• The edge of the precipice

    by Tyler Dellow • November 23, 2012 • Hockey • 13 Comments

    I was sort of surprised by the appearance of decertification stories in the Globe and Mail and LA Times yesterday. Suddenly, it’s everywhere, the players talking about decertifying their union – Darren Dreger’s talking about it, Nick Kypreos is talking about it…everyone’s talking about it.

    I am not entirely convinced that the membership of the NHLPA is particularly serious about pursuing this, as opposed to using it as a bargaining chip. James Mirtle had an interview with Ryan Miller in which Miller made some comments that I thought were telling:

    After watching the other sport leagues go through labour disputes last year, it is apparent that until decertification is filed, there will not be any real movement or negotiation. Many things in our negotiation are very consistent with the NFL and NBA negotiations, and both of those leagues filed papers necessary to decertify.

    …Decertification becomes part of the script because Gary Bettman and the owners are trying to get a sense of how far they can push us and at some point we have to say ‘enough.’

    “They want to see if we will take a bad deal because we get desperate or if we have the strength to push back. Decertification is a push back and should show we want a negotiation and a fair deal on at least some of our terms.

    One of the arguments that the NBPA faced, or would have faced in court, when their union disclaimed interest in the CBA negotiations (for more on the distinction between disclaimer and decertification and why it matters, check out this piece by Gabe Feldman at Grantland and, for people who like legal academia, this paper (PDF) by Nathaniel Grow)) is that the disclaimer of interest was a sham, something that the union was doing to gain a tactical edge in the labour negotiations. This become harder to refute where one of the union members is basically saying: “This is TOTALLY a sham for leverage” although a good lawyer would undoubtedly minimize the importance of what Miller’s saying if the issue were litigated.

    The timing of all of the stories turning up everywhere is kind of suspicious too. Nobody’s really talking about it and all of a sudden everyone is talking about it? With Miller making the comments he did? The @walsha-bot and Ian Pulver singing the praises of a free market when you haven’t heard anyone talking about it before? To me, the decertification (I’m using decertification to cover both decertification and disclaimer) angle looks like something they’re using as a stick to wave at the owners to try and force them to bridge the (not particularly large) gap that remains between the parties.

    One counter-argument to that. Damien Cox has, off and on, been saying something that I think makes a lot of sense: isn’t it weird that Don Fehr decided to go and run the NHLPA? He made a name for himself in baseball and presumably made something like a zillion dollars as the MLBPA head. What’s the incentive to get back into it with the NHLPA and do a deal that goes from 57/43 to 50/50? What does he get from that? Money? He’s presumably rich. Ego? How does that serve his ego? Bill Daly basically said the same thing today on Sportsnet, kind of suggesting that Fehr wasn’t motivated to make a deal.

    It’s never made sense to me. One plausible explanation (and, something that I think NHL owners have been worried about, judging by some comments that have been made about Fehr not having the same skin in the game as hockey people do) is that he wants to take hockey players from playing in a cap system to one in which there’s no cap. I could see that serving his ego, being a metaphorical head for the wall worth coming back for. (Note: I’m not using “ego” in a bad sense here, only in the sense that we all have reasons for the things we do and ego, or trying to better something we’ve done before, is one of them.)

    I believe free markets produce better outcomes for sports fans, so I’m in favour of blowing up the union and entering a post-collective agreement era in professional sport. I hope that Fehr wants to blow things up. On balance though, I suspect this is something that the players are trying to use as a threat and I can’t imagine that they’ll actually decertify and enter a Randian world. There are a lot of things that people are talking about as being reasons not to do it that strike me as pretty lame: the loss of agent certification, disappearance of pension plans, loss of guaranteed contracts…I suspect a lot of that’s nonsense. For one, workers pay for pension plans themselves, by making less money now than they otherwise would. If I was pulling down $2MM a year, I wouldn’t worry about a pension plan. Guaranteed contracts? Lots of guys don’t really have guaranteed contracts now. They have two way deals. There’s nothing preventing the negotiation of terms that guarantee a contract and, if the sporting experience in much of the world is any example, they’d probably become standard for pretty much any NHL regular.

    No, the real reason I suspect that this won’t happen is the uncertainty. Personally, I think the uncertainty is within reasonable bounds: top tier hockey, in some shape or form, would exist next year, even if the season is lost. The Phoenix Coyotes might not. Some teams aren’t going to be able to support the payrolls they once did. There will be people who would profit immensely – I think I’ve made a reasonably good argument over the past few years that stars get screwed under the current CBA – and there would be some guys who would lose out. My suspicion is that the pool of money available to the players would grow but that the distribution would be much different. There would be big winners and big losers. Making some sort of deal with the NHL ensures that hundreds of guys continue to make ridiculous piles of money. They might make less than they want or feel is fair but life as they know it, more or less, will go on.

    Here’s the thing though: I think that if they don’t, they’re just going to do this again in five years or seven years or whatever the length of time is. This is something I wrote in August of 2010:

    I think that this would be a fascinating negotiation to be part of and what’s contained in Brooks’ piece doesn’t really surprise me. If Brooks is right, it looks to me like the NHL is going to try to (in part, at least) address the problems created by revenue disparity by driving down the amount paid to the players leaguewide. The NHL is, I think, so screwed up and has so many teams with so many disparate interests that this is about all they can do to try and create a system in which all of their member clubs can thrive.

    The negotiation on the percentage is going to be an interesting one. It’s understandable that the NHL is going to try and drive it down. At present, they’re the only serious employer of elite hockey talent in the world and if they cut the pot of money by $135MM or so annually, it will still be paying more money than any other league in the world for hockey talent.

    It will be an interesting experiment to see what happens if the NHL can push down the player’s share of revenue. Until there’s some reason not to keep doing it – reduced revenues or losing the prestige and money that comes with being the best league in the world, they’ll try to drive it down further. At some point though, there will be some response, whether because the players perceive a clearly better option or some owner or owners within the NHL do.

    The thing I wonder is this: how is any of that not true in five or seven years? 50% – 45% – 40%…why would the owners stop, until there’s some reason to stop? Everyone gets a nice boost in the capital value of their team, the number of cities that could plausibly support a team increases (which makes possible some expansion and a nice lockout dividend) and everyone makes more money for five to seven years. Remember that Bettman quote from earlier in the lockout? “There seems to be this notion that the 54% escalating to 57% we agreed to seven years ago is a perpetual entitlement.” You can just file that away for any future negotiation. “There seems to be this notion that the (FILL IN BLANK) we agreed to seven years ago is a perpetual entitlement.” Sure, they won’t have guys like Mark Spector arguing that 50/50 is fair because that’s how mom used to split the candy, but he’ll just seize on something equally stupid and support the owners?

    In other words, it seems to me that a decertification threat, followed by a CBA within the next couple weeks is great in terms of getting hockey back on the ice but doesn’t do anything to solve the players’ larger problems: when next time comes, they’ll be asked to take less, regardless of how the league does between now and then. Making a deal now does not solve the basic problem: hockey’s done really well for the last seven years and the owners want to pay them less and limit their rights. I think they’ll end up making a deal, because they’re reasonably close, and I can’t tell guys with short windows to make millions of dollars that they’re wrong to pass on uncertainty and grasp the golden ring, but they should be clear what they’re doing: the only way to ensure that the NHL doesn’t just do this again in five years or so is by pursuing the decertification angle and being successful in doing so. Otherwise, this will just happen again.

    Maybe the players don’t care about that. I’m not sure I would if I was Shawn Horcoff, for example. Hopefully enough of them either don’t care, misjudge things or have a taste for wild uncertainty that, for once, the best interests of people who like to watch hockey get served, even if only by accident, and the North American sports labour movement starts to move beyond collective bargaining.

    Email Tyler Dellow at mc79hockey@gmail.com

    About Tyler Dellow

    13 Responses to The edge of the precipice

    1. dawgbone
      November 23, 2012 at

      Once a union plays the decertification/disclaimer card, how likely is a judge to side with them if they try it again during the next set of negotiations?

      Obviously the interests of the union can change over 5 years, but if they resort to it this time as a ploy, will they have that option again next time?

      Could the league just argue that they are only doing it to increase their bargaining position?

      • Tyler Dellow
        November 23, 2012 at

        DB -

        Yeah, I would think that’s going to be a problem if it becomes a pattern. Of course, if owners always make a bunch of concessions after decertification process begins, players are free to argue they’ve always intended to decertify and employers have always dumped a truckload of goodies on them to change their mind.

        In other words, it’s an argument but I think it’d be tough with a good lawyer on the other side poking holes in it.

    2. pete
      November 23, 2012 at

      I’m nodding along here — I have a hard time the players, as a collective, are going to jump off the precipice into an unknown like that.

      SOme of the stars likely know they’re losing out and have an incentive to take a short term hit in order to blow the lid off. But there’s got to be a lot more plugs and tweeners out there who know they’re on the fringe and if that’s the case, they’re better off agreeing to $400K a year and 700+ NHL jobs than some murky free market alternative.

      But from my perspective, I’m just sick of this shit and have realized that pro sports owners are by and large bound and determined to drive their costs down to the point of guaranteed profits.

      So I say go for it — decertify. The result will either be awesome, or no worse than things are now. But the current status quo is just a mexican standoff that never ends.

    3. Tach
      November 23, 2012 at

      I began cheering for an NHL-pocalypse at least a month ago. I am so done with the government subsidy sucking monopolists and unimaginative boob players with their agents who are all too happy to sponge up their piece of the riches. The assorted media hangers on can join them in eternal self-flagellation for all I care.

      Bring on the relegation style league and the free market.

    4. JonB
      November 23, 2012 at

      What I don’t understand is that it was made clear in the NFLPA decertification fight that using said decertification as a negotiationg tactic was rejected by the court.

      Why as a player union wouldn’t you just vote for decertification at the end of term in the new agreement?

      I would a think a successful negotiation play would be to take a NHLPA vote in favour of decertification at the end of the new term and then inform the league that if there isn’t a CBA negotiated to there liking by day X, players will accept a deal on the table and decertify at its expiry.

      I understand there might be some leverage concerns with telling owners you will accept a deal by X point in time regardless but the idea of signing the owners deal with a guaranteed decertification looming at the end of it would certainly have to shake some shins amongst the owners, no?

      It just seems to me the timing of decertification isn’t being used properly by the union and you’re right who takes it seriously when you only bring it out during the end game

    5. skinny65
      November 23, 2012 at

      Tyler, I do agree the decertification angle is an alluring one. What I have been thinking about for a while now is that if the season is washed out, what’s the possibility of 6 rich guys starting up another league for next year. 6 cities, they could pull together all-star teams and we’d love it.
      I would imagine that as soon as word of this broke out, the nhl would settle and that would be that. So the thinking goes, why would smart rich guys put any money behind some idea like this when they know as much as anyone else that it would never happen.
      That’s the catch 22 I see in it, but man would I love to see Jim Basille and a few other rich guys tweak the nhl by threatening something like that. Just wondering your take on something like that.

    6. RiversQ
      November 23, 2012 at

      The last thing I want to see is another “victory” by the owners, because it will be Groundhog Day all over again in 5-7 years time. The game needs something to stop the vicious cycle. Decertification is one route. Canceling the year and then acting astonished when ~4 teams can’t make a go of it post lockout is another one. Would 100 player jobs and a major dent in the NHL’s US regional coverage get their attention? Fans walking away in droves worked to fix baseball; maybe the weird regional disparity of the NHL can work in the favour of hockey fans by sacrificing some shitty markets that no one cares about anyway.

      Aside: it would be interesting to see what the NHL would look like without a union at all. Not sure it’s in any of the current parties’ best interests though. Only the big fish on either side stand to gain from that IMO.

    7. Woodguy
      November 23, 2012 at

      After watching the other sport leagues go through labour disputes last year, it is apparent that until decertification is filed, there will not be any real movement or negotiation. Many things in our negotiation are very consistent with the NFL and NBA negotiations, and both of those leagues filed papers necessary to decertify.

      …Decertification becomes part of the script because Gary Bettman and the owners are trying to get a sense of how far they can push us and at some point we have to say ‘enough.’

      “They want to see if we will take a bad deal because we get desperate or if we have the strength to push back. Decertification is a push back and should show we want a negotiation and a fair deal on at least some of our terms.

      That’s really unfortunate for fans because I think Miller’s comments extend the lockout.

      I’ assuming that Bettman and Daly had at least *some* doubt as to the determination of the players to pursue de-certification, but now they *know* they don’t.

      I think this will cause them to not move their position much and really push this negotiation to higher stakes.

      Unfortunately when higher stakes comes then emotion and ego (as Tyler defines ego) come into play more, which can lead to poor decisions (to not take revenue from someone who wants to give it to you).

      Bettman and Fehr are pros much above my current level, but if Bettman decides to test what Miller revealed, I can’t imagine emotion and ego not coming into play.

      The thing I wonder is this: how is any of that not true in five or seven years? 50% – 45% – 40%…why would the owners stop, until there’s some reason to stop?

      If I am an NHL player, this is the best reason to take it to the limit this time.

      Roll over easy and you’re bulldozed next time.

      Make it painful and then maybe you can get a longer deal or at least make some owners more lockout adverse.

      Given that the average NHL player has a career less than 4 calendar years, its not actually bullshit when Cole says he’s paying it forward. Whether or not he believes it, given the length of even a 5 year CBA, for the most part, he is right.

    8. Woodguy
      November 23, 2012 at

      fter watching the other sport leagues go through labour disputes last year, it is apparent that until decertification is filed, there will not be any real movement or negotiation. Many things in our negotiation are very consistent with the NFL and NBA negotiations, and both of those leagues filed papers necessary to decertify.

      …Decertification becomes part of the script because Gary Bettman and the owners are trying to get a sense of how far they can push us and at some point we have to say ‘enough.’

      “They want to see if we will take a bad deal because we get desperate or if we have the strength to push back. Decertification is a push back and should show we want a negotiation and a fair deal on at least some of our terms.

      That’s really unfortunate for fans because I think Miller’s comments extend the lockout.

      I’ assuming that Bettman and Daly had at least *some* doubt as to the determination of the players to pursue de-certification, but now they *know* they don’t.

      I think this will cause the NHL to not move their position much and really push this negotiation to higher stakes.

      Unfortunately when higher stakes comes then emotion and ego (as Tyler defines ego) come into play more, which can lead to poor decisions.

      Bettman and Fehr are pros much above my current level, but if Bettman decides to test what Miller revealed, I can’t imagine emotion and ego not coming into play.

      The thing I wonder is this: how is any of that not true in five or seven years? 50% – 45% – 40%…why would the owners stop, until there’s some reason to stop?

      If I am an NHL player, this is the best reason to take it to the limit this time.

      Roll over easy and you’re bulldozed next time.

      Make it painful and then maybe you can get a longer deal or at least make some owners more lockout adverse.

      Given that the average NHL player has a career less than 4 calendar years, its not actually bullshit when Cole says he’s paying it forward. Whether or not he believes it, given the length of even a 5 year CBA, for the most part, he is right.

    9. Woodguy
      November 23, 2012 at

      Tyler,

      Please kill the first post. Pretty much same as 2nd except I bold and italic to work.

      I apologize for the double post, the screen looked like a fail after I hit “submit comment”

    10. godot10
      November 24, 2012 at

      My thoughts, FWIW:

      1) Bettman (and the owners) lose control of the process if the players decertify. As the players are seeing for the 3rd straight time, the lockout is a powerful ownership negotiating tactic that will force them to make massive concessions every five years. It is better to take a stand while who are still strong.

      2) Decertification may be a tactic, but as a tactic it works. See NFL, NBA…because (see 1), the owners lose control over the process. The union may lose in court, but not before costing the owners a lot of money. Remember, the players are losing future salary. The owners can lose existing capital and wealth.

      3) The NHLPA has a better case for decertification than the NFLPA and NBAPA Last time around they conceded a hard salary cap, and took a 24% pay cut. They essentially caved 100% to the owners. This time, they have offered to give up 7% of HRR, going from 57% to 50%. And they are using decertification as a final option, not the first option as the other two players union did. The NHLPA can argue that they bargained in good faith, and that they have no choice but to decertify, because the owners are using the lockout process to bludgeon the rights and incomes of players again in this round.

      Disclosure:

      My preference is for a hard salary cap tied to league revenue. Or a salary cap with hefty “taxation” if a team goes over, to flow to the revenue sharing pool. And my preference would be to essentially eliminate all contracting provisions (except that the average of the top five years of a contract is the cap hit of the contract). No draft. No waivers. No limitations on numbers of contracts.

    11. November 24, 2012 at

      Thing is Tyler, it’s both. It’s used as a tactic to get a speedy resolution, sure, but if that doesn’t work, the litigation continues and it becomes a longer term play.

      They can also push to get an injunction to end the lockout immediately.

      Is it still a sham if it potentially turns into a larger fight once the season is cancelled? I don’t think so.

    12. Kris
      November 28, 2012 at

      Decertification could kill some of the weaker teams. They couldn’t compete for star players at all. (Even under older non-capped CBA’s, the weaker market teams like Edmonton had some control over keeping their players, for a while, from the highest bidders.)

      IMO, the players and the agents see decertifying as possibly killing some of the available jobs by killing some of the teams. And that is the worst case scenario for half the union (not the star players).

      I’m sure they’re happy to use it as a bluff, even to begin the process to force a new CBA. But my guess is that the league know that a majority of the players don’t want to follow through with it.

      IMO, anyway. I thought this thing would be over in weeks. I thought the players would’ve accepted less cash, but forced a long, long term (15 years?) CBA to stop the league from doing this again for a while.

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