Friday, May 05, 2006


Follow the bouncing Loonie

Gee, with no team to follow, my attention is really wandering around. Anyway, I had a couple of Business of Hockey thoughts.

**Earlier this week Tyler pointed to a clause in the Roloson trade that's either pointless or illegal, depending on the exact wording. The sentence that caught my eye was this, though:
If I was the NHLPA, the first thing I'd be doing after the Oilers are eliminated is filing a grievance relating to the validity of this condition of the trade.

From most employee unions in most businesses, yes. But the "cost certainty" element to the new CBA has really altered the interests of the relevant parties here.

If you're not clear on the gist of this part of the CBA, let me recap. The Players get 54% of all League (hockey-related) revenues. But the salary cap is actually set at about one-thirtieth of about 62.7% of revenues. If enough teams spend the cap or thereabouts, total league payroll amounts to higher than 54% of revenues. To recover this "extra" money, the league then claws back a percentage of every player's paycheque so that the total amount actually paid to the players is 54%.

The strange but direct consequence of this is that (e.g. every offseason) once the total "book" amount of the league's payroll reaches 54% of league revenues, every "new" dollar paid to a player is literally deducted off the paycheque of every other player in the league.

So back to Roloson: Tyler is right that if Minnesota is in line to receive a draft pick from Edmonton if they sign Roli, it has a negative effect on Roli's value--he's not truly unrestricted. But here's the thing: when and if the NHLPA goes to bat for Roloson and his financial interests, they will be acting contrary to the financial interests of every other member of the union. If voiding the compensatory draft pick means than Roloson is worth an extra $200k, that is $200k taken away from the other 749 players.

Will the NHLPA continue to advocate in earnest for individual players? I don't know, but there's not much of an incentive when "winning" a grievance just means that money transfers among the players.

**On the topic of RFAs again, this same disincentive applies (if less so) to agents. Take an agent with 50 clients, one of whom is Chuck Kobasew. This summer, the job of Chuck's agent should be to find Chuck the best possible deal; if there's a team other than the Flames willing to pay him an extra $300k/yr, then the agent needs to get that deal worked out.

But again, a decent chunk of this $300k is going to come straight off the paycheques of the agent's other 49 clients. Are they supposed to be happy about this? How will agents reconcile this conflict of interest?

**Lastly, back to the new Flames Bar & Grill. It should be fun, etc. etc.. Let's say the Flames make a million dollars in profit off of this thing. Let's further say that the Flames, being pretty financially stable, decide that this means they, as a team, can spend another $1M on player salaries (e.g. the cap is $45M, and they boost their player budget from $41M to $42M).

Great news for Flames fans. Another better player, or whatever. But this $1M is not hockey-related revenue, so it doesn't actually increase the amount that the League as a whole is allowed to pay the Players as a whole. So, that $1M in added Flames salaries gets clawed back from players on all 30 teams, and redistributed back to the owners however that works.

In short: contributing to the bottom line of the Flames' restaurant effectively costs money to the players on the other 29 teams. Reductio ad hilarium: this means that you can go there and get faced with the added pleasure of knowing that every new round of drinks is, indirectly but unquestionably, taking money right out of Derian Hatcher's pocket. Sad caveat: it might also mean that you're giving money to Bill Wirtz.


Interesting article about related stuff on ESPN today.

"A league source said the upper limit of the salary cap could go as high as $46 million next season, approximately $7 million more than this season. The source added that the final number, which should fall between $44 million-$46 million, will be based on this year's league revenues, currently figured to be about $2.1 billion. That's about $400 million more than the $1.7 billion figure the league used to calculate this past season's cap numbers.

If the upper limit does reach the $46 million mark, the cap floor will rise to $30 million.

The league and players' association are still considering a different cap scenario, where the limit would be $5 million more than the midpoint, rather than the previously agreed upon $8 million. Under that new scenario, the cap floor would be $11 million less than the midpoint, rather than $8 million. The owners have agreed to accept such a change. The union has yet to make a decision.

If the change were to be adopted, the upper limit would be about $43 million, while the floor would be established at or about $27 million. That would further limit what big-market teams could spend on players. On the union side, there has been talk the change would help alleviate the players' escrow payments.

As part of the new collective-bargaining agreement, the players must pay into an escrow account. If total salaries exceed 54 percent of league revenues, the owners collect the difference from that escrow account. This season, because league revenues acceded the conservative estimate, the players did not lose any money through escrow. Next year, using a formula based on this year's numbers, that could be different. The players could well have to dip into that escrow fund. That's just a little food for thought for our skating stars."

Hey fuckers -

I thought long & hard about how to prephase this...Gentlemen...Whatever.

I guess you could call me a long time "lurker", first time poster.

Enjoy the blog a ton, but the rest of my ADD afflicted idiot friends could care less. Too bad, I love it.

Anyway, at the risk of taking a beating here, I wonder if you guys know how I might score a couple tickets for a game in EDM. I have no issue paying 2x, 3x, 4x ...waaait a minute.

Don't say e-Bay...I think e-Bay is a great thing, but don't feel like doing that mofo 3 hour drive from CGY to EDM to find out my tickets are fakes. Please offer opinion if you think it's safe,

Anyway, just askin'.

Before Mr.Cosh starts berating me...I'm a freakin' Post subscriber and a wanna be Western Standard subscriber.

And I'm drnk.

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