• Not so fast

    by Tyler Dellow • November 21, 2012 • Hockey • 19 Comments

    As I took a quick look through the NHLPA’s latest proposal, something caught my eye:

    (Aside: I don’t even know why the NHLPA has bothered with its much vaunted app. Why not just make TSN.ca the official source of communications with the players and make a few bucks of something that’s inevitably leaked anyway?)

    Our players’ share proposal is identical to yours in all material respects except for the amount of the transition payments added to the 50% share. There are no guarantees or fixed targets, other than a requirement that, beginning with the second year of the Agreement, players’ share, expressed in dollars, may not fall below its value for the prior season. This proposal allows us to determine players’ share regardless of the effects of the lockout and its aftermath.

    The second sentence there is a gem: “There are no guarantees, except for the guarantee that the amount of dollars that the players get will never decrease” is what it says. So, basically, although the PA has now moved away from saying “We get $X as our share and if you guys grow the business at Y%, you get what you want”, they’re now saying “If you guys have a bad year, that’s your problem, not ours.”

    In other words, if revenues ever do shrink, the players will make more than the 50/50 that the NHL is after. The NHLPA has moved away from their initial position here which was a hard number of dollars but only partly – what they’re saying is that they’ll take a hard number of dollars but rather than expressing that number as $X, it becomes a number that will be defined by whatever the NHL pulls in next year. Their share can then never be less than 50% of that amount.

    It is therefore a move away from the linkage that the NHL fought so hard for in 2004. Personally (as someone who views the cap and the entire NHL structure as anathema), I don’t see what the problem is. The justification for this is that if the players should take less, part of what they should get for taking less is a transfer of risk of a bad financial year from the players to the owners. It also provides the owners with some incentive to do something about the three or four sucking chest wounds that it has in the southern part of the NHL – an easy way to grow revenues is to put teams into markets that will pay NHL prices to watch hockey.

    One would assume that if the idea of running a risk that league revenues won’t be $1.8B or whatever the players wanted was a non-starter for the NHL, so too will guaranteeing any amount, even if that amount is set by whatever the NHL revenues happen to be next year. I’ll be very interested to see if the NHL is complaining about this when the two sides do their duelling press conferences at the end of the day.

    Email Tyler Dellow at mc79hockey@gmail.com

    About Tyler Dellow

    19 Responses to Not so fast

    1. Tambellini's Magic 8 ball
      November 21, 2012 at

      “anathema”

      You really are a pretentious prick ;)

    2. dawgbone
      November 21, 2012 at

      Am I reading that quote wrong?

      I read it as “As revenues increase, we can’t make less than what we did the previous season.”

      Doesn’t that mean that if the NHL sees a steady increase say 3.3B to 3.4B to 3.8B to 3.5B to 3.6B that the players share can’t drop below the 3.8 in year 3?

      • Tyler Dellow
        November 21, 2012 at

        Nope, that’s exactly what it means.

    3. November 21, 2012 at

      If the owners have a problem with that clause they have a dim outlook on the future of the business and should probably be selling their franchise but beyond that, I think it is a good clause in that it places an extra burden on the owners to grow revenues. This seems only fair since players salaries are directly tied to revenues, but the players for the most part have no direct say in how revenues are generated. That said, if I were the owners the one thing I truly would want changed about that is to a currency fluctuation clause so that if revenues fell solely because of a significant drop in the Canadian dollar they don’t get penalized for it (only fair as that would be out of the owners control).

      • Gerald
        November 21, 2012 at

        “If the owners have a problem with that clause they have a dim outlook on the future of the business”

        Since the players have determined that it would be a valuable provision in the CBA for them to have downside protection, evidently it is the players who have a dim outlook on the business. You should talk to them about that before considering that it would be easy for the NHL to concede on such a point.

        “it places an extra burden on the owners to grow revenues”

        Does anyone seriously think that the owners require extra motivation to grow revenues?

        • Tyler Dellow
          November 21, 2012 at

          Is there still a team in Phoenix?

          • Gerald
            November 22, 2012 at

            Apparently so. Why do you ask?

            • Triumph
              November 22, 2012 at

              I think he’s getting at the fact that owners are given incentive to raise their own revenues, but want the rest of the league to do poorer relative to them. Thus you might have the league opposing a move from a low-revenue spot to a mid-revenue spot because poorer teams will suffer as a result – their salary obligations go up, but they see no money as a result.

    4. uhno
      November 21, 2012 at

      “It also provides the owners with some incentive to do something about the three or four sucking chest wounds that it has in the southern part of the NHL – an easy way to grow revenues is to put teams into markets that will pay NHL prices to watch hockey.”

      19 teams are losing money, and not all 19 of those teams are in the south.

      And ticket prices alone do not make a team successful. The Jets had the highest ticket prices in the league last season and they just barely pulled in a profit. True North was actually expecting to lose money.

      • Doogie2K
        November 21, 2012 at

        But not all money-losers are sucking chest wounds, i.e., losing eight figures.

        • Bubba
          November 21, 2012 at

          The Sharks lost 8 figures – are you really going to consider a team that has sold out every game for a bunch of seasons despite raising ticket prices each season in a row and had record TV numbers a sucking chest wound?

          • Triumph
            November 21, 2012 at

            You really think the Sharks lost 8 figures? I don’t believe that for a minute, nor do I believe that there are 19 teams losing money.

          • Doogie2K
            November 21, 2012 at

            I have a really hard time accepting the Sharks losing that much. Granted, Forbes has them at an operating loss of -$7.8MM which isn’t a whole lot better, but they’re also listed as a mid-revenue team, with the Oilers (both at $96MM), which has me wondering just where the hell their money’s going. They’re high spenders (~$63MM last year) but not Flyers-level spenders, and not significantly higher than the Oilers (~$61MM last year), who are listed with one of the highest operating incomes in the league ($17.3MM). Either I don’t understand these numbers well enough (conceivable, even likely), or the Sharks are spending like $40MM on non-player expenses, and double the Oilers’ outlay, which is just nutso.

            So the follow-up here is, what the fuck am I missing? Or, what the fuck are the Sharks spending an extra $20MM on?

            • Tyler Dellow
              November 21, 2012 at

              The Forbes numbers are garbage. People shouldn’t even look at them.

      • RiversQ
        November 22, 2012 at

        The Jets had higher ticket prices than the Leafs or the Rangers? That sounds absurd.

      • Jeremy
        November 24, 2012 at

        Yeah, that is the company line. Highly doubtful that they lost money. In fact I’d bet good money that they made crazy money this year. Look at the arrangement with the arena, the gov subsidies, huge sponsorship… The jets made money and buckets of it.

    5. RiversQ
      November 23, 2012 at

      Given what Jonathan Willis found out about the Panthers’ finances, I seriously question whether there are more than 3-4 teams actually “losing money” by a reasonable usage of the term. Basically the Islanders and Phoenix are near certain to be bleeding cash, but after that I would be very skeptical about any other claim. Florida was way down the list of 2010-11 ticket revenue numbers leaked to the Toronto Star.

    Leave a Reply

    Your email address will not be published. Required fields are marked *