• It’s not collusion

    by Tyler Dellow • July 30, 2009 • Uncategorized • 16 Comments

    The always cautious James Mirtle picks up on Bruce Garrioch’s collusion story and adds the following:

    “NHL teams know that [players will panic] and for the most part agents think NHL headquarters instructed teams to get as many players as possible to free-agent market to get players fighting against each other [for contracts],” the agent told me via email. “Some GMs have said that ‘we’ll wait until August because we believe we get better deals then.’ None of them will say anything about Bettman instructing them since collusion charges could [come into play].”

    I trust the source that said that to me, but I’m still uneasy about spreading rumours that widespread collusion is going on. It would be incredible if all 30 teams were able to agree to not stock their teams as well as possible to further some nefarious league objective.

    Even the bright guys like Mirtle seem to be missing the obvious here: the NHL no longer has an interest in trying to keep salaries down. The various agents whispering in the ears of Mirtle and Garrioch may not remember, but the league had a labour dispute a few years back, a minor thing really, and the end result was a collective agreement in which salaries are tied to revenues. If someone wants to do something as crazy as committing $15MM over four years to Nikolai Khabibulin, the NHL shouldn’t really care – the overall dollars are fixed. Say that the NHL somehow succeeded in convincing teams to pay every player in the NHL the minimum salary. They’d just end up cutting a large cheque at the end of the year to ensure that the players got their share of the revenue.

    James has, I think, hit on the real problem here:

    In short? There’s really not much cash left at all — and that’s a more likely explanation for all of the guys searching for homes than GMs banding together for the greater good. Five to 10 teams could use another piece, but they won’t be spending much, and that’s bad news if you’re either an unsigned player or an agent, whatever the cause may be.

    Yeah, this is about right, I think. What’s more, I think that this was pretty foreseeable. I did a post on May 1, 2008 – so before the economic bust – in which I pointed out that if you assumed a cap of $61.9MM, the 196 players signed for the 2009-10 season were already eating up 37.3% of the available cap room and 44.2% of the available salary (assumption being that league revenues would end up matching the midpoint of the team salary range). It would be easy enough for an agent to maintain something similar and keep an eye on the coming market. As deals were signed in the summer of 2008 and the economic forecast got worse, I’d think it’d be pretty obvious that this was going to be a rough summer for some good players.

    Of course, that’s not exactly a fantastic explanation to give to your client. The flip side of this, if you’re running a hockey team, is that this would be a heck of a summer to be looking for deals on players if you’ve got some cap room and money. Deals for guys who weren’t difference makers at difference maker prices? Those are probably haunting a few people at the moment, as they look at some of the talent that they could acquire and then look at the guys who they’re stuck paying for another year or two.

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    16 Responses to It’s not collusion

    1. MattM
      July 30, 2009 at

      Interestingly, it seems to me that the only people with an interest in keeping the deals for the current FAs down are the players who are currently signed. The CBA has some peculiar effects.

    2. Corey
      July 30, 2009 at

      And this may get only worse next year if the cap decreases.

      Tyler, what do you think of

      1. Scaling contracts according to the cap, such as if the cap decreases 5% the cap hit decreases 5%, but the players still get their % of the revenues.

      and

      2. No more average cap hit, make cap hit equal to real money paid in that year. It would prevent the frontload loop as teams would have enormous cap hits in the early years, thy couldn’t backload either because the players would only agree to it if they thought they would retire after tha deal.

    3. July 30, 2009 at

      I think it’s Tom Tango who remarked it a few weeks back; the cap doesn’t have to go down, they can settle for a large escrow while revenues are down.

      It seems the CBA works for signed players when revenues are flat, and for Free agents when revenues are growing.

      Quite interesting, indeed.

    4. July 30, 2009 at

      Great write-up Tyler. Do you have any idea why agents might be spreading this kind of information? Surely they know it’s false for the reasons you’ve already stated (if I were a player, the first thing I’d do is go ask my agent if he believed the collusion allegations and if he said “yes” I’d find a new agent). Given that they likely know they’re blowing smoke, what do you think they’re hoping to achieve?

    5. mc79hockey
      July 30, 2009 at

      I have no idea. Mirtle and Garrioch should take these questions to their sources. In fact, I’ll email James and ask him to ask his source.

    6. July 30, 2009 at

      The NHL definitely does want to keep escrow down, however.

      I agree collusion doesn’t make sense, for a number of reasons, but the league would certainly prefer if teams didn’t always get into the sort of salary cap hell they seem to by March.

    7. July 30, 2009 at

      This is just a product of supply and demand too. Middling veterans no longer have a place because of their salary demands.

      Either you’re an effective producer, or cheap labor, otherwise you’ll be out of a job.

    8. July 30, 2009 at

      Either you’re an effective producer, or cheap labor, otherwise you’ll be out of a job.

      Or you’re one of the many players who got a ridiculous contract from a piss poor GM, and now you’re crowding out the middling veterans who don’t suck and get overpaid.

      The NHL can’t be an efficient market until people who give Daniel Briere $6M are out of a job. And guys who give Ehtan Moreau $2M aren’t getting promoted to Master of Hockey Operations and Disco Dancing.

    9. July 30, 2009 at

      the nhl will never be an efficient market when long-term contracts exist – this much is obvious.

      but it’s certainly true that a lot of the guys still looking for work are of the variety that always seemed to find a home even pre-salary cap – gritty mcgrit type players whose scoring days were well past them but could still help a team. now teams seem much more willing to entrust that role to a younger or cheaper player. if someone like rob niedermayer wants an nhl job this season, he’s going to have to play for less than 7 figures and he’s not guaranteed a roster spot.

      what i can’t believe is how montreal had a ton of cap room and squandered so much of it.

    10. Vic Ferrari
      July 30, 2009 at

      ” … promoted to Master of Hockey Operations and Disco Dancing.”

      Not to be a stickler, but I believe the official title is “Vice President in Charge of His Pants”.

    11. Showerhead
      July 30, 2009 at

      Something about that last line makes me want to amend the title to (dis)Charge of…

    12. July 31, 2009 at

      What’s so surprising about GMs over-paying for difference-makers and leaving the table scraps for the faded, injured, disinterested and over-rated?

      That’s not collusion. That’s the market.

      I think Malkin to the Kings is getting an inordinate amount of attention for his anonysourced drivel the Sun uses to fill the space between escort ads. Mirtle chiming in with “I heard the same thing” doesn’t lend any weight to the fiction. Why, just yesterday, two people who declined to be named told me the oil companies fix prices at the pumps.

    13. August 2, 2009 at

      I think what will be interesting is if the NHL adopts a maximum total between 2-4 players like the NBA does.

      That way theres a bigger cut of the pie for the middle-men.

    14. August 3, 2009 at

      Art, the point was that there are agents out there who legitimately believe there’s collusion (or something along those lines) going on. My post points out that there just plain isn’t any cash left.

    15. August 3, 2009 at

      James, which raises the point of either a possible CBA issue or by coincidence too many assets in the pool this summer.

    16. August 4, 2009 at

      James:

      I think there’s cash left, but much as panic strikes on July 1, the opposite of panic has set in. Teams know that if they miss out on one guy, they can just sign another one. And yeah, these guys are going to make 1/2 to 2/3rds of what they thought they were going to make.

      Agents are often just as ignorant about the way this thing works as their clients, at least if they believe what they say to the media.

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