"How
did you go
bankrupt?" Bill
asked. "Two
ways," answered
Mike. "Gradually
and then suddenly."
- The Sun Also Rises
- Ernest Hemingway
The NHL's seemingly
inevitable and nasty
labour mess of 2004 is
still far enough away
that the issues, let
alone the solutions,
remain nebulous, like
what lies beyond the
known universe and the
reasons our Prime
Minister thinks hanging
on is somehow good for
the country.
But the picture may
be clearing a bit.
The New York Post
raised many guffaws a
month ago when it
suggested NHL owners
would use 2004 as an
opportunity to go for
the throats of players,
putting a hard salary
cap of $32 million in
place to ensure everyone
would have a chance to
make a buck, regardless
of the size of the
market they might
inhabit.
At the time, this
seemed like a singularly
unimaginative and
draconian measure, like
killing a fly with a
Tommy Gun, even if it
could be carried off.
Yet there was Leafs
GM Pat Quinn
the other day, while
defending himself from
charges he wasn't
aggressive enough
shopping for
unrestricted free
agents, mentioning $35
million as the possible
top end of a hard salary
structure in 2004.
``We want to be in a
good position not to
bury the organization
with contracts you can't
get rid of. If you've
got three guys making
$24 million (U.S.) and
your limit is $35
million, that's not a
good situation. How
would you pay the rest
of the team? Guys aren't
going to play for
$400,000,'' said Quinn.
``When Armageddon is
finished, we want to be
in good shape.''
Yipes. $35 million as
a hard salary cap?
Even the negotiations
with Curtis Joseph,
Toronto's uber-goalie
who fled to the Wings,
seemed to have been
coloured with the 2004
brush.
"With Curtis,
the factor was less the
age than it was coming
out of what is probably
going to be a lockout,
and having a high number
of guys under contract
in a new collective
bargaining agreement
that we don't know the
ground rules for,'' said
Quinn.
Brian Burke, being
unusually circumspect
considering his normal
self, recently talked of
the need for "cost
certainty" and said
the probability that
things will be radically
different after 2004 is
already colouring
contracts around the
NHL.
''It's certainly a
factor in length of
contract for some
teams,'' Burke told the
Boston Globe. ''We're
counting on a new system
in 2004. What that will
look like we're not
allowed to speculate on,
and frankly, we trust
the commissioner's
judgment on what that
will look like. But we
are counting on a new
system and we are
planning on operating in
that new system in 2004.
But that being said,
these four- and five-
and six-year deals,
someone's going to have
to figure out how they
operate in the new
system, and we don't
intend to be one of
those teams who has a
problem figuring out how
they work.''
So there you have it.
The new plan. Don't have
many contracts going
past 2004 because the
"cost
certainty" is going
to be a very, very tiny
one in comparison to the
$70 million salary scale
the Rangers are expected
to employ this year.
It may not end up
being $35 million but
the fact a hard cap is
even being shopped might
tell us owners have
finally had enough of
themselves, that the
'idiot-proofing" of
this next CBA will be
the undercurrent of the
next negotiations.
It's fashionable in
some quarters to believe
owners are cooking the
books, crying poverty
while the dough flows
over the counter into
their pockets. But you
can count on a
capitalist in at least
one regard. He'll cry
crocodile tears and
squeal in pain even when
he's making money but
he'll only go out of his
way to shut down his
league, anger all his
patrons, stop the flow
of money and risk
corporate suicide if
he's actually reached a
point where that's the
most profitable
alternative.
Owners have been
going broke gradually -
relatively speaking -
over a period of a
decade through massive
and largely self-induced
salary inflation. But
issues like the Adelphia
collapse in Buffalo,
threatening the
existence of the Sabres,
as well as the
annihilation of the
stock prices of Comcast
(Philadelphia),
Compuware (Carolina),
AOL Time Warner
(Washington) and
Computer Associates
(Islanders) to name
four, is turning hockey
from a toy for boys into
an albatross.
The stock market is
no longer underwriting
the losses generated by
many of these
franchises.
The day of going
broke
"suddenly" has
arrived.
There are some who
simply don't believe it.
The Rangers for one.
Maybe Dallas for
another. Some might not
care. How can you figure
the $30 million and $25
million deliberately
induced losses in
Washington and St.
Louis? But they were
never your friends
anyway. The rest? Well
… they seem to be
taking it all pretty
seriously. And where
there's smoke there's
usually fire.
But we've seen past
examples of teams
anticipating a certain
outcome only to be
savagely disappointed.
The Calgary Flames,
as one example, entered
the lockout of 1994-95
confident the end result
would be a new CBA
giving them the ability
to put the screws to Joe
Nieuwendyk, Theo Fleury
and Robert Reichel, all
with contracts expiring
just as the following
summer rolled around.
But the Flames found
themselves scooped when
Gary Roberts remained
injured, Reichel elected
to play in Frankfurt,
Nieuwendyk held out and
only Fleury bothered to
sign a below the belt
deal being offered by
ownership. Doug
Risebrough was fired
after a horrific start,
holdout Nieuewendyk was
eventually traded for
Jarome Iginla and only
the miraculous return of
Roberts later in the
year saved a playoff
spot.
It's been all down
hill on the fiscal front
in Calgary ever since.
The lesson learned?
Don't count your
chickens before they're
hatched.
So we wonder aloud if
owners will be able to
inflict a miniscule and
hard salary cap on
players.
Not without an epic
fight.
The NHLPA's Bob
Goodenow was asked by
Ron MacLean on HNIC a
while back why he hadn't
followed through on an
invitation from Gary
Bettman to get started
on talks for a new CBA.
"All Gary wants
to do is roll things
backwards," was
Goodenow's paraphrased
response.
More specifically,
Goodenow had this to say
about the need to start
negotiations sooner
rather than later and
indicates a hard salary
cap isn't going to get
more than a one-word
reply from the players.
"We have an
agreement until 2004,
and we intend to abide
by it," said
Goodenow. "If Gary
Bettman has made public
statements he wants to
start negotiations, then
. . . if he has a
proposal he thinks the
players would be
interested in, he should
bring it forward. He
hasn't done that. He's
commented about how he
would like a hard cap
and that sort of thing,
and that's a
non-starter. He knows
where we were on that
issue in 1994-95; if he
thinks that's going to
be of interest to the
players, he should bring
it forward. I don't know
(if) he would do that,
though.
There's nothing to
talk about? They'll
stare at each until 2004
… and then beyond?
In fact, they
probably will stare at
each other if the battle
lines are as fixed as
they appear, if a hard
cap is the answer the
owners are focussing on.
No dilly-dallying with
the complications of a
luxury tax or a flexible
cap. No examining the
fairness of fixing
player salaries as a
percentage of revenues
as the NBA does.
We always thought the
NHL would actually
require a more
complicated solution
than the other major
sports anyway. The NHL
lacks the smoothing
effect of a large
television deal, with
franchises earning
substantially
disproportionate revenue
streams and has always
faced an uphill battle
to find the right
balance.
Unless, of course,
they went the low-tech
"club 'em on the
head" route while
pleasing the lowest
common denominator.
Did we mention a low
value salary cap might
even eliminate the need
for owners to share
revenue, thereby
eliminating another
sticky problem?
Interestingly, the
prospect of a hard cap
is likely to be
accompanied by the only
carrot the players could
possibly salvage from
such a disaster,
unrestricted free agency
for players 25 years of
age and older.
Last year in this
space I suggested such a
probability and drew
universal laughter but
gained some redemption a
month later when a
player agent (Charlton's
NHL - May 16, 2001)
quoted anonymously in
the Calgary Herald
backed me up.
If the majority of
owners believe a low
value hard salary cap is
the target then they
must also believe that
unrestricted free agency
will begin much sooner
than it does now. One
would seem to follow the
other.
Which leads to
another question. Since
we're already seeing
contract practices being
altered will we also see
trading patterns begin
to change to fit the
kind of outcome
anticipated in 2004?
Sam Pollock made a
career of trading old
used-to-be's for up and
coming young
whippersnappers, the
infamous Ralph Backstrom
for a first round pick
which turned into Guy
Lafleur trade perhaps
his finest moment. And
that's been an iron-clad
rule in hockey for a
long time - trading
future young stars for
serviceable veterans
comes with a large
esthetic price tag which
eventually has to be
paid.
Will that change in
2004?
Recent speculation
coming out of New York
had the Rangers Petr
Nedved coming to Calgary
for Derek Morris (denied
by the Flames). Such a
rumour smacks of
something in the Lafleur/Backstrom
vein, a disaster waiting
to happen as Nedved
fades towards retirement
and Morris ascends to
his long forecasted
stardom.
Unless, of course,
you believe that a few
years from now Morris is
going to be a
unrestricted free agent,
not much different than
Nedved in the minds of
most, his services open
to the highest bidder
without compensation.
And that fact would
also come in a world
where all teams are
equal in the shadow of a
hard salary cap.
Will this be the
summer where trading
patterns change to
reflect a newer, coming
reality where a 25
year-old is no longer
substantially different
than a 31 year-old in
terms of free agency
status?
Not yet. Morris is
still a Flame and Nedved
is still a Ranger while
Calgary GM Craig Button
scoffs at the suggestion
of such a trade.
Nevertheless, a hard
salary cap accompanied
by much younger
unrestricted free agents
would lead us to wonder
as well how
enthusiastically teams
will be when developing
young talent, knowing
the kids can skip town
just when they begin to
hit their stride at age
25.
Will a hard cap mean
the new carrot for
players choosing one
destination over another
could be marketing
opportunities in larger
American cities? Iginla
is an excellent example
of how a hard cap
doesn't necessarily put
Calgary on an even
footing with New York,
his opportunity for
other income being
substantially greater in
the U.S. than in Cowtown.
The cold hard reality
is that this could also
be the last contract
Jarome Iginla signs in
Calgary.
There is a certain
compelling argument in
favour of hard cap and
even total unrestricted
free agency. Every team
is equal and good
management is the only
requirement to win. Fans
in some larger market
cities might actually
see ticket prices
regress to win back
their support after a
long work stoppage.
On the other hand,
the Flames are having
trouble breaking even
with a $31 million
dollar payroll. How does
a $35 million cap help
them?
So many questions. So
much uncertainty. And
yet, teams seem to be
engaging in actions for
a plan, which still
doesn't exist and still
hasn't even been
negotiated.
Is this a group of
owners seeing a future
with rose-coloured
glasses? Maybe. But
hockey people are the
one's who are bringing
it up these days, not
the media. And most
league GM's seem to be
altering their patterns
of doing business to fit
a predicted "new
order."
They're not just
thinking about it.
They're doing it.
''THERE ARE A LOT
OF DIFFERENT WAYS TO
COME UP WITH COST
CERTAINTY, and we
trust the commissioner's
judgment. I do think he
has wide-ranging support
and I do think some of
the people who have
decided to spend money
(on free agents -
Dallas/New York) support
him completely. They're
just willing to operate
under the new system
with these long-term
deals. I don't think
it's a sign the
commissioner doesn't
have a unified group
behind him at all. He's
got our complete carte
blanche.'' - Brian
Burke, President and GM
of the Vancouver
Canucks. Burke
highlights the one
factor, which is
markedly different about
the coming negotiations
between NHL players and
owners versus previous
confrontations. Bettman
has been given a 75%
veto by owners to
negotiate a deal to his
liking. That means to
overturn his judgement
on what needs to be
done, at least 23 teams
would have to vote
against him. That's a
tremendous amount of
power that millionaires
and billionaires have
given to Bettman, a
salaried employee. It
also makes the job of
Bob Goodenow
significantly more
difficult than the one
he had in 1994. We would
presume that Goodenow
will do what he has done
in previous
negotiations, look for
the seam which brings
the mid-sized market
owners in line with the
larger markets, screwing
the small markets for
the benefit of his
union. Which is his job
by the way and something
I wouldn't argue
against. Bettman,
without a doubt, was
given the 75% veto to
prevent Goodenow and his
team from pitting owners
against themselves. It's
perhaps another example
that owners recognize
themselves, and not the
players, as their own
worst enemies.
. . . . . . WE'RE
ON RECORD AS SAYING WE
BELIEVE there must
be a system of cost
certainty that enables
all of our clubs to be
economically viable and
competitive where they
are currently
located." - Gary
Bettman.
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