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The CBA Debate
Part 2 of 4
10/6/04 - From the Publishers of the Hockey Alliance

There is no greater issue facing the fans, players, and owners of the NHL than the expiration of the current collective bargaining agreement. Both the player's union and the owners are waging a war for public opinion, considered fairly vital in case of a long term labor shortage. Fans find themselves, as always, stuck in the middle with no represented voice at the CBA negotiation table. Fans have to look past the propaganda and rhetoric spewing from league and union offices in an attempt to understand the issues being raised. The divide among fans who are lining up either behind the players, the owners or themselves is fairly strong and has sparked many interesting debates this summer. The following is a debate between Hockey Alliance publishers, representing both sides of the agument. Contributors include:

The debate was triggered by an article written by Lyle Richardson for This conversation is a good example of the kind of debate NHL fans are having this summer and shows the kind of passion fans have for the league and the game of hockey. The conversation is picked up after discussion about the article had begun.

This is Part 1 of 4

Lyle Richardson : For those who say the players out-smarted the owners, well then, what does that say about the calibre of the owners? The current CBA would've kept player salaries under control if it had been used properly by the owners. The reason the players were able to get away with asking for increasingly large salaries was because there was always going to be team, usually in a large market, who was willing to pay it. The owners had it in their means to keep salaries under control and blew it. Now they're talking about wanting to scrap everything in favour of "cost certainty", whatever that is. My question is, how do we know salaries will remain under control under "cost certainty"? How do we know for sure there won't be teams who'll either find loopholes they can use to their advantage or will happily pay whatever penalties to ensure they get the players they want? How do we know for sure "cost certainty" will in fact work to keep salaries under control?

I agree the European market will likely be limited, but again, what to make of that report that cited the players savings, war-chest, investment account and royalties? As I noted before, the players are in better shape to ride out a prolonged work stoppage than they were ten years ago, and we shouldn't underestimate their determination and their means for surviving a lockout. Yes, I agree a five percent rollback is chickenfeed, but that could be something to be used as a starting point. The NHLPA suggests 5%, the league should make a counterproposal and then off you go with negotiating down to a figure both sides can live with. Instead, the league rejected the proposal with no negotiations in favour of their modified "cost certainty". If the league would put into clear terms what they mean by "cost certainty", it would be much easier for me to be sympathetic to their cause. Believe me, if it were the other way around and it were the players, not the league, dancing around "cost certainty", I'd be hammering them to the wall every week in my articles. So far, we've heard Bettman and company say a cap is one option but not the only one, that there are many different options available but none they're willing to talk about publicly. In my opinion it's been Bettman who's been the slippery one thus far. At least with the union we've got some idea as to what they're willing to discuss.

And the NHLPA is willing to discuss a luxury tax. They said so in their October proposal, which was a remarkable statement to make since they were unwilling to accept such a thing during the last lockout. To me, that's indicative of their willingness to address the league's claims of financial distress. I do agree with you that the union should provide evidence to the contrary that the league isn't losing money, but you've gotta admit, that's kind of hard to do when the league won't let you audit their books. Please understand, guys, I'm not in the players camp on this one, in fact, I'm not pleased with either side. It just seems to me that the union appears willing to negotiate and seem better prepared than they were in the past, while the owners toss blame at the union, the agents and their rival owners, and offer up nothing but weasel words about "cost certainty". Some may consider it futile to lay blame for this mess, but I believe those who are most at fault - the owners - have a dubious reputation, and that in turn has made me cynical as to what the outcome of the next CBA will be.

D’Arcy, I just don't understand this blame shtick you keep running with. It's irrelevant. If I and 100 other people own a condo in a giant Condominium complex and we as as tenants get assessed an additional "upkeep" fee every month if garbage is found by the swimming pool I'd be right pissed if only 1 of the 100 owners keeps leaving beer cans lying around and I haven't. That's the case with the owners. One guy makes a mistake and sets the market upward leaving the other owners no choice but to fall in line or fall hopelessly behind on the ice. Tough choice to make. You say "weasel comment" about cost certainty. What's weasel about that term. If I owned a 100 million dollar asset I'd like a little certainty on my costs too ... who can blame them? The owners can't just counter a silly 5% offer or they'll end up with a process that meets a roll back number in the middle and does nothing else to stop salary escalation - it's common sense. The NHLPA rolled that baby out for PR reasons and it appears you bought it and swallowed it hard.

Bill Pax: What's a bit upsetting to me, and I believe Lyle alluded to this in his article, is the fact that the sides don't seem to be talking. The owners have their idea, the players their idea and they're light years apart. But it would be nice if they'd use those proposals (cap vs. 5% pay decrease) just as end posts for a negotiation. Why aren't both sides sitting in a room everyday talking to one another, shooting ideas across the table? The "it's our way or the highway" approach both sides seem hell bent on only hurts the fans and the already battered image of the NHL as a bush league in my opinion. However, if there's going to be a "winner" in this my money is on the players. As usual they seem united and I've already read and heard stories about a possible break in the ownership between the bigger money teams and the "smaller" money teams.

Lyle Richardson :
Bill - You're right, the lack of negotiations is very frustrating for all of us right now. That being said, I think what we're going to see is a lot of public posturing while the real negotiations talk place quietly behind closed doors. Goodenow prefers the "11th hour" gambit as he believes it works to his favour, but Bettman, to his credit, is also a dogged negotiator and isn't pressured by deadlines. As we near September, I think we'll see more serious discussions between the two sides which will increase as "D-Day" approaches.

Whether we have a new deal by then remains to be seen.

D’Arcy McGrath- :This "blame shtick" is nothing of the kind, nor is it "irrelevant". It's simply the facts. What's "irrelevant" about trusting the owners, a good number of whom signed off on the current CBA, to ensure they won't make a mockery of the next one? What's "irrelevant" about pointing out that they've so far done little, if any, negotiating with the union thus far? "One guy makes a mistake?" There are numerous "mistakes" made by the owners over the past ten years. How about the "mistake" Bill Wirtz of Chicago with his pitch for RFA Keith Tkachuk back in 1995? That was copied by the Rangers in 1997 with Joe Sakic and the Hurricanes in 1998 with Sergei Federov. How about the majority of Group II free agents getting significant raises, even when in some cases they staged, or threatend to stage, lengthy holdouts? Those are "mistakes" made over and over and over again. How about the Boston Bruins making a mockery of the restrictions on entry level salaries with their bonus-laced offer to Joe Thornton? That "mistake" was copied again and again throughout the league, so much so that when players finish their entry-level salaries, they're now seeking substantial raises because their bonus clauses paid them well over the rookie cap.

What about the "mistake" that, despite having the option of walking away from arbitration awards, only one team - the Bruins - ever exercised that option? The rest either paid out the arbitration awards or traded away that player's salary to a club more willing to pay it. What about the continued "mistakes" of the UFA market,which until last summer was a spending frenzy that continually drove salaries higher and higher? Those are more than mere "mistakes", D'Arcy, and they're not "irrelevant". They're important to remember when one decides to put their trust in the league and the owners to "get it right this time". What's weasely about "cost certainty" is Bettman has not given us anything of substance as to what it means. He denies it means a hard salary cap of $31 million, but then suggests a cap is "one option" of many. OK, well, what are the other options? Share them with us and the union. If you don't necessarily have a cap in mind, then what do you have in mind?

He claims it's a "concept that has a definable relationship between revenues and expenses." That's nice, but what exactly do you have in mind, Gary? A salary cap? A luxury tax? Revenue sharing? A poke in the eye? What?? It certainly isn't a luxury tax because back on June 27th Bettman said he doesn't believe such a system would work. And there's already rumblings that the big market clubs will resist any attempt to get into a major revenue sharing scheme with their small-market cousins, and Bettman is on record as claiming such a scheme wouldn't work without "cost certainty". So round and round we go, and all signs seemingly point to a cap. And I'm disappointed with your response regarding the union's October proposal being nothing but mere window dressing for a gullible public. Granted, most news releases on both sides goes for PR effect, but behind all that is substance, D'Arcy. It's the same with the NHL's claims of losses. I don't doubt for a moment there are teams losing money and some are already in dire straits. All I'm suggesting is that if the league truly wants to get the union onside toward working out a new CBA, then why not open their books to the union and allow them to check them out. Hey, the LA Kings had no problem allowing one of their fans, who is a portfolio manager and equity analyst, to check their books when he questioned their claims of financial losses. His findings not only proved the Kings were losing money, but also stood to lose more. So why not open 'em up for the union and settle this nonsense once and for all? I'm merely calling it the way I see it, and the way I see it is, the owners have to get their bloody act together if we're to put our faith in them to come up with a better mousetrap, and they must be more willing to work with the union.

Lyle Richardson "Mistake contracts", D'Arcy. Exactly what by your definition constitutes "mistake" contracts? All of the UFA ones since 1995? Some of them? A handful? And what about the RFA signings since 1995? All of them? Most of them? A few? "Held hostage?" Nobody put a gun to Neil Smith's head when he made his pitch for Joe Sakic, or to Pete Karmonos's for his offer to Sergei Fedorov. Certainly nobody forced teams to sign their rookies to deal that exploited the CBA. They all knew what they were doing in that instance blew apart the entry level cap. The only thing they were "held hostage" to was their own fear that their North American first round pick would hold out for two years and then go back into the draft where they'd be snapped up by another club. Few of them had the balls to call the bluff of those rookies and their agents. And with European rookies, they hold their rights until they turn 31, so why would a team like the Wild cave in and give Marian Gaborik the same deal as Thornton? Yes, they want a star player to sell their club around, but they could still afford to wait him out. I'm willing to bet most of those rookies would gladly sign to the entry level cap for three years just for the chance to play in the NHL, earn their spurs and then go for the big bucks.

Remember, that's all part of the business of hockey, the give and take between a team owner, represented by his GM and a player, represented by his agent. So what does that say about the business "savvy" of the owners? Still trust 'em to "get it right next time?" The lawyers on both sides helped draft the current CBA, based on recommendations made by owners and the players, represented by the NHLPA, whose player reps were involved in the process. As for "lawyers" finding loopholes to exploit, sorry, D'Arcy, but you're wrong on that count. It was the players agents and the general managers who sought to exploit them. They may have used lawyers to ensure what they were doing wasn't violating the CBA, but you can bet they went on orders from both sides. "To blame owners for trying to be competitive" is not what I'm doing. I'm blaming them for not using the CBA to their advantage, something they've only started doing since last summer. There's nothing competitive about a small group of big market teams turning the UFA market into their own grab bag, leaving the small-and-mid markets to fight over the scraps that remain. There's nothing competitive about driving player salaries so high that small market clubs (like your Flames) struggle to retain their best players.

And besides, D'Arcy, didn't you just say that they were being "held hostage" by "mistake contracts"? So where's the competitiveness in that? I simply don't understand how you can say "blame is irrelevant", when it's pretty much the same bunch that put the NHL in this mess in the first place! How can it be "irrelevant" that they've conducted their business so poorly since 1995? How can we be sure we can solely trust them with their "cost certainty" scheme when they won't even tell us what they have in mind, other than to say they must tie player salaries to revenues and a salary cap is one option, but then won't tell us what else they've got in mind? Suppose they get an agreement that is tilted even further in their favour than the current one and they still screw things up? Will it be irrelevant then? Do we still trust them to "get it right next time"? There will always be the human element in business deals, but what it takes is simply better management of the agreement by both sides.

We've already seen both last summer and so far this summer that most of the owners, when they collectively set their minds to it, can use the current CBA to their favour and thus keep player salaries affordable. My question is, why the hell didn't they do this earlier? I believe the likelihood of a lockout would be greatly diminished if they had used it the way it was intended. The players, with probably few reservations, would've still accepted the current deal because it would still compensate them fairly, while the owners would still have largely affordable payrolls. Obviously there would be a few issues they'd debate about, but we certainly wouldn't be hearing talk about losing next season to a lockout. As I stated earlier, D'Arcy, I'm well aware that statements from both sides are as much about winning a PR war as it is about breaking news, and I'm also well aware that talks go on behind the scenes all the time. As I said to you before, don't underestimate the players resolve on this one, as they're in far better shape to withstand a lengthy shutdown than they were ten years ago, and they were willing to lose the entire 94-95 season. I simply don't see them trying to undercut Goodenow now, after all the gains he's made for them despite a CBA that should've worked more in the owners favour than in theirs.

Frank Thorpe: As I said to you before, don't underestimate the players resolve on this one, as they're in far better shape to withstand a lengthy shutdown than they were ten years ago, and they were willing to lose the entire 94-95 season. I simply don't see them trying to undercut Goodenow now, after all the gains he's made for them despite a CBA that should've worked more in the owners favour than in theirs.

See this is the problem that I have with the NHLPA. They are not in better shape to withstand a lengthy shutdown, because the league which is already on life support won't survive. My god the NHL has lower ratings then the other 3 major sports, Arena Football, Poker, Nascar. This is the wrong time for the league to do a work stoppage. They need to generated revenue and interest not push fans and sponsors away.

I'm glad the players have their money set aside, hopefully they can live the rest of their lives off of it. Playing hockey for millions will probably be a
thing of the past if this season is lost completely.

Lyle Richardson : As I noted earlier in this debate, the average NHL player has $2 million in savings, can draw on a substantial strike fund from the union as well as an investment account, plus royalties from trading cards, video games and so on. That's not counting what they might earn in Europe or from personal investments, businesses and endorsements. They're in much better shape now than they were ten years ago when they far more to lose and far less to fall back on.

The league isn't on "life support", but it obviously needs to get its financial house in order or it very well will reach that point. By getting a workable deal in place working in conjunction, rather than against, the players union, will be a significant first step. After that, they can focus on improving their on-ice product which is a major reason why the TV ratings are in the toilet and the NHL ranks behind those aforementioned sports, including the more dubious "poker".

"Playing hockey for millions" won't be a thing of the past under a new agreement even if the league gets it's mysterious "cost certainty" into place, but the days of third and fourth liners and fifth and sixth defensemen and backup goalies earning over $1 million per season likely will be regardless of the outcome. The top players will still earn millions, but I suspect the days of salaries in the $8-$10 million range could become a thing of the past. Some of them probably won't like it, but that is what must go into place for the league to pull itself out of it's current financial mess. Regardless of the outcome of the next CBA, it'll be predominantly up to the owners to ensure it works, since they're the ones who pay the salaries and abused the current one which was slanted in their favour. If the usual suspects once again find ways to exploit it, we'll be right back in the same mess again in five years time, as I suspect the next CBA won't be extended as the present one was.

D’Arcy McGrath: Blame is irrelevant in that the system dictates that winning and being competitive will always be the root of franchise killing contracts until the human element is taken out of the mix ... hence the talk of cost certainty.

Once again ... listing four examples doesn't make the ownership as a group guilty of anything. These guys all want to win. Because of that they all have to pay the going rate or they risk the season at hand and possibly their fan base in some markets. That's the bottom line. The examples you listed and others have set the bar in some cases, meaning owners that would love to be fiscally responsible are put in a situation where they need to either pay the going rate or suffer the consequences. Pretty tight spot to be in. So yes ... they are held hostage by a system that doesn't keep the mavericks in check. You dismiss my lawyers finding loopholes comment but then say agents who sought to exploit them ... guess what? Many player agents are former or current lawyers doing exactly what I said they were doing. Exploiting holes in the CBA. I've never once said that it's all the players fault, in fact it's the opposite, I don't blame a single player for getting all they can possibly get. I did say blaming the owners in a silly waste of time as they nature of the beast is to drive up salaries to win in a market that doesn't protect all the owners from the ones that refuse to follow the bottom line.

Lyle Richardson : So if the same mistakes are made this time around as last time, you're cool with that, is that what you're telling me? That the owners shouldn't have to account for the blunders made, both singly and collectively, during the past ten years? Sorry, but that doesn't wash. If we want to ensure the "human element" is taken out of mix, there must be a certainty that the owners (more so than the players union) are willing to be more collectively responsible. You can parrot "cost certainty" until you're blue in the face but if the owners conduct their business in the same manner as they did over the past ten years, nothing will change, and we'll be right back in the same mess again in five years time. I'm still amazed that you can flippantly dismiss those examples I cited earlier, D'Arcy. As I noted earlier, some were responsible for free spending that pushed salaries out of hand and contributed to the difficulties faced by small and mid-market clubs. All were guilty of signing rookies to bonus-laced contracts that punched holes in the entry level cap, and all were guilty of paying out substantial raises to RFA players, be it through negotiation or arbitration, which also contributed to the rise in salaries.

Those examples were just the odd occurrence, D'Arcy, they happened again and again and again over the past ten years. It's only be the uncertain future of the league past September 15th that has forced them to act more responsibly. Yes, D'Arcy, I'm well aware that some of the player agents are or were lawyers, but not all of them are, OK? And that doesn't take away the fact that the agents did this with the players blessing. You make it sound as though the owners and players are dumb sheep being led by the nose by lawyers. Sorry, but if somebody screws up a job, you don't say, "oh well, fair play to you, no sense laying blame". It's called responsibility, OK? When in Buddha's name are the owners supposed to be responsible for their mistakes, be they singly or collectively? I'm not going to give them or the union a free pass. Folks wanna know why we've reached this point and I'm more than happen to point out who is responsible. BTW, D'Arcy, are you familiar with the book "Money Players" by the Calgary Herald's Bruce Dowbiggin? Or "The Defence Never Rests" by the same author? Or "Game Misconduct" by Russ Conway? Or "Net Worth" by David Cruise and Allison Griffiths?

D’Arcy McGrath: To be honest man, I don't get the feeling you've been actually reading what I've said (no offence by the way).

From the beginning I've pointed out that competition drives bad decision making by the few, and the market moves as a result, forcing the more fiscally prudent owners into a rock and a hard place situation of either getting killed on the ice, or getting killed on the balance sheet with no safety in-between. Look back ... that's all I've said. No passes to owners that are stupid, no disagreement that some contracts have been foolish, but just pointing out that a few mavericks have actually done most of the damage. Therefore you need a system to protect owners from themselves. Players always act on their own behalf (get as much as they can) and I have no ill will for them doing so. You don't really need to change the system from the players side unless you fear the overall good of the game. Owners, if looking out for themselves like the players will take one of two directions. Stay prudent to the business model and at least break even, or do what it takes to win. Therein lies the problem. You need to keep the latter group away from the piggy bank. Hence cost certainty. To preach to me about accountability, responsibility, and blame is a waste of time ... we just may disagree Lyle, that doesn't make you right. I'm well aware of Bruce Dowbiggen ... if you're quoting some of his theories I can see why we don't see eye to eye. Major blow hard in our market that is dead wrong more often than he's right.

>> Part 3

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