Speaking of the CBA and the upcoming NHL lockout….

Okay, well in my case, trying desperately to not speak of the CBA, the on-going negotiations, and the upcoming lockout…

I’ve consciously avoided digging in to the CBA and negotiations so far because there really hasn’t been a lot to talk about. We’ve heard the NHL position, which is that the universe will fall into a black hole and we’ll all die unless the NHLPA gives back even more money. In fact, the NHLPA needs to start paying the owners for the privilege of playing, because otherwise, the game is doomed. 

Something like that. The Owners want more restrictive free agency, reduced salaries, shorter contracts, and a pony. 

The player’s response has been pending, but at least some of the details are now starting to hit public view. They’re calling for the removal of the salary cap and replacing it with a luxury tax. That luxury tax will fund revenue sharing from the higher-revenue teams who are willing to spend money to the lower revenue teams that are struggling to meet the current salary floor. The players also want a partridge in a  pear tree.

Typically when I start talking about sports labor negotiations I tell people two things: first, ignore everything both sides say in public, because they are lying, and second, nothing will happen to solve the problem until the last possible second, if then. In this case, surprisingly, both sides have been surprisingly honest in their comments (for a labor negotiation) and beyond that, the discussions are unusually amicable. There are definitely strong disagreements about what the new CBA needs for approval — but at least both sides are acting professionally and seem committed to finding that middle ground. 

That is encouraging to me. That might be surprising to some given the players hired Donald Fehr, but remember, in professional baseball, the owners were so anti-union for so many years that they were found guilty of collusion (to the tunes of hundreds of millions of dollars) multiple times. Not only were the baseball owners willing to break the law to break the union, they did it again and again after getting caught. No wonder the baseball player’s association didn’t exactly cut them any slack… Fehr and Bettman, at least, seem to be keeping this civil and businesslike, and that, at least, is a good starting point.

It should also be noted that even though the new CBA is an agreement between two groups, the players and the owners, there are actually three groups at the negotiating table: the players, the rich owners, and the poor owners. 

Gary Bettman’s role in this is to figure out a way to steer the rich and poor owners to a consensus both sides can live with that the players will agree to. My honest opinion: fans don’t appreciate just how hard his job is and what he does to keep the owners from screwing this sport up massively. Also, whatever the owners pay him, he’s underpaid given the crap they put him through. 

Donald Fehr has a lesser problem: the wishes of the rich players vs. the needs of the journeymen. Hockey, fortunately, has players with a strong sense of working for the greater good of the game, as opposed to a sport like basketball where the rich player’s view of the depth guys is “hey, there are lots just like you in europe waiting, so shut up”. In the case of basketball, there’s some validity to that, too, where in hockey, it really is more of a team game, and the player’s union attitudes match that.

Fehr’s bigger problem is that his negotiating stance isn’t really about what the players want, it’s about presenting a set of demands that force the two owner factions to come to that compromise position. In some ways, his job is help Bettman beat sense into the owners in a way that the players get a deal they like. Or will tolerate.

Donald Fehr’s negotiating position is intended to push the owners to revenue sharing: his view is there’s lots of money in the game, and that the rich owners need to help out the less rich owners. The rich owner’s position is that the less rich owners can suck on it and that the proper way to solve this problem is to take more money out of the players, which will make the less rich owners richer, and the rich owners even more richer. 

That is the core issue in this CBA negotiation: the owners want the players to make them richer. The players want the rich owners to help out the less rich owners. The less rich owners generally don’t get to air their opinions in public, but I think it’s safe to say they want some kind of improved revenue sharing, but they don’t have a big enough faction to make that happen on their own. Bettman and Fehr will use all of the other issues on the board (the ones highlighted so far are free agency, contract length, the salary cap, the luxury tax, length of contracts and various player discipline issues) as chess pieces on a complex board where the rules are, at best, fluid. 

My prediction for most fans: try not to pay attention to this, especially early in the game. Definitely pay little or no attention to sports pundits writing about it. Most don’t put in the time needed to study the issues and take over-simplistic positions without really understanding what’s going on. Most of the rest are mouthpieces for one faction or another and are pushing some aspect of some agenda. I would put myself in the “don’t pay attention” pool as well, and I hope to not feel the need to talk about this much. 

My next prediction: the league will miss opening night. The owners will lock the players out when the current CBA expires in September. The player’s offer to continue playing under the existing CBA isn’t really acceptable, because all that does is transfer the timing of the work stoppage into the hands of the players. Of course the players want to play in October, even under the old deal. The old deal wasn’t bad for the players, and that gives them the ability to call a strike when it hurts the owners most. The owners won’t allow that to happen, so they’ll force the issue at the start of the season when incoming revenue is weakest and it hurts the owners less. 

I don’t expect this negotiation to drag on too long, though. I believe there will be hockey by November 1. There are significant issues to solve, but I don’t see this as a serious war. It’s hard negotiation and it’s a very solvable situation. For all the owners quiet pretensions of impending disaster, it’s not in their best interest to let this drag on, the amount of money involved isn’t worth it. 

Yes, this is millionaires arguing with billionaires over how to carve up a pretty big pie. That’s life in professional sports. Fans, get used to it. That’s how it is.

In a perfect world, I’d like to see the teams split gate revenue 60-40; the home team keeps 60%, the away team gets 40%. Over the length of a season, a team with weaker home revenues would see it balanced out by stronger revenues from away games in strong cities, but a home team with really good revenues still gets an advantage so there’s motivation for all teams to push for their own revenues to thrive (my goal: all teams get enough of a safety net to be viable, but not so much revenue parity they can be lazy or incompetent and still be profitable. That’s been a problem in the NFL over the years where so much revenue is shared). 

In the Rich owners perfect world, they would keep 100% of gate (and all other) revenues, and pay the Washington Generals a flat fee to come in and lose home games on a regular basis. that may sound like Hyperbole, but I do believe there’s a core group of owners that would love a ten team league, if they could only avoid the repercussions of doing away with the rest of the league from the fans, press, politicians and the player’s union. And, of course, they could keep all of the revenues for themselves. and hopefully stop paying the players… 

What do I think will happen? 

Nothing, until the owners agree to some modification of the revenue sharing rules to balance out revenues across teams in some way. Fehr’s luxury tax is probably dead on arrival, at least in this initial form, but in baseball, seems to help some of the lesser teams without slowing down teams like the Yankees that are willing to spend the money and pay the tax. It’s not a bad starting point (but it’s not really an optimal financing form; it is, however, a lever that can be used against the rich owners towards other revenue share options). 

The owners demands are simply to push hard against the player’s position from the start, and try to make the negotiation a case of the player’s limiting their losses. Fehr’s response seems oriented more towards ignoring that and pushing the owners off in a different direction. How well that’ll work I don’t know yet, but it makes sense. To respond directly to the owners would be to agree that some set of take-backs are going to happen. Fehr’s goal is to reshape how revenues move between owners. He’ll be happy if nothing really changes in player compensation.

The other big issue seems to be player discipline, and the union clearly wants more say in how players are disciplined, especially suspensions and appeals. I don’t expect the owners are at all interested in allowing the union any new powers here. I would not be surprised if this is the big wedge that halts negotiations from finishing and that the players ultimately give it back to the owners when the owners make enough concessions elsewhere. It seems a perfect issue for the players to refuse to compromise on until they get what they want elsewhere. 

Ultimately, the owners really do need more rational revenue sharing. This isn’t a “greedy player” problem, it’s a revenue disparity problem between the richer teams and the less rich teams. Player compensation isn’t unreasonable when you compare it with other major sports leagues, and the NHL isn’t exactly revenue poor. There are definitely issues with the current CBA — I think free agency was made too liberal, leading to salary escalation too early in a player’s career, and contract length has extended way too long, and there have been too many abuses of contract length to circumvent the salary cap. I don’t think the luxury tax is a bad idea, personally, but Id’ rather see a more honest revenue share setup in place. 

I would like to see most contracts capped at 3-5 years, with some exception for franchise players. I agree with the owners that salary arbitration is inflationary to salaries, but I haven’t seen them put out an alternative to solve the problem (“let’s kill salary arbitration and restrict free agency even further” is not a rational alternative). There needs to be some way to let player’s salaries grow as they prove themselves in the league without the current massive bumps after the initial three year entry deal, but I haven’t seen a good proposal how to fix it. 

One way I’ve considered to deal with the franchise player contract length is to cap how many years of contracts you can have with a franchise at any time. If you have (say) 25 players under 1-way contracts and the average contract length is capped at 3 years, that means you can only have 75 years worth of contracts signed. If you choose to sign your star goalie for 15 years, that means the other 24 players have to have contracts totaling 60 years or less. That gives teams some flexibility as to how to structure deals, and new and interesting ways to screw themselves over with stupid contracts. I see that as a feature. It also gives a team an opportunity to bring in another longer-term contract player — as long as they stay under the team cap. (I admit to liking team caps more than individual player caps for a lot of things because it gives a smart team opportunities to be inventive, and incompetent teams opportunities to shoot themselves in the foot). Having to wedge contract length into a cap along with salary caps will give capologists (pro and amateur) even more reasons to grab the Maalox; also a feature in my eye.

I think the league needs to move to longer restricted free agency; players are going unrestricted too young, given top players now routinely play into their late 30’s and 40’s. Some of the existing rules were framed when players careers were ending at 32 or 33. Now it’s more likely to be 35 or 37. 

So my plan? something like this:

  • Owners share revenue more equitably. If they can’t work it out, then some kind of luxury tax for the Rangers and Leafs to complain about. I won’t get 60-40, but the richer teams need to get over it and help out the less rich teams more. (they will be allowed to whine and pout about it, though). 
  • Players accept four year rookie deals instead of three.
  • Longer terms for restricted free agency, and push unrestricted free agency for most players out two years. 
  • Teams can not exceed a total of three years of contract per player, capped on a team-wide basis. (with lots of details to work out about how to handle injuries and etc). 
  • Player discipline and suspension unchanged. That system isn’t broken, so ultimately, let the owners have it back in favor of other concessions on revenues.

And lets see if they can get it done by October 20th. 

At least, one can hope…