Tuesday, July 19, 2011

Another Lock Out Looking Inevitable!

1) Few who follow this blog will be shocked to see that headline. We have been on record from almost the beginning of the last CBA in 2006 that this was going to be the case. Despite getting almost everything that they wanted in the new CBA the owners were never going to stop there. Bettman got his precious "cost certainty" and all was going to be well, right? We wrote about it way back in 2007 when Kelly was instituted as the new CBA boss.
new-labour-war.Then once again 2 years later:

2) Yes, as new readers can see we have been WAY out in front of this now looming issue. Things have been becoming even worse in recent months as the usual media mouth pieces start to spew the NHL line of how player salaries are now out of control and hurting the small market teams, etc, etc. here's one --->
We could probably cite several more written right around the recent free agency madness. Its reminiscent of what was written back in 2003-2004 right before the NHL went to war (and won?) with Bob Goodenow and the NHLPA. The story line then was the players salaries comprised too much of the % of revenue, the richer teams had an unfair advantage, and ticket prices were becoming too high.

3) So here we are 6 years into the new CBA and the story line is the same. The problem is that the league now has its "cost certainty". Translation: The players get a fixed percentage! Supposedly it was pushing 70% before the last Bettman lockout, and its now fixed at 56%. It doesn't matter how much the league makes or doesn't make, the players still get their fixed piece of the pie. As the league has grown so has the average player salary, BUT the % of the overall revenues has stayed the same! If revenues fail to meet expectations the players lose their "escrow money" and the owners get a refund on paid out salary.

4) As we and many others wrote before and during the last Bettman lockout, the problem is NOT player salaries, its the lack of revenue sharing between the big market (revenue) teams and the small market(revenue) teams. The big markets and all the Canadian cities are raking in record profits, while the small markets are struggling. Why? the provision in the CBA that required all teams to spend a certain amount. As our post race-to-floor states teams are now forced to spend even if they don't want to. The result: Continued/worsening financial hardship. The likely Betman fix? Reduce player percentage, tweak the salary floor, and if they see blood, eliminate guaranteed contracts all together

5) What SHOULD be done? A realistic revenue sharing system like the NFL has. The NHLPA proposed a very sensible revenue sharing system as part of a possible CBA agreement last time which was rejected out of hand by Bettman. Yes, we know the NHL is a regional sport and most teams make their own money locally, not from national TV etc. However if the NHL wants to stay in these markets they will have to make significant concessions. If not we will have the teams moving from market to market. Atlanta lost a team with this CBA. Phoenix, Florida are on the precipice of losing their respective franchises. Bettman will probably use these teams' plights as a weapon against the NHLPA and not see it as it is: An indictment of his mistakes in constructing the last CBA.

6) The biggest question is not; will Bettman and the NHL play hardball again? Surely they will. However the 2 billion dollar question is; Do the players have the intestinal fortitude to go toe to toe once again and possibly lose another season? Regardless that they now have a tested labor negotiator in Donald Fehr, (Fehr has yet to lose, but that was baseball) the NHLPA has a long history of failure. Can Fehr set goals and keep the players together and cohesive as the pressure inevitably mounts next summer. Surely the league as well as the usual media puppets will be blaming the players and trying to drum up public outcry against the 'greedy millionaire players'). We believe based upon the past the players will initially hold firm(leading to Bettman's third lock out) but unravel leading to Ferh's ouster and possibly union desertification. It is then that the owners and Bettman may go for the kill, and demand the elimination of guaranteed contracts.

Stay tuned folks the bumpy ride is just getting started. Be sure to keep it here to get unfiltered perspective!

No comments:

Contact the Media