Wednesday, August 15, 2012

The Parties In Negotiation

The NHL collective bargaining process is starting to get interesting.

The storyline we are going to live with for the next month (months if we take a cynical view) is Team Owner vs. Team Player.

You know, if it were really that simple, I think this thing would get settled. The complexity of the thing is really much greater.

First of all, neither side is a united team. Sure, they unite through one spokesman, but behind each statement is an internal struggle and compromise. The owners consist of rich big market owners (individuals or partnerships), small market owners (individuals or partnerships) and conglomerates. Each party's interests are unique, even within those headings. The players are the same, there are super-salaried players (mid-career), super-salaried (end career), middle salaried and minimum-salaried players.

I thought it would be interesting to speculate as to what each group might be pushing and willing to take.

Big Market Owners (individuals or partnerships)
These guys have the money they came in with and are making a profit on the investment they made. Sure they're going to be willing to push for a greater share of the pie, but are probably less willing to risk killing the goose that lays the golden egg. And revenue sharing -- this is the group that will resist most. In their view, they probably made some genius move to make Montreal or Philadelphia a hockey city and don't want to subsidise those lesser owners who can't come up with ways to make hockey work in 100 degree heat.

Ultimately, this group also wields a large amount of the power. These are the teams that people pay to watch and the teams that US networks pay to televise. As they bring in the majority of league revenue, they are, for the moment at least, the NHL.

The question with these guys is, do they have vision. Are they interested in trying to expand the pie even more and increase their portion by an increment at the risk that whatever is tried might sink their little utopia? Or, are they just happy with the status quo, players, other owners, fans, dreamers be damned.

Small Market Owners (individuals or partnerships)
Numerous, but holding less sway. These owners are the ones the players need to court if they are looking to get creative. I think the players proposal gives a big nod to that with its revenue sharing.

These guys are all rich guys too, but their hobby farm (NHL team) is costing them rather than earning them money. To some this might be a justifiable expense for what is essentially a toy. But others may have viewed this as a big cog in their continued drive to amass wealth. The twist with this group is that missing a season is actually better if we believe the reports. What's more, the egg they get from the goose is not golden, so they personally have less interest in fattening it up.

The salary cap has been good to these owners and the last CBA was their best arrangement yet. But they want more too. They are not people used to sitting idly by and seeing what may happen. As they did in their respective business ventures before ownership, they'll look to fashion conditions for profit. That probably looks like something slightly different to each owner. Maybe Columbus hangs onto realignment this time, while Nashville pushes for no floor, who knows. It's pretty certain that most of the poorer cousins would be behind revenue sharing.

I see this group as a risk. They don't wield New York Ranger power, but if they band together and dig their heels in, could lock out the players for a pretty long time, I'm sure.

I'm thinking specifically of the Leafs here. When corporations own businesses outside their core expertise, I don't know what the history of tolerance for losing money is. With the Leafs, a lost season would be a double-whammy, as the owners would not only lose the games, but also the content to show on their premium channels.

I think this group has a lot of similarities to the Big Market owners I talked about above, but I'd guess less tolerance for losing a game, a month, a season.

Big earning players
It's notable the guys standing behind Donald Fehr yesterday were the guys from this group. Crosby, Ovechkin. These guys make a ton of money for playing hockey and will should never have to worry about working in any other job so long as they live.

I often wonder if these players think a lot about the goose that lays the golden egg for them. I'm sure some do. 57% of a $3 billion pie with most going to a very small elite group. It's not a bad arrangement at all.

I am only guessing, of course, but think the main concern with this group is to limit the rollback and future earning potential for themselves. This group is probably the least interested in hearing about changes to free agency and salary rollbacks as these last few years have been good to them with status quo. And I wonder how much if push came to shove, this group of influentials would persist with revenue sharing. After all, the top tier of players will still be playing pro hockey in a 6-team league.

The subgroup within is the last paycheque crowd. Those players that would just like to see out the next few years with the best possible conditions for their earning. These are like those old CEOs who would try producing electric cars if it didn't mean 5 years of lower earnings right before they call it a day. And funnily, as the established stars of years, this group will have a very loud voice. It will be to the union to seek union and consider not just the loud out goers, but even the dormouse newcomers who stand to be most affected by the decisions that come from this negotiation.

Middle earners
The players below the top tier are an interesting group. The salary cap was meant to rein in salary, and it did. But rather than curtail the huge offers paid to stars, it seems it is this middle group that paid the most for a cap. This is also a bigger group of players than the stars, but who knows if they can channel their voice as well. Funnily, there could be other vested interests, like hanging onto a salary floor, which is perhaps the best and only mechanism for driving up middle players salaries.

What does this group care about measures to keep the 30-team system ticking? Quite a bit, I'd imagine. The expansion of the leagues has been filled with 15-goalscorers and these guys must know that. For all their pains in getting raises, they are still paid well, and better than they would be if they were 4th liners in a 12-team league. So something like revenue sharing is a good thing for these guys, a job on the first or second line is held thanks to Toronto's dollars in Miami.

Minimum salaried players
Oh boy, if the salary cap did one thing, it was to increase the number of players earning close to league minimum. After the owners blew their money on two guys, they need some lesser paid lights to ice a team.

These are the guys that should care most about the health of the league as it is. If two teams drop out of the 30-team NHL, it'll be 50 of these guys, not anyone else. So they must have an ear for the small market owners and for any talk of revenue sharing.

I must note that we are about to be subjected to the sob stories of players who apparently aren't greedy despite fighting for every inch of a $3 billion pie they can get. We'll hear all about the guys on minimum salary with careers of 3 years, and how that is their career potential. Let's just nip this in the bud. 3 years at $500,000, even after tax is more than enough to make it a comfortable time until the guy figures out what job he can do for his retirement years. Heck, it'll even punch a ticket to a few years in Europe at a salary he can live on and delay the decision about whether to do construction or motivational speaking or power skating camps until a good few years into the future. Sure, this pales next to the owners of rich teams that print money for a lark, but compared to those of us who actually pay for ice time to play hockey, it ain't half bad. No tears will be shed for these guys here.

The fans
The final group, which always claims to be forgotten yet is always constantly reminding, is the fans.

What the fans want is the spectacle. To the average fan, a game on that first October Saturday and then every Saturday thereafter until June would be the result. Most, dare I say, probably care little for the ins and outs of the negotiation and are happy to declare both sides greedy, without a second of introspection.

I've been asking recently. What really do the owners or players actually owe the fans. Most of the money that fans have spent is for goods delivered. They paid for tickets, they went to that game. They paid for season tickets, they saw that season. If a game is paid for, but not played, I don't think any owner is expecting to say tough luck, refunds will be provided.

So the fans have been given what they paid for. Already. There was never an arrangement that all this would go on forever just because you paid $300 for a red seat. If the owners and the players who are the league decide that they need to take time to work out something that works for them, and accept that could mean less money for them, then the fans should not feel at a loss. Yes we pay for the league to happen, but we haven't paid for 2012-13 yet.

Fans, we should also know this. They striked in the 1990s, we came back, they locked out in the 1990s, we came back, they cancelled an entire season in 2004-05, and we came back (in greater numbers, apparently). If the NHL and NHLPA are considering us, then they have been conditioned to think that fans will put up with a fast and be hungrier for the meal because of it. They know that if we were going to find basketball charming it would already have happened, they know our appetite cannot be sustained by a football game a week. Are they wrong?

One thin is certain, the fans are not a party at the table. And though there will be some fan suggestions that end up by coincidence as the final solution, we are not really part of the consultation at all. We like hockey, they'll do hockey when they're ready.

That said, the fans are not to be disregarded. They are a consideration, not the consideration. A professional sports league with no one paying to watch is a backyard game with far-too expensive and brittle sticks. I suppose revenue could be boiled down to number of fans, and so maintaining the numbers as high as possible is important.

Who knows where this leaves us
So many possible interests, and a lot at stake. Who really knows where this negotiation will lead us?

I am surprised by the opening positions, and to a survivor of 2005, the gap seems a bit large for a month of talks. But who knows? Personally, I try to take enjoyment out of this process (reading, arguing and pontificating about it) and that seems to make it pass by faster.

As a Habs fan, I can't be happier with the timing of this thing. Greedy, sure, but I put up with a missed World Series chance, so I say too bad Boston, we're happy enough to miss a down year while your team's peak passes.

Enjoy the summer and the sport of bickering.

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