By Dallas Ross Hicks, F.S.S.
Okay, I know I said I'd have
a report on goaltenders by the next time I wrote an article,
and it's almost done, but it's hard to do research on teams that
I don't get to actually see. All I can do is read post-game summaries
and other press articles, but now and then, I do get to see a
CHL or AHL game televised and I watch the goalies to see how
they perform that particular night. Anyway, as soon as I had
a chance to review the PA's offer, I knew I had to write about
this right away. I'd like to re-establish, for the record, that
I am generally neutral in this conflict: I think both sides are
run by fools and are equally to blame in this mess, but now that
one side has finally made a "substantial" offer, I
believe that it needs to be analyzed very carefully.
What does that tell us? Well,
you can see that the team was forced by economic restraints to
abandon the high-priced free agent approach and try to build
from within. You'd see a similar model if you looked at Pittsburgh's
numbers. However, if the Sharks managed to draft players and
train them, and then, like Edmonton, be forced to re-sign them
or let them go to a team that can afford then, you would see
the payroll continue a cycle of increase-decrease, but the overall
inflation in salaries would continue and offset the decrease
by showing the same degree of increase in a rich teams' spending.
Using two of the three teams above, we see that the differential
between the Sharks and Wings spending is an increase of 23% over
a three-year period. Awful close to a number like 24% rollback
offer, eh? I must admit that this is a quick and dirty analysis,
but you can try it by pitting the difference between a money
dumping team and a spending team and see what you come up with:
What the players association has proposed is to see a return to 2000-01 numbers (actually, closer to 2001-02 numbers), but with no tenable system in place to prevent a return to the same numbers of today three years from now! I don't know about you, but the odds of me getting a 24% increase in pay over three years is pretty damn slim. It looks to me like the players could make that happen; they've done it before! Even accounting for the average ten percent increase over a three-year period that most unionized workers strive for, that still leaves an increase of 26.5%. Knock off that 24% the union proposes, and you're left with another 1.5% increase over and above the ten most can expect! Therefore, to everyone who gasped in surprise at the amount the NHLPA was willing to roll back, look again! It's not that big a deal; the players would still be in line with "the rest of the world" in seeing a drop back to only 11.5% more than what they made three years ago, and they, of course, get to keep all the extra cash (the other 24%) they made over that period of time!
Here's something else to chew on: I was originally looking for a middle-of-the-road team to add to the above analysis, and I had a hard time finding a team that fit that description. Most teams now are either big spenders or big savers. Using the $45.5M mean, take a guess how many teams fit into the bracket of +/- 10% of the mean. Ready for this? Three: the Devils, Bruins and Canucks (with the Capitals and the Islanders falling just out of range, one above and one below. Also of note: the expected number of teams that should fall within the +/-10% range of the mean would be six, or twenty percent, of course). Consider the styles of management of these three teams now: two could be considered very well managed (although one fired their excellent manager in the wake of another premature playoff exit, which had very little to do with him), while one is often accused of being outright stingy. Of these three, only one has seen any playoff success in the past ten years. While it can be argued that the Devils' success has been due to their coaching style as well as asset management, this is the only team that's really been able to achieve their goal without either breaking the bank or kicking all of its free agents to the curb like the Bruins (again, this might not continue, but can Scott Niedermayer really get any better? Maybe it's time to part ways). The point I'm making here is that now, more so than ever before, the league has become genuinely polarized between its haves and have-nots and serious measures must be undertaken in order to keep the league viable, be it a salary cap or luxury tax.
Now, what about this luxury tax proposal? I have to admit that a luxury tax could work if the penalties were punitive enough and the money collected from the penalties was distributed evenly or properly. Bob McKenzie made a good point last night that since their TSN Solution suggested a dollar-for-dollar luxury tax was quietly rejected by some league types as "not strong enough for cost certainty", this proposal isn't going to do the job, either. Notice that the NHLPA suggests that the starting point for a Luxury tax is $45M. Take a look at the average team payroll last year above and you'll see where this number came from! For the record, based on last years' numbers, twelve teams are above this $45M line (the Bruins, Kings and Capitals will probably no longer be, however). The usual suspects are firmly entrenched above the mean: Detroit, the Rangers (they still do have Jagr and Holik to pay, remember), Toronto, Philadelphia, St. Louis, Colorado and Dallas. While we have seen the emergence of some new powerful teams like Tampa Bay (sorry, Flames fans, I still have no evidence that they were anything more than a Cinderella yet), they would be forced to join the upper echelon of payroll or lose their key players to richer teams if the old system were maintained. Now, let's say we're Mike Illitch and we want to spend some cash to replace the old guard guys like Yzerman, Shanahan and Hull. We throw a bunch of cash at one guy and now the payroll is $45M. We sign up another big star for $8M/season. That's a total of $53M, plus the NHLPA's tax: $5M x .20 = $1M, and $3M x .50 = $1.5M (note: out of curiousity, does the tax money count against the cap levels? That is, would the million that would be paid for the $45-50M range be taxed again, this time at .50, adding another $500,000? Does it count against "cap space"? Something to ask about!), for a total of $2.5M in luxury tax. A whole $2.5M. Wow. That's a lot of pizza, right? No. Hey, let's grab a new goalie and pay him a lot of cash, too! Give him $8M, as well. That's either a total of $61M or $63.5M, depending on how this works. Let's call it $63.5M. Now we add $7M x .50 ($3.5M) and another $3.5 x .60 ($2.1M), giving us a grand total of $69.1M, with about $8.1M in luxury tax, or the cost of adding yet another player of the same supposed calibre. Is this significant? If you're the Edmonton Oilers ownership group, very much so, but if you're Mike Illitch, what does this mean to you? SFA, folks, cause you're filthy stinking rich, and an extra $8.1M doesn't represent a whole lot when you have a television deal and you have merchandising cash flow because you're a successful team in a strong market (before you start sending me hate mail, Wings fans, keep in mind I could substitute Leafs for Wings anywhere in this paragraph and it would be the same).
If they're seriously going to make a luxury tax or soft cap work, there's going to have to be much more serious fines, like 1 to 1 dollar for the first ten million over (and starting the cap at $40M, too), then 2 to 1 for the next ten, then 3 to 1 for the next ten, and so on. Run that through the above calculation, and that might make Mr. Illitch sweat a little. Here's the problem that the NHL itself is worried about: it might not! What's to keep an owner from paying these insane fines in a blaze-of-glory attempt to win it all for one year? Well, the Rangers are proof that it doesn't always work, and that might be enough. It seems that Mr. Bettman acknowledges that some of his owners don't have the self-control to keep their spending in check and a system needs to be implemented to keep the cookie jar under lock and key.
Did anyone notice Bettman's complaints about how the details of the deal were presented completely to the media, not just to the league itself? This was done probably for two reasons: first, the NHLPA wanted to trumpet this rollback in an effort to make themselves look like the good guy should the NHL reject the offer outright or in the very near future. Also, this is a chance for the owners themselves to get a good look at it without Bettman's interpretation, or spin, so to speak. Don't think for a second that some of the owners wouldn't love to see this go through; with a weak luxury tax, it'll be business as usual and to hell with the small markets yet again. Bettman's response to this will determine whether or not his "Canadian teams are important to the league" rhetoric when he blew through Edmonton and Calgary last week was just hot air or not.
Here's another big question: where does this money collected from the luxury tax go? It's been spelled out time and time again by Spector that if we think lower salaries equals lower ticket prices for the fans, we're deluding ourselves. If either of these sides wants to win some PR points (and it appears they do, but since we don't decide which system to implement, it still seems ridiculous), they should collect all the monies from these luxury taxes, pool it and then use it to subsidize ticket prices! Sure, if the big boys want to start throwing their money around and pay that much over the cap, they can, but we the fans are the ones who deserve to benefit, and not just the fans of the rich teams, either! If the league makes about $30M in luxury tax fines, each team gets a million to offset the costs of their ticket prices. It's not a lot; if teams make $20M on gate a year (this is a bigtime ballpark figure, so I might be off here), a whopping five percent off ticket prices isn't going to be the difference as to whether you take your family or not, but here's another example of where less teams might be a good idea.
Am I outright crapping on the players, even though they made a "real" offer? I have to say it's about time Goodenow made an offer with some substance; it is the eleventh hour, after all, and he's right on time. My problem with it is that it's not the big thing that everyone's making it out to be, and quite frankly, the league would be foolish to accept it "as is". However, it is something that can provide the basis for negotiation, and as a first step, it's a very strong one. You can't expect a union to provide its final offer first; maybe these luxury tax numbers are just a stepping stone, and they'll suggest higher fines in exchange for a reduction to a 20% rollback in salary (to appease their membership who might feel a bit shocked by the initial proposal). Both sides can find agreement in the amendments to the entry-level system, so the NHL might ask that the deal be only three years in length to permit re-assessment by that point, because if you recall, the last collective agreement went an awful long time, and really started to pay the players in the final years (I know, the NHL agreed to the extensions, but the Olympics may have had something to do with it). Quite frankly, this proposal stands to do just that: the biggest rewards will come to the players after the first three years, because it'll take three years (or less) for them to recoup that 24% rollback with the system they've suggested. What's nice to see is a genuine revenue sharing approach, but again, some of the owners still don't like it, and that's something Bettman needs to do is get all of them on board with this. If this round of negotiations fails because of that, then Bettman will be to blame. I have a feeling that the owners will accept only one of two scenarios: a luxury tax with revenue sharing, or a hard cap with no sharing. There might be a major divide between these camps, but of course with the gag order in place, we may never know. What we do know for sure is that there's going to be a lot of talk between the owners this weekend, and much to Gary's chagrin, a lot of it may not involve him.
By Dallas Ross Hicks, F.S.S.
October 13, 2004
Not a person was cheering, not a single rink rat.
Their dreams are on ice, their hopes now despair,
But Bettman and Goodenow really don't care.
While visions of breakaways dance through their heads
While mamma in her jersey and me in my cap
Grow ever more weary of the labour claptrap.
It becomes obvious they don't know what's the matter
Whenever an owner tries to speak his own mind
Bettman just slaps him with a quarter million fine
A press release later says it was a big lie
Some of the big boys went to Europe to play
But what of the rest? Will they work for Subway?
Can Modano afford to buy food for his dog?
No, the players are rich; they are victims of fame
But we remember a time when we'd call out their names
"Go Mario! Go Marty! Go score us a hat trick!"
"Go Roy, Brodeur, Belfour and the Bulin Wall!"
"Go Bourque, Pronger, Lidstrom; Go check 'em all!"
Is the whining and crying year after year
"This isn't fair! He's paid more than me!
I'm going home to sit out, just watch and see!"
The owner caves in to the player's demands
Don't forget, though, the players, as rich as they are
Are dwarfed by the owners, much richer by far.
More cash in a year than in life you will take?
Don't forget the players have their bosses, too
From the looks of ticket prices, they don't care about you.
Some are part owners in your local Wal-Mart.
"To Hell with small markets that we never see!
To Hell with Joe Fan and his young family!"
Who can nurse this broken down game back to health.
Every time someone comes up with a plan
Both sides just say, "No, we're doing what we can!"
If they were really talking, then we wouldn't see
Bettman and Goodenow, Daly and Saskin,
Every damn day with their jaws just a flappin'.
Why won't they accept our proposal? Why?"
It doesn't take someone of intelligence great
To know nothing has changed, except for the date.
Think how the team staffs and refs will get by
The NHL doesn't pay us fans, per se
But these people are broke while Gary gets his pay
Check out the AHL, the Q, 'Dub or O!
Why is success tied to the U.S. at all?
They want to watch Nascar and golf and football!
But I can't seem to shake off this feeling of dread
By the time these two sides to their senses arrive
We'll have hockey for Christmas of 2005.
Yes, I'm getting a little
bit sick of hearing the constant chatter of the league and the
PA's talking heads. I wish they would channel their collective
hot air and actually aim it at each other at the bargaining table,
instead of plying the airwaves with the standard rhetoric that
we've been subjected to from months before. Frankly, I was highly
disappointed with Bettman and Goodenow on the CBC talk show.
It's pretty sad when a pathetic little man like Bettman can actually
curry favour with hockey fans; wake up, people! This is the man
who thinks that hockey doesn't belong in Winnipeg, but should
be forced down the throats of those who have other things to
watch like golf and auto racing. This is a man who thinks that
a hard salary cap is such a good idea that if any of his bosses
(yes, HIS bosses! The owners hire him to be their representative)
think otherwise publicly, he takes the equivalent of a house
mortgage out of their pockets. Where does that fine money go?
His salary? That's a question I'D be asking. Goodenow's no saint,
either: a few players have dared to think that maybe some controls
wouldn't be such a bad thing, but within hours of speaking their
mind, an NHLPA press release comes hot on the heels of the statement,
saying that the player was wrong and he really didn't think that
a salary cap of any kind would work, and he's very sorry, and
the large men holding the baseball bats behind him are just out
of work ball players and have absolutely nothing to do with his
change of mind. Right.
One more thing: I finally got the chance to see that Nike ad with the melting rink, begging the League to "Bring it Back." I have two words for Nike: the second one is "Off", and the first one is quite unprintable for the audience of this website, but let's just say it's brought to you by the letter "F". The temerity of these jerks! The sheer audacity of these people! Rrrgh. Okay, here's something you folks may or may not know, and no, I'm not going to get into the whole "sweatshop" thing. What Nike did to hockey is more insidious than that. Back in 1997, I ordered my first authentic jersey, complete with my name and number, authentic cresting, from a store in Winnipeg for the princely sum of just over $200 Cdn. after tax. It was a CCM new Oilers away (now home) jersey, and it's still my favourite shirt. This was the year before other companies starting trying to get the rights to market jerseys. That summer, Nike got into the business, and saw a chance to start ripping people off. They got the exclusive rights to market jerseys for six teams; three "original six" markets and three popular markets: Toronto, Detroit, Chicago, Anaheim, San Jose and Philadelphia. They claimed that their new authentic jersey contained some sort of polyurethane mesh under the armpits (which it did) that was quite good at absorbing sweat (which, I've heard, it wasn't). The result: the price of an UNCRESTED authentic jersey jumped to $269 Cdn.! That was an increase of nearly 90%! As it was later discovered, after Nike flooded the market with these jerseys, some pre-crested with players that no one was willing to fork out almost $360 Cdn. for, the wholesale cost wasn't all that much more than before! They simply saw a market to exploit and charge mark-ups of over 200%! Eventually, Nike started to buy up other hockey related companies like Bauer, because they began to realize that their brand, which was immensely popular with NBA fans, wasn't doing quite so well with hockey fans who were ticked that their favourite jerseys were now costing so much. This forced the creation of the "semi-pro" jersey, or the 550 Series if you prefer, which was a major step up from the crappy "replicas" that sold for about $50, but these were going for between $80-$100, still not the most fan friendly price, and other companies were getting into the market, too. Pro Player got involved, as did Starter, but their entries in the jersey business were short lived. Eventually, Nike decided that people weren't doing their part in coughing up far too much money for their product, and got out of NHL jerseys (they're still, much to my chagrin, involved in WHL jerseys, and even my hometown Wheat Kings sport the "swoosh". Ugh.). When CCM/Koho took over all jersey marketing to try and stop the madness, the result was that Nike had established a new benchmark for prices, and CCM saw no reason to bring it back down. Thanks to Nike, the price of jerseys, both authentic and semi-pro, have been raised far faster than standard inflationary measures would have suggested, and hockey fans took it in the ear. Thanks a lot, Nike. Go sit on a skate and take your crocodile tears advertisements with you. Your big market, the NBA, is doing just fine thanks, and if people want to pay a 200% mark-up on shoes, that's just fine. Hockey fans, if you didn't have a reason to tell Nike to stick their products before, here's one you might be able to get behind.