The CBA Wars Volume Two


Yesterday Gary Bettman Spoke on the state of the NHL following the general managers meeting, and as is tradition when Bettman speaks, nothing of substance was said.  He can’t entirely be blamed for this, he really can only say what his superiors (the owners) will allow him to, and at the very begining of the Stanley Cup Final is probably not the best time to say anything that could cause a stir.  Donald Fehr has been eerily quiet going into the summer as well, which is leading many to worry about the possibility of losing games come this fall.  Here is random speculation on what may happen that will shake the NHL this negotiating season, and the owners themselves may not even be prepared for it.

When the Season was lost in 2004/2005, the NHL was playing the bleeding franchises card as hard as it could.  They were not wrong in doing so, as the current business model was not really supporting the league expansion that was sought after when the deal was crafted 10 years prior.  The NHL owners legally could not work together to hold down player salaries, and human nature being what it is, larger markets such as Toronto and New York were spending at will (with buckets of success….SIC).  The salary cap was the absolute result of the players having little if any leverage to fight the NHL in their endeavor to impose a collectively bargained salary cap.

The NHL is about to go through an experience similar to that of Ebeneezer Scrooge in Dickens ‘Christmas Carol’ when Donald Fehr comes to the table, and there are two instances which the ghost of NHL past are going to hinder them from getting their way with the players.  The first is going to be the moment that the NHL fought tooth and nail to prevent Jim Balsille from purchasing both the Nashville Predators and Phoenix Coyotes, and the second, and far more damaging will be the Atlanta Thrashers move to Winnipeg.

When the NHL intervened with the sale of the Phoenix Coyotes three years ago, they did so under the premise that the NHL could be the only party that could dictate the terms of a franchise relocation.  The basis was sound and actually under any other circumstance would not have hurt them, but like most people when dealing with legalities, they said too much.  When making arguments in court to Justice Redfield T. Baum, the NHL gave a grand exposition on the failures of ownership to properly market the team which severely hindered them from the proper levels of financial success.  The NHL then proceeded to take on the team, stating that it would sell them to an owner of their choice.  The implication was that this could be done rather expediently, perhaps 6 months to a year.  By not only failing to sell the team in a reasonable time period, but to proceed to lose buckets of money at a record pace, the NHL actually proved the claim of Jerry Moyes that the team was not financially viable.

Why should the players care about this?  The NHL calculation for the salary cap is based on hockey related revenue.  The NHL calculation is kind of like when the tide comes in, the more money all 30 teams make, the higher the players salaries will go.  This is by virtue of the system that the NHL wanted, the players wanted no part of it.  By working hard to artificially hold down the value of one of it’s franchises for the simple purpose of proving to a private business person that they made the decisions, the league actually contributed to holding salaries down the last three seasons, by how much is hard to tell.  The union has loaded guns on this one, which is in part why the Winnipeg Jets 2.0 are going to hurt the league worse.

The Coyotes were the team that originally was intended to lift off, not the Atlanta Thrashers.  Bill Daly and Gary Bettman took great pains to mention early and often that Winnipeg was not a market the league felt could generate enough money to be successful.  The size of the market was a huge question mark, as was the dedication to keeping a franchise in its present location.  Then the Glendale city council, in perhaps one of the more misguided ventures in American political history, bought the snake oil the NHL governors were selling and dedicated substantial amounts of taxpayer dollars to cover the losses of the Coyotes, based on the promise that a) the team would be sold soon at which time the agreement would include a method for the city to recoup the funds and b) the NHL running the team would ensure that it was being properly run, and the losses would not be nearly as high.  Unfortunately, the NHL was wrong on both accounts, and the city is now insolvent.

The Thrashers move to Winnipeg squashed the very two promises that were made in the heroic effort to save the Coyotes, first being that the NHL would work sleepless nights to keep a team in it’s current location.  The time period between the start and end of negotiations to move the Thrash was hardly two weeks, and the NHL barely spoke of any efforts to save the team.  The Second promise was that Winnipeg would not be considered as it was not really a viable market.  The Thrashers went from collecting revenue sharing to almost qualifying to pay into it, which is exactly the opposite from what was assured by the NHL.  The movement increased the franshise value overnight, and also got the league a very healthy franchise relocation fee (which the players got none of).

When Donald Fehr enters negotiations this summer, he is armed with the knowledge and evidence that the NHL held no regard for the financial rights of its biggest partner, the players.  Fehr will most likely look to fight for a piece going forward of franchise relocation funds, as well as input into the status of franchises in financial peril which the NHL has taken control of.  This would include disclosure of the fact that the NHL is advancing revenue sharing, a practice that has been done on multiple occasions when teams were in trouble.

Sorry for the long winded explanation of the possible outcome, much of this is just speculation based on statements made at the ownership trial of the Coyotes.  Hockey needs less of these kinds of things in the news, but they just can’t help themselves.