salary growth caused ticket price increases. Or Edmontons revenue problems were CBA related instead of Cdn$ related. Or saying Edmonton is one of the threatened franchises when their own revenue sharing models see Edmonton ineligible for receiving any.

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12-17-2004, 04:34 PM
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Well....you can't stop the salaries rising with just a roolback. That would be just hiding the problem for 2-3 years. The players are just gonna ask for more money and as usuall, they are gonna get it because there are always gonna be some GMs who are gonna ruin everything for everyone just to win.

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12-17-2004, 04:39 PM
  #9
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Quote:
Originally Posted by x-bob
Well....you can't stop the salaries rising with just a roolback. That would be just hiding the problem for 2-3 years. The players are just gonna ask for more money and as usuall, they are gonna get it because there are always gonna be some GMs who are gonna ruin everything for everyone just to win.
Then why not sign a 3-year CBA.
And deal with it again in three years.
Seriously. Who knows what damage has been done to the sport already.

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12-17-2004, 04:41 PM
  #10
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Quote:
Originally Posted by Newsguyone
A 24 percent rebate in a three year deal is actually such a threat.
Wouldn't a 24% rebate in year three actually be an incentive to spend?

If you look at the both the PA proposal of 24% accross the board and the NHL's proposal of 35% at the top, they both basically let the stupid GM's off the hook for the stupid decisions they made.

That was all without them knowing a rebate could be in the cards....imagine how much more stupid they may get knowing that one was coming....

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12-17-2004, 04:44 PM
  #11
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Quote:
Originally Posted by copperandblue
Wouldn't a 24% rebate in year three actually be an incentive to spend?
Of course. It's just the like the way the lottery gives you "winnings" of $2 or $10 etc on a ticket.

They know it's coming right back to them.

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12-17-2004, 04:46 PM
  #12
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Quote:
Originally Posted by Newsguyone
Then why not sign a 3-year CBA.
And deal with it again in three years.
Seriously. Who knows what damage has been done to the sport already.
Because if you are going to go this far in CBA negotiations then imagine if you put the fans through this enterprise again.

The tone of many is that they are willing to deal with whatever the consequences are in this negotiation, but fix the system now.

Those who want hockey this season at all cost are less inclined to be patient for systemic change.

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Old
12-17-2004, 04:52 PM
  #13
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That's what I suggested. Sign a 3 year CBA(That would never happen)..The players would NEVER sign a 3 year cba either becasue they can't guarantee anything. Gary should propose that and watch then union turn it down. With a 3 year cba, the players can't ask for much b/c everything is attributed to the rollback. Only a select handful of players have contracts past 4 years and even with the rollback those contracts are out of whack..

After the 3 years everything will go back up. Please Gary go offer them a 3 year cba and watch them look like idiots and reject it. Gary wouldn't want one either. You don't want to be back at the bargaining table again in 3 years.

 
Old
12-17-2004, 04:53 PM
  #14
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My guess is that the players would not have given the 24 percent give-back if it was for only a three-year proposal.

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Old
12-17-2004, 05:07 PM
  #15
x-bob
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Quote:
Originally Posted by Newsguyone
Then why not sign a 3-year CBA.
And deal with it again in three years.
Seriously. Who knows what damage has been done to the sport already.
You can't just negotiate every 3 or so years just to save a season. They need to fix the problem, not solve it another day.

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Old
12-17-2004, 05:59 PM
  #16
thinkwild
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Why cant they establish the system, and then negotiate every 3 years on the market correction required. It wouldnt be that hard an agreement.

What I cant understand is how since the beginning of Pro Hockey in the early 1900's, owners have been claiming they are losing money, and yet franchises values just keep continuing to rise. Seems irreconcileable to me

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