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The players end up as the biggest losers in a lost season, so why are they doing it?
To preface, I don’t really care who “wins” this round of the NHL CBA negotiation war. I won’t even pretend that this will drive me away from being a fan of NHL hockey.
What I will say is that the players seem to be getting some lousy advice from a group of people who probably don’t have their best interests at heart.
Who Wins and Who Loses?
First and foremost, the players have a lot more to lose than the owners do if this lockout lasts a full season. Yes, the owners lose out on 41 home dates of revenues (more than that if you aren’t the Oilers, Jackets or Islanders and can occasionally make the playoffs), but all but a handful of owners in the league receive revenues from other events that happen at the arena. They aren’t losing out here.
The players on the other hand, lose a full season of wages. This is money they can’t get back again. Shawn Horcoff isn’t going to make up the $6million he loses this year. His career won’t be extended a full extra season. In fact, his salary goes down from $6 million this season to $4 million next season. What does he gain from this lockout?
Ryan Nugent-Hopkins is trading in potentially $3.775 million for $70K in the AHL. Jordan Eberle has a contract extension starting next season that pays him $6 million per year. His current contract sees him getting paid $787,500 in base salary plus an additional $312,500 in bonus money. He’s trading that in for a $65,000 AHL salary. Eberle has a pretty good chance to make up these lost revenues at some point down the road, but that’s still money he’s giving away now.
What Happened Last Time?
Back in 2004-05, the players allowed a season to be burned over their refusal to allow a salary cap, a salary cap which they eventually agreed to and thrived under. I’m not suggesting that they should have taken the first offer the owners gave them (a $31mil unmoveable hard cap), but I am suggesting that they could have saved a lost season by at least opening their minds to negotiating a salary cap early on, and trying to tie it into revenues like the eventual deal did.
Unfortunately, the players themselves still don’t understand how ridiculous their stance was back in 2004-05. Aaron Ward was on NHL tonight last month and was asked if he had any regrets about the lockout. His answer (paraphrased), was that no he didn’t because he felt that they had to make the sacrifice because others in the past had done it and that they needed to do it for the future.
There are a couple of things wrong with this. No players in the past made that kind of sacrifice. In fact, until 1992, the players had never taken a stand (where they went on a 10 day strike). The group in 1994 might have, but the owners caved in and it saved half a season (which I suspect made the union think that they’d cave again 10 years later). The other issue is that doing it for the future ignores the fact that the players aren’t often part of that future.
Aaron Ward was due to make $2.2 million dollars in 2004-05. That is money that is gone and that he will never see. His gain from the 2004-05 lockout has been a loss of $2.2 million. Him fighting for the future gained him absolutely nothing.
Unlike a typical union where a guy is going to put in 25-30 years, NHL players get between 1 and 10 (and a few get more than that). If I’m in a union for life I want to make sure I’m not sacrificing something too far down the road for small gains now. In 20 years I'll regret giving up the 8 weeks holidays (instead of 4) at the 20 year mark for a slight increase in wages. If I’m a pro athlete, I want to maximize what I get now.
Who Gains on the Players Side Then?
There is a group of people who do benefit from thinking long term, and it’s the same group that takes a 3% cut of a players wages. As an NHL agent, I’d be wary about this group of players sacrificing too much because it would impact me down the road. Many of the players are sacrificing money they will never see again. Many of the agents, who advise these players, have a pretty good chance to make their losses from this season back providing they can keep the players share of HRR over a certain percentage. So in the end, whose interests are actually being looked after here?
Where Do We Go From Here?
The players looked at the owner’s initial offer as a slap in the face. What they should have viewed it as was a negotiation ploy with the end game to get revenues to 50/50. The battle is about revenue share and it’s turned into so much more because the players have taken offense to the opening offer (spurned on by their agents, who should know negotiation good enough to know what the original offer was).
There are a few things the players should fight for, but ultimately those things would be agreed to in a CBA that sees a 50/50 split. The primary battle they should be fighting is to get rollbacks off the table. Ed Snider can’t sit there and try and sign Shea Weber to that kind of deal and then turn around and request a rollback. Minnesota can’t sign Parise and Suter to those deals, and then get to take a chunk away from that. If the league wants to get to 50/50, the owners who signed these deals should find other ways to get under the new cap. Based on projected revenues of $3.4 Billion for this season, the salary cap would be approximately $63 million and there are currently 12 teams over that mark (none more than $6million above that mark).
Amnesty buyouts (67% of the contract, no cap penalties) would solve most of the issues. Boston would be free from Thomas’s $5 million deal, Vancouver would be free from Luongo’s $5.33 million deal. They could also come to an agreement on increasing the difference between the cap floor and ceiling. Put the cap up to $70 mil and the floor at $35 mil. There are 10-12 teams who will spend to the cap, and another 8-10 who will spend 85-90% of it. That allows several teams to go through a rebuild while not bleeding money.
The other battle the players shouldn’t give up is the contract battle, specifically ELC length and UFA age. Again I assume that the initial NHL offer was in an attempt to set their dream CBA, not necessarily what their end goal was. All the contract restriction talk is unnecessary if the revenues are split properly. The players don’t need to tie themselves down like that. Sacrificing money is one thing, sacrificing freedom of choice is something else entirely. The players should not have to sacrifice both.
The battle lines have been drawn in the wrong spot and the players are the ones who are going to lose out. Everyone knows the owners are willing to sink a season. Are the players willing to sink 2 seasons? What’s the end cost going to be for each individual player?
Authors note: Corrected Jordan Eberle's salary from $475,000 to $787,500
Authors note #2: Corrected Ryan Nugent-Hopkin's AHL salary from $65,000 to $70,000