Making sense of the NHLPA mess

by James Mirtle on Nov 8, 2009 7:00 AM CST Comment 41 comments

Maybe the players don't care about the NHLPA, but the agents sure do. They are generally distrusting of one another to begin with, constantly worrying (and with good reason) about poaching of clients. But, five years after the lockout, there are still hard feelings about who sided with whom. A number of high-powered agents felt Goodenow was taking them off a cliff.

It was their feeling that ownership had changed. There were guys with more money, who didn't have hockey in their blood. They were willing to sacrifice a season to get rid of Goodenow and get cost-certainty. The big agents felt he didn't recognize that and didn't understand it wasn't the same as 1994.

– Elliotte Friedman, Hockey Night in Canada

I've been meaning to sit down and write something on this whole debacle for a while now, but the thing is, it's such a tangled mess that making sense of everything is no easy task. The players are widely indifferent, but those that are plugged in – often motivated by their agents – are extremely divided, taking one side or the other.

Elliotte noted on Twitter that it took him three weeks to piece together the article above, and I believe it. It is, in a nutshell, is an excellent recount of the hows and whys of where we are with this fractured group and some of the solutions those behind the scenes are proposing.

Friedman's got more (and better) sources than I do, but those I've been talking to about this story argue that the coverage out there to date has been very one-sided in support of Paul Kelly and against Ian Penny. In addition to the issues Friedman lists (with the reading of confidential minutes obviously the fatal error), some close to the situation say Kelly's continued pursuit of putting resources into marketing and working in a "partnership" with the league rubbed many the wrong way.

It's no coincidence, in other words, that marketing executive Kevin Lovitt was one of the first to go when Kelly was booted this summer.

So there were issues there. Whether they were legitimate enough to pull the "coup" at 3 a.m. in Chicago, it's hard to say (and probably depends which side you were on in the first place). I was told by one agent that much of the reason the issues surrounding Kelly's departure haven't been fully leaked is that his settlement has yet to be negotiated and that it's in the union's interest to keep quiet.

As for whether or not Kelly could at some point return to the PA, something that's been suggested by some in the media, a source said: "Not a chance."

The Chris Chelios-led review committee, meanwhile, has stirred up all kinds of renewed angst among players and agents. Chelios is a divisive figure at the best of times, and some of the committee's conduct (as alleged in this letter by Ian Penny) has outraged the membership.

A review is one thing, but directly meddling in the union's affairs is another.

"My players are wondering what the hell's going on," one agent said last week. "If Penny's letter is accurate, it raises all kinds of questions."

Everyone involved agrees on one thing, however, and that's that they need to begin a search for the next executive director as soon as possible and let him pick through the wreckage. Whoever that is going to be has a heckuva task on their hands trying to rebuild this thing, a job they'll only be able to complete if the PA's constitution is rewritten to give the ED much more power than Kelly had.

It won't be easy. It may not even be possible, at least in terms of regaining some of the power the union had back during the first labour stoppage 15 years ago. Because they are unlikely to be willing to submit to yet another stoppage, how then will players fend off whatever Gary Bettman and ownership wants to bring in?

As he argued throughout the last lockout, Tom Benjamin writes that the membership may be better off with no union at all given the way the next CBA negotiations are shaping up – an extreme viewpoint if there ever was one, but he has a point.

The NHL's push to destroy the PA has worked all too well. More than four years later, it's as big a mess as it ever was.

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Management has to walk a pretty fine line, too. They really want to emasculate the union, but, for legal reasons, they don’t want to destroy it. A number of things important to them are not permissible without a collective bargaining agreement, and thus a union. I believe that that includes having a draft.

by J. Michael Neal on Nov 8, 2009 10:02 AM CST reply actions 0 recs

The real problem is that the league is run by idiots. Regardless of how toothless the union will be I have absolutely zero confidence in the NHL’s ability to construct a financial system which won’t be ruinous to a solid third of their franchises.

Seriously, if you allowed Gary Bettman, Bill Daly and Jeremy Jacobs to draft the next CBA exactly as they want it, they’d still F it up and cause huge problems for teams. That’s essentially the opportunity they had this last time around, and the current CBA is killing 10+ teams.

by HockeyinHD on Nov 8, 2009 11:26 AM CST reply actions 0 recs

The problem isn’t that the league is run by idiots. It may or may not be, but that’s not the issue here.

The problem is that there are several different groups of owners, each of which has widely divergent interests. In the NHL, the gulfs are wider than they are in other sports, which means that even destroying the union isn’t sufficient for them to be able to find a compromise that is acceptable to enough owners. (The NFL may be reaching this point, too, thanks to Jerry Jones’ innovations.)

The owners are every bit as split into factions as the players are. The difference is that they are real economic divides, rather than mostly matters of ego, and that the owners are much better at not letting their in-fighting play out in public.

by J. Michael Neal on Nov 8, 2009 6:29 PM CST up reply actions 1 recs

I don’t really agree with all of that. Yes, I agree there are factions of owners, that is going to be a given in any league… I just don’t think those divides are anywhere near as serious as you think they are.

I think you can make a reasonable argument that there are maybe 10-15 owners who have some degree of active interest in their NHL team. That number is certainly no higher than 20, so even in the most liberal interpretation of ‘active interest’ the NHL is in a situation where there are fully 10 guys who, as long as their teams aren’t hemorraging money or providing an embrassament to them which might impugn their other business ventures they couldn’t really care less what happens to their team.

Of the remaining maximum of 20 owners, perhaps only 8 are really trying to improve with the point of winning a Cup. Most of the rest are simply trying to get better, or remain competitive, with the goal of maintaining fan interest and the overall bottom line.

If all Bettman does is look at policies which improve the bottom lines of the NHL teams, he’ll carry 10-15 votes almost by accident, and only barely half the league even cares what he does with regards to on-ice rules, so he can get a rubber stamp from those guys and then only has to worry about carrying half of the owners who actually care.

by HockeyinHD on Nov 9, 2009 6:53 AM CST up reply actions 0 recs

The owners may not care about hockey, but that doesn’t mean that these shrewd businessmen from other areas will suddenly start treating this one business venture like idiots. And face it, as far as the owners as businessmen are concerned, Bettman’s done a fine job during his tenure. Of course, for some of them the hockey team is quite important financially, while for others it’s a negligible part of their business empire.

But the division between small market owners and big market ones has grown when the cap has risen and will only continue to do so as some teams keep bleeding money.

by Malurous on Nov 9, 2009 2:04 PM CST up reply actions 0 recs

The divides have little to do with who is trying to build a winning team. They have a lot to do with the disparities in revenue each team generates. The Maple Leafs and the Bluejackets have vastly different views on the desirability of more revenue sharing. They have vastly different views on what steps should be taken to get a TV deal. They have vastly different views on both the salary cap and the salary floor, not from the perspective of winning or losing, but from the perspective of making profits.

Money is the great divide here. The revenue disparities between the richest (Toronto) and poorest (take your pick) teams is greater in hockey than it is in any other sport. Consequently, the divide in interests of the owners is greater. (The NFL is facing trouble, because the potential revenue disparities there are almost as large, and Jerry Jones is doing his best to realize them.)

It isn’t as simple as saying that the small markets outnumber the big ones, so they can just impose more revenue sharing by majority vote. They need the big markets in a number of ways, and there is a limit to how far they can push it. The only thing they can agree on is that the best way to paper over these differences and push solving off until sometime in the indefinite future is to so weaken the players’ union that the disparities aren’t financially crippling for as long as possible.

by J. Michael Neal on Nov 9, 2009 2:38 PM CST up reply actions 0 recs

“Money is the great divide here. The revenue disparities between the richest (Toronto) and poorest (take your pick) teams is greater in hockey than it is in any other sport. "

I think I hear the Red Sox and Yankees giggling.

Again, of course there are divergent opinions among the ownership group. That’s obvious and 100% to be expected. It’s seems like it should be just as obvious, though, that until a significant minority (approaching majority) of NHL teams are either a) losing cash every year or b) seeing their franchise values tank, there’s no real motivation or energy behind any actual owner schisms.

by HockeyinHD on Nov 9, 2009 7:48 PM CST up reply actions 0 recs

I think I hear the Red Sox and Yankees giggling.

The revenue gap between the Yankees and the Royals is dwarfed by those in the NHL.

by J. Michael Neal on Nov 10, 2009 12:21 AM CST up reply actions 0 recs

Dwarf?

Hardly.

http://www.forbes.com/lists/2009/33/baseball-values-09_The-Business-Of-Baseball_Revenue.html

The cap negates the entire issue in any event.

by Gerald on Nov 10, 2009 2:00 PM CST up reply actions 0 recs

Well, I think teams on the low end of the spending scale still are hampered by the issue, but it’s not nearly as pronounced as in baseball.

Blogging on hockey at fromtherink.com

by James Mirtle on Nov 10, 2009 3:47 PM CST up reply actions 0 recs

Not as pronounced?

In MLB, th top revenue team has ~2.6 times the revenue of the lowest team.

In the NHL, the difference (say PHO at ~$58 mil and TOR at ~$170 mil) is ~2.9 times the lowest team.

And that is only after the MLB gap was closed dramatically by a much larger revenue sharing scheme which results in teams gettting revenue sharing cheques of ~3 times the largest NHL revenue sharing cheque.

by Gerald on Nov 10, 2009 10:32 PM CST up reply actions 0 recs

The Forbes numbers don’t include MLB Advanced Media revenue, which would add about $15 to $20 million per team. As for the revenue sharing numbers, MLB hasn’t released them for any season since 2006, so know one actually knows what they are.

It’s more complicated than it looks like, because most of the revenue sharing money is not taken from the big market teams through the payroll surcharge. It would be impossible for it to be otherwise, since the Yankees were the only team to pay it, and even they weren’t paying all that much.

Almost all of MLB’s revenue sharing money is actually central league revenue, mostly the national TV contract and merchandising. These revenues are distributed unequally among the 30 teams through a complex, not public formula that has shown substantial swings from one year to the next. This skews the numbers relative to what is called the revenue sharing money in the NHL, since the baseball teams would have gotten a significant slice of the revenue sharing money even if their were no revenue sharing, because they’d just get an equal share of those central funds. To be the equivalent, you’d have to include all transfers from the NHL central fund to be able to do a comparison.

by J. Michael Neal on Nov 11, 2009 12:00 AM CST up reply actions 0 recs

Ah, semantics.

My point is that teams like the Yankees and the Red Sox GENERATE vastly more revenue than do the bottom teams in baseball, and do so to a degree of seperation which is more pronounced than between the haves and have nots in the NHL.

That MLB a) re-distributes those dollars in a much more aggressive manner from the high-revenue clubs to everyone else via the luxury tax and b) has significant external revenue streams due to national TV contracts is somewhat beside the point, because that deals with the means one league deals with their payroll discrepancies compared to another… and not looking at just the revenue-generating capacities of the teams themselves.

In other words, the difference is the TV deal.

by HockeyinHD on Nov 11, 2009 6:44 AM CST up reply actions 0 recs

That MLB a) re-distributes those dollars in a much more aggressive manner from the high-revenue clubs to everyone else via the luxury tax

They do so so aggressively that there was exactly one team that paid the tax.

by J. Michael Neal on Nov 12, 2009 2:55 PM CST up reply actions 0 recs

As you know, that is not the main means of revenue sharing.

by Gerald on Nov 12, 2009 9:35 PM CST up reply actions 0 recs

THere is no evidence that the Forbes numbers exclude Advanced Media (or, for that matter, that Advanced Media contributes $450-600 million).

Forbes has the Yankee revenue sharing bill at $95 million, so take that for what it is worth. THey may be alone in contributing the luxury tax, but they are not the only ones contributing revenue sharing, of course.

Almost all of MLB’s revneue sharing is central league revenue? Sorry, but that is incorrect. A few years ago, PITT’s shares were made public, and they got more from revenu sharing than from central revenue.

Finally, the Yanks’ revenue is understated by $100 mil or so IN ADDITION to the revenue sharing reduction. The Forbes revenue numbers exclude “stadium revenue used for debt payments”. For th eYanks, Forbes has that at ~$100 mil. That makes the MLB top/bottom disparity worse than the NHL.

by Gerald on Nov 11, 2009 12:51 PM CST up reply actions 0 recs

I’m talking about the gap in spending being not as pronounced in the NHL as baseball. Hence “low end of the spending scale.”

Blogging on hockey at fromtherink.com

by James Mirtle on Nov 11, 2009 9:26 AM CST up reply actions 0 recs

Great article.

Thanks for sharing it!

I’m not sure where I stand on these things. I definitely think that players are paying too much in escrow. This is a quote from Adrian Dater’s (Denver Post Avalanche beat writer) blog from nearly a year ago, March 3, 2009.

And remember: players are already having 22.5 percent of their checks deducted for escrow, to make up for a potential NHL revenue shortfall for this season alone. None of the players I’ve talked to expect to get any of that money back. So, pick any player right now and look at their salary, deduct 22.5 percent, then deduct another 40 percent or so in income and federal taxes, and they’re basically taking home only 37-percent of what their salary says on paper.

http://blogs.denverpost.com/avs/2009/03/03/dont-expect-too-many-big-names-going-anywhere/

I do also agree that the NHLPA needs to get its younger constituency actively involved.

The other key thing that the NHLPA should not give up on is the participation of NHL players in future Olympic games. Any exposure to hockey is good for the NHL and Olympic hockey is some of the best that there is to watch. And from the players’ perspective, there is not much higher honor than being asked to represent one’s country.

Some other points: I don’t feel that there needs to be more buyout periods, and I don’t want to see NFL styled non-guaranteed contracts. But, I do feel that there needs to be a cap on the length of contracts (Luongo, Zetterberg, Franzen, Hossa, etc.) Although, I’m not sure that that will happen as both players and teams seem to be getting benefits from that.

From a health and safety perspective, I would like to see mandatory visors grandfathered in. And the NHL and NHLPA should work jointly to push manufacturers to imrpove helmet safety technology (like what Mark Messier is doing) and reduce concussions to protect the futures of players and the on ice product.

by c0nquistad0rian on Nov 8, 2009 12:31 PM CST reply actions 0 recs

Isn’t Chelios currently playing in the AHL without an NHL contract? Does that affect his status with the NHLPA in any way?

Professional cusser causer.

by T is for Truculence on Nov 8, 2009 1:15 PM CST reply actions 0 recs

I keep wondering that too. If he’s not even playing the NHL currently, why does he still have PA membership, much less influence in how it’s run?

by Nael M. on Nov 8, 2009 9:54 PM CST up reply actions 0 recs

Or

Mike Komisarek acting as the Habs rep in Chicago when he was a member of the Maple Leafs.

by Exit716 on Nov 8, 2009 10:22 PM CST up reply actions 0 recs

I think it's a paperwork thing.

Detroit has never replaced him as their player rep. Convienent, to be sure. :)

by HockeyinHD on Nov 9, 2009 6:37 AM CST up reply actions 0 recs

I think the new player reps don’t officially change until November 1. So Chelios is no longer Detroit’s rep, but he was appointed to this committee to investigate the Kelly firing. He’s paid a lot of dues with the NHLPA over his lifetime, it’s not like he gets declared inactive for not being in the NHL this past month.

Hockey blogging can't get any flatter.

by saskhab on Nov 9, 2009 10:01 AM CST up reply actions 0 recs

I sense many players think that now that they are partners, they only need find a way to work together harmoniously with the owners; there will never be a need for a strike again by the house union. Reminds me of those who wondered why they couldn’t spend the big peace dividend when the wall fell and there was no more need for a military.

by thinkwild on Nov 8, 2009 7:08 PM CST reply actions 0 recs

This looks like a job for...

Superjoe!

26 Card Jet

by Tommelot on Nov 9, 2009 4:14 AM CST reply actions 0 recs

Using Dater’s 40 % total tax rate (and I hope the players have good advice on sheltering the maximum income from taxes), the 22.5 % escrow hit is actually closer to a 13% cut. The salary cap has risen 46% since 05-06 so overall the players are still ahead by about 33% (in an environment of low or no inflation) since the lockout, something very few people in the world economy can say.

Incidentally, when the Bush tax cuts expire in 2011 and if the House health bill with its’ “millionaire” surtax becomes law, players in high tax US states (NY,California etc) will be seeing 60% of their income go to various taxes. We know how high marginal rates affect high earners in general (lower investment rates, more attempts to evade taxes) but for the subset of NHL players, I wonder if offers like “tax-free” contracts from Russia
won’t become more attractive (Are you doing the math, Ilya Kovalchuk?)

by Big Picture Guy on Nov 9, 2009 9:54 AM CST reply actions 0 recs

Weak union/players unwilling to lose another season? Say good bye to guarenteed contracts!

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sometimes I find it's better to be somebody else

by Fauxrumors on Nov 9, 2009 10:49 AM CST reply actions 0 recs

God I hope not

Non-guaranteed contracts have made the NFL un-followable.

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Jibblescribbits: C'mon over and waste some time

by Jibblescribbits on Nov 9, 2009 1:06 PM CST up reply actions 0 recs

or...

…the players could just decertify.

by yrmom on Nov 9, 2009 1:52 PM CST up reply actions 0 recs

That is their nuclear weapon that threatens the destruction of everyone. A good deal of the league’s ability to avoid anti-trust action on a number of issues is a collective bargaining agreement. Without it, the draft disappears. The reserve clause probably does as well. No salary cap would be possible. There are plenty of other consequences as well.

by J. Michael Neal on Nov 9, 2009 2:41 PM CST up reply actions 0 recs

In a world with a guaranteed portion of revenues going to the players, guaranteed contracts are irrelevant from a financial POV.

by Gerald on Nov 10, 2009 1:52 PM CST up reply actions 0 recs

From whose financial POV? Definitely not from an individual player’s POV. Maybe true for the league ownership as a whole (because they pay the same % of revenue), but definitely not true for an individual player.

by SJKel on Nov 11, 2009 1:29 PM CST up reply actions 0 recs

I was referring to the teams’ POV of course – the point being that I don’t think it would be a worthwhile negotiation point for the owners. It certainly would not be my focus if I was advising them.

by Gerald on Nov 12, 2009 10:31 AM CST up reply actions 0 recs

But GMs would definitely welcome that change. But I’m not sure if owners are willing to sacrifice financially to make GMs’ job easier. You have a point.

by SJKel on Nov 12, 2009 1:52 PM CST up reply actions 0 recs

Does the guaranteed portion of revenue going to the players include salaries that don’t count against the salary cap? If not, it’s far from irrelevant.

I've been looking at the sky

by Back In Black on Nov 12, 2009 10:13 AM CST up reply actions 0 recs

Unlike the salary ceiling (cap) and floor, the players’ share (and therefore escrow) depends on the actual amount of compensation paid, not the averaged contract value (i.e. cap hit). And compensation includes non-salary items like benefits.

by SJKel on Nov 12, 2009 12:40 PM CST up reply actions 0 recs

The only way that union moves forward is by clearing out any and all players who have loyalties and connections to Goodenow. It is clear that Goodenow, through his puppet Chelios, is still trying to pull the strings within the NHLPA, and avenge his demise.

by SeaOtter on Nov 9, 2009 3:17 PM CST reply actions 0 recs

You should re-read the articles. If Chelios were Goodenow’s puppet, he would not have fought so far about firing Ian Penny, who is Goodenow’s man. Chelios was one of the few Kelly supporters who attended the 3am meeting.

by SJKel on Nov 9, 2009 5:44 PM CST up reply actions 0 recs

Great Article by John Buccigross

http://proxy.espn.go.com/nhl/notebook?page=buccigross/091110

From “someone inside the circle” and confirmed by others. Really good.

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by Rob Luker on Nov 10, 2009 2:07 PM CST reply actions 0 recs

http://tiny.cc/k9RMM

don’t know why that link didn’t finish.

Blueshirt Banter - Where every loss is the end of the season

US Soccer - The Yanks Are Coming

Red Sox Fan behind Enemy lines.

by Rob Luker on Nov 10, 2009 2:08 PM CST up reply actions 0 recs

Sounds like an agent or a former player rep.

Interesting thought that, at the end of the day, Kelly might be welcomed back with open arms if he were still interested. Certainly, it’d save the PA a few million in paying someone not to work for them, since they’re doing a lot of that already.

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by Doogie2K on Nov 11, 2009 10:18 AM CST up reply actions 0 recs