Rant

[JackStraw]

who said anything about guaranteed profits? The discussion is about percentage of revenue dedicated to head count.

I would disagree with that. The owners' desire to claim a percentage of the revenue is an attempt to guarantee profits for the poor teams.

Revenue down, freeze hiring; revenue up, fill vacancies.

Fill vacancies and cut salaries? Seems like a strange way to do business. Revenue is up. To record levels in fact. Bettman keeps telling us so. Usually when a business is making record profits the employees benefit.

[radoran]

@radoran

And forgive me if I have zero sympathy for employees who average over two million dollars per year but demand their employers maintain an obviously unsustainable business model. I said it before: I'm sure there is greed involved from some of the owners, but a fair number are talking about the ability to continue operations long term. While it feels great to say, hey, stupid league and stupid owners, you made your bed by expanding into dumb areas and paying players too much, now sleep in it, but... Who loses when teams start to fold?

Where are the players "demanding that their employers maintain an obviously unsustainable business model"?

They're not.

Where are the players demanding that the 57/43 split - created by the owners - be maintained?

They aren't.

Who created he obviously unsustainable business model? The ownerrs.

And how "obviously unsustainable" is a model that has seen revenue increase dramatically after the last lockout, in which the owners achieved salary stability that is contracted to go though 2025?

[Bertmega]

If you had the chance to meet and have an open discussion with Gary Bettman; would you:

a)

b)

c)

d) shake his hand for a job well done

If you answered "D", you are obviously Kuato, or a basketball fan.

[brelic]

Yes, players can - and have and will - go elsewhere.

The players aren't the ones "demanding" things in this situation. The owners are.

The players didn't create the league's salary structure. The owners did.

The players aren't looking to abrogate contracts. The owners are.

The owners can go elsewhere, too. If they can't make a go of running an NHL franchise, perhaps they can buy a Stuckey's.

I agree with all your points. Ok, so I guess we agree?

[JackStraw]

Absolutely yes to your last question. Isn't that what being in business and being an owner means? You are responsible for leading the business forward. Some are better at that than others. Many many many of them fail. And employees lose their jobs. Seriously, none of this is new.

I have no problem with that. Columbus should fail. The people who work the concession stands and in the front office should, unfortunately, have to go find new jobs. That's not the same as saying that NHL salaries in general should be cut to make sure that the Jackets make a profit.

I used to live in the Cleveland Park neighborhood of Washington, DC. If you've ever been to DC, it's the area where the National Zoo is located. Very nice, "leafy", neighborhood. Lots of educated professionals (lawyers, lobbyists, IT types...). When I moved there, in '95, there were (and still are) many good restaurants- Italiian, Thai, non-determinate Asian, Greek, Spanish... and there was also one McDonald's. Guess which one closed its doors first? Turns out that upscale professional types don't want Happy Meals, they want Sushi and Baklava and Pad Thai. Now I don't know for sure, but I'm willing to bet that McDonalds didn't ask it's employees nationwide to take a pay cut just so that this one franchise, located in a place where a bit of market research might have come in handy ahead of time (very few families with children in that area).

That's the way business works. You screw up, you fix it and move on. The NHL screwed up with some of these franchises and no amount of revenue splitting with the players is going to fix it. I posted an article from the Globe and Mail which pointed out that if the owners split their share of hockey revenue equally among them, right now every team would be profitable. So, since it was the owners decision to put those franchises where they were likely to struggle, why shouldn't the owners bear the cost of keeping them afloat?

Again, the NHL is making record profits. If you're making record profits, and some franchises are still basically train wrecks, what would make you think that getting salary cuts from the players is going to fix anything?

[brelic]

I used to live in the Cleveland Park neighborhood of Washington, DC. If you've ever been to DC, it's the area where the National Zoo is located. Very nice, "leafy", neighborhood. Lots of educated professionals (lawyers, lobbyists, IT types...). When I moved there, in '95, there were (and still are) many good restaurants- Italiian, Thai, non-determinate Asian, Greek, Spanish... and there was also one McDonald's. Guess which one closed its doors first? Turns out that upscale professional types don't want Happy Meals, they want Sushi and Baklava and Pad Thai. Now I don't know for sure, but I'm willing to bet that McDonalds didn't ask it's employees nationwide to take a pay cut just so that this one franchise, located in a place where a bit of market research might have come in handy ahead of time (very few families with children in that area).

That's a fair point. But McD's employees are also low-wage, low-skill, and non-unionized. They're easily replaced. And McDonald's franchises are not competing against each other (often the same owner owns multiple franchises in a given territory), and they are not competing for a finite pool of elite-level talent.

Those are the conditions which makes the NHL owners make short-sighted decisions in spite of good business sense. Because often those 'bad' decisions are also the same ones that are 'good' or 'awesome' when it pays off. Playoffs give an owner more revenue. Winning the Cup gives the owner and the players more revenue. And it's a zero-sum game. There is one winner and 29 losers (or, at the very least, 16 winners who make the playoffs and gain more revenue, and 14 losers).

I'm not excusing their behaviour so much as just trying to explain why they behave the way they do. This quote from Marx is bang on - "I shall hang the last capitalist with the rope he sold me." There are many ways that has been interpreted, but short-sighted is generally what it comes down to.

[radoran]

That's a fair point. But McD's employees are also low-wage, low-skill, and non-unionized. They're easily replaced. And McDonald's franchises are not competing against each other (often the same owner owns multiple franchises in a given territory), and they are not competing for a finite pool of elite-level talent.

Those are the conditions which makes the NHL owners make short-sighted decisions in spite of good business sense. Because often those 'bad' decisions are also the same ones that are 'good' or 'awesome' when it pays off. Playoffs give an owner more revenue. Winning the Cup gives the owner and the players more revenue. And it's a zero-sum game. There is one winner and 29 losers (or, at the very least, 16 winners who make the playoffs and gain more revenue, and 14 losers).

I'm not excusing their behaviour so much as just trying to explain why they behave the way they do. This quote from Marx is bang on - "I shall hang the last capitalist with the rope he sold me." There are many ways that has been interpreted, but short-sighted is generally what it comes down to.

Right, so the ownerrs make "short sighted" decisions and want some sort of guarantee that they will receive a specific ratio of revenues.

This is also why "running teams like a business" isn't how it really works. "Winning" and "profitability" can be two different things.

The Coyotes were in the WCFs and are hemorraghing money. The Bolts, Stars and Ducks have all won Cups and have serious concerns.

If an owner is in this business "to make money" they really should consider selling and buying a McDonald's.

Demanding "guarantees" that no matter how badly you run your business, you still get a fixed percenage of revenue is childish.

[brelic]

Right, so the ownerrs make "short sighted" decisions and want some sort of guarantee that they will receive a specific ratio of revenues.

Sure. It doesn't have to make sense. It's just the rules they want to play by. And as an 'employee', you can either take your labour elsewhere, or work under the conditions set out by your employer (and agreed to by your union or association). The owners are now saying that the previous arrangement no longer works. The players are hoping that's just a bluff. We'll see where we end up. But at the end of the day, both sides will suffer because revenue will drop.

If an owner is in this business "to make money" they really should consider selling and buying a McDonald's.

Totally agree. This is not a money-making type of business. BUT you should not be losing money on a regular basis. If so, something's out of whack.

[JackStraw]

ut McD's employees are also low-wage, low-skill, and non-unionized. They're easily replaced.

Isn't that just supporting my point? Since their employees are non-union, low-skill, and easily replaced, McDonald's could have just unilaterally changed their pay scale to make this franchise turn a profit (assuming they could keep at least to minimum wage). But they didn't, they made the reasonable business decision to close this franchise. There is in fact, another McD's less than a mile away. That one is right by the Metro stop for the Zoo. That one does attract families with their kids, and that one stayed open. So it's not really an issue of union vs non-union, or skill level, it's all about market demand. Which is what it comes down to for the NHL. If people in Phoenix are not willing to financially support a team, then the league has to move it or close it completely.

Winning the Cup gives the owner and the players more revenue. And it's a zero-sum game. There is one winner and 29 losers (or, at the very least, 16 winners who make the playoffs and gain more revenue, and 14 losers).

Mmmm... I don't know about that. Making the playoffs certainly brings in extra revenue. But a successful franchise doesn't need to rely on that. Look at the Leafs as exhibit A. There are plenty of teams in pro sports that don't win championships, or even seriously compete in the post-season, that are doing ok. Sports teams compete on the field of play, but franchises in the same league don't compete with each other financially, except in some cases where the market will support two teams (Mets and Yankees).

[radoran]

Sure. It doesn't have to make sense. It's just the rules they want to play by. And as an 'employee', you can either take your labour elsewhere, or work under the conditions set out by your employer (and agreed to by your union or association). The owners are now saying that the previous arrangement no longer works. The players are hoping that's just a bluff. We'll see where we end up. But at the end of the day, both sides will suffer because revenue will drop.

Totally agree. This is not a money-making type of business. BUT you should not be losing money on a regular basis. If so, something's out of whack.

The players have offered a path to 50/50. The ownerrs insist on 50/50 rightnow.

The players are asking that the contracts they signed be honored. The owners want to cut them unilaterally.

Again, where is it that the players are the problem?

And, when you have a situation where teams claim "losses" to the players and claim "earnings" to people they waant to get to loan them money, where does 'good faith" enter in on the owners' side?

[brelic]

Isn't that just supporting my point? Since their employees are non-union, low-skill, and easily replaced, McDonald's could have just unilaterally changed their pay scale to make this franchise turn a profit (assuming they could keep at least to minimum wage). But they didn't, they made the reasonable business decision to close this franchise. There is in fact, another McD's less than a mile away. That one is right by the Metro stop for the Zoo. That one does attract families with their kids, and that one stayed open. So it's not really an issue of union vs non-union, or skill level, it's all about market demand. Which is what it comes down to for the NHL. If people in Phoenix are not willing to financially support a team, then the league has to move it or close it completely.

I don't know what it's like to close an NHL franchise, but I'm sure it's way messier and costlier than closing a McD's. But yes, I agree, if a franchise is unprofitable after X amount of years, cut your losses and move on.

I do think union vs non-union is relevant in this case. Why do you think Walmart continually quashes unions? They know wages will be driven up, benefits will be demanded, which forces them to either cut into their profit margin or raise prices. And raising prices makes them less competitive, and the less competitive they are, they harder it becomes to sustain their business model. McDonald's employees are not making those kinds of demands on their employer.

And it's also a skill issue. A McDonald's employee has no leverage because he or she has no specialized skills demanded by the task at hand. But Claude Giroux and Sidney Crosby have very specialized skills that very few in the world can match. That's certainly a high degree of leverage.

Mmmm... I don't know about that. Making the playoffs certainly brings in extra revenue. But a successful franchise doesn't need to rely on that. Look at the Leafs as exhibit A. There are plenty of teams in pro sports that don't win championships, or even seriously compete in the post-season, that are doing ok. Sports teams compete on the field of play, but franchises in the same league don't compete with each other financially, except in some cases where the market will support two teams (Mets and Yankees).

That's true about the Leafs. There are probably a handful of those kinds of markets in the NHL. Leafs, Rangers, Flyers, Wings, Habs, Bruins. Can you think of others that would fill rinks even when the team stinks?

You're right that franchises don't compete against each other financially... at least not directly. But they do compete for the same finite pool of resources. Ultimately, this competition is what leads to stupid contracts at their own detriment!!! This off-season was one of the worst! And I'm sure the owners did so knowing full well they were going to try and invalidate those contracts (or at least undercut them). Rotten, I know. I don't think anyone is saying otherwise.

[brelic]

Again, where is it that the players are the problem?

Wait... I never said that the players were the problem. The owners are being petulant and dirty.

The problem, at least from my perspective, is that I care for neither side. I think the owners are being dirty, and the players are spoiled brats who don't know how incredible they have it. I cannot relate to players or their situation. I can't relate to billionaire business owners either.

So there you have it. They've made me not care about them or their product. Well done!

[JackStraw]

I do think union vs non-union is relevant in this case. Why do you think Walmart continually quashes unions? They know wages will be driven up, benefits will be demanded, which forces them to either cut into their profit margin or raise prices. And raising prices makes them less competitive, and the less competitive they are, they harder it becomes to sustain their business model.

While all of that is certainly true, the owners got what they wanted in CBA in 2005. So wages are not going up (unless profits go up too), there are no new benefits being demanded (that I know of)... the players are not even asking to maintain the status quo. They're willing to concede beyond everything they already conceded in 2005.

And it's also a skill issue. A McDonald's employee has no leverage because he or she has no specialized skills demanded by the task at hand. But Claude Giroux and Sidney Crosby have very specialized skills that very few in the world can match. That's certainly a high degree of leverage

It gives those guys leverage when it comes time to negotiate a contract within the framework of the CBA. Individually they have leverage. But neither Giroux nor Crosby have any leverage when it comes to deciding how the league shapes its business model. They only get that through the NHLPA, in the CBA negotiations.

That's true about the Leafs. There are probably a handful of those kinds of markets in the NHL. Leafs, Rangers, Flyers, Wings, Habs, Bruins. Can you think of others that would fill rinks even when the team stinks?

I don't think you necessarily have to fill the building every year, you just need enough of a fan base to be able to ride out the down years. Minnesota, LA, StL, Pitt have generally done that, and there are others. But when a team gets to the conference finals and the league still can't find anyone to buy it, something is very wrong.

Edited November 21, 2012 by JackStraw

[JackStraw]

Wait... I never said that the players were the problem. The owners are being petulant and dirty.

The problem, at least from my perspective, is that I care for neither side. I think the owners are being dirty, and the players are spoiled brats who don't know how incredible they have it. I cannot relate to players or their situation. I can't relate to billionaire business owners either.

So there you have it. They've made me not care about them or their product. Well done!

That's the tightrope they have to walk. Usually in these situations I feel pretty much the same, with probably some sympathy for the players (since they're the ones I pay to watch). But this time, I think the owners are so wrong that I would actually rather see the season lost than to see the players give in. And it's not even because I hate the owners or love the players, it's because I think forcing the owners to deal directly with the problems they themselves created is what's best for the league going forward.

[radoran]

So there you have it. They've made me not care about them or their product. Well done!

I think of the two, the players recognized this with their offer to play the season.

I find tha ownerrs' lockout to be unconscionable.

And when it's gotten to the point that people like you and me are sick to death of the whole thing, the NHL is in serious trouble.

[aziz]

@JackStraw

the owners got what they wanted in CBA in 2005. So wages are not going up (unless profits go up too)

Well, no. Wages go up if *revenue* goes up, not profits. Players' share of HHR is from the gross, not the net. That is part of what the owners are claiming, that while revenue has increased markedly (and thus the players' share), expenses have, too, and so net profit is down. Believe, don't believe it, I don't know. I know jet fuel prices have doubled since the last CBA, but beyond that I have no idea. Anyway, my point is that revenue and profit are not the same, nor are they linked 1:1.

With all of that said, I went back and looked again at the player proposals, and it does look like rad was right, one of them was essentially what I mentioned earlier, so......

[JackStraw]

Well, no. Wages go up if *revenue* goes up, not profits

Ok, I stand corrected. Even though I'm currently sitting.

[Lindbergh31]

It seems to me the players cause is doomed to failure. Fehr is famous for waiting out his opponents, letting time pass and having the offers get sweeter due to the desperation of the other side. Problem is, I don't know how long the NHLPA members can hold out. Sure some are still making money, but a great portion are not getting paid what they used to. The old adage the more you make, the more you spend is certainly applicable here. There is huge bills to be paid on the players side of the ledger, the more time passes, the more this turns to the owners favour IMHO. Realistically, like aziz said in the opening post, most of the owners will make money by not playing. Combine the owners making money by not playing and Fehr's classic wait and lie in the bushes approach, we have a long wait ahead of us.

The other problem the players have is this a year/wages they can never get back....it's not like careers are 20+ years, that is the exception, not the rule. If this thing looks like it will take up a full year and push into a second, the owners are in the drivers seat...if they don't go bankrupt waiting out the process.

Jammer, look at Jerome Iginla - he lost $7 million on the last lockout and stands to lose another $7 million on this lockout if it goes the whole year. Besides losing 2 years in his hockey career, he also loses $14 million in pay that he'll never get back. Both sides, mainly Bettman and Fehr have to get their collective heads out of their asses, put their egos aside and make a deal that will be good for the league and its players in general. I'm sorry but there is nobody from the NHLPA that convince me why they can't accept a 50/50 split on revenue, just the same no one on the owners side can convince me that they need the players to make a whole lot of concessions in order for them to survive from themselves. They have to move some franchises to cities that will support NHL hockey and fold other ones who can't survive on their own. Stop granting expansion teams in order to split the franchise fees amongest the 30 owners, maybe any new franchises that are granted, the money should be split 50/50 with the players union. All both sides accomplished was to piss off the die-hard fans of the league, the hockey that benefitted from their stupidity was the minor and junior leagues.

[radoran]

Jammer, look at Jerome Iginla - he lost $7 million on the last lockout and stands to lose another $7 million on this lockout if it goes the whole year. Besides losing 2 years in his hockey career, he also loses $14 million in pay that he'll never get back. Both sides, mainly Bettman and Fehr have to get their collective heads out of their asses, put their egos aside and make a deal that will be good for the league and its players in general. I'm sorry but there is nobody from the NHLPA that convince me why they can't accept a 50/50 split on revenue, just the same no one on the owners side can convince me that they need the players to make a whole lot of concessions in order for them to survive from themselves. They have to move some franchises to cities that will support NHL hockey and fold other ones who can't survive on their own. Stop granting expansion teams in order to split the franchise fees amongest the 30 owners, maybe any new franchises that are granted, the money should be split 50/50 with the players union. All both sides accomplished was to piss off the die-hard fans of the league, the hockey that benefitted from their stupidity was the minor and junior leagues.

The players have offered a path to 50/50 split.

The owners insist on an immediate 50/50 split with immediate rollbacks of the salaries they agreed to pay "in good faith"

[Lindbergh31]

The players have offered a path to 50/50 split.

The owners insist on an immediate 50/50 split with immediate rollbacks of the salaries they agreed to pay "in good faith"

The players' path to 50/50 split doesn't take effect in the first year of the agreement? Also, I was under the assumption that the owners would honour the contracts but would prorate this year's wages based on the number of games remaining once the deal is signed.

[radoran]

The players' path to 50/50 split doesn't take effect in the first year of the agreement? Also, I was under the assumption that the owners would honour the contracts but would prorate this year's wages based on the number of games remaining once the deal is signed.

Owners want s 20% reduction in existing contracts to be realized through the escrow clause.

Players' "path" (as we know it) began in Y1, yes.

[brelic]

The players' path to 50/50 split doesn't take effect in the first year of the agreement? Also, I was under the assumption that the owners would honour the contracts but would prorate this year's wages based on the number of games remaining once the deal is signed.

I come back again to asking "Why is 50/50 fair?". Are we saying that the players are worth exactly 50% to the NHL, and that owners are worth exactly the same proportion? Based on what? That's exactly what they're trying to figure out.

[radoran]

I come back again to asking "Why is 50/50 fair?". Are we saying that the players are worth exactly 50% to the NHL, and that owners are worth exactly the same proportion? Based on what? That's exactly what they're trying to figure out.

People spend a lot of money to see Jeremy Jacobs in the owners' box.

I hear they're going to start televising owners sitting on their posteriors on NBCSports. Smell the ratings!

[JackStraw]

People spend a lot of money to see Jeremy Jacobs in the owners' box.

I hear they're going to start televising owners sitting on their posteriors on NBCSports. Smell the ratings!

I myself have always been mesmerized by the shots of Clarkie eating popcorn.

[flyerrod]

I myself have always been mesmerized by the shots of Clarkie eating popcorn.

LOL....especially when they catch him popping out his dentures to get that pesky kernel..........