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Differences Between the NHL's October 16th offer and current CBA
Read what you just wrote that I bolded. How is that not a negative impact on players salaries going forward as I suggested? By changing it to a payment outside the revenue share the make whole payments take up no cap space, meaning teams can pay salaries right to 50% and the players get to keep it rather than escrow get it if the make whole and the paid salaries push them over 50%.
Yes. It is a negative impact on future player contracts exactly equal to the positive impact on current contracts. Net zero.
The make whole payments were never outside the revenue share in the October offer. No money was flowing from anyone to anyone else off the cap. The excess of current deals over the cap was going to be paid to those players at a later date by being taken out of future caps.
Are you eating those rocks? I'm saying look at the proposals and compare them. Don't listen to what either side is saying. Is the ability to sign for 2 years longer better for the individual player signing that contract? Yes, a longer guarantee is a better option than a shorter one. Is the arbitration award for $2.5m which can't be walked away from better than the one that can for the individual player receiving the award? Yes. Those are the questions you ask. The fiscal portion of it is removing all reality from the equation and just looking at number on a paper. It's not how things work.
So maybe there's some psychic value to the players of knowing that they don't have to sign another contract for two more years. You get the same money either way, but you just don't have to think about resigning, maybe moving. If that psychic victory is worth $450M, then maybe the players were right not to take the October offer. That's the logic you would have to use, and I personally find it very far-fetched. I think folks who rely on that logic to convince themselves the players made a smart move are probably comforting themselves with something highly improbable that nevertheless can't be disproven.
Escrow has nothing to do with this. The offer was 50% every damn year, and you can pay yourselves back later for the haircut you're taking now.
That is zero dollars moving from player to owner.
I seldom come out and talk like this, but here it is: anyone arguing that being relieved of the $211M make whole payment to themselves was any kind of victory for the players is just so dead wrong it's not even funny. You may think you're running towards some obscure, tricky logical victory, but you are knee deep in wrong right now.
Escrow has everything to do with it. If there was no make whole being offered, then players that year would be getting all of their salaries adjusted by what was the actuals for 50%. If make-partial comes out of their share too, the money available to the new players to share at 50% is reduced by the amount using to cover make partial from previous years.
Now not only is not going to be reduced by that amount, but some portion of $300 mil will come out of the owners pockets.
Its like looking at an 18-12-5 record by the west over the east. It doesnt mean the easts record is 12-18-5. The owners arent paying the initial $200 mil diff i agree, but the players not being made whole arent affected by that loss to other players either.
Compared to the early november offer, here's what the PA got:
- Lost $600M in earnings for 2012-2013
- Gained $80M in Make Whole
- Extended max contract length to 7-8 years from 5-7 years
- Higher year to year variation of salary
- Teams can't walk away from arbitration awards lower than $3.5M
- Higher cap for 2013-2014 of $64.3M (vs $60M), although lower floor
All in all, it looks like the PA spent $520M to get slightly better contractual rights which benefits only the top 10% of the PA members. I wouldn't be happy to have lost 1/3 of my wages to satisfy the stars if I was a 2nd-4th liner...
How come no one does this over view from the owners perspective, or even considers what the owners have lost? Since there is no significant revenue sharing, the key to fixing financial issues is the 50/50 split, which the players agreed to ages ago.
Since we have the split any loss to overall revenues caused by the lockout, and I don't mean immediate losses but rather stuff like fan disinterest and sponsor dissatisfaction plus big events like the Winter Classic and All-Star game, it's going to be felt equally. Except for the players half the loss will be split over 700-800 members, or even more if you consider it over the life of the deal. The owners the loss will be split between 30 teams, and some will feel it much harder than others. That's going to hurt a lot more. Not to mention it can have a double impact if it has an effect on the ever important franchise values.
In my opinion the owners lost more than the players here. The $600M in lost earnings isn't so bad considering how many players it's spread over. It's painful if you lose a full year, but even the minimum wage guys are going to get a significant paycheque this year.
Yes. It is a negative impact on future player contracts exactly equal to the positive impact on current contracts. Net zero.
The make whole payments were never outside the revenue share in the October offer. No money was flowing from anyone to anyone else off the cap. The excess of current deals over the cap was going to be paid to those players at a later date by being taken out of future caps.
The concern was that it was put downward pressure on salaries in later years, effectively taking money out of their pocket then to pay guys who lost out on money earlier. So over the life of the deal, it would remain at 50/50. For a guy who doesn't break into the league until year 4 of the deal, that means he gets less money. That's why it needed to be put outside of the system. The union wasn't willing to sacrifice the pay of guys who aren't yet members for their own gain. This runs counter to the way many of these negotiations have gone in the past, where the veterans sacrifice the interests of the future for their own interests.
Because every losing side in every negotiation since the dawn of time comes out and says, "I fought hard and I really valued my right to eat my dirt sandwich cut into quarters with a side of rocks, because I really value sandwiches more when they're cut into quarters, and therefore, good for me."
So listen, the PA may say they got things they wanted, but they were never going to say they didn't. If you want to be objective, you don't just listen to what either side says. You look at the deal itself and count the dollars.
And just like in 2005, you can't do that the day the agreement has been reached.
When the deal was announced back in 2005 there was a unanimous declration that the Union was crushed.
7 years later we look at that result a little differently.
This was always a negotiation of compromise. The players were never going to come out better than they had before.
But to say it was folly to hold out for what they believe was the best deal for them cannot be determined before the deal is even ratified on either side.
Lets see this play out over the next 8 years.
And being the economist that you are, you look at every thing from a dollars and cents perspective. And that is fine. But being able to play where you want, to some (albeit a very few), is as important to them as is the $$ attached to the contract.
Not being tied down to any one franchise for to long is a big deal to alot of guys.
Being able to negotiate deals that provide for greater financial security (7-8 year deals over 5 year deals) later in your NHL career are huge factors even if at the end of the day the PA is just getting 50/50.
The whole argument of who won or lost is ludicrous imo. Nobody won or lost. They came to a mutually agreed upon decision. Was it worth it for the players? That's a completly personal opinion. It could be worth it for Ron Hainsey and not for Roman Hamerlik. And both would be completely correct since it is a completely subjective thing. Not to mention the ide of "losing" money by not playing is incorrect. They didn't lose the money, they simply didn't earn it.
You can't put a monetary value on certain things. Because its completely upto ones self to determine what its worth.
I was simply correcting you statement that long term deals meant more money to other people. On aggregate the amount of money paid to the players doesn't change regardless of contract length allowed.
Yes Player A may benefit more in guaranteed money. For for every extra dollar he earns there is anotehr player that doesn't earn it. Like I said, its all about how the money is distributed, it has absolutely nothing to do with the amount of money.
I made no comments about long term deals beign fair or not. simply said that the contractual rights issues fought over has nothing to do with amount of money earned by the players.
The union fighting for certain contractual rights, it was fighting for a certain class of player. Cause if it beenfits one player, there is another player who's losing out because of it.
You're ignoring the effects of growth and the effect long term deals have on supply. In any given year it's a zero sum game (the players splitting what's available). It's a different set of individuals each year, splitting a different-sized piece of pie (a usually 5-10% bigger piece).
Escrow has everything to do with it. If there was no make whole being offered, then players that year would be getting all of their salaries adjusted by what was the actuals for 50%. If make-partial comes out of their share too, the money available to the new players to share at 50% is reduced by the amount using to cover make partial from previous years.
Now not only is not going to be reduced by that amount, but some portion of $300 mil will come out of the owners pockets.
Its like looking at an 18-12-5 record by the west over the east. It doesnt mean the easts record is 12-18-5. The owners arent paying the initial $200 mil diff i agree, but the players not being made whole arent affected by that loss to other players either.
No, escrow does not have anything to do with it. Here's the model of the $211M make whole offer in October:
Year 1 cap is $60M. Deals are on the books for $70M. Everybody only gets paid $60M, though, so everybody gets 50%.
Year 2: Everybody who didn't get paid the full value of their contract in year 1 gets some of that back. The amount they get back counts against the cap. So for players signing new deals, they have less cap space to play with. Everybody gets 50%.
Because you never vary off of 50% and no money ever flows around off the cap, whether you do make whole or not has absolutely no impact on how escrow gets calculated.
Owners offered "make whole" as a form of concession (albeit and empty one) to players, not a demand. Players never were going to lose money because of "make whole" in the October offer.
I know you're a die hard pro-PA poster here, but you are barking up a dead tree. Seriously.
You're ignoring the effects of growth and the effect long term deals have on supply. In any given year it's a zero sum game (the players splitting what's available). It's a different set of individuals each year, splitting a different-sized piece of pie (a usually 5-10% bigger piece).
And no matter how they split that pie or how long the deals they split it under are, it's the same sized pie in any given year. Period.
No, escrow does not have anything to do with it. Here's the model of the $211M make whole offer in October:
Year 1 cap is $60M. Deals are on the books for $70M. Everybody only gets paid $60M, though, so everybody gets 50%.
Year 2: Everybody who didn't get paid the full value of their contract in year 1 gets some of that back. The amount they get back counts against the cap. So for players signing new deals, they have less cap space to play with. Everybody gets 50%.
Because you never vary off of 50% and no money ever flows around off the cap, whether you do make whole or not has absolutely no impact on how escrow gets calculated.
Owners offered "make whole" as a form of concession (albeit and empty one) to players, not a demand. Players never were going to lose money because of "make whole" in the October offer.
I know you're a die hard pro-PA poster here, but you are barking up a dead tree. Seriously.
The original "make whole" the league offered would have been a net loss to players that signed before the CBA expired because they would have been paying it forward. Those players gained that loss + 300m in make whole. Players that would have been paid forward only gain the difference between that and the 300m make whole the league is now paying.
The swing really depends on which side of the fence the player was on.
You're ignoring the effects of growth and the effect long term deals have on supply. In any given year it's a zero sum game (the players splitting what's available). It's a different set of individuals each year, splitting a different-sized piece of pie (a usually 5-10% bigger piece).
I get that, but if you aggregate over the number of years the idea is still the same. The amount of money paid out to all the players over all those years is the same regardless of how its split up.
I suppose the argument can be made for the growth side. It is entirely possible that the ability to sign a player for 7 years creates more fan interest in a team and more revenue and thus more money to split vs only being able to sign them to 5 years. The intagibles like that are obviously not measurable.
The concern was that it was put downward pressure on salaries in later years, effectively taking money out of their pocket then to pay guys who lost out on money earlier. So over the life of the deal, it would remain at 50/50. For a guy who doesn't break into the league until year 4 of the deal, that means he gets less money. That's why it needed to be put outside of the system. The union wasn't willing to sacrifice the pay of guys who aren't yet members for their own gain. This runs counter to the way many of these negotiations have gone in the past, where the veterans sacrifice the interests of the future for their own interests.
Year 4 rookie gets less money exactly equal to the amount that year 1 current player gets more. Net neutral.
And you have to be kidding me about the players sacrificing for future generations. If they were doing that, they wouldn't have demanded make whole at all. The entire purpose of make whole was for guys to keep making their 57% money now while selling the next generation down the river by locking them in at 50%.
The original "make whole" the league offered would have been a net loss to players that signed before the CBA expired because they would have been paying it forward. Those players gained that loss + 300m in make whole. Players that would have been paid forward only gain the difference between that and the 300m make whole the league is now paying.
The swing really depends on which side of the fence the player was on.
PA represents all players. All players came out net neutral.
How come no one does this over view from the owners perspective, or even considers what the owners have lost? Since there is no significant revenue sharing, the key to fixing financial issues is the 50/50 split, which the players agreed to ages ago.
Yeah, I wonder. I mean, the players lost $450m or so, because the owners are giving $300m in make whole. It's harder to tell what the owners actually lost because there isn't any way of knowing what revenues would have been this year. But let's just say they were for this season what they were for last season. You're talking about around $600m for the 32-34 games that were missed. And all essentially over issues that don't affect how much of their revenue they'll be getting, as has been pointed out. Net neutral, right? So, was it worth it for the owners to take such a hard line on these contracting issues?
Nobody is arguing that. Why can't you acknowledge the significance of the rights they gained to an individuals slice of that pie?
I don't care if you believe that these rights have significant psychic value to players - whatever helps them sleep at night. I'm just trying to make absolutely clear (because I keep hearing people try to make absurd arguments to the contrary) that none of these rights make them a cent richer. If we agree on that, I'm off my soapbox. But as long as people keep coming forward and arguing garbage like "but for every $5M/year deal the PA can now sign for 7 year instead of 5, the PA wins $10M from the owners," I am shutting that down.
I don't care if you believe that these rights have significant psychic value to players - whatever helps them sleep at night. I'm just trying to make absolutely clear (because I keep hearing people try to make absurd arguments to the contrary) that none of these rights make them a cent richer. If we agree on that, I'm off my soapbox. But as long as people keep coming forward and arguing garbage like "but for every $5M/year deal the PA can now sign for 7 year instead of 5, the PA wins $10M from the owners," I am shutting that down.
If I sign for 7 years @ 5m instead of 5 years @5m that's 10m gained in guaranteed money.
I'd say that makes me more than a cent richer... nothing "psychic" about it.
Your inability to even acknowledge the importance of individual rights makes the discussion impossible.
Like I said, you can ascribe any psychic value to those rights that you want. What I am trying to make absolutely clear is that none of them move a dollar from owners to players. As long as you're clear that the value of what was gained is intangible or psychic or whatever you want to say, as long as you're not trying to make an argument that somehow this puts more money into the PA's pockets, I'm fine. Carry on.
If I sign for 7 years @ 5m instead of 5 years @5m that's 10m gained in guaranteed money.
I'd say that makes me more than a cent richer... nothing "psychic" about it.
By the exact same amount it makes your brethren poorer. By giving you a win, the PA also fought to give your colleagues an exactly equal loss. I say that means the PA didn't win any money for its membership through that measure.
If we decide to judge the deal the way you're trying to do, you also have to argue on behalf of all of the players who will lose money because of your example player's gain.
Like I said, you can ascribe any psychic value to those rights that you want. What I am trying to make absolutely clear is that none of them move a dollar from owners to players. As long as you're clear that the value of what was gained is intangible or psychic or whatever you want to say, as long as you're not trying to make an argument that somehow this puts more money into the PA's pockets, I'm fine. Carry on.
Your arguments are are as bad as theres. To say non-monetary compensation is worthless is not living in the real world.
Year 4 rookie gets less money exactly equal to the amount that year 1 current player gets more. Net neutral.
Net neutral, yes. Small consolation that is to the guy that was 16 years old when this deal was being negotiated and now has to make less. That's why the NHLPA wanted it out of the system. This way, the year 4 rookie doesn't get less money, he gets what's owed to him in a 50/50 world. And it isn't just about the year 4 rookie, although that's the easiest example. Year 4 role player hitting UFA status for the first time also makes less money. This particular issue is all about dollars. No matter how you put it, the players receiving more than 50/50 over the life of the deal because the make whole is outside of the system is better than them receiving 50/50 for the whole deal no matter what.
We can argue all day about the relative merits of losing $400-450m to get the rest of the issues taken care of, but the fact still remains that this IS a better deal for the players than the October one. Whether it was worth it is a matter of opinion.
