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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.

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Old
12-22-2012, 01:13 AM
  #126
mitchy22
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Originally Posted by Mork View Post
Player agents will negotiate all these things in most contracts.

If player contracts were like other employment contracts, the player could just as easily quit and walk across the street to take a better offer from another team. It works both ways. Employees quit to take better offers every day.

That's why player agents and management will negotiate terms that limit movement during the term of the contract, and even call for [GASP] guaranteed contracts.

NFL players don't get guaranteed contracts because their bargaining agent, the union, collectively bargained them out of their CBA. Lotta good that did NFL players. NFL players would be also be better off without a union at all than the fluff-ball they have negotiating for them now.
Did you notice I mentioned players quitting and that some would indeed be able to contract some of these things the way they stand now?

Do you honestly believe that all NHL players are going to receive every perk they do now in a truly free market? I'm sorry, but the agents aren't going to get all of their clients, all of their wishes, all of the time. You can happily point out to me in the future if that becomes the case, but the reason why the two sides will eventually agree is because it's truly doubtful that the players would see that as a possible scenario.

The problem with the "quit and walk across the street" argument is that the amount of NHL-quality jobs is limited. If teams fold, even more will be limited. Until the gap is closed as the market fills in the spaces, there will be a loss of higher paying jobs. NHL players have hockey skills. Those tend to be their best skills. Therefore, their highest paying jobs at the time that their skills are at a premium will end up being hockey playing/related jobs.

A player "walking across the street" might literally mean "going overseas". For some this will be fine. For others it will be an issue. What happens with the PHPA and its agreements in a "free-for-all" NHLPA-less environment would also be really interesting.

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12-22-2012, 01:16 AM
  #127
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Originally Posted by Fugu View Post
It would be far more difficult for the NHL to simply restructure into a single business entity. How you'd valuate 30 separate businesses, get their owners to let a central authority run their teams, leases, their contracts, employees and so on....and they may run into antitrust laws in this instance as well. MLS was set up this way from it's inception, I don't think it's easy to do with 30 separate legal entities.
May run into anti-trust laws?

There's almost zero chance that this would be allowed to go through.

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12-22-2012, 01:16 AM
  #128
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If six teams fold the 250 most marginal players will lose their jobs. The others will likely make even more money in a league without the financial losers. Good riddance. Good for hockey. It sure won't break my heart when Phoenix, Columbus, Florida and a few other of those 18 monley-losing teams close-up shop!
Do you honestly think that only 6 teams would fold?

~18 teams lost money last year with a salary cap and rev sharing. Take that away and many more than just 6 teams fold.

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12-22-2012, 01:16 AM
  #129
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Would stripping away the league's ability to act as a collusive whole have any impact on the ability of team's to ignore the head office and relocate willy-nilly?
I wouldnt think so Dado. The franchise agreements, stipulations & clauses, the NHL Constitution & its By-Laws would likely remain intact, minor tweaks here & there. Depending on whatever systems of governance they decided to employ pursuant to possible Revenue Sharing, that I suppose would be added, while on the labour front, a separate agreement altogether I should think.

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12-22-2012, 01:22 AM
  #130
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Originally Posted by Ragamuffin Gunner View Post
Do you honestly think that only 6 teams would fold?

~18 teams lost money last year with a salary cap and rev sharing. Take that away and many more than just 6 teams fold.
The NHL worked for years without a salary cap, and losing it won't spell the end of the league.

Anti-trust laws don't prevent teams from sharing revenue, if that's what they want to do. However, without a salary floor, teams can set their own player budgets and are better able to spend within their means.

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12-22-2012, 01:26 AM
  #131
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Originally Posted by Fugu View Post
It would be far more difficult for the NHL to simply restructure into a single business entity. How you'd valuate 30 separate businesses, get their owners to let a central authority run their teams, leases, their contracts, employees and so on....and they may run into antitrust laws in this instance as well. MLS was set up this way from it's inception, I don't think it's easy to do with 30 separate legal entities.
It wouldn't be easy to be sure. But I think it would be better then some franchises folding and would insure the stability of the league in the long run. And i believe that is the endgame plan for the owners.


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The creation of this type of monopoly might give rise to an even stronger anti-trust suit. Monopolies and oligopolies are what U.S. anti-trust laws were designed to address in the first place.
It wouldn't be a monopoly. You still have AHL, ECHL as alternatives and KHL, SEL, DEL, EBEL, ... in Europe. The closest example i can think of is McDonalds for the NHL and Wendy's, KFC ... for the other leagues. Players still have a choice where to play and in KHL for comparable money, at least for the top players.

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Big deal. If some teams fold and some players are displaced, that's the way the market works. Maybe after the weak teams are eliminated, new stronger teams will grow elsewhere. Teams losing money in losing markets don't help anyone.
A team still only has 23 players and there aren't many prime locations left. The NHLPA's duty is to look after the players as a collective and not only for the top players.




And I don't believe that players would gain much in free market. Only KHL can afford the same money for the top players as the NHL, while the rest should look to DEL and SEL for the wages of second line players and AHL for the bottom players. In average the wages would probably move down.

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12-22-2012, 01:27 AM
  #132
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That was the result of the vote. Or do you have better sources than TSN or LeBrun?
I'm not disputing the fact that 97% voted to allow the NHLPA to file a DOI. I'm disputing the assumption that all 97% of those players actually want a DOI filed.

They want the threat of DOI to get a better deal, they don't actually want to spend the time and money of actually following through with it.

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Oh, so doomsday.

There would be a CBA in the future - just one that provides maximum benefits to the players.
I guess you didn't read the post I quoted where Fugu said he didn't see a need for unions anymore. And w/o a union there can't be a CBA.

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Very interesting concept.

If the NHL needs the union to exist, then it should stop treating the union like the enemy and start treating it like a valued business partner.

Who needs the lockout after lockout after lockout that the NHL gives the union?
Maybe they should offer to give the union 50% of HRR to show them that they are partners?

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12-22-2012, 01:38 AM
  #133
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Thats a pretty dire forecast Ragamuffin. The NHL doesnt operate in a complete vacuum. Any number of systems & templates can be applied absent a CBA that would even the playing field to some degree, be it voluntary or mandated. All kinds of interesting possibilities actually.
10-20 years might be a bit extreme. However, I would bet that there would be 10 or less teams by then.


As for the "quit and walk across the street for a better offer" argument; you forgot about non-compete clauses. I'm sure the owners would ensure that players couldn't just quit and play for a rival NHL team at will.


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12-22-2012, 01:45 AM
  #134
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Originally Posted by Ragamuffin Gunner View Post
Maybe they should offer to give the union 50% of HRR to show them that they are partners?
If they'd opened with that offer they might have a deal without a lockout. Umm, and without all the other take-backs on free agency, contract term and the like.

Usually when you have a partner, you honour your agreements as well. Otherwise, you don't have a partner for too long.

What kind of partner signs a contract and then won't honour it?

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12-22-2012, 01:48 AM
  #135
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If they'd opened with that offer they might have a deal without a lockout. Umm, and without all the other take-backs on free agency, contract term and the like.

Usually when you have a partner, you honour your agreements as well. Otherwise, you don't have a partner for too long.

What kind of partner signs a contract and then won't honour it?
Do you even know how NHL contracts are paid? The NHL didn't propose a single offer that didn't honor contracts.

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12-22-2012, 01:48 AM
  #136
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Originally Posted by Octavius View Post
. . . It wouldn't be a monopoly. You still have AHL, ECHL as alternatives and KHL, SEL, DEL, EBEL, ... in Europe. The closest example i can think of is McDonalds for the NHL and Wendy's, KFC ... for the other leagues. Players still have a choice where to play and in KHL for comparable money, at least for the top players . . .

And I don't believe that players would gain much in free market. Only KHL can afford the same money for the top players as the NHL, while the rest should look to DEL and SEL for the wages of second line players and AHL for the bottom players. In average the wages would probably move down.
So you're saying it would not be a monopoly because there are other leagues, but those other leagues are not at all comparable to the NHL?

That still sounds like a monopoly to me.

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12-22-2012, 01:50 AM
  #137
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Originally Posted by Ragamuffin Gunner View Post
Do you even know how NHL contracts are paid? The NHL didn't propose a single offer that didn't honor contracts.
Go figure.

Beats me what all the fuss is about, then.

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12-22-2012, 02:02 AM
  #138
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Originally Posted by DuklaNation View Post
If the existing contracts are tied to a valid CBA, this tactic by the players wont end well for them. Their antitrust suits may fall short of their lofty expectations. Unsigned players like Subban will get nothing. Given the losses incurred by the players to date, I dont see how they can come out ahead in this. Important to note that the executive board of the PA doesnt need to disclaim anything, they are in charge, they can fire Fehr anytime or vote against any of his proposals. Fehr could disclaim or just quit. Therefore, a judge will not look upon this DOI filing favourably given that it was NOT the intent of the law. Decertification is what the players need to do. DOI is just a stall tactic that is transparent. So decertify right now and get it over with. Or maybe thats just a bluff? How much have you lost so far? Bluffing to get what exactly? If the players so against the cap, watch teams start to fold. The bottom 20% need a wake up call.
From what I hear, the top 97% seem to think they know what they're doing. Sure they're taking risks, but whatever's happening already hasn't prevented them from being locked out (1994) again (2004) and again (2012). It's the same thing over and over.

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12-22-2012, 02:03 AM
  #139
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Hi Mitch, good to see some "what if" propositions. I think there are pros and cons to every system, and to varying degrees depending on who you are.

What I will say though is that agents will have a great deal of information on player salaries and contract structures. I don't think anything stops them from talking to peers to and making sure they're looking out for their clients.
Howdy, Fugu. That's fine. Players can talk to each other. Agents can talk to each other. The problem is that none of that talk means they're guaranteed to get the contract they want simply because they're trying to work off of what someone else received. (More on that below.)

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Yes, but nothing says that you cannot bargain for it, or even MORE than is allowed right now. An elite guy can demand housing, a yacht, a piece of the team.......
This is true. He can make any demand he wants. What matters at this point will be what demands will actually be met. Perhaps, some will look at the current NHL-NHLPA bargaining process and consider what some individual teams negotiating with players might end up looking like.

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No need for arbitration because everyone will be a free agent. I agree that it will help top players the most, and then it will trickle down.
This last part is an assumption or unclear if you're suggesting an even flow downward. How things "trickle down" is completely up in the air. You might have 2-3 players on every team making a lot more than the rest of the team. You might have 3rd-4th liners making a lot less. You might have teams in "lesser markets" making a lot less than those in thriving markets.

All of a sudden it's not just Player A vs. Player B, but...

Player A is Market A vs. Player B in Market B
Player A on Team A in Market A vs. Player B on Team A in Market A

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They cannot make it a two-way contract unless you sign a two-way contract. If I were an agent, I'd always have the 'opt out' clause for my client, in case he doesn't care about the rest of the contract and just wants out.
Nobody is making anyone sign anything. However, if you want the prize of a multimillion dollar salary, there's going to be expectations of your performance. A two-way contract might look completely different than what we're thinking of now. The AHL salary might be a lot higher than current levels, but it's also important to realize that players can be fired. We shouldn't look at these things in absolutes because the absolutes are all gone the second the CBA is. The AHL in this case is a demotion in every sense of the word. The employee is welcome to sign elsewhere if he gets a better offer.

You can say you'd have an "opt-out' clause, but that's not the problem. Your player can quit. He doesn't need an "opt-out" clause.

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Originally Posted by Fugu View Post
Some players, who have performance clauses and/or no guarantees will certainly be susceptible. How about players who build in bonuses for exceeding performance metrics? What about clauses that say, sure, you can let me go, but you must pay me for the next X months, or a severance pay? Who can get what will depend on the player's perceived market value and how badly a team needs that player. Agents will have to do a much better job than the boiler template deals now.
Again, the players who get the most will be those that can literally demand the most. I'm sorry, but the grunt workers in an industry don't tend to get all of the perks. Yes, you could see Crosby owning part of the team. Of course, be careful how many of those types of contracts you give away. It'll only be truly special players that end up in that situation. There could be severance packages, but that package might also be a lot cheaper than the rest of the player's contract.

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Of course. NHL teams wouldn't insure a contract unless it's guaranteed. This will affect both sides.
Like I said, the NHL might insure players (as in the person being capable of playing for the team.) The NHL might also insure contracts of players as a perk, but in my mind (and I'm not pretending to be some kind of visionary), I simply can't see every or even most players getting that perk. The sport is dangerous, and the average player only lasts 3-4 seasons worth of games from what I can tell.

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There will be no draft, so teams will have to scramble to find prospects to sign. Elite prospects will get a lot more money much sooner.
Yes, some elite prospects will get more money sooner on potentially non-guaranteed contracts with a lot more protections built in to them.

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Originally Posted by Fugu View Post
I think we'll see a split. Very long contracts once a team knows they have someone special and they will try to lock that player up offering security, guaranteed, over what they might get on the fully open market. I'd think GMs would offer 1-2 yr deals to the lower level players.
Only a few players receive the very long contracts now. When players can quit at any time, what would that really mean in the future? And again, I can only see guaranteed contracts for the better players. That's part of the way teams will keep the special players happy. You might even see contracts with "guaranteed" and "non-guaranteed" years. The range of contracts will be interesting to see, but there's going to be a lot more diversity than at present. Consider that 3-4 year player playing lifespan and how hockey players used to receive 5-year deals only if they were special players.

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The rules cannot affect how labor is priced nor put limits on contract length, structure.
Nope, but that doesn't mean that the NHL as a league can't freeze rosters for competitive reasons such as playoff eligibility. Teams agreeing to compete in the NHL for the Stanley Cup, and one would assume a more significant monetary prize all of a sudden enters the equation, will need to follow certain rules to enter the competition.

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I think some teams may be eliminated. I'm not convinced it's more than the teams that are massively struggling right now.
I'm of a similar mind. However, that reduces jobs for a period of time. That means more NHL-quality players and less NHL-quality jobs. We all know what that does to wages.

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I like an equilibrium that is set by free market conditions. I may not know what it will look like, but I know I will like it.
I hope this is the case. Truly free market conditions would be best for the people who are least represented in the current battle - the common team employes and, most importantly, the fans. Of course, while we won't have to deal with the labor relations strife, we will see a lot of players we root for get juggled around more. However, if anything was ever going to drive ticket prices down, it would be an open system - the open system just has trade-offs even for fans.

Also, if a team wants to "join the NHL", the NHL would need to have specific rules to join the competition. They might have an "entry fee", some kind of annual fee, and whatever other fee they feel they'll need to run the league. Chances are, you may see all of the rules regarding teams in local markets thrown out the window. A GTA team all of a sudden becomes even more possible. The free market (and areas which support buildings privately or publicly) will actually dictate where teams find their homes. Eventually, the dust settles.

I actually think an equilibrium will be more beneficial for the hockey players not currently in the NHL than it will be for those who are already in it. I think NHL jobs will still be quite limited. We may see a lasting contraction, but not by much. We also might see new hockey markets open up and it will be the private sector that lives and dies by those decisions. We'd also see what teams were ************ us with the woes of high salaries and those that truly were under significant pressure to cut costs in order to get by without bleeding owners. I think we'd see surprises in both directions, but a few more on the down side.

Personally, I'd love to see it happen just so we can see how the market might actually end up functioning.

,
Mitch


Last edited by mitchy22: 12-22-2012 at 02:20 AM. Reason: fixing some typos/some grammatical errors/brain farts/minor clarification
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12-22-2012, 02:07 AM
  #140
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So you're saying it would not be a monopoly because there are other leagues, but those other leagues are not at all comparable to the NHL?

That still sounds like a monopoly to me.
KHL can match the NHL pound for pound, at least for the top players. Just like the MLS can match for some players in football (yup, not soccer) against the likes of premiere league.
But nobody will overpay for fringe 1st/good 2nd liners from NA if they can get cheaper local players who actually know the system. They could get work in SEL, but for a lot less money then in the NHL due to lower payrolls.
How is the NHL a monopoly if they can still find work, just for less?

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12-22-2012, 07:46 AM
  #141
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Originally Posted by Ragamuffin Gunner View Post
Do you even know how NHL contracts are paid? The NHL didn't propose a single offer that didn't honor contracts.
Uh yes they did: None of their offers have them honouring every contract that currently is signed for its entirety.

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12-22-2012, 07:56 AM
  #142
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Originally Posted by Ragamuffin Gunner View Post
Do you even know how NHL contracts are paid? The NHL didn't propose a single offer that didn't honor contracts.
You get that payment terms are part of a contract, right?

If I sign a contract with you to pay you to build a house for me for firm $200K, but then come back and say "I still want you to build the house for me, but I'm only going to pay you $175K unless my finances grow faster than they have in the past several years" that's not actually "honoring the contract".

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12-22-2012, 07:58 AM
  #143
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Originally Posted by Octavius View Post
KHL can match the NHL pound for pound, at least for the top players. Just like the MLS can match for some players in football (yup, not soccer) against the likes of premiere league.
But nobody will overpay for fringe 1st/good 2nd liners from NA if they can get cheaper local players who actually know the system. They could get work in SEL, but for a lot less money then in the NHL due to lower payrolls.
How is the NHL a monopoly if they can still find work, just for less?
Super special emphasis on "some"!!!!!!!!!!!!!!!!!!!

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12-22-2012, 08:05 AM
  #144
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Originally Posted by Mork View Post
If they'd opened with that offer they might have a deal without a lockout. Umm, and without all the other take-backs on free agency, contract term and the like.

Usually when you have a partner, you honour your agreements as well. Otherwise, you don't have a partner for too long.

What kind of partner signs a contract and then won't honour it?
The contracts that players signed were done so under the old CBA. That CBA said that all contracts are subject to change based on any new CBA agreement. So if the new CBA agreement says that players will receive 50% of the HRR, then the existing contracts get rolled back based on the difference between 57% and 50% through the salary escrow system.

No contract was ever going to be honored at 100% face value, unless the cap was exactly 57%/30 of the HRR, which it never was during the term of the old CBA.

So if anyone "isn't honoring" their end of the deal, it's the PLAYERS. They are demanding to be paid money under the table; outside of the CBA agreement which THEY signed.

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12-22-2012, 08:20 AM
  #145
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The contracts that players signed were done so under the old CBA. That CBA said that all contracts are subject to change based on any new CBA agreement. So if the new CBA agreement says that players will receive 50% of the HRR, then the existing contracts get rolled back based on the difference between 57% and 50% through the salary escrow system.

No contract was ever going to be honored at 100% face value, unless the cap was exactly 57%/30 of the HRR, which it never was during the term of the old CBA.

So if anyone "isn't honoring" their end of the deal, it's the PLAYERS. They are demanding to be paid money under the table; outside of the CBA agreement which THEY signed.
Haven't we been told that the previous CBA has no impact on the current CBA?

Or they could raise the players' share.

No they're not: There's no CBA and they're not being paid.

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12-22-2012, 08:24 AM
  #146
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Haven't we been told that the previous CBA has no impact on the current CBA?

Or they could raise the players' share.

No they're not: There's no CBA and they're not being paid.
I haven't said that, no.

Raise the players' share? Not sure what you mean. You mean negotiate it from 57% up to say 75%? Sure, if that's what the new CBA deal is, then the players get more money.

I'm talking about what the players were demanding through these negotiations. They wanted "make whole" money, right? Show me where in the old CBA it says that the players are to receive this.

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12-22-2012, 08:34 AM
  #147
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I haven't said that, no.
Not you specifically, but others have.

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Raise the players' share? Not sure what you mean. You mean negotiate it from 57% up to say 75%? Sure, if that's what the new CBA deal is, then the players get more money.
Yes.
Quote:
I'm talking about what the players were demanding through these negotiations. They wanted "make whole" money, right? Show me where in the old CBA it says that the players are to receive this.
Show me in the old CBA where it says the players share should go from 57% to 50%, or where there's a cap on the length of a contract.

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12-22-2012, 08:48 AM
  #148
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Kinda. Would change "union" into a "trade association" (with Fehr still the head).
what would this mean in reality? I understand that having a union means labour law applies to both parts (clubs, players). You can sign CBA, have draft, RFA, UFA, ELC, salary cap etc.

trade association is not involved in labour law.. so NHL and players trade association can not sign CBA. Can they sign any agreement to make draft, RFA,UFA etc?

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12-22-2012, 10:13 AM
  #149
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Originally Posted by DyerMaker66 View Post
Not you specifically, but others have.


Yes.


Show me in the old CBA where it says the players share should go from 57% to 50%, or where there's a cap on the length of a contract.
The old CBA allows for changes in "any new CBA". So if the percentage of HRR that goes towards players salaries is negotiated to be something other than 57%, then that is what the players will get. It could go up, or it could go down. But it is NOT a god-given right of the players to receive what they got in the old CBA. That's the issue here. It is subject to change through negotiation. Just as contract length is subject to negotiation. Both are up for grabs. But many people are stating that it is "dishonorable" for the owners to not honor the old contracts. That's total horsepoop.

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12-22-2012, 10:19 AM
  #150
Freudian
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Quote:
Originally Posted by Mork View Post
The NHL worked for years without a salary cap, and losing it won't spell the end of the league.

Anti-trust laws don't prevent teams from sharing revenue, if that's what they want to do. However, without a salary floor, teams can set their own player budgets and are better able to spend within their means.
It didn't work. Two teams were in bankruptcy in 2003 and the league decided they had to shut the league down for as long as it took to get a salary cap to help fix the leagues problem. The last CBA certainly had its fair share of warts but it was much better than the system we had before the cap.

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