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Old
12-11-2003, 12:50 AM
  #1
stardog
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CBA related

Speculation or a question about the possible new CBA...
If there is a cap in the CBA that is going to mean obvious lower salaries.
I wonder if that will be a detriment to guys coming over from the Euro leagues to play.
Say a guy who would be a solid # 4/5 D-man who under the current CBA makes anywhere from 1-2 million per season now can only be payed 600k. Do they stay in Europe where they make a few hundered thousand more? Could the new CBA be a detreiment to players crossing the pond?
This could have interesting ramifications.

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12-11-2003, 08:49 AM
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Quote:
Originally Posted by stardog
Speculation or a question about the possible new CBA...
If there is a cap in the CBA that is going to mean obvious lower salaries.
I wonder if that will be a detriment to guys coming over from the Euro leagues to play.
Say a guy who would be a solid # 4/5 D-man who under the current CBA makes anywhere from 1-2 million per season now can only be payed 600k. Do they stay in Europe where they make a few hundered thousand more? Could the new CBA be a detreiment to players crossing the pond?
This could have interesting ramifications.
I doubt the players would ever agree to a cap that limits player salaries to that extent. I think more likely, a cap, if instated, would only be low enough to stabalize, not decrease salaries.

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12-11-2003, 09:46 AM
  #3
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Originally Posted by coolguy3650
I doubt the players would ever agree to a cap that limits player salaries to that extent. I think more likely, a cap, if instated, would only be low enough to stabalize, not decrease salaries.
What do we mean by stabilize salaries?

In the first six years of this agreement mean salaries more than doubled from $733,000 to $1.58 million.

This happened because players got free agency for the first time, and because the owners were silly about trying to sign restricted free agents. In the following four years, the rookie salary cap started to bute, and owners stopped making offers to RFAs. Salary growth slowed a lot. The mean went from $1.58 million to $1.79 million this year. That growth does not seem to be out of control.

This is particularly true because the average NHL salary is a pretty meaningless number. It is very easy for one side or the other to influence it. Normally, it is in the NHLPA interest to have that number as high as possible and the NHL to have the number as low as possible.

(This is not always the case. The owners like a low number because it means they have to dish out fewer 10% raises to qualify players. On the other hand a low number can create more players who get free agency earlier than age 31.)

The mean, the median, and the mode are different numbers. The most common NHL salary is about $500,000. The median is about $750,000. The mean is $1.79 million. The stars - the top 30% of players - get 70% of the money. When the mean, median and mode are so different, the term average is misleading when it refers to the mean.

Fans think the average NHL salary is computed like averages are usually computed. It is not. It is negotiated. If the owners did not negotiate very hard this year, the number is higher. Perhaps this year the owners conceded more than they usually do for PR purposes.

How will we know when salaries are stable?

Tom

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12-11-2003, 10:09 AM
  #4
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Quote:
Originally Posted by Tom_Benjamin
What do we mean by stabilize salaries?

In the first six years of this agreement mean salaries more than doubled from $733,000 to $1.58 million.

This happened because players got free agency for the first time, and because the owners were silly about trying to sign restricted free agents. In the following four years, the rookie salary cap started to bute, and owners stopped making offers to RFAs. Salary growth slowed a lot. The mean went from $1.58 million to $1.79 million this year. That growth does not seem to be out of control.

This is particularly true because the average NHL salary is a pretty meaningless number. It is very easy for one side or the other to influence it. Normally, it is in the NHLPA interest to have that number as high as possible and the NHL to have the number as low as possible.

(This is not always the case. The owners like a low number because it means they have to dish out fewer 10% raises to qualify players. On the other hand a low number can create more players who get free agency earlier than age 31.)


Fans think the average NHL salary is computed like averages are usually computed. It is not. It is negotiated. If the owners did not negotiate very hard this year, the number is higher. Perhaps this year the owners conceded more than they usually do for PR purposes.

How will we know when salaries are stable?

Tom
I thought he made a relatively simple point. The CBA will not result in a rollback of of player payroll. At best, it will aim to stabilize payroll increases.

How is the "average salary" negotiated, except in the sense that it's the product of all those individual negotiations? I don't understand. The NHLPA and the owners negotiate a minimum, but they don't negotiate an "average", do they?

And I don't understand what you mean about the owners "liking a low number" because it effects the number of 10% raises they have to give. Aren't qualifying offers unrelated to any "average salary"? Depending on what group of restricted free agent I am, am I not entitled to a qualifying offer as of right? I don't get what it has to do with "average salaries"? If I make less than the average, am I somehow not entitled to a 10% increase in the qualifying offer?

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12-11-2003, 10:40 AM
  #5
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I think you took what I said a little to far, Tom. I was just trying to say that salaries would not decrease enough to cause an exodus to Europe.

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12-11-2003, 10:49 AM
  #6
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Quote:
Originally Posted by JV
How is the "average salary" negotiated, except in the sense that it's the product of all those individual negotiations? I don't understand. The NHLPA and the owners negotiate a minimum, but they don't negotiate an "average", do they?
The very first arbitration decision under the new CBA was over this point. How do you compute the ALS?

Quote:
And I don't understand what you mean about the owners "liking a low number" because it effects the number of 10% raises they have to give. Aren't qualifying offers unrelated to any "average salary"?
If a player gets less than the ALS, the qualifying offer requires a 10% raise for the team to retain the player rights. If a player gets more than the ALS, he can be qualified by offering the same as he made before.

The ALS for this year was determined in June when the owners and players sat down to negotiate it. They ended up agreeing that it would be $1.79 million for this season. Thus, a player who made $1.75 million had to be offered a $175,000 raise or he becomes a free agent. A player who made $1.8 million gets no raise.

The problem is determining which players count. At the beginning of this season I downloaded all the salaries from the NHLPA site. The average - mean - was about $1.75 million, but that only included the 690 players who were on the roster opening day. More than 1,000 players will play in one NHL game this year. Most of the 300 injury replacements make far less than the average salary. Who should count and who shouldn't?

An arbitrator decided this was an issue that should be negotiated each year. So every June the NHLPA sits down with a list of players they think should count. The NHL brings their list to the table too, and they hash it out. The NHL usually argues for each fringe player because a lower number saves them money on the qualifying offers. The NHLPA tries to get all fringe players thrown out to get a higher ALS and more 10% raises. They make tradeoffs.

I was very surprised by the ALS this year. Usually if you tally it up at the beginning of the year the average salary as published by the NHLPA is higher than the official number. It comes down through the course of the year as injury replacements are added. This year it was actually lower than the official amount. It is almost certain that the ALS will be lower next year.

Anyway, for PR purposes on the CBA front, a high ALS would appeal to the owners more than it usually would. If they wanted a misleadingly high number, all they had to do was accept the NHLPA list for this year. Did they? Who knows?

I wasn't really disagreeing with Coolguy's point although I think salaries are probably going down, no matter what comes out of this CBA. I'm asking the questions:

What do we mean by stable salaries? How do we decide they have stabilized?

I agree that an exodus to Europe is a non-issue.

Tom

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12-11-2003, 10:59 AM
  #7
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I was fairly shocked at the immense discerpency in median and mean salaries. Granted, you probably don't expect a normal distrubution in salaries, as more people will always be on the lower end, but it really seems to me that the higher level players have been the ones to truely benefit from increasing salaries. Have the players at the lower end really seen much of an increase? Are they not dissatisfied with the higher level players hoarding all the cash?

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Old
12-11-2003, 12:04 PM
  #8
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Quote:
Originally Posted by coolguy3650
I was fairly shocked at the immense discerpency in median and mean salaries. Granted, you probably don't expect a normal distrubution in salaries, as more people will always be on the lower end, but it really seems to me that the higher level players have been the ones to truely benefit from increasing salaries. Have the players at the lower end really seen much of an increase? Are they not dissatisfied with the higher level players hoarding all the cash?
I don't think we have to feel sorry for any players. This CBA probably has the effect of raising the salaries of the role players at the expense of the stars. Age - not quality - is the most important determinant of salary. The best players get more and more money as they approach free agency.

Role players who were high draft picks find themselves out of a job if they don't take a pay cut at around 26 or 27. It is too easy to find a third liner at $600,000 to pay someone a million to do the same job. The highest amount isn't always the best contract. Fleury could get sent down this year. I would not have negotiated easy to reach bonuses for him. He would make more with hard to reach bonuses if he is sent down.

JJ Daignault was once asked why he had enjoyed such a long career when he wasn't ever a top four defenseman. "I always made sure I was affordable," JJ replied.

Jason Wiemer is a pretty good player who has played for five teams in seven years. Why? He makes $1.6 million which is at least 50% too much for his quality. Sooner or later, his team won't qualify him, he'll become a free agent and find a home playing for $750,000.

Tom


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Old
12-11-2003, 12:06 PM
  #9
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Quote:
Originally Posted by Tom_Benjamin
The very first arbitration decision under the new CBA was over this point.
Tom
Thanks for the explanation.

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Old
12-12-2003, 09:56 AM
  #10
The Rage
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Proposal

I have a proposal for accurately calcualting average league salary. Basically, every player who has a one way contract would be counted as a single player. The amount to which a two way contract is counted should depend on the number of games played in the NHL by the player in question. Basically, if a player played 38 games in the NHL on a two way contract, he would count as 38/82th of a player in the calculation of league average salary. I think this would be the best way of calculating league average salaries. What do you think Tom, or anybody else?

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Old
12-12-2003, 12:28 PM
  #11
Tom_Benjamin
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Quote:
Originally Posted by The Rage
I have a proposal for accurately calcualting average league salary. Basically, every player who has a one way contract would be counted as a single player. The amount to which a two way contract is counted should depend on the number of games played in the NHL by the player in question. Basically, if a player played 38 games in the NHL on a two way contract, he would count as 38/82th of a player in the calculation of league average salary. I think this would be the best way of calculating league average salaries. What do you think Tom, or anybody else?
I think if you were looking for the most accurate mean, this would work although you could not use games. Players are paid the NHL salary if they are on the NHL roster. I'm not sure it really matters except for the players and owners. Negotiating it the way it is done today is okay as long as people take it for what it is.

Whenever you see "this year's average NHL salary", realize we are really talking about last year's number as it was negotiated by the NHL and NHLPA last year. It has nothing to do with what players are paid this year. Is that crazy? It is true. Every single statement made about the NHL that is a variation of "NHL players now make $1.79 million a season" is simply not true.

The fact that the ALS is negotiated each year also renders a statement like "The ALS went up from $1.74 million to $1.79 million last season" meaningless. Did salary costs go up last year? Who knows? Only the owners.

The positions of the parties will not always be consistent in these negotiations. Both parties will do the work to understand the impact of a particular ALS. Both parties will sit down and figure out the possible range and whether a high or low number benefits them more. "If it is low, how many fewer Marty Lapointe free agents happen? If it is high, how many more players get a 10% raise?"

Hands up everyone who could not understand why Kevin Lowe did not offer Todd Marchant an extra $100,000 to insure he would not be a UFA this season. That was inexplicable, right? Maybe because Lowe knew the owners intended to go for a very high ALS in the year leading up to the labour dispute. Maybe Lowe knew it was going to cost an extra $300,000 - or more - to hold him.

Hands up everyone who was surprised Kariya took $600,000 less than the ALS to assure free agency next year. That was inexplicable, right? Maybe because he knows how easy it is to manipulate the ALS. If he took $1.5 million, for example, it might save the owners money to negotiate a lower ALS on that alone.

"Let's see. There would be an extra 15 players who get 10% on the qualifying offer and half of them will get more than 10% anyway. Kariya becoming a free agent would cost the league $X million. Reducing the ALS an extra $200,000 will cost $Y million."

Unlikely? Kariya apparently does not think so.

Furthermore, the real business issue is player costs, not salaries. Obviously, the average salary can go up while player costs go down. A small decrease in the injury rate will do that trick. A small increase in the injury rate will reduce the ALS and increase costs.

The story we are being told about the business of hockey is, and always has been, a crock. None of us know the real player costs any more than any of us know the real revenues. When the owners claim that player salaries have outstripped revenues, they are making a meaningless claim. Never mind the revenue side - the salary side of the argument is bogus, too.

Tom


Last edited by Tom_Benjamin: 12-12-2003 at 02:41 PM.
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Old
12-12-2003, 05:11 PM
  #12
The Rage
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Excellent post, as always. My proposal was more intended to be how the media, or even us fans, could gauge whether salaries were increasing, and by how much. I guess the best way to do it would be to take the amount of money paid out to salaries, and divide it by the number of teams. That's perhaps the most accurate way of doing it. A question: when you said the mean went from $1.58 million to $1.79 million, what was the time frame?

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12-12-2003, 07:08 PM
  #13
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Quote:
Originally Posted by The Rage
Excellent post, as always. My proposal was more intended to be how the media, or even us fans, could gauge whether salaries were increasing, and by how much. I guess the best way to do it would be to take the amount of money paid out to salaries, and divide it by the number of teams. That's perhaps the most accurate way of doing it. A question: when you said the mean went from $1.58 million to $1.79 million, what was the time frame?
When Mario returned, he took that year's ALS and was paid $1.58 million. That was the 2000-01 season. In other words, the agreed upon average for 1999-2000 was $1.58 million. The agreed upon average for 2002-03 was $1.79 million. The average for this year will not be agreed upon next June.

Tom

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