Friday, February 18, 2005

The NHL Lockout

I've thought long and hard on the subject of there being no NHL season this year and I've decided that I'm siding with the players over the owners.

The owners are currently trying to make this look like greedy players are ruining the league financially. There's all this talk about all these teams that are losing money and even more talk about how the average salary per player is $1.8 million per year. Who wouldn't love to have a job where the average salary is $1.8 million you will hear all the hockey GM's ask?

I'm sure many players would have voted to agree to the $42.5 million cap. They know the money they could have made this year is probably more than what their parents made in their lifetimes. They know that the average fan thinks they are either crazy or greedy for wanting more than that average $1.8 million.

I'm sure that if put to a vote though, the majority of players would still vote against a hard salary cap.

Before I go into why I think the owners are wrong let me first say that I think Bob Goodenow did an awful job. He is as much to blame for there being no hockey this year as anyone. He should have done his negotiations in public. He should have been able to express the reasons the players were right and he should have taken his case to the fans. He should have exposed and explained the owners naked greed. He didn't and now he is exposed for the boob that he is.

In a nutshell the owners are trying to put the hammer to the players. They don't care about the fans or the game of hockey. All they care about is money. Never forget that fact.

You hear about all the teams that are losing money but no specific list has been released to my knowledge. If there was a list - I bet the teams losing money would fall into three general categories. You would have the franchises that are just poorly run. You would have franchises that are fronts and are supposed to lose money or break even. Then you would also have teams located in areas that cannot support a professional hockey team.

Think about the back of the napkin math. Supposedly, the NHL had a little over $2 billion last year in revenues. With 30 teams that would average out to about $70 million per team but of course that revenue doesn't average out. Just like in baseball there are big market teams and small market teams. What the owners and Gary Bettman want to do is control the big market teams' spending and it is the players who will pay that price.

That $42.5 million cap that Bettman proposed was a hard cap. No team would be allowed to go over it. That doesn't mean that all the teams would have to spend $42.5 million - it just means that teams would not be allowed to spend more than $42.5 million.

Let me make a baseball analogy. Imagine if a hard cap of $75 million was put in place in MLB. That hard cap wouldn't incent teams like the Tampa Bay Devil Rays to spend more money. They would remain at about $35 million. The big market teams like the Red Sox and Yankees would have to stop at $75 million and the money that is today spent on salaries over that number would go directly into the owners' pockets. Plus, if a big market team like the Yankees was at the cap number - then they couldn't go out and just sign any new free agent they wanted. This would depress the earnings potential of free agents and this is exactly what the NHL wants and exactly what they are trying to do.

The small market teams get a better chance of resigning their stars because the market is depressed and the big market teams get to put more money in their pockets. That's what the hard cap boils down to.

Take this the logical next step further. Gary Bettman has said there will definitely be a season next year. He's counting on the players caving. In addition, don't be surprised if he says that the new cap number is now $40 million. The players will either come back at a reduced rate or the owners will bring in replacement players. If replacement players are brought in you can be sure that ticket prices will remain the same even though the product on the ice will be greatly diluted.

Why should the onus for the owners keeping their spending in line be placed on the players? Each franchise is a business. Shouldn't the owners who were able to amass large fortunes that enabled them to buy franchises be able to handle a balance sheet?

Why wouldn't a soft cap like what the players proposed work? If a team goes over the cap they pay a luxury tax that goes to the poorest teams. This system works in baseball.

What the owners are trying to pull in the NHL is nothing but naked greed. I'm siding with the players on this.

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