Wednesday, September 24, 2008

Guaranteed Contracts.. Next Grounds for War!

1) After the last CBA was signed, ending Gary Bettman's 2nd imposed lock out of the NHL, many were quick to state that the owners had cleaned the players clocks. That they got almost everything that they had wanted (a salary cap) and the players caved and their former representative, Bob Goodenow quit in disgrace. However, we at FAUXRUMORS were one of the few, along with Lyle Richardson (Spector) and a few others who stated 'not so fast'. We reminded folks that many also thought the 1995 CBA agreement (after Bettman's first lockout) was a slam dunk winner for the owners. It turned out to be just the opposite. The players were making oodles of money(average salary of about 1.2 mil) by the time of the 2nd Bettman work outage in 2004

2) Therefore folks like ourselves (independent) who are Neither owner lackeys like Stan Fischler or carry the water for the players side like Larry Brooks looked at this agreement. After looking at the details and seeing how it worked the first year or two we came to the conclusion that the players were NOT vanquished as much (if at all) as the owners/Bettman/Fischler had believed. That in time there would still be a big disparity (albeit smaller than before 2004) between the big revenue and the small revenue teams. With the lowered UFA age there would be huge contracts given to younger players. Given the nature of business almost all 30 teams would be close to the salary cap ceiling every season.

3) This has largely turned out to be true. We also were probably the lone voice in the wilderness that stated with conviction that we had NOT seen the last lock out. That once this CBA expired the owners, having smelled blood with the last CBA would think that the players would NOT have the stomach for losing another possible years salary. So what would the owners ask for this time? We projected that it would be Guaranteed contracts. When we first broached this possibility 2 years ago we were dismissed by every one whom we discussed this idea. Even the folks who we agreed on other CBA issues could not see the owners trying to do that and lose another season.

4) Which brings us to today. We read with keen interest an article published on August 24th by Boston Globe's Kevin Dupont. In his piece he discusses his city's NHL owner, ultra hawk Jeremy Jacobs. Apparently during the last CBA he (Jacobs) repeatedly suggested that the NHL's players were so highly paid that they weren't giving their all, and, as such, eliminating guaranteed contracts might give fans more bang for their buck. (It would give owners more bucks to bang, but we digress) Dupont then cites The Hockey News's Ken Campbell who declared that guaranteed contracts were a bane upon the sport, and in doing so, he proffered a line of thought the owners will likely suggest when the CBA eventually expires."

5) Not to worry folks, the CBA has another 3 years remaining. The players DO have the option to terminate the deal next year if they choose, but we doubt they will. Their new boss Paul Kelly hasn't directly stated as such (he has stated he will gauge player opinion when he visits all 30 teams this fall) but the logic wouldn't be there for the players to end an agreement that has worked wildly in their favor thus far. Average salaries this coming year will be significantly HIGHER than they were before the 2004 Bettman lockout. Even in these uneven economic times the salary cap will likely continue to rise annually.

6) However, we believe the stories like that Dupont refers in The Hockey News and from Jacobs will begin to become more frequent as the time for real negotiations for a new CBA get closer. Perhaps Jacobs won't be able to sway enough fellow owners to go that route, but if economic times DO get really tough you might see smaller market teams quickly get on board a proposal to eliminate guaranteed contracts, like the NFL did. It would certainly cause a huge amount of rancor in the players camp and would no doubt lead to another work stoppage. Enjoy the next few seasons of peace. The worst of the labour wars friends is still in front of us we fear.


jb said...

Interesting story.

You misspelled "Guaranteed" in the title.


1) Thanks Jb. Our editor has been fired. ; )

Jibblescribbits said...

On the flip side, guaranteed contracts should make owners value their investments a little more and take less risk on risky players because they have to honor their commitment towards those players. Yet there are plenty of GMs throwing out ridiculous sums of money towards risky players...

The argument that players play harder under non-guaranteed contracts is tenuous at best (and in all likelihood downright stupid).

It goes along with the tired, outdated and insane idea that winning teams are the teams "That want it most". Pretty sure The Pens wanted to win just as much as Detroit last season.

The Puck Stops Here said...

I still have to argue the owners won the 2005 lockout. Why? Because they got what they wanted.

Lets try this as an analogy. Man and woman are arguing about how to spend some money. Man wants a carton of cigarettes. Woman wants food. They buy a carton of cigarettes. Man won the argument. It doesn't matter if man winds up with lung cancer in the future. He still got his way. He still wom the argument.


1) Puck: In the case of your analogy we'd argue that it would be relevant to this discussion/current events if:
we added that despite 'the man' winning 'the woman' ended up having much more $$ left over than previously anticipated so she was able to buy as much food as before their argument anyway
2) As most women do, she'll allow her man to think he won. ; ) but an outside observer can see that she did just as well as before.
3)Jibble: We'd argue that owners don't value their 'investments' (players) IF they aren't performing well. They will argue that they shouldn't be forced to pay someone who isn't playing up to his salary expectation.
4) The NFL model where a player gets a huge contract BUT only a fraction is 'guaranteed(usually the up front bonus). If he comes to training camp and is beat out of a job, is cut, the team doesn't have to pay him. Owners will argue that this will cause players to be 'motivated' not only in their 'contract year', but ALL the time.

Jibblescribbits said...

The NFL model is an awful model. The only players who get any guaranteed money are high draft picks or superstars.

Not only that, because NFL GM's are so busy trying to get new shiny toys, i.e. free agents, they consistently cut players who are performing well and doing just fine.

The NHL's guaranteed contracts are just fine the way they are. The salary cap keeps teams from spending too much on players, but still requires GM's and teams to make smart solid investments.


1) Jibble: We don't necesarrily disagree with your take, but we can foresee the owners using that model/excuse/explantion for their request for that concession next time around

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