Coyotes' strike a real deal
NEWPORT BEACH, Calif. --
September 15 is not supposed to be a date familiar to hockey fans.
But anyone who even loosely follows the National Hockey League knows it's the expiration date of the collective bargaining agreement between the league and the NHL Players' Association. There's more than six months between now and what could become the last day of contractual peace for a long time.
And although NHL commissioner Gary Bettman has invited union chief Bob Goodenow to a formal negotiating session after a five-month hiatus, according to Friday's Los Angeles Times, the actual process of sitting down is nothing for fans to get excited about.
The huge philosophical differences between the league and the union manifested on Thursday in a rare public back-and-forth between Bill Daly, the NHL's executive vice president and chief legal officer, and Ted Saskin, senior director of business affairs for the NHLPA.
The discussion illustrated the fundamental gap between the sides: The owners want cost certainty, namely a salary cap, to limit spending. The players want a market-driven system.
"Owners set the market for player salaries, owners decide what players are worth and that's all our players want," Saskin said. "They want to be paid, not a penny more, not a penny less than an owner is prepared to pay, and that's what sets the value in a marketplace."
Daly pointed out that although there is not a team salary cap currently in place, the current CBA already imposes limits on what players can make, including
in the sport, there are already limits that don't make the NHL a complete free market - including prescribed minimum salaries and arbitration.
"There will be a marketplace for players at the end of the day, even under a cost-certain system," Daly said. "There's going to be individual negotiations for salaries, there's going to be free agency. There's going to players who change location based on personal preference. It's all in the context of the marketplace and the rules that govern the marketplace, that's what the negotiation is about."
Although Bettman and Goodenow haven't been talking, the NHL has been doing plenty of talking to its fans recently.
Last month, it commissioned a financial report composed by economist Arthur Levitt that cited that the league's teams lost $273 million, largely as a result of doling out 76 percent of the revenues to the players. The league also is maintaining a Web site, www.nhlcbanews.com
"It's up to the two parties to negotiate this agreement," Daly said. "Nonetheless, I think the fans play a role in how you position yourself and what your position might be in collective bargaining to a certain extent."
Saskin said the information the league is passing off is simply propaganda.
"It depends on how one reasonably defines the hockey business and we obviously have disagreements on that," Saskin said of the findings that were released Feb. 12. "It's very easy to track gate revenues, it's easy to track national broadcast revenues, the local (networks) when there are related entities that own them, that's more problematic. How you deal with arenas, how you deal with suite revenue ... those are challenges and proportions are made, adjustments are made and we certainly don't agree with their assessment of what the hockey business is."
Most fans care more about their team's win-loss record than the losses claimed on their owner's balance sheet.
"From a fan's perspective, the most important thing is competitive balance and the belief that at the beginning of every season that their team can compete," said Montreal Canadiens' president Pierre Boivin.
Other league executives, while acknowledging that spending is out of hand, tend to play down the relationship between capping salaries and competitive balance.
"Spending big money does not a championship make," said Greg Jamison, president and chief executive officer of the San Jose Sharks, who Jamison said would have to be Stanley Cup champions in order to make money this year with the team's $35 million payroll. "Just because some teams spend more does not that they are guaranteed to be successful and I think that manifested itself in last year's playoffs. Some of the biggest spending teams were not there in the end."
While it is true that the more money a team has to spend the more mistakes it can make, Saskin is quick to point out that, as of now, about three-quarters of the league still has a chance to make the playoffs.
"You can't have more teams competing (for a spot) than you have now," he said.
As the days go by, teams have started to begin planning for a prolonged work stoppage.
The Toronto Maple Leafs have already made public their contingency plan. Employees of the team reportedly will not get a cost-of-living increase or any bonuses if a lockouts take place. If no progress is made before Jan. 1, employees will take pay cuts of between 25 and 35 percent.
Other teams, including the Sharks and the Canadiens, are still formulating their plans, which will be made public next month.
"The teams are definitely on their own in terms of coming up with an organizational philosophy and plan and you will see a variety of different structures," Daly said. "It's our job to tell them where we stand and give them our best view of where they are going and how long it will take to get there."
While some hockey executives have said that some teams are losing so much money that they would be better off not paying players and enduring a work stoppage, Jamison said he didn't think that was the case for the majority of the teams.
"We're focusing on what we will do in the event of a stoppage," he said. "But as of now, we're preparing as if we're going to have a season."
For the 2004-05 season to open on time the substance and tone of the conversations between the league and the union have take a dramatic turn over the next six months.
"If someone wants to pick a fight with (hockey players), they are accustom to responding," Saskin said. "Certainly if the owners consider it appropriate to pick a fight, I think they understand the response that is going to come from the players."
Darren Rovell, who covers sports business for ESPN.com, can be reached at firstname.lastname@example.org.