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Old
04-07-2004, 05:09 PM
  #1
CanmoreMike
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Oilers on Sportsnet.ca

http://www.sportsnet.ca/hockey/artic...07_145914_3500

If anyone wants to check this out it's about the up coming labour negotiations complete with the rhetoric everyone is saying. The players can't imagine an NHL without Edmonton; the owners want competitive balance. blah-blah-blah.

What stood out on this article was the comment made by Laforge and how, "The club also had to put up $13 million as its share of a contingency fund to keep the league operating in the event of a lockout situation next fall."

Ok - so we get a small profit, or a negligible loss, and we find the cash to cough up for 13 mill? Haven't we also been paying into this fund for a couple of years now?

I know a lot of people side with owners on this one, but if the league can afford to find the cash to front a huge offensive versus their players, why not meet well in the middle of what you want and use that money to something productive?

Anyone have some light they can shed on this topic for me? Thanks.

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04-07-2004, 05:19 PM
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All unions do this. They create a fund in case of a work stopage. The NHLPA has a war chest, teacher's unions have war chests, and the NHL (essentially a union of 30 team owners) have created a war chest. It's only common sense; without it, when there was a work stoppage, we would lose teams.

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04-07-2004, 10:06 PM
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Also it's not simply a matter of metting in the middle when they're talking on completely different wave lengths. Owners are talking cost certainty, players are talking free market. Isn't exactly a compromise - like saying I want a capitalist country that is communist - just doesn't work.

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04-07-2004, 10:26 PM
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Quote:
Originally Posted by thome_26
Also it's not simply a matter of metting in the middle when they're talking on completely different wave lengths. Owners are talking cost certainty, players are talking free market. Isn't exactly a compromise - like saying I want a capitalist country that is communist - just doesn't work.
Socialist?

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04-07-2004, 10:51 PM
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Is it really the same?

Quote:
Originally Posted by H-Bear
All unions do this. They create a fund in case of a work stopage. The NHLPA has a war chest, teacher's unions have war chests, and the NHL (essentially a union of 30 team owners) have created a war chest. It's only common sense; without it, when there was a work stoppage, we would lose teams.
I think I understand what you are trying to say here, but is it really the same. There is one thing that drives me crazy about the union vs the owners. Its that it is legal for the players to unify, its called a union. It is not however, legal for the owners to unify, its called collusion. The teams have to act independantly ( or at least appear to ) and prepare for this "war". This is a double standard that clearly gives an edge to the players union.
As for the falicy of a "free market", what if Bill Gates decided to buy a team and acquired the top free agents by paying them annual $30 million contracts. What would that do to the "value" of the remaining players in the league? It would likely make them unaffordable to the majority of the teams in the league. What would we have then, a 12 team league? Is that really what the market will bear, or was the market skewed by Mr. Gates? I am not an economist, but it seems to me that we need cost certainty to ensure the viability of the league because this isn't a true "free market" commodity.

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04-07-2004, 11:08 PM
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Cash Call

Remember when the Oiler's brass approached the owners to put more dough into the kitty?? Many thought it was a "cash call" and alarm bells went off like crazy that the team was under financial stress. Remember? The story making the rounds is that the NHL asked the local ownership to chip in to help bolster the "League strike fund". Both sides are crazy if they don't have a big chunk of cash sitting there to hold them over.

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04-08-2004, 12:19 AM
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Quote:
Originally Posted by guymez
I think I understand what you are trying to say here, but is it really the same. There is one thing that drives me crazy about the union vs the owners. Its that it is legal for the players to unify, its called a union. It is not however, legal for the owners to unify, its called collusion. The teams have to act independantly ( or at least appear to ) and prepare for this "war". This is a double standard that clearly gives an edge to the players union.
As for the falicy of a "free market", what if Bill Gates decided to buy a team and acquired the top free agents by paying them annual $30 million contracts.

...
I hear what you're saying. This has driven me crazy too.

The whole concept of a players' union is ridiculous (as it currently is set up). Generally, by joining a workers' union, each member forfeits most of their rights to negotiate individual contracts, and therefore are bound to some sort of payment based on seniority, etc. and not on individual merit. Of course there are exceptions... but that's always the common complaint from union employees. The idea is that the union collects more money on the whole by banding together so the common union member is better off.

The NHLPA flies in the face of this by negotiating a set of restrictions for owners in negotiating players contracts (the CBA), however there is no compromise on the players' side for an equitable distribution of funds. If the NHLPA negotiated like bus drivers, nurses, teachers, miners, airline employees or government workers - the players would be recieving drastically less cash. This is because revenues would be evaluated and then a player budget would be established on a formula based on the revenue... and then the union would negotiate how the player costs would be distributed to its members. Clearly the player union doesn't seem much like a union at all.

Further to that, Goodenow calls for "free market forces" to guide player salaries and argues that there is absolutely no need for cost certainty because the salaries will be established by what the market will bear.

However this concept is a bunch of bull in the sports world because everyone knows that in the free market costs are regulated by competitive forces and supply/demand. As such, part of the goal is to control market share and drive your competitors out of business and diminish their ability to compete with you. However, in the NHL it is critical to the players that free market forces don't take hold... this is because if they are followed than the richer teams WILL be able to drive their competitors out of business - which is detrimental to the health of the league and to player jobs.

Therefore it is critical that in these negotiations one of two things happen... either the NHLPA starts acting like a union and establishes an equitable way to distribute player costs - or - players are allowed to negotiate their own contracts, but a system is set up that prevents teams from putting each other out of business (essentially, a salary cap or revenue sharing).


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04-08-2004, 01:15 AM
  #8
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Reckless owners were responsible for the escalation in salaries.

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04-08-2004, 01:27 AM
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Quote:
Originally Posted by Tyrolean
Reckless owners were responsible for the escalation in salaries.
Exactly. Players (for their jobs), the league (for its future), and fans (for ticket prices) all require a system in place that protects owners from other owners.

5 or 6 owners can afford to be reckless, another 5 or 6 are reckless because they're stupid and everyone else suffers.

I'm not blaming the players for the current situation... I'm just saying the PA's argument is faulty and would lead to the demise of the league because owners will never be able to regulate themselves in pure free market conditions.

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04-08-2004, 01:13 PM
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Excellent points Mr. Mackey. Owners need protection from other owners. The players are reaping the benefits, but would they be willing to pay the cost of losing a team or three full of players if contraction is required? Most of them would probably be overaged veterans and journeymen so the stars wouldn't care. Especially since some of the stars (ala Bill Guerin's 9 million contract) makes NINE times the journeymen wage (say Horcoff). Nice equality in the union.

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04-08-2004, 02:33 PM
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First off, thank you for contributing to this thread. There is one question that still hangs with me and that is this - haven't the Oilers been paying into this system for a couple of years? Haven't they been paying 10million or so every year into this war chest fund? Ultimately, how much cash is in there? Because for all our whining about not have the cash to get/keep good players - well guess what folks? - HERE IT IS! This is the money that keeps us Doug Weight. This is the money that gives us a couple of extra dollars to entice players to sign longer deals with, ala Ryan Smyth and Eric Brewer.

If we are sinking cashinto a fund to get a salary cap (which I will state here that I agree with the players and think it won't work) its money wasted. The NHLPA has never stated it doesn't like revenue sharing - in fact, it's probably all for it! The NHL owners have long stated that the problems with the league are players being over paid (by the owners) and it's the players responsibility to rectify the problem, not the owners (even though its their fault). If the owners took this war chest and applied it to something tangible, like their debts, and used licensing and TV revenues to fund fund all Canadian teams earning less than league average (ie. not the Leafs, Habs) with a fair dollar (ie. 1$ CDN = 1$USA) and whatever was left to help out the small market American teams, THERE WOULD BE NO LOCKOUT/STRIKE! The NHLPA doesn't care if the 1.2billion spent on salaries is evenly distributed or paid out in large chunks by the minority of the league.

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04-08-2004, 02:44 PM
  #12
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Quote:
Originally Posted by CanmoreMike

The NHLPA has never stated it doesn't like revenue sharing - in fact, it's probably all for it! . . . The NHLPA doesn't care if the 1.2billion spent on salaries is evenly distributed or paid out in large chunks by the minority of the league.

How is limiting certain owners' ability to make money (i.e., by making the teams that make lots of money through TV, merchandising, share the revenue with the teams that make less), different than making the players share their salaries amongst themselves? Of course the players are not opposed to revenue sharing - so long as it isn't THEIR revenue that is being shared. Players don't give up anything in this scenario. But why would owners agree to such an arrangement?


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04-08-2004, 03:14 PM
  #13
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NHLPA has already said that they feel revenue sharing is a must.

Keep in mind that when it comes to teams making money - lots or little - it is in no small part because of the other teams.

It's not like a typical business where an owner tries to make more money at the expense of the competition but instead they make money because of the competition.

Things like merchandising is all league controlled already, television is also in part based on the competing teams (eg. Toronto is a must TV game because of the audience interest, whereas Minny right now isn't. In a couple years when Minny gets real competitive they may be a big draw and Nashville will get ignored) Basically with the ebb and flow of the different teams in the league, they all contribute to each others success in the hockey cycle.

Will the owners agree? I don't know but it is a logical step in correcting things in the NHL.

A little off topic, but did anyone else notice that Staios was the PA rep for the Oilers? That kinda disappoints me. Last CBA the reps really took a beating in their respective cities and many where moved as a result (Ranford included). I hate the idea of Staios being raked over the coals here and then sent packing because of ill will towards the labour dispute.

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04-08-2004, 03:46 PM
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Quote:
Originally Posted by copperandblue
A little off topic, but did anyone else notice that Staios was the PA rep for the Oilers? That kinda disappoints me. Last CBA the reps really took a beating in their respective cities and many where moved as a result (Ranford included). I hate the idea of Staios being raked over the coals here and then sent packing because of ill will towards the labour dispute.
Yeah, I'd rather it be Scott Ferguson... someone with one foot already out the door.

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04-08-2004, 03:58 PM
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MrMackey
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Quote:
Originally Posted by copperandblue
NHLPA has already said that they feel revenue sharing is a must.

Keep in mind that when it comes to teams making money - lots or little - it is in no small part because of the other teams.

It's not like a typical business where an owner tries to make more money at the expense of the competition but instead they make money because of the competition.
I like the idea of revenue sharing... but I like the idea of some sort of profit sharing system even better. My thinking is that some teams are tied in to restrictive leases with their arenas and other cities will have higher non-player operating costs given their cities (New York teams in particular, and basically any non-Canadian city).

Just sharing revenue will put some teams at a serious disadvantage, when the goal of this new CBA should be to level the playing field.

However, I also agree with Pine Jockey, in that owners will not go for a system that will prohibit them from making money... therefore there should be a stipulation that allows for certain activities over and above the normal operations of a hockey team that could provide additional profit if the owner assumes the risk and expense of undertaking such a venture, and it was approved by the PA & the Board of Governors (for example - the Heritage Classic).

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04-08-2004, 06:05 PM
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Quote:
Originally Posted by PineJockey
How is limiting certain owners' ability to make money (i.e., by making the teams that make lots of money through TV, merchandising, share the revenue with the teams that make less), different than making the players share their salaries amongst themselves? Of course the players are not opposed to revenue sharing - so long as it isn't THEIR revenue that is being shared. Players don't give up anything in this scenario. But why would owners agree to such an arrangement?
How is owner revenue sharing different than players' sharing their revenue? I can't honestly say. I will say this, if the owners ever could get on board and share their cash the way the NFL does, and come to this agreement sometime before September, the players would not be in a position to refuse a salary cap. No fan would support a player strike if the owners were willing to make it a levelled playing field where every team has the ability and responsibility to spend between $35-40million a year on salaries. The owners get that far, get that united I don't think the players would call down the owners and challenge them. It would be a losing proposition. As things stand right now, the owners want the players to take the fall for the financial woes of the league while they accept none.

The owners have agreed to expansion into dead markets, horrible history of sharing revenues, poor negotiations in TV deals, etc. That is what is killing the league - so own up and take some of the blame.

I honestly don't blame the players for saying "stick it" to the owners. They have been the ones labelling their franchises' marquees greedy, selfish, unco-operative, since 1992. It's time for that to stop. They don't include players in decision making about anything about the league, yet they have the audacity to step up and tell the players to accept their role in the league as partners.

I guess the answer to the question is that there is no difference. No one person should be required to make the entire effort. If the players agreed to a salary cap it should be under the pretenses of strong revenue sharing and free-er free agency. From there it is a matter of fine tuning the rest of the issues (arbitration, the draft, etc).

Now, does someone have an answer for me? How much have the Oilers put in total into the NHL war chest? Is it just the $13million this year? Has other money been deposited into this chest. Please, someone answer me if you can.

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04-08-2004, 06:54 PM
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Quote:
Originally Posted by CanmoreMike
No fan would support a player strike if the owners were willing to make it a levelled playing field where every team has the ability and responsibility to spend between $35-40million a year on salaries. The owners get that far, get that united I don't think the players would call down the owners and challenge them.
Unless this is part of the CBA, this is collusion. The owners can really only stand united during negotiations. If they don't negotiate a cap in to the CBA, but instead just put in place a revenue sharing model and then simply unite and agree to spend a maximum of $40M apiece, I'm certain the players will take them to task.

Quote:
Originally Posted by CanmoreMike
As things stand right now, the owners want the players to take the fall for the financial woes of the league while they accept none.
I don't think I've read one quote from an owner that its the players fault. I have heard lots that the current system needs to be changed, I've heard that too much money is being spent on player salaries and I've heard the owners accuse the players of not seeing things their way... however I've never heard the owners say that the only reason they need a new CBA is because of the players themselves.

Quote:
Originally Posted by CanmoreMike
The owners have agreed to expansion into dead markets, horrible history of sharing revenues, poor negotiations in TV deals, etc. That is what is killing the league - so own up and take some of the blame.
Personally I don't think any of these issues come close to the player salary issue in terms of killing the league. Frankly, I was surprised at the last ABC/ESPN deal... I thought it was more than generous, given how the NHL is viewed in the states. The lack of popularity of the game in the States is probably the second biggest problem the league faces and if the two sides can't come to a quick resolution to their upcoming dispute, then both sides will be to blame.

Quote:
Originally Posted by CanmoreMike
Now, does someone have an answer for me? How much have the Oilers put in total into the NHL war chest? Is it just the $13million this year? Has other money been deposited into this chest. Please, someone answer me if you can.
I can't answer for sure... but I would suspect that if they put a single penny more than $13M in to the pot, then it would've been mentioned. Why would you make a public statement saying you're prepared because you've put aside $13M, when you've actually put in $60M (for example)?


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04-12-2004, 03:15 PM
  #18
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Quote:
Originally Posted by MrMackey
Unless this is part of the CBA, this is collusion. The owners can really only stand united during negotiations. If they don't negotiate a cap in to the CBA, but instead just put in place a revenue sharing model and then simply unite and agree to spend a maximum of $40M apiece, I'm certain the players will take them to task.
My comment wasn't suggesting collusion, rather it is saying that if both parties agreed to share the responsibility then you might get some work done. I use the $40M because I have heard that the NHL spends about $1.2B on salaries. Divided over 30 teams, $40M is what you get. So if the owners agreed to a revenue scale where everyone shares their revenues to the point that everyone can spend an accumulated total of $40M team, I don't think the players would object.


Quote:
Originally Posted by MrMackey
I don't think I've read one quote from an owner that its the players fault. I have heard lots that the current system needs to be changed, I've heard that too much money is being spent on player salaries and I've heard the owners accuse the players of not seeing things their way... however I've never heard the owners say that the only reason they need a new CBA is because of the players themselves.
Fair enough. Nobody has come out and said for certain that the players are greedy and need to take the blame for this mess. You are correct. But ask any of these owners what they think about revenue sharing and the don't like the idea one bit. Yet if you look at the NFL and the NBA you see that the owners all share their revenue to one degree or another. How can an owner of an NHL team say that he likes the idea of a salary cap, yet vehemently deny he should share his revenues all the while being assumed to not "blaming the players?" If he takes some responsibility, then he should understand that revenues shared will be one avenue the league needs to improve on.

Quote:
Originally Posted by MrMackey
Personally I don't think any of these issues come close to the player salary issue in terms of killing the league. Frankly, I was surprised at the last ABC/ESPN deal... I thought it was more than generous, given how the NHL is viewed in the states. The lack of popularity of the game in the States is probably the second biggest problem the league faces and if the two sides can't come to a quick resolution to their upcoming dispute, then both sides will be to blame.
This is a point I can make a real dissertation on given the chance. Talking about TV deals I can't attack the ESPN/ABC deal, but something that goes back years earlier. NHL had an option of taking less money to be on network TV during prime hours or go to PrimeTime Sports (I think that is what it was called...). Anyway, instead of getting good exposure, the NHL took the loot and paid for it later when other leagues established themselves in pimp time slots. The sports network the NHL signed with went under, and even when it did exist it didn't reach nearly the household numbers that ESPN did. That was the boffo mistake I'm talking about.

As for the US, I think a lot of people in Canada seem to think Americans don't like hockey. I for one think they do but they are just as fickle about the sport as we are, if not more. I'll bet there are huge patches of fans - die hard fans - who hate the direction the game has gone. So they watch their NFL, NBA or MLB and give the NHL only a passing interest. The numbers that the US pulled in for the Olympic final are numbers they could probably pull in for huge events while lesser games might only be half. The problem is that enough people know the product sucks, and TV network execs know about these people and don't give the NHL a chance.

Which brings up a quick point - the NHL doesn't include players in decision making about the rules of the game enough. You can't call someone your partner while you make all the moves that directly affect them. This irks players off something fierce.

Quote:
Originally Posted by MrMackey
I can't answer for sure... but I would suspect that if they put a single penny more than $13M in to the pot, then it would've been mentioned. Why would you make a public statement saying you're prepared because you've put aside $13M, when you've actually put in $60M (for example)?
Fair enough. I'd heard about this cash years ago so I didn't know if this was money being put in on a yearly basis or as a one time fee. Thinking about it, if this was yearly that is a huge sum of cash to be dumping. As impossible as it is to imagine this being yearly, I'll say that on the off shoot that it is, almost all of the Oiler problems are solved if this money goes into the organization and not into the NHL's warchest.

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04-12-2004, 05:59 PM
  #19
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Quote:
Originally Posted by CanmoreMike
Fair enough. I'd heard about this cash years ago so I didn't know if this was money being put in on a yearly basis or as a one time fee. Thinking about it, if this was yearly that is a huge sum of cash to be dumping. As impossible as it is to imagine this being yearly, I'll say that on the off shoot that it is, almost all of the Oiler problems are solved if this money goes into the organization and not into the NHL's warchest.
Great post! I still disagree on a couple of points, but overall I don't think your opinions differ from mine as much as I had thought.

Anyway, about the last point. I remember the Oilers talking about this several times over the past few years as well, but I can't remember any hard numbers being thrown around... as I recall it is always discussed at the end of the season when there is talk about whether or not the team made money & there is usually some mention that there are extra items that the team has to account for, such as preparing for the negotiations. So I think the team was putting money away yearly, and in the end it amounted to $13M.

I seem to remember at the time of the cash call that about half of the money was to be put in to the CBA fund, while the other half was to be used to pay down some principle on their debt in order to reduce their interest payments.

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