The Continuing Chronicles Of Jay Feaster's Incompetence

[SeanDMan]

Wow, I knew Gary Bettman was a jerk, but now he's murdering children.

[Plubby]

Unlike the lockout, can't really see a way to pin this one on the players

[Gabriel]

Anyone know of any good and legal ways to get my hockey fix?

Doesn't matter what league, really. I would just like to be able to watch some hockey this year. Sportsnet, CBC and Shaw Cable should be showing the odd AHL/Junior games, but I'd like something a bit more consistent.

[Beefus of Bethesda]

You could buy the CHL Package through your local provider if you want to go the legal route and theres sites like The First Row which has absolutely everything sports related on there, that site alone is saving me 400 bucks a year.

[Ruki]

Apparently Semin signed a contract with his hometown team (In the VHL or something...it's like the AHL for the KHL, I believe). That's not the interesting thing.

Rather than sign a huge contract worth millions he signed for league minimum, which is $1600US a month. I can now say I make more than a professional hockey player.

[Plubby]

He was going to play for free but league rules disallowed it.

[SeanDMan]

Happened last lockout too. A bunch of NHLers played for $200/w To play for their hometown team in the Central League.

[TGWL]

Apparently Semin signed a contract with his hometown team (In the VHL or something...it's like the AHL for the KHL, I believe). That's not the interesting thing.

Rather than sign a huge contract worth millions he signed for league minimum, which is $1600US a month. I can now say I make more than a professional hockey player.

But his insurance is still better...

[TGWL]

I love how they'll take such a pay cut to play for their home town, yet there needs to be a lockout because they think they deserve more revenue. I also love how Owners will justify their signings just to get a player on his team, no matter the deal/worth, then complain that revenue for the players needs to go down. It's quite sad how far apart both sides are. I don't agree with either side, and that's what scares me about this lockout. Hopefully the thought of losing all revenue on the winter classic will be enough to push the owners closer to an agreement, and maybe the thought of the winter classic being canceled will bring the NHLPA closer to what the owners will agree on.

[SeanDMan]

I love how they'll take such a pay cut to play for their home town, yet there needs to be a lockout because they think they deserve more revenue.

This is a fundamental misunderstanding of what's going on. The NHLPA doesn't want a higher share of revenue, they want hockey related revenues to be clearly defined and fairly calculated. The owner's bookkeeping hides a lot of revenue and duplicates a ton of expenses, which makes it seem like the owners are losing money when they really aren't.

The other issue is a revenue sharing proposal that NHL owners refuse to agree on; from what I've heard, the Caps and the Sabres insist on increased revenue sharing while the "Big 8" (most likely Van Cal Edm Tor Mon NYR PHI and BOS) think the current system is enough.

[SeanDMan]

Anyway, that wasn't what I was coming in here for.

I feel almost bad for laughing at Toronto because the Canucks made an... odd hire. They announced recently that they'd hired Dan Cloutier as a goaltending consultant. Apparently, they hired him 2 months ago, but knew that the Canucks fanbase and the media would take a huge shit on the move so they decided not to tell anyone, only announcing it once word leaked to media. (He's a "Systems Consultant" and works with all level of player, and he'd been working with Eddie Lack in the AHL.

Also on the subject of Canucks goalies: Not even a season, still a Canucks goalie controversy.

[Plubby]

"Here's what not to do."

[TGWL]

I love how they'll take such a pay cut to play for their home town, yet there needs to be a lockout because they think they deserve more revenue.

This is a fundamental misunderstanding of what's going on. The NHLPA doesn't want a higher share of revenue, they want hockey related revenues to be clearly defined and fairly calculated. The owner's bookkeeping hides a lot of revenue and duplicates a ton of expenses, which makes it seem like the owners are losing money when they really aren't.

The other issue is a revenue sharing proposal that NHL owners refuse to agree on; from what I've heard, the Caps and the Sabres insist on increased revenue sharing while the "Big 8" (most likely Van Cal Edm Tor Mon NYR PHI and BOS) think the current system is enough.

They absolutely want a higher revenue that what the NHL OWNERS are offering, whether it's because of the hidden revenue or not, it's still more than what the meetings have offered. I wasn't suggesting they want a higher revenue than what the current CBA had. Not that the owners plus 20% roll back in current salaries is helping negotiations. NHL has to increase the sharing pool and have it available to the teams that need the help. MLB and NFL already have this sharing programs that allows team in the league to have a shot at being profitable.

[TGWL]

the parents of late Rangers enforcer Derek Boogaard have filed a $9.8 million lawsuit against the NHL Players’ Association, alleging the union did not take the proper steps to help them collect the balance on their son’s NHL contract after he passed away.

Boogaard died on May 13, 2011, at the age of 28 from what doctors later determined to be an accidental combination of alcohol and oxycodone toxicity. His parents documented Boogaard’s addiction to painkillers and sleeping pills and compiled records of team doctors for the Minnesota Wild and Rangers prescribing thousands of pills to their son.

Believing these NHL teams were partly responsible for Boogaard’s death, his parents say that they approached the NHLPA and that the union promised to help them file a grievance to get the Rangers to pay out the remaining $4.875 million on their son’s salary.

But the lawsuit alleges the union failed to file the grievance by the required deadline, and now Boogaard’s parents are suing the NHLPA for the remaining $4.875 million on his contract, plus $5 million in punitive damages.

TMZ first reported the lawsuit on Friday.

“We are saddened to read reports that the parents of the late Derek Boogaard have filed a lawsuit against the NHLPA,” the union said in a statement. “We have not been served with or seen a copy of the complaint, but we are confident that there is no meritorious claim that can be made against the NHLPA in regard to Derek’s tragic death. It is not appropriate to comment further at this time.”

The language in the now-expired collective bargaining agreement, applicable here, contains the following regarding deadlines for filing a grievance in Article 17.2, Section b. – ‘Initiation:’

“A grievance must be initiated within 60 days from the date of the occurrence or non-occurrence of the event upon which the grievance is based, or within 60 days from the date on which the facts of the matter became known or reasonably should have been known to the party initiating the grievance, whichever is later. A Player need not be under an SPC (standard player contract) to a club at the time a grievance relating to him arises or at the time such grievance is initiated or processed.”

Boogaard died in May 2011, but reports on his parents’ knowledge of the full scope of their son’s addiction did not surface until this past June.

A posthumous study of Boogaard’s brain revealed that he had chronic traumatic encephalopathy (CTE), a degenerative disease of the brain that has been identified in more than 20 dead NFL players, several boxers, and late NHL players Reggie Fleming, Bob Probert and Rick Martin.

[SeanDMan]

Again, TGWL, you're exhibiting a fundamental misunderstanding of the differences between both sides. It's not about a percentage of revenue. It's about a transparent and factual calculation of what the revenue actually is.

Imagine you sign a contract to do a job. The job says that for every hour of work you do, you get an orange. That sounds fair to you, so you sign the contract. When your hour of work is over, your boss brings you a piece of an orange. You ask him why you don't have a full orange, and he tells you he had to slice a third of the orange off to hold it in escrow, due to the possibility that he might run out of oranges. If he doesn't, you can have that piece later. Promise. Well, okay, that sucks, but what other choice do you have? So you peel your orange and you find that it's mush inside. You ask your boss what's going on, and he simply says that the orange juice is not considered to be part of orange related revenue, so the juice was extracted and given to other employees. You are left with an orange peel, a bunch of seeds, and a small puddle of mush where you were promised a complete orange.

So tell me, how many hours do you work before you get fed up and want an actual orange?

[Plubby]

So you peel your orange and you find that it's mush inside. You ask your boss what's going on, and he simply says that the orange juice is not considered to be part of orange related revenue, so the juice was extracted and given to other employees. You are left with an orange peel, a bunch of seeds, and a small puddle of mush where you were promised a complete orange.

I haven't seen this much hyperbole bordering on falsehood since the last time I listened to the ESPN First Take podcast, Sean Bayless.

EDIT: Also, you forgot the bit where the guys who sign the contract get the majority of the oranges, then call the boss greedy when they ask to share.

[SeanDMan]

Dude you play hockey on grass, your opinion is irrelevant.

But fine, here we go.

Looking back over Forbes.com’s listings of NHL Team Values from 2005-06 to 2010-11, nine teams – Nashville Predators, Florida Panthers, Columbus Blue Jackets, Phoenix Coyotes, New York Islanders, Atlanta Thrashers, Carolina Hurricanes, St. Louis Blues and Buffalo Sabres – were either perennial or near-perennial money-losers.

Given the Thrashers move to Winnipeg and re-branding as the Jets, that club probably won’t be in the red when Forbes.com releases its NHL Team Values List for ’11-’12.

Assuming the remainder see little change in their fortunes that season, eight NHL franchises could truly be considered “struggling” over the past seven seasons, the lifespan of the 2005 NHL CBA.

It’s also apparent a number of factors (among them: payroll, fan cost index, attendance, arena leases, outstanding debt, market) contributed to their consistent losses.

The same can also be said of the other nine teams which showed operating income losses in ’10-’11, and those which occasionally reflected losses in from ’05-’06 to ’10-’11.

When the NHL fought for “cost certainty” during the previous season-killing lockout, it tied runaway player salaries to the financial losses of its struggling franchises, threatening dire consequences for those teams in particular, and the league as a whole, unless salaries were brought under control.

The league achieved its aim of cost certainty, with the imposition of a triple-tier salary cap system, rolling back salaries 24 percent, and slashing the players’ share of hockey-related revenue from 75 percent to 54 percent, ultimately ensuring it would never rise beyond 57 percent in a given season.

Background: Eight NHL teams lose money, the rest make profit. This is under the official accounting that Forbes did based on NHL owners numbers, which the players take issue with as suspect (more on that later).

The system was peddled by the league as a “cure-all” for its financial woes, supposedly “leveling the playing surface”, allowing all teams to become more competitive, and (hopefully) more profitable.

By the penultimate season under that CBA, however, those goals were not achieved.

Despite the strict limitations placed upon player salaries, the escalation in the salary cap – rising from $39.5 million in ’05-’06 to $59.4 million in ’10-’11 – is often cited as a principle factor for so many NHL teams losing money.

The rise of revenue has caused the NHL salary cap, and, by the way they're tied together, the NHL salary floor, to rise, forcing teams to spend more money. This has the effect of giving the players more money. This does not have the effect of giving the players the majority of the money. The percentage is the same; more revenue, however, leads to more salary.

Yet, the nine teams which posted operating income losses throughout this period did so regardless of what the salary cap limits were. They lost money during the seasons the cap was at its lowest as well as at its highest. Variances in those losses appear as much tied to on-ice performance as to the cost of operating an NHL franchise.

Supposedly successful clubs – like the San Jose Sharks and Washington Capitals – frequently posted losses during this period. Some in traditional hockey markets -Chicago Blackhawks, Philadelphia Flyers, Boston Bruins and Minnesota Wild – also posted losses from time to time, while the Buffalo Sabres, playing in another traditional hockey market, posted almost annual losses.

In examining the consistent money-losers, the problems for most of them from ’05-’06 to ’10-’11 was due to on-ice performance.

Forbes analysis: A business that performs poorly performs poorly. News at 11.

For most, if they consistently missed the playoffs over this period, they struggled at the gate, forcing them to lower the cost of attending their games in hopes of attracting more fans. It also, in most cases, forced them to carry lower payrolls.

True, the constant escalation of the salary cap made it difficult for many of these teams to stay above he rising mandated cap minimum, but the poor product iced by those teams were due more to mismanagement than payrolls.

If most of those clubs had been better managed, the on-ice performance would’ve improved, increasing attendance and their fan cost index, generating more income, making it possible to keep pace with a rising cap floor.

Forbes analysis: If a business is successful, it makes more money. It's currently 15 degrees outside with 1 44% chance of precipitation.

The Predators, a well-managed, fiscally responsible, perennially competitive team, were an exception to that rule. Their losses, however, were tied to lingering debt, a nearly-botched selling of the team to local interests, and the difficulties of playing in what is considered a non-traditional hockey market.

The Predators have a very limited amount of local corporate interest that is interested in reinvesting in the team the way bigger cities do. This has always been a problem in smaller American cities.

Mismanagement is also responsible for teams carrying high payrolls whilst maintaining their fan cost index below the league average, meaning if they failed to make a strong playoff run, they risked operating income losses.

While supporters of those teams will justify those tactics as a team owner willing to spend to improve his club, more often than not, such tactics usually prove to be costly gambles which rarely pay off over the long run.

Mismanagement of payroll was just one factor, as other issues contributed to operating income losses. Lousy arena lease agreements. Lack of lucrative local broadcasting contracts. Considerable debt from previous years, often left over from previous – sometimes irresponsible – ownership. Change in ownership resulting in change with the on-ice product, sometimes not for the better, driving away fans and driving down operating income.

Market also plays a part, particularly for clubs which consistently iced a strong product yet continued to post operating income losses. Downturn in the local economies, especially since 2008, were also factors for some teams.

BREAKING: Mismanagement leads to lost revenue.

A few clubs with consistent on-ice success which posted operating losses appear to have funnelled part of their revenue either to their respective parent ownership group, or to the cities where they play.

WHAT?! But... NHL owners don't do that! NHL owners are honest... they wouldn't try and hide revenue from their employees... would they?

Fluctuations in the value of the Canadian dollar affected the two Canadian-based franchises which twice posted losses over this period.

Any combination of the aforementioned factors could, and in many instances did, result in teams winding up in the red, be it occasionally or consistently, during the period in question.

For the eight truly struggling NHL franchises, a reduction in the players share of HRR might provide some short-term relief, though considering how many of them posted losses under the 2005 NHL CBA when payrolls were at their lowest, that’s not a certainty.

Assuming, however, it would provide some short-term relief, without a meaningful system of revenue sharing, most of those clubs could remain consistent money-losers again over the course of the next CBA.

The rest of the article deals with revenue sharing and mostly backs up my position. But I'm not done yet, so let's go on.

Jason Brough cited a “tweet” by RDS’ Renaud Lavoie claiming a league source told him the NHL had lost $240 million over the past two seasons.

This is interesting, given the numbers The Globe And Mail quote (based, again, on Forbes):

Revenues have risen from roughly $2.2-billion to $3.3-billion – or an average of about $160-million a season – over the length of the current CBA, pushing the average revenue-per-team figure to $110-million.

Overall, the league is profitable, too.

Take that imaginary average team making $110-million a season. Their player costs would be 57 per cent of that figure, or $62.7-million, and their other, non-player related expenses are likely to be in the neighbourhood of $35- to $40-million, depending on their lease arrangement and various other complicating factors.

What’s left is the profit – which according to these rough estimates here would be between $7- and $12-million per team.

Curious.

Finally, Forbes article on NHL valutations. From last year to this year, 8 teams have increased their value by over 10 percent, one team (The new Winnipeg Jets) by 20%. Conversely, only 7 teams actually lost value, and the biggest drop, 17% by the New Jersey Devils, is due to payments for a brand new arena that only opened this year (something which has a tremendous long term value). If so many teams are doing so well, and the issues are more based on systemic problems than the percentage of revenue, why are the owners locking the players out for not accepting that the percentage needs to change?

[Plubby]

What does any of that have to do with what I said?

This is just stuff I could have (and for the most part, have) read from any of the following twitter feeds: The NHLPA, any player, Chris Botta, and Allan Walsh. It's the party line: some owners mismanage their teams. All owners are greedy.

Both true statements - the owners, I bet, are greedy people. But as it comes to this CBA, they certainly aren't alone on that podium.

All I said above was that

• The players are hypocritical for saying that this is a lockout driven by owner greed. They have most of the revenue as per the previous CBA, and they're not sharing. There is an element of greed involved with that.
  
• I also said that your orange analogy, while for the most part accurate in principle, was hyperbole on the level of Skip Bayless when you describe how much the players are left with. I was with you until after the bit about escrow.
  

Your wordy and impressive post disproves neither of these two. And as I think is well-established by now, those handful of teams you listed that aren't making money - the league wants the players to give back to help them out, and the players want the haves to share more revenue to help them out. This has been the core of the disagreement as far as I can tell since the get-go. Representing it as anything else is just spin.

[SeanDMan]

No it's not. The primary issue between both sides is not about the percentages of revenue but about THE REVENUE ITSELF. The league says that the percentage of revenue is the heart of the issue but the players position, at least from the union, is that it's not a matter of numbers but a matter of TRUE NUMBERS.

The NHL, in addition to still doing fuzzy math regarding how it reports it's own books, also made a proposal to NHL players that said they could have a 49% split of hockey related revenue, with four caveots:

1. The NHL wants to add offseason and "special exhibition" expenses, such as preseason and regular season games in Europe, to their hockey related expenses, since they aren't compensated with ticket revenue. So the NHL wants to grow the game in Europe and they want the NHL players to fit the bill for it.

2. The NHL wants to remove luxury box sales from hockey related revenue. Because NHL teams traditionally use their luxury boxes as a handshake to local companies who invest advertising dollars, they don't consider that to be "money". So the NHL wants to be able to write off luxury boxes as an operating expense. An operating expense. A room full of people watching a game, catered to with chocolates and champagne and cigars, is an operating expense, like the guy driving the zamboni.

3. The teams want the ability to deduct any money spent on arena renovations to count as hockey related expenses. I went over this before at length in other posts, but this simply doesn't make sense. The Canucks, for example, paid several million dollars last year into a slush fund the team controls to redevelop the area around the arena with a 5 star hotel and a casino. So let me ask you a question: what percentage of the slot machine profits do you think would go to the NHLPA? How much of the $300 per night room cost at the hotel would go to the average NHL player?

4. NHL owners want to seal the Wade Redden cap loop hole: namely, if Wade Redden sucks a massive dick, and you demote him to the AHL, it's silly that his contract comes off your books and doesn't count against your cap. I actually don't have a good arguement against this one, but it DOES effectively shift the number line, so I can see why the NHLPA has issues with it.

From the calculations that the NHLPA did, they figured that the revenue split the NHL offered was reportedly 49%, but with those caveots added would move the number closer to 43%. That's before removing the currently accepted creative bookkeeping the NHL employs (such as branding their players a depreciable asset, such as livestock). In addition, the NHL's proposal included a change in the escrow set aside from salaries: up to 20% in the first year and down to 13% in year six, which is still well above it's current level 8%.

And again, Plubby, this is a fundamental misunderstanding of how economics works. You said:

The players are hypocritical for saying that this is a lockout driven by owner greed. They have most of the revenue as per the previous CBA, and they're not sharing.

Refer back to the Forbes list. The Toronto Maple Leafs are worth $521 million. The Rangers are worth $507 million. Hell, forget that. Rounding out the top ten is the Los Angeles Kings, worth $232 million. Find me an NHL player worth $232 million. Go on, I'll wait. Once you do, we can have a discussion about how the NHL teams and the players are on even footing, money wise. Otherwise, go back to your grass pitch and stop being an ass, bitch.

[Toe]

I think it was on Grantland where I saw an article about the financial reporting done by pro sports teams, and it showed that a team that claimed to lose money each year (it was the Marlins or Rays) actually made between 5 or 10 million in profit in each year they reported those loses.