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Brooks: Owners want to cut salary despite having more revenue

Jul 21, 2012, 11:29 AM EST

Donald Fehr, Manny Malhotra, Dan Winnik, Henrik Lundqvist, Brandon Dubinsky AP

If there’s anyone who is dialed in on the NHLPA’s side of things during labor negotiations it’s Larry Brooks of the New York Post. Brooks obtained a memo from executive director Donald Fehr outlining what it is the owners are looking at doing.

Fehr outlined the owners’ proposal by putting it into terms if it were in effect last season. It paints a pretty clear picture of what sorts of cutbacks the NHL is looking to get back from its players.

“(1) Player compensation would have been reduced by $450 million, or 24 percent … Using the definitions in effect under the current CBA, the ‘46%’ player share in the proposal is really only ‘43% and change.’

“(2) The salary cap would have fall to an Upper limit of $50.8M, a Midpoint of $46.8M, and a floor of only $38.8M.”

“(3) This would mean Player compensation would fall to below 2003/04 levels, notwithstanding the large revenue increases in the last few years.”

The way this reads is that the owners are essentially looking for a do-over when it comes to the financial system they locked the players out for over a year to get in place. NHL Commissioner Gary Bettman and the owners, I’m sure, would look at things a bit differently.

As it stands, the NHLPA has not fired back a counter-proposal, something we’ll need to have to really have an idea how ugly things might get.

  1. sabatimus - Jul 21, 2012 at 12:10 PM

    Here we go. If a lockout happens it will be one of the most inexcusable ones in the history of sports.

  2. alexb64 - Jul 21, 2012 at 12:31 PM

    The owners should probably find better advice than “The C. Montgomery Burns Guide to Negotiating”.

  3. chiadam - Jul 21, 2012 at 12:53 PM

    If these reports are correct, there are two reasonable assumptions:
    1. the season is done.
    2. the NHL is run by the stupidest people alive.

    The union will never accept anything close to this. How can they? The league spends all their time boasting about revenue, then they turn around and offer this garbage? It’s the height of stupidity and arrogance. And is this how the league will operate going forward? Roll salaries back and lose a season every time the CBA expires?

    • sabatimus - Jul 21, 2012 at 4:51 PM

      This is what happens when owners attack: GREED.

  4. hockeyflow33 - Jul 21, 2012 at 12:57 PM

    Are the owners aware that they are the ones responsible for salary costs?

  5. atwatercrushesokoye - Jul 21, 2012 at 1:10 PM

    Yes revenues are up for Toronto, NYR, Philly, Boston, Chicago, all the other Canadian teams, but for pretty much every other team they’re losing money, so until there’s improved revenue sharing using the collective revenues of the league is useless. Toronto’s revenue is huge, it’s almost double the second team…that doesn’t mean the league is healthy. Both sides will need to do some heavy lifting if they want to keep 30 teams in their current locations.

    With all of that being said I’m really starting to think baseball has the best model for hockey, let teams spend with they want but put a luxury tax in there that penalizes them for spending too much, with that money going to the lesser teams. Yes the Yankees and Red Sox overspend and sign a lot of players but they don’t win every year, middle of the road teams are always in the mix, just look at San Fran and St Louis winning the past two years.

    • theawesomersfranchise - Jul 21, 2012 at 2:18 PM

      Well this sounds nice, and I tend to agree to an extent, but in reality the owners are not giving up on a cap in exchange for better revenue sharing. But the league definitely would benefit from better sharing of profits, as long as the weaker teams are doing everything possible to create one of their own.
      In the end though, hockey isn’t baseball, the signing of 2-3 stars on a MLB roster does not have the same effect as it does in hockey. I would like to see some sort of Larry Bird rule that allows teams to pay one of their drafted players and have the contract only count towards a % of the cap.

    • chiadam - Jul 21, 2012 at 2:25 PM

      The league’s revenue issues are of their own making. They have way too many teams in non-traditional markets (Arizona, three in California, two in Florida, Texas, Nashville and formerly Atlanta). They have too many teams in tiny markets (Columbus, Carolina). They stupidly pissed off ESPN with their last lockout, thus forcing them onto Versus, which no one had ever heard of. Only now are the television deals starting to look up. Sooner or later the owners have to fix their own issues. It’s no longer fair to hold massive pay cuts up as the only solution to problems their idiot commissioner and their own incompetent spending brought on.

    • ucaneverscorenoughgoals - Jul 21, 2012 at 7:43 PM

      I can’t agree. No salary cap and poor ownership still contributed to a team like the pittsburgh pirates to struggling for 19 years. Revenue sharing may have even given their ownership reason to avoid spending money because the revenue coming in from other teams allowed them to break even while spending very little of THEIR OWN money. In the mean time the Pirates served as a club for other teams to pluck starters from.

      No group of fans should have to sit through 19 straight years of losing and still continue to support their team because teams like the Yankees and Red Sox can out spend a smaller market team by 4 or 5 times.

      I’m not saying the Yankees and Red Sox are wrong or evil because I am fully aware they are completely in their rights to spend whatever they want to win. BUT, a salary cap is part of the reason the NFL is so successful. Even if small market teams have bad ownership a salary cap at least gives them an opportunity to try and compete with the big market teams.

      • atwatercrushesokoye - Jul 21, 2012 at 9:37 PM

        The difference being the NFL is a television revenue driven league with no local deals and only 4 massive national deals which the 32 teams share equally. The NHL is a gate revenue driven league where teams pretty much depend fully on their own ticket sales and local tv deals with a meager amount coming from the national tv deals. Right now they have an artificially high salary floor (because of Toronto’s huge revenues) and they’re asking teams to spend a minimum of $53 million (I think) when for many of these teams anything over $30 million is losing money.

        The Pirates and Royals are horrible for baseball, not because of their cities or fans, but because their owners didn’t care, they’ve been willing (especially the Pirates) to keep a low payroll and spend little money while collecting revenue sharing a turning profits. Meanwhile look at small markets in Oakland, Tampa, Minnesota, St Louis, and now Washington who have all done a great job of developing young players and had success of various degrees in the last decade.

      • ucaneverscorenoughgoals - Jul 21, 2012 at 9:52 PM

        I agree with everything you just said atwater.

        My issue is that everyone knew the Pirates couldn’t spend big money so there was little to no public pressure on ownership to do anything differently or more importantly sell to better ownership.

        Penguin ownership actually tried to acquire the Pirates over 18 months ago and offered the current owners more than the team was worth by about 25 million dollars. However, Pirate ownership knew they had enough talent to possibly compete and were happy with the money they were recieving in revenue sharing. Therefore they would not sell.

        As a Pittsburgh native who knows Penguin Ownership would have spent more to make the team competitve almost two years ago, this is incredibly frustrating after 19 years.

  6. theawesomersfranchise - Jul 21, 2012 at 2:29 PM

    Hope the owners do not think they will have even close to the public support they had the last time. They crushed the players, the players were short-sighted, a cap was being added come hell or high water. The players took a lot of blame for allowing it to go so long.
    That won’t be the case this time around

    • atwatercrushesokoye - Jul 21, 2012 at 9:40 PM

      I agree fully, they crushed them and the players accepted the system the owners forced on them, you can’t now blame the players because the owner’s system turned out to really good for them. Especially when teams have been so eager to figure out ways to get around their own system.

  7. ucaneverscorenoughgoals - Jul 21, 2012 at 2:35 PM

    C’mooooon….. This really isnt that tough!

    The NHL is going to argue half of the teams lost money because player costs are too high, cap circumvention is occuring, and small market teams are struggling to retain players because larger market teams have more money to lure them away.

    Aaaaaand the players are going to argue that the league generated record revenues and that in a free market system players should have plenty of flexibility to shop their services because NHL careers have no guarentees.

    Yada yada yada…..etc…etc.

    Let’s eliminate the obvious issues.

    1.) Teams shouldn’t be able to circumvent the cap. Term limits are trivial. If a player wants to play for less than the market will bear, that’s his choice. But, disparity from year to year in salary over the life of a contract shouldn’t vary more than 25%.

    2.) Arbitration is neccessary if RFA exists. If teams don’t want to deal with arbitration then eliminate RFA. At the end of any deal (entry level included) guys become UFA.

    3.) Extend entry level deals. Small market teams need to be able to hold onto elite talent. But pay players better in their entry level years if they produce. No player should feel used by the system because he is too good.

    4.) Just split the Revenues 50/50 and lets move on. Under the current system with the mid point being 8 million dollars under the cap as usual, it brings the salary cap to 62.6 million. Only 7 teams need to get under that and only 2 teams need to get to the floor of 46.6.

    If I can understand how to create a reasonable cap from going here: http://m.theglobeandmail.com/sports/hockey/nhl-salary-cap-to-be-temporarily-set-at-703-million/article2449267/?service=mobile
    YOU SHOULD TOO!

    Spend the next two months arguing over the specifics all you want but don’t deprive me or anyone else of the sport we love come October because both sides are trying to milk a system THAT’S MAKING EVERYONE MONEY DURING A RECESSION!

    • sabatimus - Jul 21, 2012 at 4:54 PM

      You should, no joke, email this to both Bettman and Fehr. Very well-though out and reasonable.

  8. norseman81 - Jul 21, 2012 at 3:36 PM

    ucaneverscorenoughgoals

    Excellent Post! I can tell you that my teams owner is going to want games to be played, with the Suter and Parise bump. He is going to have to pay for those salaries somehow. I am confident larger heads will prevail and a deal will get done.

    • atwatercrushesokoye - Jul 21, 2012 at 9:43 PM

      The problem with that is that your owner was arguing 3 months ago that players salaries were too high and that’s the reason the Wild were losing money.

  9. lostpuppysyndrome - Jul 21, 2012 at 5:07 PM

    The whole CBA owners-vs-players thing is ultimately kind of stupid. The owners should be negotiating with each other because that’s where the battle really lies. It’s not the players that affect whether a small-market team makes less money than a bigger one. Even if the players’ revenue gets slashed to 30%, it’s still not going to help a team like Phoenix make money. In fact, it’s stupid to keep teams like that around if they keep bleeding money, and then asking for teams like Toronto or New York for a handout. Yes, the NHL has made a lot more money but the problems are with the individual teams. The owners only create problems for themselves by keeping Phoenix and other non-hockey market areas. They don’t even qualify as “non-traditional” hockey markets. They’re simply not hockey markets.

    Either the owners share more money amongst themselves or (re)move the leeches of the NHL. This isn’t an owner-vs-player battle because they both need each other, and neither of them will get anywhere on their own. A house divided will not stand; we saw that 8 years ago already.

  10. quizguy66 - Jul 21, 2012 at 7:02 PM

    This news is filtered through Larry Brooks, that paragon of excellence. It’s hard for me to get past that fact, though he’s basically the shill for the NHLPA (crazy that a Murdoch paper would have the pro-union guy but so it is in this case). And I say this as someone who is generally more favorable to the players vs management. Nonetheless, things don’t seem to be off to an encouraging start.

    -QG

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