Things Really Heating Up (NHL)

[RichS]

Oh wow, a "Nickerson"...that's funny...::rolleyes::

Ithaca a franchise?  Yeah, it's more desireable than Tampa Bay!

Seriously, is anyone listening to Goodenow's press conference?  This guy can really shovel it!  :-D

[DeltaOne81]

http://sports.espn.go.com/nhl/columns/story?columnist=ratto_ray&id=1992790

[mjh89]

[Q]CUlater 89 Wrote:

 [Q2]mjh89 Wrote:

 Yea, the players may have to settle for a worse deal than the one they were offered today.[/Q]
Or not.  How many times during negotiations did the league say "you're not going to get any offers better than this one," yet they were willing to offer something better after all?[/q]

Many, but Bettman also said that the package without linkage is gone. With so many things uncertain, whenever hockey resumes, the owners may demand linkage to ensure they dont lose millions and millions.

[KenP]

I can see both sides of the story.  Most of my sympathy for the players was due to the league's reluctance/inability to produce honest, reliable financial statements.  A co-worker of mine, though, said on several occasions the league offered to open their books up to an independent audit.  Is this true?

[nyc94]

[Q]KenP Wrote:
 A co-worker of mine, though, said on several occasions the league offered to open their books up to an independent audit.  Is this true?[/q]

That's what Bettman said during his press conference.  I'm not sure which set of books they were going to turn over.

[Nate 04]

[Q]nyc94 Wrote:

I'm not sure which set of books they were going to turn over.
[/q]
I bet not the "How To Negotiate For Dummies" ones they are using.

[DeltaOne81]

I had a thought I wanted to toss out there. I don't think linkage is necessarily the problem, but merely the way the league presented it. How many people here would take a job if the boss said "we'll pay you $xxxxx, but if our revenue takes a 5% hit, you lose 5% of your salary". Its unappealing, insulting, and hurts you for what could be other people's failures (bosses, coworkers, etc).

Now how would you feel if the boss said "we're having a tough time, so we may have to cut back some benefits, but we hope to restore and even increase them if we can turn this around." Sure, not saying you'd like it, but it'd just feel more reasonable, even if monetarily it worked out to the same thing.

The difference in the second scenario is that the effect is stepped. Its not "we lost 2%, so you lose 2%". They should work out some deal, where the league can get linkage, by saying that if the revenue declines more than, say 3% in a season, the cap/tax threshold(s) decrease $1 million. If its more than 5%, they decrease $2 million, or something like that. So the players know that any change will be gradual and it feels more like a temporary correction to adjust for current problems, rather than a paycut for someone else's problems.

Also, here's another thought, Bettman has been pretty much saying that a salary cap draws teams up to the limit. That setting a maximum would pull most teams up towards it, cause they should be spending that amount. If he really feels that way, then shouldn't he prefer *not* to have a cap? Wouldn't he prefer a strong luxury tax, which MLB seems to show is an effective way to set a soft ceiling but yet not draw people up to it.

The the union wants a luxury tax with no linkage, the league wants a cap with linkage - what about a strong tax with stepped linkage?

I swear there's a middle ground there, but I don't know why I bother :-P

[nyc94]

[Q]DeltaOne81 Wrote:
 I had a thought I wanted to toss out there. I don't think linkage is necessarily the problem, but merely the way the league presented it. How many people here would take a job if the boss said "we'll pay you $xxxxx, but if our revenue takes a 5% hit, you lose 5% of your salary". Its unappealing, insulting, and hurts you for what could be other people's failures (bosses, coworkers, etc).[/q]

I don't think it is that insulting if you consider that most other people in the seven figure income range have compensation linked to revenue.  Actors and CEOs come to mind.  Granted, their incomes rarely go down although it's relative to where you start.  A $20 million a picture actor might take $10 million upfront or even nothing for a cut of the box office.  If the movie is a stinker and the total compensation comes in less than $20 million then you could call that a pay cut.  Or consider guys on Wall Street that usually receive bonuses that are several times their base salary.  They don't know exactly how much they are going to get at the end of the year.  They might be able to estimate but in the end their compensation is linked to company (or division) performance.  I'm sure they don't plan strikes on their weekends in the Hamptons.

[Jacob '06]

The players major issue with the linking from what I understand is its short-term effects on team composition. For example, a team that just picked up a bunch of talent, but hasn't gotten molded together quite well yet might not have the best revenue that year, but the next year they'll be great. However, since their ticket sales sucked that year they all have to get a pay cut or get traded. I think having a teams salary cap change year to year is kind of ridiculous, and it would make it much harder for the teams to keep a consistent roster year to year. Unless of course they are one of the teams that consistently has a pretty high revenue because they are in a big hockey town.

[Trotsky]

[Q]RichS Wrote:
Ithaca a franchise?  Yeah, it's more desireable than Tampa Bay![/q]
FWIW, I'd give Potsdam a franchise, too.

The CTHL:

Eastern Conference

Boston A
Boston B
Burlington
Capital District
Ithaca
Orono
Potsdam-Canton


Western Conference

Ann Arbor
Denver
Grand Forks
East Lansing
Madison
Minneapolis-St. Paul
Upper Peninsula

[Lauren '06]

So we're all sure Cornell wouldn't be able to fill a 5,000-capacity rink, and that's serious business, but it's okay to joke about dropping a pro franchise in Ithaca?  ::nut::

[KeithK]

[q]I had a thought I wanted to toss out there. I don't think linkage is necessarily the problem, but merely the way the league presented it. How many people here would take a job if the boss said "we'll pay you $xxxxx, but if our revenue takes a 5% hit, you lose 5% of your salary". Its unappealing, insulting, and hurts you for what could be other people's failures (bosses, coworkers, etc). [/q]Lots of people are in this situation and while they might bitch about the loss of income I doubt it's considered insulting.  The difference is that the portion of income that gets cut is called a "bonus", while the fixed portion is labelled salary.  Sports teams do this as well with performance bonuses.

I think an ideal system (in terms of "fair" compensation, not necessarily for the players or owners) would be one where a large portion of players salaries is performance related or team results related.  This greatly reduces the risk of some lousy player getting a big payout because of one career year, but also rewards players and teams for doing well.  It also, removes cost certainty for the owners, but that's not a problem in my hypothetical world. :-)

[nyc94]

[Q]KeithK Wrote:
Lots of people are in this situation and while they might bitch about the loss of income I doubt it's considered insulting.  The difference is that the portion of income that gets cut is called a "bonus", while the fixed portion is labelled salary.  Sports teams do this as well with performance bonuses.[/q]

I have yet to meet a Wall Streeter that doesn't factor in a minimum expected bonus.  When it is expected it becomes a bonus in name only.  My point was that most people wouldn't quibble if their bonus is $200,000 or $210,000 because they are already out the door to the Porsche dealer or their real estate broker.  If they have a problem it is more likely that the guy down the hall got more than they did rather than faulting the management for making the entire bonus pool too small.

[DeltaOne81]

This is what I'm saying, kind of. That its all about how you phrased it. If the league came to the players and said we want a new contract structure where you get minimums, and bonuses depending on team (or league) revenue, I think it would sound much more reasonable. Or that the salary cap will *slowly* adjust to match revenues.

But to say that, "if our revenue drops 50%, you only get half your pay", is going to turn anyone off. Even if in reality, that scenario is extraordinarily unlikely.

I'm saying that at least in part, its how you say it. Sure, structure all contracts to give minimums plus revenue bonuses. Put a salary cap on the minimums or something. Bettman could have sold it a lot better than he did. It really is all about how you say it, more than what you say.

This works the other way around too. The union could have presented the luxury tax better, cause luxury taxes can be very effective salary controls as well. Although I suppose they made that argument.