Jul 232007
 

If you listened to Gary Bettman the lockout that cost the NHL the 2004-05 season was to allow the NHL and the NHLPA to become partners and to ensure the viability of NHL hockey in all current NHL markets but only two years after that CBA was signed I am beginning to wonder if disaster on several fronts could be looming in the near future.

Based on recent developments it is apparent that NHL commissioner Gary Bettman seems intent on doing whatever he can to preserve hockey in the existing NHL markets and it appears he is going to do whatever he can to do this. As more and more information comes out it is becoming pretty clear that he played a significant role in blocking Jim Balsillie’s bid to purchase the Nashville Predators. ESPN.com’s Scott Burnside has written that the Balsillie group blames Gary Bettman for current Predators owner Craig Liepold backing out of the deal to sell the team to Balsillie.

“We were advised by Mr. Leipold that the commissioner had found out about the existence of the negotiations and ordered him to immediately cease any further communications with us,” Balsillie’s legal representative, Richard Rodier, told ESPN.com this week.

The common belief is that Bettman preferred Liepold to sell the team to William ‘Boots’ Del Biaggio III whose intent is to move the team to Kansas City. I believe this is not the case and Bettman really urged Liepold to seek local ownership of the Predators to keep the team in Nashville. Surprisingly, or maybe not, a local group surfaced and held meetings with the league last week and there was also a ticket drive organized for last Thursday to also ensure the team would stay in Nashville. I don’t think any of this is coincidence and I believe that Bettman will do whatever he can to keep the Predators in Nashville.

But why would Bettman do this if the Nashville community isn’t fully supporting the team and the team is going to lose money even if they only spend the minimum $34.3 million required of them all while collecting significant revenue sharing money? I believe there is some personal legacy issues at stake and Bettman doesn’t want to see a team fail which he brought into the league. But more importantly I believe that it is the intent of Bettman, the league and its owners to expand. Over the past week there has been rumours that Bettman has told NHL owners that he expects he can collect up to $500 million in expansion fees to expand to Las Vegas and Kansas City. If you do the math that would equate to more than a $16.5 million windfall to owners and the owners wouldn’t be required to share any of it with the players.

But that is only a part of it. Another side effect of expanding to two almost assuredly small revenue cities is that it would bring down the salary cap and more importantly the league minimum. Expanding to those two locations could see the salary cap drop by as much as $2 million. Ever wonder why a local ownership group suddenly popped up in Nashville? Well maybe Bettman’s promise of up to a $16.5 million windfall a year or two from now and a promise of a potentially lower salary cap (and minimum) is one of the reasons.

From a short term purely financial point of view this seems like a perfect plan and a plan that can be extended further. Why stop at 2 expansion teams? Why not also expand to Portland (or Seattle) and return to Hartford, Quebec City and Winnipeg and whatever other city wants to join the NHL including possibly European expansion? You can argue that the NHL can’t be supported in some or all of those cities but remember expanding to small market cities brings the salary cap down which makes survival in those small market cities more likely.

Noticed how I left Hamilton out? The NHL does not want to go to Hamilton because Hamilton is likely going to be a larger revenue location that will not only infringe on the Leafs and Sabres territory but will also likely cause the salary cap to rise making Bettman’s small market franchises less viable.

And there is the problem. The above plan is a plan of short term greedy owners, and not a plan based on what is good for hockey and the fans both now and in the future. Talent will be even more sparse divided, scoring will drop even more, rivalries will diminish even further, and the schedule will feature more uninteresting games between untalented teams. If that itself doesn’t cause fan interest to drop and eventually break the NHL, the irritation of the players just might and it may very well be the players who stop this plan in its tracks.

Gary Bettman enthusiastically proclaimed the new CBA to be a new a partnership with the players but the players are now beginning to think that this partnership is a little one sided. Where as the owners are interested in generating expansion fees and overall team value (neither of which gets shared with the players), the players are interested in generating revenue which means locating franchises where the greatest fan interest resides. That means Hamilton, not Nashville or Kansas City or Las Vegas. Tim Wharnsby has written a good article on the situation and the growing player discontent with the league blocking the sale of the Predators to Balsillie.

In June Martin Brodeur unexpectedly quit his role with the competition committee largely because he didn’t believe the league wasn’t listening to the views of the committee. He doesn’t believe the partnership on the competition committee is working either.

“I didn’t feel I was making a difference, and I hate wasting my time when it doesn’t seem to matter,”–Martin Brodeur

The NHLPA is in a state of flux right now after the firing of Ted Saskin and the NHL may view it as an opportunity to push some of these things through but it is likely going to backfire against the owners because the players are rebuilding their organization almost from scratch and they are likely going to rebuild it from a disgruntled player point of view and it could very well be an unhappy, militant NHLPA when done. That could lead to more labour problems in the not too distant future. The NHL CBA is currently set to expire in September 2011 but the NHLPA has an option to terminate the agreement prior to the 2009 season which is only two years from now. If the relationship between the NHL and the NHLPA doesn’t change (which I suspect it won’t) I fully expect the players to invoke the option to terminate the CBA to negotiate a real partnership or abandon the partnership idea altogether and try to get to push for a luxury tax idea again. More labour strife is on the way and it could be a long players strike next time.

What the NHL will look like after another lengthy labour conflict is anyone’s guess. With enough small market teams essentially controlling the NHL the NHL will not likely be very flexible in negotiations. But with the players being annoyed by being bullied around in the last CBA negotiations and the players developing view of a non-existing partnership they might be stronger than ever. Who blinks first is anyone’s guess.

What is interesting in all of this is that prior to and during the 2004-05 lockout most fans and casual observers (I was not one of them) believed it was the players greed that was the problem and most sided with the owners but as it stands right now owner greed is the problem and the players interests are currently are the most closely aligned with the fans interest (i.e. locating teams to where the most fans exist). These are interesting times in the NHL and it would not surprise me if the not to distant future is more ominous than the not to distant past.

  28 Responses to “Will the NHL Self Destruct?”

  1.  

    If the owners don’t get rid of Bettman, the league is going to end up dying…

    Can’t they realize how much he has hurt the NHL???!!!

    http://www.FireBettman.com

  2.  

    except that it was player greed that caused the lockout – sometimes in collective bargaining you can get too good a deal, just look at the auto workers in the US – fleeced their owners but now union membership is half of what it was when the deal was signed. This is what happened in 1995 and the league paid as a result. The players only get to show their collective greed during bargaining – and they lost out on a year of salary as a result of their outright stupidity in negotiating.

    Re: Nashville – everyone forgets just how much Nashville wanted an NHL franchise. Everyone forgets that the New Jersey Devils almost sold in 1995 to move to Nashville. The city leaders and businessmen wanted this team badly – it hasn’t quite worked out.

    Re: Hamilton – the league doesn’t want to move to Hamilton because there is absolutely no point. Canadian teams get the worst road attendance, so that doesn’t help the NHL – the NHL wants a national contract that actually pays money, a team in Hamilton doesn’t help that, and the last three Stanley Cup Finals have had garbage ratings in the US in part because they’ve involved a Canadian team. The Hamilton area is already Leafs fans, so it’s not like this is a remote city who enjoys the NHL – this is just cutting up an already established market.

    Re: Kansas City – it gets the highest TV ratings of any non-NHL city for national telecasts. It’d be a good place for either Phoenix or Nashville to move. There’s no NBA team to go up against. People were surprised when Columbus got an NHL franchise, but that franchise has been wildly successful.

    About the expansion fees and lowering of the salary cap because of reduced revenues – I hadn’t thought of that and it makes some sense, but I think it’s preposterous to think revenues would be low for a new team. New teams enjoy a honeymoon period where people just show up.

    If the league really wanted to lower the salary cap, it’d move a team to Winnipeg.

  3.  

    oh and also i really don’t think players are stupid enough to create any labor turmoil over this – you realize that after the last labor conflict they lost a year of salary and had their pay cut by 24%, right? nhl salaries still haven’t recovered to 2002-2005 levels.

    either side re-negotiating this CBA and causing a labor stoppage would be bullheaded – missing even ONE DAY of NHL revenue and the resulting fallout would be worse than how the players are ‘getting screwed’

  4.  

    oh and also i really don’t think players are stupid enough to create any labor turmoil over this – you realize that after the last labor conflict they lost a year of salary and had their pay cut by 24%, right? nhl salaries still haven’t recovered to 2002-2005 levels.

    That only tells the players how much they have to gain while on the owners side they will have less incentive to stay out than last negotiation because last negotiation they were losing money, now for the most part they are making money. The players will be in the position to bargain next time and the question is whether owners will be willing to either enter into more of a partnership (i.e. players get a formal vote in league matters) or whether they are willing to go with less of a partnership and relax the salary cap restrictions some. Last time was all about how much the players will have to give up, next time it will all be about how much the owners are going to give up.

  5.  

    BTW, the issue of the resulting fallout of a lockout may have minimal impact on negotations because the fallout after the league cancelled a season was relatively minimal.

  6.  

    Why should the owners have to give anything up? What is so wrong with the current system – players are UFA at 27, they get paid very well when they reach UFA, arbitration works – what in the world do the players need in the next negotiation? There’s no way they should have a formal vote in league matters – that’s a definite conflict of interest.

    The players don’t have much to gain. Quite frankly, the notion that they can make money from labor strife is preposterous – this isn’t baseball. Where is this money going to come from? From another lost season? The fact that the lockout had minimal impact just strengthens the owners’ cause – players get old, and players are retiring/leaving the league at a younger age these days. Losing a year of salary is huge for these guys.

    I can almost guarantee that neither 2009 nor 2011 will result in lost time. I just can’t see either side willing to lose out – because now, both sides have a lot to lose.

  7.  

    As I stated in my article, the players feel the ‘partnership’ is not working. They don’t feel they get any say in the rules and they don’t like that Bettman is apparently blocking an owner from buying a franchise and relocating it to where more revenue (and this a greater players share) will be generated. The players standpoint will be that if the owners want a revenue sharing partnership then the players should have a say in how and more importantly how much revenue is generated (i.e. where franchises are located to maximize revenue). It would not surprise me if moving Nashville to Hamilton would land the players an extra $20-30 million.

    I would be fairly confident in saying the players get something back in the next CBA. How much they get or how quickly the owners give it up is still to be determined but a lot might depend on the actions of the league in the next couple years and whether they become more accomadating of the players views.

    Getting back to Kansas City, I previously stated that the high water mark for them is probably Columbus as they are similar market sizes. But Columbus is in the bottom half of the NHL in terms of revenue and their presence brings down the salary cap. At best you have a second tier market in Kansas City at worst you have another Nashville or something like the Royals are in MLB.

  8.  

    Well, if what you say comes true, it would appear that the NHL will become nothing but a minor league playing in some larger cities. I think the 21 team league was just large enough, and could maybe make a case for 25 teams (a team each in Sweden, Russia, Finland and Czech Republic/Slovakia?).

    But 32 teams is ridiculous. That’s 7 * 20 = 140 minor leaguers getting a “major” league cheque as far as I’m concerned.

    It would be interesting to see if Bettman would try to sell this as 40 new NHL jobs, though.

    I just have two words for everyone: Thomas Vanek. Why did we lose a year again?

  9.  

    David, the problem with Hamilton is that it maximizes short-term revenue gains but limits long-term revenue gains. It negatively impacts every other franchise in the NHL because of the television contract and road attendance issues – the league does *not* need another Canadian team. Plus you are hacking up a market already well-served. Under your logic we should move another baseball team to Boston since it can support it.

    It would VERY MUCH surprise me if going to Hamilton netted the players $30 million – you realize that’s 54% of the total revenue – you think moving to Hamilton will generate around 57-58 million dollars of new revenue? The league generated 2.2 billion dollars of revenue last season – divided by 30, that’s around 60 million a team. So in other words, whatever Nashville generates (prob near last) – it will now be near the very top of the league?

    Kansas City is a terrific sports town – the Royals were well supported back when they were good and had a chance, and the Chiefs sell out every game every year. The city itself is bigger than Columbus and I think saying best-case scenario another Columbus is being naive.

    Caligula – what in the world defines a minor league player? To me, the league has more talent per team than it did in say, 1997. You see more and more guys calling it quits early because they just can’t keep up with the speed of the game. The NHL would have no problem expanding – I don’t think it should, but these anti-expansion arguments need to be better than ‘diluting the talent pool’. The increase in talent overall usually makes up for that within 5-10 years.

  10.  

    Arguments against diluting the talent are pointless. The US is producing more players, and ever since Europe opened up to players playing in the NHL the number of overseas imports has increased drastically. Canada still produces almost 60% of the players in the NHL. You’re telling me there aren’t enough “good” hockey players in the US, Sweden, Russia, Finland, Czech Republic, Slovakia, Germany, Belarus, Ukraine, Lithuania, Latvia, Estonia, etc. etc. to fill 40+ teams in the NHL? That’s only 1200 players… for the entire planet? That really isn’t that many. NFL teams have huge rosters, and there’s 30 of them… and the only place producing football players of NFL skill is the NCAA… and nobody talks about teams full of “minor league” football players being an issue.

    Frankly the idea that there aren’t enough good hockey players to go around is preposterous. If that were the case then you wouldn’t have problems with teams like Pittsburgh having too many good players to be able to hold onto all of them.

    As far as Hamilton goes, if you think they can easily support an NHL franchise please examine the city corporate structure, local fan base, and overall affluence… it might have population but it doesn’t really compete with Montreal, Ottawa, Toronto, Vancouver, Calgary, (or even Edmonton)… pie in the sky people… pie in the sky.

    I’ve got a bridge to sell you all in Brooklyn…

  11.  

    Arguments against diluting the talent are pointless.

    Well, as long as you START the argument with the idea that arguing is pointless, I guess you “win”, huh?

    My argument against expansion beyond 30 teams is : why aren’t these great players in the NHL now?.Sure, you can always make the argument that some teams are deep. Some guys have ticked off an organization, MAYBE. But you’d made your “argument” stronger if you could give us a list of 40 players you’d think could be playing in the NHL right now. Heck, give us 20 and I’d listen.

    Why not expand to 50 teams then?

  12.  

    Forbes estimated the Senators 2005-06 revenue to be $76 million (http://www.forbes.com/lists/2006/31/biz_06nhl_Ottawa-Senators_318444.html) and the Nashville Predators revenue to be $61 million (http://www.forbes.com/lists/2006/31/biz_06nhl_Nashville-Predators_310472.html) but I believe that includes the $10 million the NHL gave them in revenue sharing so it is really $51 million. That is a $25 million difference which is even greater now due to the rise of the Canadian dollar and also I am sure that the Senators have increased ticket prices more than the Predators have (I think they may have dropped them in fact). So let’s conservatively estimate the revenue difference to be $30 million. Now, I suspect Hamilton has the potential to generate even more revenue than Ottawa (potentially a greater TV deal) but let’s say it is the same. The players share next season is likely to be close to 56% so that would equate to $16.8 million. So, I might have been a bit high with my initial $20-30 million estimate but not dramatically so.

    You can argue that Canadian teams are bad draws in the U.S. but I’ll counter that and point out that the Predators have the worst road attendance in the NHL (http://sports.espn.go.com/nhl/attendance?sort=away_total&year=2007) so I am not sure that makes a difference.

    You might also argue that Hamilton does nothing to help produce a U.S. national TV contract but I’ll also point out that neither does Nashville. National TV deals are mostly about putting the big market teams on TV, not the Nashville’s, and the few thousand fans that might watch a Flyers-Rangers game in Nashville is not going to have any impact on any national TV deal. Besides any kind of significant U.S. TV deal is years off if it ever happens.

    One can argue that Kansas City is not a terrific sports town. They support the NFL but not MLB but the NFL only plays 8 home games so it’s not like you need it is a huge commitment on the part of fans. The Royals get horrendous support. Near the worst in baseball. Kansas City has failed in the NHL in the past (Kansas City Scouts) and didn’t really have that successful of a minor league team (Kansas City Blades).

    According to http://en.wikipedia.org/wiki/List_of_television_stations_in_North_America_by_media_market the Kansas City television market is ranked 31st in the U.S., just behind Nashville in 30th and just ahead of Columbus in 32nd. That may or may not equate to population but probably equates to likely revenue potential. Like I said, best case scenario is an NHL team in KC is no better than Columbus. Worse case is another Nashville. Either way, they won’t get near the support of Hamilton.

    There is not enough talent to go around. Yes, the U.S. is developing more players as is Europe, but they are not really developing more star calibre players. The talent is thin and the league would be more entertaining if more teams had more upper tier talent level players.

  13.  

    As far as Hamilton goes, if you think they can easily support an NHL franchise please examine the city corporate structure, local fan base, and overall affluence… it might have population but it doesn’t really compete with Montreal, Ottawa, Toronto, Vancouver, Calgary, (or even Edmonton)… pie in the sky people… pie in the sky.

    Hamilton will get a ton of corporate support, both from local business (including nearby Kitchener-Waterloo and eastern Toronto suburbs like Oakville and Burlington) but also from corporations that want exposure to the NHL but can’t afford to get involved with the Leafs. Hamilton will get more support than Ottawa (which struggled significantly to generate support until recent years), Calgary or Edmonton (which are getting a lot of oil money right now which may or may not last).

  14.  

    Because that would dilute revenues – there aren’t 50 cities taht can support an NHL franchise.

    40 players who could be playing in the NHL right now? Well, I can name at least one – Alexei Yashin. No, there aren’t any players I can name who should be in the NHL who aren’t. But my point is that there are 40 guys not much different from the bottom 40 guys on NHL rosters now. I really think the talent dilution argument is insane and if you look at any years that aren’t 1990-1995, you’ll see that the talent level now beats the hell out of the talent level of those eras.

    I don’t think the league should expand. But I don’t think it has anything to do with talent – the league is more talented than ever.

  15.  

    So you mean an Ottawa team that was best in the league (and it wasn’t even close) will generate the same revenues as a Nashville/Hamilton team that’s just been stripped of almost all its top talent?

    I may be wrong about this, but Kansas City supported the Royals when the Royals were good. The MLB salary structure is all screwed up and the Royals have a very difficult time competing. There are lots of sports dollars in Kansas City IMO – I recognize the IHL failed there, but mentioning the Scouts is a joke – hockey failed in Denver once, I guess the Avs should go back to Quebec?

    The TV deal was the whole reason the NHL expanded south and west. It’s still got to be the plan – the NHL cannot just sit around and let revenues stagnate like you’re suggesting. Plus, if the Canadian dollar falls to 90s levels (unlikely), we’re looking at struggling franchises in Canada once again.

  16.  

    So you mean an Ottawa team that was best in the league (and it wasn’t even close) will generate the same revenues as a Nashville/Hamilton team that’s just been stripped of almost all its top talent?

    In short, yes, but if you prefer we can use Edmonton (who had $75 million in revenue) or Calgary (who had $68 million in revenue) and still realize that Hamilton will generate a whole lot more revenue than Nashville.

    I may be wrong about this, but Kansas City supported the Royals when the Royals were good.

    Maybe but that would have been 20 years ago and you are making a false assumption that the new Kansas City hockey team will be good.

    The TV deal was the whole reason the NHL expanded south and west.

    Yes, and it was a colossal failure.

    It’s still got to be the plan – the NHL cannot just sit around and let revenues stagnate like you’re suggesting.

    It may very well still be the plan, but it would be a plan that won’t succeed. They will not generate a big TV contract by expanding to second rate TV markets. The way to generate a big TV contract is to maximize interest in Chicago, Los Angeles, New York, Boston, etc. The NHL would have a far better chance of generating a big national TV contract if they put another team in Chicago than if they put a team in Kansas City because the current NHL team there has completely ruined it as a hockey city. That’s just my opinion anyway.

  17.  

    Can ANYONE ans my question. If a player is making 15 M over 3 yrs, and is making 4 mill in the 1st year, 5 mill in the 2nd year, and 6 mill in the final year; will $5 Million hit the cap each year, or will it be the amount made in that year. Please let me know. I’m almost 100% sure its the amount u make. But is there a max? wut aobut Briere’s contract. CAN ANY1 PLEASE LET ME KNOW. THANKS:)

  18.  

    It is the average value so in the case you mentioned the cap hit will be $5 million. The maximum any player for any particular year of his contract is 20% of the salary cap.

  19.  

    No one is arguing that Hamilton won’t generate more revenue than Nashville – the question is how much more, and is it a good idea going forward.

    The Kansas City hockey team would be good if it were the Predators moving there – they’ve got some solid young defenders and a serious front line talent in Radulov. The Royals’ ownership is incomptent and has been for years, but unlike in Toronto, people actually give up on fools in the front office after a while.

    Part of selling a national TV contract means being able to sell it to as many affiliates as possible – if it’s just Chicago, Boston, New York – it won’t work. That’s why they adopted the Southern Strategy to begin with – even if Panthers and Coyotes games weren’t on nationally, that people would watch. If you reduce hockey to a purely regional sport (as it by and large is), and try to sell it that way, there is no possible growth in the league – where’s it going to grow? Most of the buildings come close to selling out and the regional TV contracts aren’t exploding.

  20.  

    Mr. Johnson and Triumph I m interested in reading both of your perspectives regarding TV contracts for the NHL and playoff formats.

    1- Under the new CBA do players have a say in TV contracts or is that strictly NHL only?

    2- Do you feel the NHL should find a way back onto ESPN?

    3- Is it possible that the NHL could create an NHL network– (similar to the NFL network and get it on cable as well as Satellite?)

    4- Should the NHL revamp the playoff system as it is and go with a system like such:

    A. Teams are seeded 1-8 to make the playoffs in each conference.
    B. Upon making playoffs the teams are seeded 1-16 regardless of conference.
    C. At the end of each round teams are seeded
    high seed always plays the low seed.

    The players during the lock out where greedy– show me any business that lasted more than 3- 5 years while paying out 76 % of revenues in salaries. The players new this and decided to hold out for as long as they could with the strike fund. They refused to negotiate prior to the CBA expiring and instead of using the strike fund money to counter the Levitt report they did nothing because they knew any spin would only prove the numbers in favor of the NHL view.

  21.  

    Mike,

    No need to call me Mr. Johnson. David will do.

    1. No. The players don’t have much say at all on the business side of the game.

    2. Yes, the NHL needs to be back on ESPN.

    3. There is an NHL network here in Canada. I suspect at some point they might try and get one in the U.S. but they need the cable companies to decide to distribute it or else it won’t work.

    4. Yes, they should revamp the playoffs, but no they should not revamp it as you describe. I would like to see the NHL switch to 4 divisions with the top 4 teams in each division making the playoffs. Then have divisional semi-finals (1 vs 4, 2 vs 3) followed by divisional finals, conference finals and stanley cup finals. This is the system they used before Bettman ruined it and it worked wonderfully and created far more interesting divisional rivalries than they have now. Plus it would get rid of the whole idea that teams are competing for the playoffs against teams with significantly different schedules (one could easily argue that Toronto missed the playoffs 2 years in a row because they played a tougher schedule than the 8th place team) and that is inherently unfair.

    The players never once during the lockout admitted they the system didn’t need changing. The players never once asked for more from the owners and always offered to give something up. The owners were the ones being greedy in the playoffs. Name me one other business in the world (aside from the NBA) where the employees are forced into a revenue sharing system where they may have to give back a portion of their negotiated salaries if the business doesn’t do well. There is none. The owners kept claiming they needed cost certainty and claimed that every other business had expenses linked to revenues but that is simply not the case. If the local convenience store makes bad business decisions or if people stop shopping there they can’t ask their employees to give back some of their salary over the past few months to make up for it. That is not how business works but the greedy owners demanded that from the players.

    And as for the players being greedy, I don’t blame Jaromir Jagr one bit for accepting the $11 million per year deal that Washington Capitals billionaire owner gave him when no one else would. It was a bad business decision either made because of stupidity or ego but to blame the player for that is rediculous.

    Did the system need to be changed? Yes because those stupid contracts had a ripple effect throughout the leage (largely due to arbitration), and the players voluntarily made consessions (including the 24% rollback in salaries, a luxury tax, and eventually including a hard salary cap that is lower than the current cap) but the greedy owners wanted what they call cost certainty or ‘linkage’ but what I call the ‘guaranteed profit clause’.

  22.  

    Wow, David – some of that is right, some of that is flat-out deluded.

    as for your questions mike:

    1 – No, the players have no say. Just like any other business.

    2 – The NHL should try to get back on ESPN, but I think ESPN has moved on. ESPN is a sad joke but their coverage of sports they don’t own a piece of is more so.

    3 – The NHL Network could go on a pay cable tier with the Golf Channel and Tennis Channel, but I see no reason to do this. Frankly, there wouldn’t be enough content.

    4 – Your playoff proposal makes some sense but is ultimately flawed because of travel – you can’t have the Kings playing the Bruins in Round 1. I think I’m with David in that the divisional playoffs might be a good idea, but having uneven divisions is rather unfair – the NHL would have to expand to 32 teams, then split into either 4 or 8 divisions. I think the current system is setup so that ‘winning your division matters’, but NHL teams are so close in quality that it really doesn’t matter that much if you win your division.

    As for businesses – name me a business where the employees are drafted at the age of 18 and expressly limited on how much these employees can be paid. Then tell me a business where you can’t fire an employee without buying him out at 2/3rds of his salary spread out over double the length of the contract. If I’m running a conveinence store and business is bad, I fire an employee – wait, in the NHL, I can’t do that. Contracts are guaranteed.

    The players’ voluntary concessions were laughable and ultimately an awful negotiating strategy – Goodenow tried to sucker owners with the giveback, they didn’t bite, and then stuck it in every further tender offer to the players. Do you realize that few players in the NHL are still significantly affected by that giveback? Givebacks are not that uncommon in union negotiations, FWIW.

    The players have every right to be greedy in contract negotiations – such is their right – but it is also the owners’ right to be greedy in CBA negotiations. Ultimately the NHL cannot be run under normal business rules because normal business rules simply don’t apply – each NHL team is not competing against one another for customers, but for a championship – and many owners aren’t too concerned about profiting so long as they have a chance to win. When this is the case, controls must be put in place to save owners who are concerned about profits from those that don’t – and the NHL did that with the salary cap.

  23.  

    As for businesses – name me a business where the employees are drafted at the age of 18 and expressly limited on how much these employees can be paid.

    Yes, yet another restriction to benefit the owners.

    Then tell me a business where you can’t fire an employee without buying him out at 2/3rds of his salary spread out over double the length of the contract.

    There are a lot of business arrangements that have penalties for cancelling a contract. CEO’s of big corporations often have huge buyout clauses in their employment contracts. It actually isn’t abnormal for employment contracts for highly skilled, high in demand professionals to have guaranteed money. A perfect example is NHL coaches. There is no CBA setting out guidelines for NHL coaches but every single one of them gets guaranteed contracts. Mike Keenan has probably made more money not working for teams than he has working for teams. The fact that the ownwers can buy out a player at 2/3rd of their money owed and pay them over the course of several years is better than the deal they negotiate with every signle coach or general manager they hire.

    The players’ voluntary concessions were laughable and ultimately an awful negotiating strategy

    A 24% rollback is laughable? I want you to go to your employer tomorrow and voluntarilly rollback your salary 24% and when your boss says OK see if you are laughing.

    Do you realize that few players in the NHL are still significantly affected by that giveback?

    Hmmm. Talk to Alfredsson or Jagr or Yashin or or several other players that just saw their paycheck get slashed and lost millions of dollars in income they expected to get. Alfredsson took a lower contract to stay in Ottawa and then a year later gets it slashed by 24% and now plays for a bargain salary of $4.5 million. The new CBA with the buyout rates cost Yashin tens of millions of dollars. Now I don’t feel sorry for Yashin but to claim that few players aren’t still affected by it is ridiculous.

    The players have every right to be greedy in contract negotiations – such is their right – but it is also the owners’ right to be greedy in CBA negotiations.

    I agree completely, and that is my point. During the last CBA negotiation it was the owners that were greedy.

    Ultimately the NHL cannot be run under normal business rules because normal business rules simply don’t apply – each NHL team is not competing against one another for customers, but for a championship – and many owners aren’t too concerned about profiting so long as they have a chance to win. When this is the case, controls must be put in place to save owners who are concerned about profits from those that don’t – and the NHL did that with the salary cap.

    I only agree somewhat. The problem in the NHL isn’t that it is unique because teams compete for a championship but rather the huge disparity between the big revenue teams and the small revenue teams. If every team had the same revenue the problems in the NHL would be dramatically reduced.

    And the players did agree with your statement and conceded that controls could be put in place. Problem was, the owners had no intention on negotiating the type of control. The players offered a luxury tax but the owners said it wouldn’t work. But they can if implemented correctly and in fact potentially could have worked better as it could have used to implement better revenue sharing. But the owners had no intention of negotiating anything and only had interest in forcing a one-sided partnership down the throats of the players.

  24.  

    great stuff! your level and depth of forethought on this issue is staggering.

  25.  

    You say that with expansion, there’s nothing in it for the players. How about 46 more jobs?

  26.  

    […] Hockey Analysis has a rather unique view of why Bettman would conspire to keep a team out of Hamilton that has nothing to do with being biased against Canada and everything to do with supressing the salary cap ceiling. Tom Benjamin feels the same way. Maybe it’s not that unique. Fucking Bettman. […]

  27.  

    wow

  28.  

    […] The Self Destructing NHL Part II By David Johnson A couple months ago I wrote about how the NHL was on the path to self destruction. Well, a couple of news items have come out this past week to reconfirm that thought. […]

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