The dark day has arrived.
[q]TORONTO (Reuters) - NHL owners carried out their threat to lockout players on Wednesday, shutting down the league after the two sides were unable to reach a new labor deal.
With the current Collective Bargaining Agreement (CBA) set to expire at midnight, a grim-faced NHL commissioner Gary Bettman announced at a news conference in New York that he had authorized a lockout ending any hope that the season will open as scheduled on October 13.
Owners, who have been preparing for a lockout for several years amassing a war chest of $300 million, have indicated they are prepared to shutdown the financially troubled league for as long as it takes to gain concessions that will allow them to operate at a profit.
Players have also dug in, wanting to maintain a market-based system vowing they will never accept any form of salary cap that they believe is at the heart of owners' proposals.
[/q]
There will be no NHL this year and perhaps beyond. No negotiations even scheduled. Too bad a bunch of billionaires and millionaires can't figure out how to fairly split $2 billion. And in the process, the FANS get screwed. PA and owners all suck. They are equally at guilt.
Luckily, we have collegiate hockey. :-D
[Q]calgARI '07 Wrote:
There will be no NHL this year and perhaps beyond. No negotiations even scheduled. Too bad a bunch of billionaires and millionaires can't figure out how to fairly split $2 billion. And in the process, the FANS get screwed. PA and owners all suck. They are equally at guilt.[/q]
Blech. I hate this logic.
The players say nothing more than "I am willing to play for whatever you will pay me. Stay away from antitrust violations and then negotiate however you see fit." They have no responsibility to rein in the owners and no reason to agree to an artificial restraint on salaries. I'll never understand why anyone would sympathize with the owners at all.
Well, the owners sure have most of the fan's support and most of the media's support. I totally agree with you that the owners set the marketplace. The PA, however, is indicating that there is no problem and that the NHL is lieing that 20 of 30 teams are losing money. They have made ONE proposal in the last 15 months, ONE. The NHL has made at least six.
[Q]ugarte Wrote:
[Q2]calgARI '07 Wrote:
There will be no NHL this year and perhaps beyond. No negotiations even scheduled. Too bad a bunch of billionaires and millionaires can't figure out how to fairly split $2 billion. And in the process, the FANS get screwed. PA and owners all suck. They are equally at guilt.[/Q]
Blech. I hate this logic.
The players say nothing more than "I am willing to play for whatever you will pay me. Stay away from antitrust violations and then negotiate however you see fit." They have no responsibility to rein in the owners and no reason to agree to an artificial restraint on salaries. I'll never understand why anyone would sympathize with the owners at all.[/q]
The players are hardly saying that. If they were, there wouldn't be a problem, as they would agree to the self-policing method owners have installed for themselves (a salary cap). A cap would mean less money for the players, so saying they will play for whatever the market price is is bogus. There is a market price under a salary cap, it is just lower. It's like a price cap on corn to protect the US farmer. If salaries continue to expand (corn prices), the farmer (NHL) could collapse. The players are hardly noble figures who "just want fair market value." Even under the most strict cap proposed by the NHL, the players would still make over half of the league's profits.
And that's what I don't understand about the players' position. Don't they understand that even under a salary cap the NHL will pay them at least 5 times what they would get in any other league? There is no way a financially viable major sports league could exist without some form of salary contol. Baseball, Basketball, and Football all have it. The players' only chance to maintain their exorbitant salaries is to work within a system that has always provided them with an acceptable standard of living.
A luxury tax sounds like a fine idea, but where do you set the tax level at? Even if owners agree to that, they would want the tax to start at 35 million. If the tax starts at a low enough level, it is theoretically worse than a salary cap. If the cap is set at say, 45 million with one or two exceptions for a player you pay as much as you want, I think the superstars get to maintain their salary level and the merely good players (Demitra, Satan, etc.. who are currently making 5 mil+ for 25 goals and 70 points) salaries more accurately reflect their worth.
I don't understand what's wrong with a complete free market. If an owner is a big enough egomaniac to want a winning team, then he should be willing to pay for it. If not, he can cut back and be merely competitive (or just suck). The owners want to have their cake and eat it, too - the ability to win consistently AND be profitable consistently. Of course that would be nice, but why should they try to artificially impose it? Why don't they just declare that all teams must finish at exactly .500, to ensure that no team will suck and there won't be losing teams languishing with little/no fan support?
[Q]Robb Wrote:
I don't understand what's wrong with a complete free market. If an owner is a big enough egomaniac to want a winning team, then he should be willing to pay for it. If not, he can cut back and be merely competitive (or just suck). The owners want to have their cake and eat it, too - the ability to win consistently AND be profitable consistently. Of course that would be nice, but why should they try to artificially impose it? Why don't they just declare that all teams must finish at exactly .500, to ensure that no team will suck and there won't be losing teams languishing with little/no fan support?[/q]
Given the choice between winning and being profitable, many of the owners would choose profitability. Which really is the right choice, unless you are sufficiently wealthy that you don't mind losing many millions every year on a hobby. (I'm taking at face value the claims that NHL teams are losing money. The numbers are probably inflated by accounting schemes, but the league is probably in the red.) If that's the case then you end up with a bunch of bad but marginally profitable teams and a couple that win big either because of better revenue stream or willingness to lose cash. Not a good situation for competitive balance or fan enjoyment.
I have more to say on this, but I can't seem to make it coherent forst thing in the morning.
And you call yourself a Yankee fan? Who cares about competitive balance or the fan enjoyment for the other 29 teams.... ;-)
And that's what you get with a limited free market system - the luxury tax puts pressure on many teams (to stay under the cutoff) but doesn't have much affect on the top team(s). I'd be much happier if the Yankees were winning every year in a competitively balanced system :-) .
BTW - I don't think you can get a completely free market with union collective bargaining. Or at least, the union doesn't want a free market. It if did, there wouldn't be minimum salaries, detailed rules about two way contracts, as many guaranteed contracts, etc. The union just wants an unrestricted auction market for the top end, which tends to drive up salaries.
Does anybody know what this means for the AHL and ECHL? Does anybody know the intentions of Murray, Baby, or Leneveu now that there is no NHL season (or least for now)?
The AHL will be playing this season: http://www.canoe.ca/AHL/News/2004/09/15/630750.html
There's an explaination at the bottom of the article.
I'm not sure about the ECHL, though I assume the same.
edit: Looks like the ECHL is indeed playing http://www.echl.com/cgi-bin/mpublic.cgi?action=show_news&cat=1&id=2813
The articles mention that the two leagues have seperate CBAs. Anybody know how this affects players who are shuttled back and forth between the NHL and AHL club? Do they have seperate contracts for each league?
I agree, Keith - neither side wants a truly free market.
I just think a free-market league would would be an interesting experiment. In business, you always want to completely crush your competition. In a sports league, at some point, that becomes counterproductive, because as your competitors can't compete, interest in your own product will decline (and many of your competitors would just fold), harming your own bottom line. In a very real sense, your product is competition itself, so you'd have to be careful to preserve that for the long run, while trying to balance the yearly books - a very tricky proposition, to be sure.
This is why the NFL is the best run league in the business. Rozelle understood that the NFL itself is the product, not the individual clubs. It is in everyone's interest to remain competitive and play by the same rules, because people aren't showing up to watch the Packers play themselves. There has to be competition for a sports league to survive.
[Q]This is why the NFL is the best run league in the business.[/Q]The NFL does have the advantage that all of it's television revenue comes from national TV contracts. It's easier to have genuine revenue sharing when the majority of the league's income comes from a single source that isn't attached to a single team or geographic market. I give Rozelle credit for establishing this system. However, it wouldn't really work the same way for the other major sports. With the number of games, TV money is going to driven by the local market in hockey (or baseball/basketball). It's a lot harder to convince the Rangers to split up TV money that comes directly from the NYC market than it is with an ESPN or ABC contract.
[Q]There is no way a financially viable major sports league could exist without some form of salary contol. Baseball, Basketball, and Football all have it. The players' only chance to maintain their exorbitant salaries is to work within a system that has always provided them with an acceptable standard of living.[/Q]
Baseball has a salary cap? What world are you living on? Baseball has the weakest luxury tax possible, only barely pressed by after negotiations that nearly caused a strike, and absolutely nothing resembling a salary cap.
I for one think the players have been very generous. They proposed a 5% across the board paycut for all players, have you *ever* hear of a union doing that? Could you possibly imagine the baseball union accepting a 0.1% paycut? They'd take it to the Supreme Court for breach of contract before they'd consider losing a penny.
A cap is one idea, but its not the only way. Paycuts, limits on salary growth, no arbitration, maximum salaries, reduced minimum salaries - there are plenty of ways that you can push down the market without saying "you can only spend X and no more" - which is an idea that I don't like, it just seems so unnatural.
The players have proposed many different ideas and Bettman an the owners just say "salary cap or nothing". Give a few other cures 3 or 4 years and see how they work. Make an agreement, written or otherwise, that if in 3 or 4 years, salaries haven't decreased to 60% of revenue, or something, then a salary cap is agreed to be the only card on the negotiating table, but why they won't give anything else a shot is obnoxious and beyond me.
The baseball luxury tax is weak, but it has probably done something to cap some of the teams at a level just under where the tax kicks in. It certainly hasn't stopped the Yankees from spending, but anyone who thought it would was kidding himself.
While a 5% paycut for all players is a nice gesture, it really isn't anything substantial. It probably wouldn't put any of the financially strapped teams in the black if they really are losing $500 million over 2 years (again, probably inflated) and it wouldn't do anything to change the structural problems with the league.
I agree there are probably other ways to change the system without a salary cap. One of my favorites is a maximum individual salary, because this sets the price for top players and in effect for everyone underneath. But it's probably hard to get the players to agree to this - they prefer having each guy negotiate his own salary without limits.
What exactly do you mean by "limits on salary growth"? Do you mean limits on the rate of increase for a single player during his career or for teams?
The owners have obviously looked at their financial situation and decided that the most straightforward way to get things in order is a salary cap tied to revenue. So they're taking a very firm position that they want this. If nothing else a cap is more certain to control costs than the other options that have been mentioned. As for trying something else for 3 or 4 years, when you're losing lots of money every year it's got to be hard to try something just in case it works.
My "limits on salary growth" was something like, between contracts a player's salary can't increase more than X% (kinda like rent control ;-) ). I'm not saying I'm the one with all the ideas, I'm just saying they're out there.
If the players came out and said we'd take a 95% paycut and limit our individual salary growth to 2% per year, would the league take it? You bet your ass they would. So to sit there and say 'salary cap or nothing', is at the best disingenuous, and at the worst an obnoxious scheme designed to cause a lockout.
There's room for negotiations, so negotiate. The players have put several ideas on the board, while the management sits there and says, "nope, salary cap." I am all for competitiveness, I am all for parity, I am all for a level playing field, but I just don't like the salary cap unless its really necessary.
Yes, the league is losing money, but we all know the owners numbers are inflated. Baseball was the one that claimed that 29 out of 30 teams were losing money. Come on, yeah right. I'm sure the NHL is in a bad situation, but telling me that 3 years of increased restrictions (that just aren't a salaray cap) would put the league in the toilet, well, I just can't buy it.
5 or 6 medium to big name players have signed contracts this off-season at a significant cut from what they were getting previously. I don't have names, but I read this on an ESPN article. Some guys who were making $5, $6 million a year just signed 3 year, $9 million contracts. The weight of the salaries (relative to revenue) is collapsing on itself. Now I'm not proprosing they sit there and hope it keeps happening, but I am saying that its possible that very little will actually be necessary, so to sit there and demand no talks about anything other than a salary cap, the end-all-be-all of salary control, is no less than stupid and obnoxious.
Hey check out this article: "NHL Fan's Guide to College Hockey" at http://www.uscho.com/news/2004/09/20_008649.php I laughed at least a half dozen times!
Great commercial about the lockout from Nike Canada:
http://www.nike.com/canada/nikehockey/lockout/