Thursday, June 28, 2012

Another Lockout? - We Can Only Hope Not

We are now in yet another offseason of hockey but as always that doesn't mean things are quiet. Starting at the end of the season things become very busy for management of the teams with the draft and then the push to sign players that have contracts ending, this after the decisions take place on who to keep and who to let go. Then you have free agency when teams are throwing out their best bids for the players that they think will help their team the most in the coming years. Throw in the HHOF selection, the awards show, and development and rookie camps all before you even get to training camps and things are busy indeed.

This year happens to be even busier yet. Earlier in the year the NHL club owners voted to cancel the final year of the current CBA so as of September 15th there again won't be a CBA in place unless an agreement is come to by then. The last time this happened the league locked out the players and the entire 2004-2005 season was lost. Hockey came back stronger and better than ever but still the pain of losing an entire season was real. Now we face a similar situation this year where despite claims that the NHLPA is ready to play even if a CBA is not in place it is very possible the league won't start on time if there isn't, just as it was eight years ago. At this time the first discussion between the party is to take place at the end of June, and while the lack of intelligence of not having any discussions between the parties prior having known of the impending end of the CBA for some time seems obvious, that isn't the point of this writing. Neither is the point of this writing to champion my thoughts on why if we lose hockey yet again less than a decade after the last lockout it should cost some high profile people their jobs. Rather the point of this writing is to point out a few things in my opinion that truly do need fixed. Yes, hockey has come back strong and the sport has been very successful, however that doesn't mean that things can't be improved or don't need addressed either.



The first and biggest issue in my opinion should be the salary cap and the floor. When the new CBA was put into place the cap was $39M. The floor was set to be $16M below the cap, so $23M. In just the 7 years it has been in place the structure that was used to create the cap has allowed that cap to balloon to a massive $70M projected for the upcoming season. The floor meanwhile is still just $16M less so $54M projected. Yes, that's right. The cap floor for this coming season is projected to be $15M more than the cap was when the CBA was agreed upon. This is massive growth and certainly bad for the owners. The players while getting paid more should also see some of the downside in this. If they need to see more see teams like Phoenix, Dallas, and even New Jersey who all have money and ownership issues. I believe that while the players deserve their money the business market also has to be taken into consideration. If the cap floor is that high teams that had trouble making a profit before don't stand a chance now as they are pushed to pay more and more to players just to get to that floor. It is my opinion that the cap floor should be a percentage of the cap itself, not a flat number. This would help to alleviate some of that while also retaining some competitive balance. For example if the floor would have been not a flat $16M below the cap but rather 60% of the cap we would see a floor not at $54M now but rather $42M. While that puts a bit more of a gap between the top paid teams and the bottom it also alleviates some of the pain on those lower income teams. I do believe also that revisiting that top end cap is something that many accountants should do and is more complicated admittedly than I want to take a stab at right now. However a cap that has nearly doubled in 8 years seems to have grown extremely fast.

Part of this is based on league income. Now if the league is that strong that this cap makes sense then that's great, but given the number of teams you hear in financial trouble it doesn't seem that way. Perhaps contraction in the league would solve some of this but this is something that everyone should fight against. You take teams away from fans and jobs away from players so I don't see either side wanting to do this. Perhaps a lot of this lies in the players share which is currently at 54%. The NFL at about 46% and the NBA at about 50% would leave the owners saying this is too high but the players will say this isn't apples to apples and compares well. However with a cap that has gone up $31M and with ownership in several cities in trouble I do think that perhaps it may be a bit high. I also think the league can look a bit more at the distribution to teams with weaker markets. While an owner wants to make money in the long run a strong league will be better than a league that faces regular ownership struggles, moves, and loss of teams.

Another topic I have heard of is guaranteed contracts. In the NHL a player is guaranteed his money from the contract he signs unless he nullifies it by doing something against that contract. To me this is the way it should be but owners and players both may be interested in what the NFL does for different reasons. First the players could look at NFL players having great years then sitting out in hopes of getting a new contract for more money. Likewise the owners could be tempted by the NFL's ability to cut a player not producing and tearing up his contract. To me neither of these is a good thing. Contracts are what they are and both sides should honor them as they are. I have never liked the diva like attitude of someone sitting out despite a contract because they think they should get more even though they agreed to what they are getting. I have also never liked owners just nullifying contracts either. Both sides agreed to a legally binding contract but both sides can break it. Personally the NHL does things right currently and if anything both sides should look to keep this system but perhaps open up a little more leway for performance bonuses. This should be an acceptable solution for both sides.

Speaking of contracts there is also some talk of owners trying to protect themselves from themselves by placing limits on the contracts they can create. Personally I think this isn't much of an issue as several things are currently in place to try to avoid cap circumvention. It could always be tweaked to be better but I think in the end the owners themselves need to be smarter about things. Sure, a cap of say 10 years on any contract may not be bad but should it be needed? An owner should be able to decide if that risk is worth it. As long as policy is in place to avoid circumvention of the cap through artificial means, for example by limiting the amount of drop in salary from the first year to the tenth year to avoid artificially low cap hits, I don't see the need for great changes just to protect owners from themselves. The type of contract I don't want to see is one, for example, that is 12 years where the first 5 years he makes $10M and the last 2 years where they are 40, 41 they make $1M and the intent is to take that cap hit from that number closer to $10M down to $6-7M. Those "artificial" years at the end are only there to account for lowering the cap and that type of situation should be addressed. A length limit may be one way to help, however looking at how much the contract can vary not only from year to year but beginning to end would likely go further in helping here. How those contracts are handled at the end of the team should also be looked into. If a player retires not only should that money be paid but the cap hit should still apply unless the player is forced out by injury.

Another thing that I think needs to be looked at though is the "Schultz loophole" where because of certain circumstances he became a free agent rather than being Ducks "property" as any other prospect would be. This situation should be amended so that the team that drafted such a player would maintain their rights. This is a case where a player was invested in by the team but because of certain circumstances he could walk free where had he played in other leagues he would be left to sign with the team that devoted that interest in him initially. Instead that team gets nothing. This loophole needs closed as team's should maintain player rights to a certain point in their careers and the way it is done outside this loophole is fair and has worked well for both sides for many years.

The schedule may be another topic. Length of season is a concern for many but honestly I like the length. However if the two sides could find a way to only take a few games and give the fans the chance to see their team play every team at least once in their arena I would be interested. Such a system where a team played their division 6 times (24 games), each other team in their conference 4 times (40 games) and then the other division twice each (30 games) is obviously a bit too much as that adds 12 games to a season. One solution to get that down to 74 games would be 6 games against division teams, 2 against everyone else but I don't like that solution honestly. In the end if they shorten the season a few games it isn't going to be that bad as we don't see as fans all 29 other teams in our arena currently each year anyway, but I'd still like to see a schedule where each team would play all other teams at least once each season.

Realignment is another likely topic. Currently there are many theories on the subject. Some even have the NHL going away from six divisions to four conferences. Personally I like the six division format and would like to see it stay. However I do agree that some degree of realignment is needed. Currently Florida and Winnepeg are in the same division and that makes no sense to continue that. In this case I think the simplest solution is often the best and there are a few ideas out there that just have a couple teams changing divisions to even things out. I for one am on board with that train of thought. This is likely more an issue with the rules and bylaws committees but I would be highly surprised if it wasn't at least discussed in some form.

In the punishment section I think that they should at least discuss having a more laid out format for punishments so there is a better understanding of what to expect at least. At the very least the maximum amount of a player fine must be adjusted. The $2500 is hardly a slap on the wrist and is no deterant to the behavoir and this should be adjusted, perhaps to as much as $25000. This would allow a bit more leway in the fine based on severity but also provides for a fineable amount that would be substantial but not over the top. The definition of a "repeat offender" and when it applies should also be more black and white. If a player is a repeat offender they should be treated as such through the entire process, not just for parts of it.

There are other things that people may think of as topics such as potential rule changes, equipment changes, safety, etc... but I don't believe those will or should be part of these talks. The CBA is more about the business of hockey and while there were rules changes that came with the first season following the last lockout, the rules/safety/competition committee(s) should address these other issues much as they have over the last few years.

As can be seen even an outsider can see there are a number of issues to address meaning there are a number of other things that haven't even been touched on here. So why haven't the two sides met yet? There is way too much to discuss to have not spoken yet and fans, both casual and hardcore, are not going to take another loss of hockey very well should it come to that.

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