NHL's response to the NHLPA offer

[Jim Bob 0]

The NHL's response:

http://www.tsn.ca/nhl/news_story.asp?id=107996

TSN has obtained a copy of a confidential eight-page memorandum sent by the NHL to all 30 member clubs, outlining the league's reaction to the NHL Players' Association proposal of last week and clearly stating the NHL's intention to reject the proposal and counter with one of its own.

"In sum, we believe the Union's December 9 CBA proposal, while offering necessary and significant short-term financial relief, falls well short of providing the fundamental systemic changes that are required to ensure that overall League economics remain in synch on a going-forward basis," NHL executive vice president Bill Daly wrote in the Dec. 12 memo which went to all governors and alternative governors, including many NHL general managers. "While the immediate 'rollback' of 24 per cent offered by the Union would materially improve League economics for the 2004-05 season, there is virtually nothing in the Union's proposal that would prevent the dollars 'saved' from being re-directed right back into the player compensation system, such that the League's overall financial losses would approach current levels in only a matter of a couple of years."

[JR Boucicaut 3797]

Doesn't surprise me one bit.

It's a quick fix. They need a permanent one.

[hip check 0]

Everyone ready for replacement players???

[Jackal3688 0]

Clearly, in spite of the NHLPA offer of last week, the two sides could not be further apart. With both sides so entrenched in their current positions on the issue of cost certainty or linkage or salary cap, there is no reason to believe there will be any negotiations coming out of Tuesday's session in Toronto.

SUCKS! Back to where we started again? Well at least theyre both making an effort now i guess <_<

[JGraz15 53]

Stick a fork in it...that is a season

[Sniper#39 0]

We're looking at two factions who have painted themselves into corners.

Owners who have bandied "Cap" about for more than just the recent past.

Players who adamantly state they will "never" accept a cap system.

Unfortunately while everyone seems happy to sit back and say it's a war of two ego's (Bettman & Goodenow) it really has become a test of will between two groups (owners and players).

I wonder what goes through a third/forth line players mind as they watch this unflold?

The owners, while no one likes to see an asset sit idle and not produce any revenue are in the somewhat fortunate position of having the wherewithal to allow this to drag on for some time and not have it really impact their lifestyles.

Some players could also fall into that category, but the younger ones and the aforementioned third/forth liners (the "fringe" players if you will) are not. They get to sit and watch their livelihood trickle away while they sit back and try to figure out how they are going to cover their costs. Lets face it, everyone knows people tend to live a bit "beyond their means" and these players aren't in the position to cover their costs - even if the PA doles out "reserve funds".

As a businessman I am fully onside with the owners on this issue, I know of NO business that can sustain a revenue/employee expense ratio that the NHL has endured in the past few years, regardless of who's fault it is (and I agree the owners are at fault) the bubble has effectively "burst" here.

My money is on the owners this time around. And if a year (or more) without NHL hockey is the result, then I firmly believe the owners are prepared to accept that. I know if it were me I would be.

So suck it up boys and girls - this could be a while.

Snipe

[Eazy_b97 1]

This is awful. I don't agree with either side, but think this whole "save me from myself" act is brutal. I just hope they come back with a good offer, the players made sacrafices, I don't think it was enough, but its got alot to build from.

[JR Boucicaut 3797]

Larry Brooks said today in his column that the reason the league rejected it is that the players believe that they will recoup the 24% in 24 months.

[Sniper#39 0]

You're right JR.

I actually took the time to read the entire proposal (I know - I'm weird) and while the immediate benefits are apparent, there is no mechanism to prevent salaries from escalating like they have over the past few years.

It fixes things short (very short) term, thats all.

I truly believe that the 24% offer was made by the PA purely from a PR perspective - "Look what we were willing to give" while full well knowing that the Ownership would turn it down because it lacked in other aspects. It's easy to offer something when you know in your mind it won't be accepted - smart move by the PA.

The problem is that fans have become too informed and for the most part have seen through this. It may gain a few sympathy points with some fans, but the informed fan will recognize the holes in the proposal.

Having said all that - tomorrow should be an interesting day - if only from a press conference perspective.. :lol:

[Eazy_b97 1]

It's upto the owners to pay them that money though. They are putting a chocolate bar infront of a bunch of fat kids on a diets. It's upto them if they want to eat it, but they know one of'em will. I think it's a great idea, but these are grown men, why can't they control their own money? There's just so many holes in anything that'll come. With a hard cap a player can go down with an injury and then your in trouble, I like the luxury tax, which was included in the PA proposal, but it needs to be much harsher. I'd say double it and sign on the dotted line.

[Sniper#39 0]

The league has recognized (albeit too late) that for the sake of the teams that don't have the means to compete in the current "marketplace" system something needs to be done.

Call it putting a leash on the teams guilty of paying outlandish salaries if you will. But I for one do not want to continue watching a number of teams effectively be "development" centers for the free spenders anymore.

I know it's their money and all, but one has to look at the economics of the entire league to put this into perspective.

Either that or we all agree to accept an NHL with far fewer teams and a whole bunch of "elite" players.

[Eazy_b97 1]

I just don't understand why they brought in teams that couldn't compete financially. Why not get a system in place and work areas in which can compete, rather than going out, getting various areas to come in. They bitch because they cannot compete and attendance is down, then they promise to fix it. I think they are doing this backwards. I have no sympathy for either side, I just miss Hockey.

[Sniper#39 0]

Theo - I don't think the players are "hated" at all.

And as for the comment about the PA trying - you crystalize my point about the PR move they made by offering up what they did knowing full well it would not come to pass.

Listen - no one misses hockey anymore than I do - but rational thought has to come into the equation here - millionaires bickering with billionaires brings nothing to the table for you and I - it's just numbers beyond the comprehension of the common person.

The players are and have (perhaps righfully so given the history of how the "old guard" were treated) made a great deal of money over the past few years. But like someone once said If it looks too good to be true - it is!. The day for reality has come - the owners aren't going to continue to pour the mounds of cash they have been into the salary bucket anymore. They've realized they are pricing themselves out of the attention of most markets given that they are still trying to create an identity for themselves.

I don't blame the players for the situation at all - they took advantage of the system and kudo's to them for it!

All I'm saying is that as a rational person looking at the numbers - it has to be fixed!

[Eazy_b97 1]

As a Leafs, Rangers, Wings, Avs fan why should I care? We have the money to support the system. We support the team, no matter what Ticket price won't come down. Why support the little guy when theres no gaurantee they'll be A. Supported or B. Spend the money on hockey operations?

Why can't these grown men manage their money? If these guys were really in this much debt why would they keep their franchises? Why not let all the little guys die of who cannot afford to keep the teams?

Just Ideas. I think a balanced NHL would be nice, but I think their will always be people who abuse the system, whether it is paying Holik, Nolan or other players incredibly high salaries to fill voids, teams recieving money from a tax and pocketing it as "profit", people losing a star players from an intentional injury because the attacker knows an upcoming playoff match is coming and they don't have any cap room.

[Sniper#39 0]

Easy - As a fan - maybe you shouldn't.

As a player - I sure would be given that fewer teams means fewer available opportunities for me to make a living playing the game.

As a league the NHL just doesn't command enough attention and/or revenue to force the owners hands in todays sports world.

It (NHL) simply doesn't draw enough revenue even in most "Major market" areas (save for maybe Toronto or Detroit) to pressure an owner to accept anything other than what they collectively believe they want.

Conversely when MLB was faced with the dilemma a few years ago there was just too much revenue to lose to let it drag on too long.

The numbers just don't favour the NHL right now.

[Chadd 916]

As a Leafs, Rangers, Wings, Avs fan why should I care? We have the money to support the system. We support the team, no matter what Ticket price won't come down. Why support the little guy when theres no gaurantee they'll be A. Supported or B. Spend the money on hockey operations?

Why can't these grown men manage their money? If these guys were really in this much debt why would they keep their franchises? Why not let all the little guys die of who cannot afford to keep the teams?

Just Ideas. I think a balanced NHL would be nice, but I think their will always be people who abuse the system, whether it is paying Holik, Nolan or other players incredibly high salaries to fill voids, teams recieving money from a tax and pocketing it as "profit", people losing a star players from an intentional injury because the attacker knows an upcoming playoff match is coming and they don't have any cap room.

I think any teams getting shared revenue must show a concerted effort to get people in the seats for games. Meeting minimum attendance figures would require them to actually attempt to get people in the seats to qualify for a handout. Shared revenue should also only be permitted to help a team break even or only go to pay certain expenses, like state, provincial or local taxes. Teams should not be able to earn a profit because of shared revenue.

The entire point of sport is to win. Most teams and/or fans are not happy if the team is marginal and breaks even. Markets like Toronto and New York are abnormal on a number of fronts and are the exception rather than the norm. Using them as an example is akin to using Carolina as an example. Carolina is so screwed up, it may be one of only two markets unable or unwilling to support NHL hockey. Under your logic, you would be back to 4 or 5 teams in your new NHL within a decade. Eventually only Toronto and New York would still have an advantage over any other team in the league in terms of finances. The strength of a professional sports league lies in its fanbase. If you have more teams, you have more potential viewers and more potential consumers to advertise to.

I don't think the NHL should adopt a system where even the dumbest businessman turns a profit just by owning a team. A luxury tax system with increasing penalties is a great step in that direction, in my opinion. Tracking actual revenue is going to be the hardest part of the whole scenario.

[Jim Bob 0]

I just don't understand why they brought in teams that couldn't compete financially. Why not get a system in place and work areas in which can compete, rather than going out, getting various areas to come in. They bitch because they cannot compete and attendance is down, then they promise to fix it. I think they are doing this backwards. I have no sympathy for either side, I just miss Hockey.

The problem there is that you have maybe 10 markets that can surive with payrolls in the $50 to 65 million range and beyond. And that league isn't nearly as big as the NHL wants.

There simply aren't 30 markets that can all play at the same level unless it's systemically forced onto them via revenue sharing and either steep luxury taxes or a form of a salary cap.

Just look at the cost of living differences between all of the markets.

Dominik Hasek's house in Buffalo cost $180k.

For $180k in NYC you can get a nice closet.

And that translates into the team's ability to generate revenue as well.

[Jim Bob 0]

As a Leafs, Rangers, Wings, Avs fan why should I care? We have the money to support the system. We support the team, no matter what Ticket price won't come down. Why support the little guy when theres no gaurantee they'll be A. Supported or B. Spend the money on hockey operations?

Why can't these grown men manage their money? If these guys were really in this much debt why would they keep their franchises? Why not let all the little guys die of who cannot afford to keep the teams?

Just Ideas. I think a balanced NHL would be nice, but I think their will always be people who abuse the system, whether it is paying Holik, Nolan or other players incredibly high salaries to fill voids, teams recieving money from a tax and pocketing it as "profit", people losing a star players from an intentional injury because the attacker knows an upcoming playoff match is coming and they don't have any cap room.

If the NFL thought that way, then the Green Bay Packers would have folded a long time ago.

Would that have been good for the NFL?

It gets back to the old cliche that you are only as strong as your weakest link. Unless the NHL is willing to go back to the days of the original 6, then you are going to have plenty of markets that can't spend like the NYs and Torontos of the world.

Plus, those big markets took the expansion fees from all the teams that have joined the league. To me, they owe it to those markets to create a system where they can all compete.

If they don't want to do that, then they should pay back all the expansion fees with interest.

And you know that isn't going to happen.

[Jim Bob 0]

I think any teams getting shared revenue must show a concerted effort to get people in the seats for games. Meeting minimum attendance figures would require them to actually attempt to get people in the seats to qualify for a handout. Shared revenue should also only be permitted to help a team break even or only go to pay certain expenses, like state, provincial or local taxes. Teams should not be able to earn a profit because of shared revenue.

I wouldn't be surprised if the NHL made selling 80% of the tickets that a team has to sell as the trigger for getting revenue sharing funds.

[Jim Bob 0]

I think salaries should be more in tuned with revenue, no question.

Another point is: In all businesses "survival of the fittest" applies...Why not hockey? Why is Bettman bending over backwards to help teams that just cannot compete with others. I am not saying all of them, because few can compete w/ the Rangers/ Leafs. Although I am sure the owners do have the money. I think more owners need to be commited of their teams and have a better sense of reality of what it takes to win, etc.

Bettman obviously views the NHL as one business with 30 various franchises and not 30 individual businesses fighting to put each other out of business.

Bettman views the NHL's competition to be the NBA, the NFL, MLB, TV, movies, and other forms of entertainment.

And in the end, the NHL owners are looking to boost franchise values. And that will only happen if the league as a whole becomes more profitable as in pro sports, a rising tide usually lifts all boats.

[MDE3 0]

I think a lot of this balanced market stuff is a bit overated in terms of the balancing a team's ability to compete. Having deep pockets has not yet proven to be the answer to creating a Stanley Cup winner for the most part in the NHL. Some could argue Detroit, but for the number of years and for the number of $ they poured in, I think coaching may have been at least as large a factor as money in securing their Stanley Cups.

Obviously this past year gave lie to the importance of money in terms of creating a competitive team..as does the performance of the NY Rangers almost every year.

I think maybe the luxury tax payouts should also be skewed towards helping a small market or at least a low salary team stay together. Teams in these categories if they can finish higher in the playoffs, show major attendance gains, or continue to maintian high attendance, would recieve not only a significant chunk of the tax collected, but based on finishing in say the top four of the play-offs, the additional monies recieved would be exempt from counting towards the luxury tax margins in the subsequent season. This system would allow the team owners to coninue to be rewarded for their management success instead of penalized by it.

This money could then be used to keep star players whose market values take a great leap after a successfull season, and help maintain the success of these teams. This would now become an "earned" incentive rather than just a sort of hand out.

[biff44 0]

"I know it's their money and all, but one has to look at the economics of the entire league to put this into perspective"

I don't know where you watch your hockey, but in boston ticket prices are through the roof! Its not the owner's money being wasted here, it is my hard earned greenbacks!

Put a cap on the system and roll back ticket prices so a family can go see a night out of hockey without mortgaging the homestead!

[Jim Bob 0]

I love Ulmer's take on this:

http://slam.canoe.ca/Slam/Hockey/NHL/2004/...782123-sun.html

[MDE3 0]

The problem with a unilateral "cap" is that the operating costs are not unilateral. I find it funny that the League should be so adamant about a salary cap, because that will definitely help the small market teams more than the established teams. I am surprised that the large market owners are not fighting the salary cap issues themselves. In short order, if a team in Nashville spends the same money as a team in NYC, then the players will probably be more drawn to the small market where the $ are going to allow them a much higher style of living, than in the larger estabished cities. Hence the large market teams will soon find themselves penalized, less able to compete for top salaries....

If instead the cap is fixed as a percentage of revenue only, the ticket price issues will continue to plague the league as well. Obviously one method of raising the team total cap could be to raise ticket prices. If attendance doesn't suffer, total revenues will be higher and total salaries can follow under the % of revenue scenario. But if in fact, they must in fact be lowered to increase attendance numbers, then the players earnings become a variable too...falling with the income of the team...tough to manage and get the players to agree to this.

All to say the salary cap is NOT a panacea for all the financial troubles.

[Smith 0]

I love these guys that live in Tronto, NY etc. That bitch about hockey not being that popular in the states, and then bitch about expansion teams. If they lived in one of these "expansion" cities the would see the impact of having a NHL team there. There so many people that play hockey here (columbus) now that would have never played before, just because of the Blue Jackets. There are more rinks now. It might not be greet for the hockey purest to put these teams in "small market" places, but it is good for the sport of hockey itself.