Thursday, July 06, 2006

 

Paging Chris Chelios

[Postscript Added]

Propz to Colby Cosh on his actual reporting regarding the status of the 3rd-rounder the Oilers owe the Wild on account of their signing UFA Dwayne Roloson. Andy linked to it last night; I hope you've all had a chance to check it out and get familiar with the issue.

My reaction to what Cosh found out can be roughly summed up like this: Man, does the NHLPA suck. Here, again, is the CBA clause on What It Means To Be An Unrestricted Free Agent:
Such Player shall be completely free to negotiate and sign an SPC with any Club, and any Club shall be completely free to negotiate and sign an SPC with such Player, without penalty or restriction, or being subject to any Right of First Refusal, Draft Choice Compensation or any other compensation or equalization obligation of any kind.

That's Cosh's emphasis. I have no doubt that the reason the three bolded words there were included was to "extinguish the old system of league-specified compensation for teams that lost players to unrestricted free agency". But if I was Roloson, or another player affected in the same way, I'd be hanging my grievance on the rest of the language in the clause, namely the words "completely" and "of any kind". Cosh again:
In the NHLPA's view, since the Oilers still had to outbid 29 other unencumbered teams for Roloson's services, the terms of the trade had no practical effect on Roloson's negotiating power.

This is a somewhat uncharitable (to Roloson) take on the economics of Unrestricted Free Agency, isn't it? The NHLPA is basically saying OK, since the top bid from one of the other 29 teams was $X, the fact that Lowe was willing to pay [$X + $1 + a 3rd-rounder] doesn't change that the most Roloson would have gotten was still [$X + $1].

Whatever -- that's far from obvious, but perhaps defensible. The biggest problem, though, is not the PA's take on Roloson's specific situation; it's their stance in general. Namely, that all this CBA language about "completely free" (and the word "unrestricted") was
not [intended] to prevent teams from seeking an extra conditional reward in a trade of a soon-to-be UFA.

Wow. Apparently the PA is A-OK with Clubs creating restrictions on individual players' future choices and earning power out of thin fucking air. The NHL Bylaws are not online, as far as I can tell: is this interpretation limited to "conditional rewards" associated with the players involved in the trade?

The Oilers sent the Wild a 1st-rounder and this conditional 3rd-rounder. What if, along with Roloson, the Wild had sent the Oilers a "conditional 3rd-rounder, if MIN signs Pisani or Dvorak as a UFA"? Would there be any difference in principle between that, and what the PA has approved? It's not like Roloson had the right to approve the terms of his trade; I don't think you can count "showing up as per his contractual obligations" as implicit approval.

What if the conditional picks were a 1st-, 2nd-, and 3rd-rounder? Ta-dah -- as far as the Oilers are concerned, he might as well be a restricted free agent!

What if, every time the Flames make a trade of any kind, they extract a conditional 1st-rounder in the event that the other team signs Kipper to a free agent deal in 2008? Suddenly "29 other unencumbered teams" becomes 25 -- or 20, or 15, etc.

This is all the more disheartening because if there's anything that the players "won" as part of the new CBA, it was the loosened free agency. In theory, it affords them the freedom to seek out the best deal for their own preferences: money, location, lifestyle, etc. at a younger age (i.e. for a greater portion of their career). But as it turns out, they didn't even get that. You think any of the players who were on the fence about approving the new CBA were clear on this?

The first time I touched on this issue, I had a question:
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.

I guess I have my answer. There's only two things you really need to know about economics, and the first is, Incentives Matter.

POSTSCRIPT: I may have let the hypotheticals etc. above cloud the central issue here.

On March 1st (pre-trade), Dwayne Roloson had a collection of rights coming up on July 1st: the right to negotiate a contract with any of 30 clubs "completely freely". When the Wild traded him they, as Tyler pointed out when he first brought this up,
...managed to do what the CBA otherwise prohibits and will collect compensation in certain circumstances. They had no interest in Roloson's rights following this season but somehow managed to create a compensable interest, albeit a limited one.

So on March 1st, Roloson had the right to negotiate an contract with the Oilers (as of July 1st) without encumbrances. Minnesota helped themselves to that right, and left Roloson with the right to negotiate a contract with any of 29 clubs "completely freely".

Perhaps the NHLPA could reconcile why that right has a value of $0 to Dwayne Roloson, but a value of a 3rd-round draft choice to the Wild/Oilers.

Furthermore, it is simply not true to say that the terms of the trade had no practical effect on Roloson's negotiating power. Any of the 29 other clubs who may have offered him a contract was aware that Edmonton was competing for his services with an encumbrance, and their offers may well have reflected that. (This is most obvious if you consider that Edmonton and one other team were serious -- in that case, the $X discussed above would have been affected by Edmonton's restriction.)

Conclusion #1: the NHLPA should be filing a grievance on Roloson's behalf, asking the League or Edmonton pay him the cash value of a 3rd-round draft choice. If the NHLPA isn't interested (and it appears that they're not), his agent needs to take the appropriate legal action with the PA and/or the League.

Conclusion #2: if you're an NHL hockey player, you'd better make sure that your personal agent is representing your individual interests vigourously, because you clearly cannot count on your union to do so.

ANDY UPDATE: 4:20 p.m., Friday afternoon

Tyler weighs in on his own site.

And yes, the time I posted this update actually was 4:20.

Comments:

It seems wrong that a team could get a draft pick in exchange for another team signing its UFA's. I always believed the 3rd round pick in the Roloson deal was conditional on him signing with the Oilers before July 1. I'm a bit suspicious that he delayed his signing until hours after the free agency period began to save the Oilers that pick. Does anyone know if the Oilers have had to actually assign a pick to the Wild?

I do expect that the league would not allow trades that encumbered true free agents. I'm surprised the NHLPA seems so ambivalent on that point.
 


The Columbus Blue Jackets have signed Ty Conklin. What a move!
 


I said this in an email last night, and I'll say it again:

I'm intrigued by the notion of what happens in the
Oiler's war-room on this one, and how much that
restricts Roloson's "unrestricted" nature. Did they
consider not siging him because of it? Or did it
perhaps help shape a threshold for them, such as,
"we'll pay him 4 million a year and lose the pick, but
I'm not paying him 4.5 and losing that pick". It HAD to of crossed their minds."Hey, we can get Gerber and keep our pick, for the same price as signing Rolli and losing it."

It seems silly to me that at least Roloson wouldn't be freaked about that. As for the NHLPA, it is no different from any other union, which has competing interests within it.

What if the conditional picks were a 1st-, 2nd-, and 3rd-rounder? Ta-dah -- as far as the Oilers are concerned, he might as well be a restricted free agent!

Even better, what if the deal was Roloson going to Edmonton for a conditional Alex Hemsky, who the Wild would acquire IF Roloson re-signed with the Oilers? There goes one team Rolli can sign with after he becomes "unrestricted." It's really the same thing, yet I would assume the NHLPA and Roloson would freak about that.
 


I think the assumption that the pick only transfers if Roli signed before the draft makes sense. Somewhere else, someone pointed out that the Oilers' 3rd in '07 was offered conditionally if they signed Peca after the draft* (beforehand, it was a 4th in '06, I think). Obviously, you can't offer up the same pick to two different teams, so it must have been the 3rd in '06, and would have become irrelevant with Roli signing after the draft.

* - Incidentally, if all of the above is true, wouldn't Peca be far more concerned about this pick compensation thing than Roli?
 


Wow -- you've got the Grabia "thousand words" disease!
 


The draft is not the key day; the Oil had the same rights to Peca on June 1st, 15th, and 30th, that being the sole right to negotiate.

As of July 1st, the Oil has/had no rights to Peca, because his existing contract has expired and he is a UFA. At least that's MY take on it; apparently the NHLPA sees things differently.
 


Wow, some poor kid is going to get taken in the 3rd round next year and wonder why all eyes are on what he might ever become.

Good catch, though.
 


I think you (and Tyler) are completely right on this one -- and you'd be more effective at running the PA and protecting the player's interests than the people who are being paid to do so.

I'm more than a little surprised that the PA is letting this slide, because it opens the door to much bigger abuses.
 


matt, you have revealed a can of worms with a great opportunity

Let's create a futures market for prospective players and players.

This new market becomes a certified player agent. All trades conducted with our players and prospects are done on a straight USD transfer basis. Take a marginally lower % than existing agents.
 


Uh, guys, Roloson signed just before becoming a UFA. Thought I'd heard Roloson quoted on TV on the weekend saying he had signed about 5 minutes before the deadline. Then with this furor, I began to wonder if I'd just imagined the quote. This from a Tychkowski article in the Sun indicates I wasn't delusional:
Five more minutes and Roloson would have been fielding offers from across the league. But at 9:55 yesterday morning he and the Oilers settled on a three-year, $11-million contract.

So, Roloson wasn't a UFA.

- Rod
 


But the point is that it could have happened, Rod. And no one would have batted an eye.

Wow -- you've got the Grabia "thousand words" disease!

Yes, literacy and thoughtfulness are so distasteful.
 


But the point is that it could have happened, Rod.
Not based on the conclusions posted above... Part of that was a conclusion that Roloson signed with Edmonton as a UFA...

And no one would have batted an eye.
Right. Because it's not a real problem. I have a hard time believing Edmonton, or any team in a cap world, would decide to lower their offer based on the "value" of an upcoming 3rd round pick. Sorry. Just not going to happen. If management did "lower" their offer by management's perceived value, then they lose the signing. It's not like the player gives them credit... "Oh, ok, that $, plus the 3rd rounder...yeah, your offer is better than team 'B'". Get real guys.

- Rod
 


I'm going to freak out if no one acknowledges the huge signing the Oilers made today...
 


Re: Rod's comments:

First, the NHLPA didn't address what the time/day was when Roli signed -- which is good, because it's irrelevant.

The harm (Cash equivalent = who knows) is done regardless of when he signed.

If the deal was for a 3rd-rounder if he signed prior to becoming a UFA, then that's fine: Roli and EDM both knew the risks/rewards of signing prior to the deadline, and both knew that the calculus would change the next day or hour.

The fact remains that MIN received consideration in exchange for something that wasn't theirs to exchange. Thought experiment: what if it was a 1st-rounder? What if, like Andy suggested, if it was a player? Say Hemsky?

Nothing the NHLPA said would indicate that such a deal would be any less legitimate, but the harm/value there is a lot easier to conceptualize.
 


I saw the deal, Mirtle. What the hell am I supposed to say? I'm not going to gouge my eyes out, or anything. I know too little about him to say anything one way or the other.
 


The letter of law and the spirit of law are rarely in sink. If we followed the letter of law, then tell the Queen to bring it on, cause the wordphrase Prime Minister doesn't actually occur in the Canadian constitution. Should we void the last election?
 


...cause the wordphrase Prime Minister doesn't actually occur in the Canadian constitution. Should we void the last election?

Eh. I doubt this qualifies as a proper example, unless it turns out that the NHL/PA dusted off a 200-year-old CBA and updated a few clauses.
 


I disagree about the relevance of the time/day of signing. What Edmonton obtained in the trade was the right to Rollo's services to the end of the season/playoffs and the exclusive right to negotiate a new contract with him through to July 1. This was what Minnesota owned and was able to trade.

Part of the consideration was a third round pick, if Edmonton was able to secure something more out of the exclusive rights to negotiate they were granted. I don't see how that was unfair to Roloson. It did not take away anything he had. He had the right to bargain with Edmonton or anybody else interested in him after July 1.

If Edmonton discounted their offer for the pick (given what they paid, it seems they didn't) Rollo could tell them forget it.

I agree that Minnesota did not have the right to extract any consideration for a deal done after July 1. That was not a right they had to give. Which in my mind makes the timing of the signing critical.
 


Draft day, July 1, whatever. The point is, there has to be some logical deadline, one way or the other, for the Roli signing to occur before the condition can no longer be met and the pick stays put. Given the phrasing of the CBA, July 1 makes perfect sense, in which case, the PA is correct under any interpretation of the language -- no pick compensation, no grievance.

I have to think if there had been some pick compensation arranged for post-July 1 signings, the PA would be in there like a dirty shirt. Maybe that's what they meant when they said "meh": they knew that he was in under the deadline, so it didn't apply.
 


What the hell am I supposed to say? I'm not going to gouge my eyes out, or anything. I know too little about him to say anything one way or the other.

A 1,000-word ode about his career would suffice.
 


Sorry, guys. You folks are wrong.

All you need is one other team willing to pay Roloson fair value. That the Oilers are encumbered is very sad for them, but they take the loss. Not Roloson.

Here's the thought experiment: Roloson's deterministic value is $3 million and this is known to everyone. The value of a third round pick is $100,000, say, also deterministic and known to everyone. I will relax these strong assumptions later.

So the Oilers offer Roloson $2.8 million... keeping a $100,000 profit for themselves. Another team notices the arbitrage and offers Roloson $2.9 million. Another team notices that there's still an arbitrage, and offers $2.95 million. And so on, until Roloson's offer is $3.0 million minus a dollar, which is where it settles. (The one dollar because any team is perfectly indifferent at a value of $3 million for Roloson).

In no case do the Oilers get Roloson in this deterministic world with no friction costs or preferences, and based on the assumption that they would never take a loss on him (ie, pay him more than he's worth).

In a stochastic world, where each team has an independent probabilty distribution for Roloson's value, the Oilers could re-sign him if their valuation of Roloson is higher than anyone else's. They still eat the value of the draft pick, because Roloson's value is the price of the second-highest team's valuation. This is a second-price sealed-bid auction, if you want to google that.

If there are transactions costs and frictions on Roloson's side (say he doesn't want to move), then he takes the loss on that. But transactions costs and frictions on the Oilers side are eaten by the Oilers. That's why Lowe didn't offer the 1st, 2nd, and 3rd round conditional picks in the trade--they're a loser for him.
 


I don't really see the problem here. Roloson has the power of choice in all these matters. He can choose whether to sign with
Edmonton before or Edmonton and any other team after the deadline. He still has the choice and based on what Roloson and the other UFA goaltenders have received thus far I think you have a tough time proving that his value was actually harmed in any way.

Edmonton was the restricted party in these matters. If they chose to meet Roloson's price before the deadline in which he had the leverage with his playoff performance and the threat of the open market then the Oilers had to meet Roloson's price plus the extra price of the draft pick.

P.S.: See Tanguay, Alex for proof of what pending UFA status means to the value of a restricted free agent, which is what Roloson was until the deadline passed. There are plenty of other examples. Jokinen, Olli is probably another good one.)

P.P.S.: Correct me if I'm wrong (maybe someone here is an economist) but this situation could be treated as a sales tax. Technically speaking based on supply and demand, the seller and the buyer equally share the burden of a sales tax. If Roloson was actually restricted here his restiction would be equal to 1/2 the value of a 3rd round pick. Of course the Oilers would be restricted by exactly that amount as well. Obviously the Wild are the beneficiaries here in any case.
 


All you need is one other team willing to pay Roloson fair value. That the Oilers are encumbered is very sad for them, but they take the loss. Not Roloson.

Nope. Because what if Roloson wants to stay in Edmonton, but the Oilers are unwilling to part with the pick. Then Roloson takes the loss. You have to look at the matter from before the signing, not afterwards.

Obviously the Wild are the beneficiaries here in any case.

That is exactly the point. They shouldn't be allowed to get any benefit off of Roloson's signing of a UFA contract. It's really quite simple.

Edmonton was the restricted party in these matters.

Only because they signed Roloson. And not really, because they went into the deal willingly. If they had not signed the deal, and had passed on Rolly, his choice would be the restricted one.

Thought experiment here. Imagine that Team A trades Player A to Team B for Player B, C, and D at the trading deadline. Now Imagine that Player C & D go to Team A only on the condition that Player A re-signs with Team B in the off-season. Player A is a unrestricted free agent. As such, Team A should recieve absolutely zero compensation for him signing as a UFA. Furthermore, Player A should be completely free and in control of signing with any team.

Now as it turn out, Player C has an amazing playoffs, and wins the Conn Smythe. Imagine he also grew up in the city where Team B plays. Now say Player D's wife hates the city where Team A play, and refuses to move there. All of a sudden, the General Manager of Team B has a problem. It will cost him too much, in terms of performance and public relations, to agree to send Player C & D to Team A. But if he re-signs Player A, he will lose both. So when the UFA period begins, he politely passes on Player A.

Player A really wants to stay with Team B, but Manager B now refuses to sign him because of the cost. He has completely lost the power of choice, which is the true intention of being completely unrestricted. Player A is now officially restricted in the number of teams he can sign with, and it is not only because Team B would lose too much, but because Team A would receive compensation. As such, he is really a restricted free agent, not an unrestricted one.
 


Andy's hitting the high points and I'm about to post on this but I wanted to hit one thing in particular.

It's not just about dollars. Roloson, as a UFA, is entitled to pick the bundle of benefits that suits him best. That includes not just cash but also lifestyle, city, team etc. If Edmonton's willingness to pay him is impacted, then he's losing out on his right. The economic stuff is a fun sideline, but irrelevant to the main point.
 


If Edmonton's willingness to pay him is impacted, then he's losing out on his right. The economic stuff is a fun sideline, but irrelevant to the main point.
That's rich. economic stuff is irrelevant.

Anyway, as macndub pointed out, if the conditional draft pick was something so "valuable" so as to impact Edmonton's willingness to pay, then they don't make the trade in the first place (to obtain Roloson). Period. It's up to the Oilers (in this case) to ensure the trade is of value to them. The Oil made the trade because they figured a 3rd rounder would be worth getting Roloson signed. Especially if he was worth a 1st rounder for only 20 games (or whatever was left in the regular season).

Second, there isn't anything in the CBA that says a team *must* offer a contract to anyone. Without the conditional pick, do the Oilers automatically make an offer? Not necessarily (as seen with Georges...).

Yeah, in all those hypotheticals you can paint a ridiculous picture in which Edmonton wouldn't resign Roloson (e.g. Hemsky & Horcoff as compensation). But does anyone seriously believe the Oil would have made the deal with those stipulations? Second, does anyone seriously believe the NHLPA wouldn't file a grievance in that instance?

The scenarios depicted would obviously change the Oilers willingness to make the trade, nevermind "re-sign" Roloson. The scenarios would obviously change the NHLPA's reaction...not to mention their chances of winning a grievance...

In sum, Roloson's contract offer was not impacted one iota win this trade. If anyone was / is poorer, it's the Oilers. But that didn't impact their offer.

- Rod
 


Well, except what you said is "economic stuff" too.
 


Player A really wants to stay with Team B, but Manager B now refuses to sign him because of the cost. He has completely lost the power of choice, which is the true intention of being completely unrestricted.

This is not what 'unrestricted' means. By this logic, Roloson could claim to be restricted by Detroit's nearness to the salary cap.

The economics is almost interesting, but no matter who carries the burden we now know how the legal boundaries work, and that's the important thing.
 


matt said...The NHLPA should be filing a grievance on Roloson's behalf, asking the League or Edmonton pay him the cash value of a 3rd-round draft choice.

...then,

matt said...The fact remains that MIN received consideration in exchange for something that wasn't theirs to exchange.

So which is it Matt? Edmonton's fault or Minnesota's?

I think it is relevant if there was a July 1st cutoff date. If Roloson wanted to sign with the Oilers in a deal that gave him fair market value and gave the Oilers fair market value (not FMV + a 3rd rounder) then all they had to do was wait until after the deadline. Then all other concerns are pointless. Unless you want to put a dollar value on what it cost Roloson to wait a few days.
 


colby cosh said:
Well, except what you said is "economic stuff" too.
I'm fairly certain that was in response to mudcrutch79...right? If so, you managed to say in one blinkin' sentence what I stumbled through several to barely convey. I'd say more...but, my fingers need a rest... ;-)

- Rod
 


To my mind a lot of valid points here, but am I the only one that sees this as arguing over pennies here? It's interesting though.

The thing I am really unclear on is who is truly hurt by this? I mean would Roloson have vetoed the trade if he knew of this possible minor impact on his contract value in the summer? I really, really doubt it.

And if Roloson had failed to get the Oilers to the playoffs, or if the Oilers had lost out in the first round (one or the other seemed very likely at the time of the trade) then EDM wouldn't be a bidder anyways.

I mean realistically there were never going to be more than a few teams bidding on Roloson. And even though the deal was signed before he became UFA, none of us are naive enough to think that his agent didn't know who else was interested and have a good idea of what they would be prepared to offer. The Oilers pay the extra cost here, and relative to the overall player budget, it is a minor one in terms of cash.

From Minny's POV, it's like a clause that says "if he is successful you owe us an extra $100k", or some such. Implicitly like the clause in the Pronger deal, but with the condition of the player re-upping as well.

As Guy Flaming understands it from Prendergast: The Oilers do owe the Wild their 3rd round selection in the 2007 draft. It would have been the 2006 draft had they made the deal with Roloson prior to that. They would have owed the exact same draft pick to the NYI if they had signed Peca as a UFA after July 1st btw, so it strikes me as strange that the NHL and NHLPA accepted the Roloson trade in the first place.

And apparently the Oilers were motivated to sign Roloson before the draft, preferring to keep the '07 over the '06 draft spot. but were not able to accomplish that.

So, the important bit:
The Oilers will not have the necessary draft selections available to tender and RFA offer sheet for a player of quality this summer. A shame.
 


I like Rod's logic here. Really, if the third was going to make a damned bit of difference, it wouldn't have been offered. This seems like the simplest expanation to me. And again, we still don't know (and will likely never know) if the third still transferred if Roli signed as a UFA instead of an RFA (i.e. after July 1). My guess is no.
 


RiversQ - I don't know that "fault" is applicable here, but I would assume that if the PA/Roli made a successful grievance, EDM would pay him the extra dough but would get their pick back (a "wash"). MIN would lose that pick, but fine, since they got it for something that wasn't theirs in the first place.

And yes Vic, in the context of pro sports, this particular discussion is about pennies. But based on what Cosh got from the NHLPA, there's no reason why we couldn't see some of these more far-out hypotheticals. (The Roli-centred discussion is annoying, because none of us have a very internal sense of what a 3rd-round pick is worth, if anything.)

LAST ANALOGY ATTEMPT:
You're close to finishing University. Suddenly the Bank providing your student loans calls you up and says, "Hey - apart from the previously agreed terms of repayment, we'll be taking 5% of your wage if you choose to work in a medical field".

You consented to this exactly as much as Roloson consented to the restriction on his choices. Your bank had no control over or financial interest in your career choice before, but they invented one out of thin air.

You could say that 5% isn't that much, or that there's plenty of other careers out there, but your bank has no goddamned business doing what they're doing, period.
 


You do realize how fully ridiculous that sounds, don't you? To say nothing of utterly irrelevant.

Roloson could have waited until he was a UFA, seen what was out there, and then picked Edmonton, anyway. He probably would've gotten the same deal anyway. Are you suggesting he would have gotten Gerber's ever-so-slightly higher contract if he'd waited ten more minutes, or if the third wasn't in place? Come on, Matt, think for a sec.

You people are all missing the forest for one entirely abstract tree. Roloson was looking for money and term. Roloson got money and term. If the Oilers were looking to "compensate" for losing the third, would they really have offered it in the first place? Of course not! Would the third still be transferred if Roli had signed after July 1? We don't know, but in accordance with the aforequoted passage from the CBA, I'm inclined to think not. So if they really wanted to account for losing the third, why not just wait ten minutes before signing him?

And perhaps most importantly, why the hell are we still arguing this, and talking about it in increasingly bizarre terms? Anyone who's going to offer two players conditional to a signing was clearly willing to part with those players to begin with, or else they wouldn't have been offered. The student loan example is only valid if Edmonton somehow lowballed Roloson, which, hello, $4M? Riiiiight. As we've all noted already, RFAs due to become UFAs tend to get overpaid at least as much as UFAs to stay past their eligibility, so I highly doubt Roli's getting more than $4M on the open market, anyway, and even if he did, now we're looking at a hometown discount, not some grievance-worthy piece of contractual shenanigans.
 


Matt: Doesn't Roloson still have to demonstrate that the value of his NHL contract was somehow reduced in order to have a case?

That gets muddy in a hurry because then we're talking about comparables, but I've yet to see anyone put up any kind of meaningful argument that Roloson actually received a lesser contract because of this situation. It's been discussed here like it's a hypothetical. It's not. Roloson got 3yrs $11MM at age 36. Given the terms of his deal, it has likely been avoided because it's a battle that can't be won.

Maybe that's another reason that the NHLPA isn't pursuing this? I don't think turning a blind eye to this deal in any way sets a precedent or prevents them from filing a grievance when some actual harm gets done.

Oh, that analogy isn't very good either. How on Earth would the bank get any sort of benefit from excluding the entire "medical field?" Realistically it's one company in one field. Granted that's a pointless argument path, but you started it.
 


re: the bank analogy...

C'mon Matt...

a) the bank only "harms" the student (Roloson) if all the banks fall in line. I'm thinking at least one would offer a better deal... So you switch banks/teams.

b) if said student can't switch banks, then the student isn't a UFA

c) a move like that makes no sense from the bank's point of view as it guarantees the student would switch to another bank (assuming the student was a client they wanted to keep).

I realize finding an appropriate analogy is difficult, but maybe that's because the problem isn't really there.

- Rod
 


Matt:

If you were an NHLPA attorney, and this deal came across your desk for approval, obviously you would have objected.

I am not a lawyer, but I would not have objected. I probably would have called Roloson and his agent to make sure they were aware that one of the potential suitors (EDM) may be just a whisker less motivated to pony up full value come UFA season. Just to make sure he was aware.

Is it "unfair", technically yes I suppose. But in the grand scheme of things the dollar impact on Roloson is small enough that it gets filed under "F it, let it slide".

The guessers on this board are between $100k and $250k for the value of the pick. At the time of the trade what were the chances of the Oilers going on a run and being interested in signing Rolo as a UFA in the summer? Maybe 25% from the most optimistic Oiler fan at the time.

So let's call it a $50k added cost to the Oilers as a very high guess. Of which some or all of it would be absorbed by the Oilers, not affecting Roloson's contract. And there are well reasoned arguments for both sides of how much of the pain finds it's way into the sum offered to Roloson. If we estimate on the very high side again, 50% ... then it's $25k total average impact. Probably much less.

I'm not sure how much it would cost the NHLPA to fight a case such as this. But surely a helluva lot more than $25k. And would Rolo even want them too? ... damn unlikely imo.
 


Doesn't Roloson still have to demonstrate that the value of his NHL contract was somehow reduced in order to have a case?

No, he would only have to demonstrate that his ability to negotiate with every NHL team in a completely free manner was restricted. My point, and our think our point, is that the very existence of the conditional pick did so with the Oilers. Sure it all worked out, but no one knew that when the trade was made.

Anyway, as macndub pointed out, if the conditional draft pick was something so "valuable" so as to impact Edmonton's willingness to pay, then they don't make the trade in the first place (to obtain Roloson). Again, this is irrelevant, for two reasons. The first is that the Wild receive compensation for Roloson as a UFA, which they should not be able to do. Secondly, the Oilers have no idea as to the "true value" of that pick either at the time of the trade, or after. But I would argue that even if it was $1 dollar, it would hinder Roloson's ability to negotiate with every NHL team.
 


To my mind a lot of valid points here, but am I the only one that sees this as arguing over pennies here?

Yes and no. We may be making a mountain out of a molehill, but the goal is to prevent the molehill becoming a mountain. Really, do I care that an NHL player might lose a few bucks as an unrestricted free agent, or that one team gets compensation for him signing as a UFA? No. But his agent, and the NHLPA, should. Free agency has its origins in baseball, and was a result of a direct challenge to the "reverse clause." Every baseball contract had within it a clause that stipulated that even when the contract between the team and the player expired (usually every single year), the team still owned the player's rights. The player could not negotiate with a new team, and if he refused to play for his original team he would not be paid. Owners could trade the players whenever they wanted, and could also pay the players absolutely nothing. A tangible consequence of this is the throwing of the 1919 World Series, but I digress. In 1969, Curt Flood challenged MLB's reverse clause, and began a process that would eventually see free agency come to baseball and the other three major professional sports leagues in North America.

The point in all of this is that players are not indentured slaves, belonging to a team for life. The other point is that a lot of older players went through a lot of bullshit so that this generation's players could earn the type of money the market dictates their skills deserve. And the last point is that it was a mountain before, and without monitoring can easily become one again. An unrestricted free agent is an unrestricted free agent, not an “almost unrestricted” free agent. There already exists a restricted free agent type that allows teams to keep their players, and receive compensation if they lose them. Why should the Minnesota Wild receive compensation for a player they no longer have a contract with? Isn’t that how restricted free agency works? Why should teams be allowed to engage in a practice of giving each other compensation for Unrestricted Free Agents? Regardless of how much compensation it is, it sets a dangerous precedent.

Sure, in this one particular case it worked out and everyone is happy. And again, in the grand scheme of things, it isn't my job to defend the best interests of NHL hockey players. But it sure the hell is supposed to be the NHLPA's job, which is how this all started. From their perspective, the practice shouldn’t be allowed, period. The fact that they seemed non-chalant about the whole affair is what is bewildering.
 


Why should the Minnesota Wild receive compensation for a player they no longer have a contract with?

They receive compensation for giving exclusive negotiating rights to Edmonton for whatever period it should have belonged to Minnesota.

The compensation is conditional in that Edmonton negotiated that they were only willing to pay for this negotiating right had it turned out fruitful (i.e., Roloson re-signs).

Roloson is no less a free agent on July 1st nor more a restricted free agent on June 30th than had he stayed in Minnesota. This is an agreement between teams that has no direct bearing on Roloson's contract amount. It is no more restrictive than trading Roloson + Gaborik to Edmonton (which also would limit the amount Rolie could get from Edmonton).

The idea of this becoming a 'mountain' is absurd only in the sense that teams do not value exclusive negotiating rights very highly. Only a team that did value this very highly would offer very high compensation for the right.
 


Excellent point Earl. I already thought the conditional pick wasn't a problem, and you've provided a great angle to bolster that. The Oil gave up a 3rd round pick for the right to talk to Roli before the noon eastern deadline on the 1st of July. That exclusive period in negotiations has value (as demonstrated by the fact he signed before the deadline). Even if he didn't sign before the deadline, that period of exclusivity gave the Oil a head start on negotiations.

Roli would have been absolutely free to negotiate with anyone. Oilers included.

- Rod
 


There already exists a restricted free agent type that allows teams to keep their players, and receive compensation if they lose them.

There's a huge difference between one team agreeing to a conditional pick, and *every* team mandated to give up prescribed picks. Besides, it could be argued the most restrictive element in an RFA world is the right to match.

Again, I'll submit that if the compensation was "significant", the PA would have raised a flag (i.e. anything approaching the compensation in RFA land). You're worried about trends and precedents. What if they file a grievance and lose?

Roloson was not restricted from negotiating in a free manner in the least. 29 other teams out there... That makes the market place, not just one. The Oil couldn't possibly lower their offer (assuming they have interest in the first place). To think otherwise, the thought process is something like: "You know, we could offer 11.5 million over 3 years...but considering that 3rd rounder...we just can't afford to...better scale that back to 11..." Get real guys. Not a chance it could have gone down like that. Especially with 29 "unencumbered" teams.

I'd guess that the PA is more upset with the NJ situation (you know, a team in the real world...no hypotheticals necessary). What are the chances Gionta gets market value...

- Rod
 


To think otherwise, the thought process is something like: "You know, we could offer 11.5 million over 3 years...but considering that 3rd rounder...we just can't afford to...better scale that back to 11..." Get real guys.

They better have considered it. If they didn't, I don't want them running my team. As much as I make fun of the Oilers drafting prowess, a draft pick is still an asset that can yield an amazing return. Mark Messier was a 3rd round pick, #48 overall. Like I said before, they better have had a thought process like this. It's the same as yours, outlined in a reasonable manner.

"Hey, we can get Gerber and keep our pick, for the same price as signing Rolli and losing it."

They receive compensation for giving exclusive negotiating rights to Edmonton for whatever period it should have belonged to Minnesota.

How can you say that, and in the same comment say this:

teams do not value exclusive negotiating rights very highly.

The fact is, Minnesota wasn't trying to get compensation for the negotiating rights. If so, Edmonton could have and would have have sent the 3rd rounder non-conditionally. It wouldn't have affected Edmonton's negotiating rights before July 1. The compensation was sent on the condition of him re-signing.
 


Andy: You didn't address my other point - How does ignoring this Roloson situation in any way set a precedent or prevent them from filing a grievance when some actual harm gets done?

I don't know too much about CBAs, but my understanding is that unions and management often pick their spots for grievances in mid-contract. Since there's no evidence of harm here, perhaps they prefer to wait until that molehill turns into a mountain.
 


One last thing... I can't believe I haven't seen this mentioned yet but I'm 99% sure this has been done before. Conditional picks based on signings are not a new thing by any stretch of the imagination.
 


You didn't address my other point - How does ignoring this Roloson situation in any way set a precedent or prevent them from filing a grievance when some actual harm gets done?

I can't believe I haven't seen this mentioned yet but I'm 99% sure this has been done before. Conditional picks based on signings are not a new thing by any stretch of the imagination.

The two points are related, so I'll try to do both.

1) I believe actual "harm" was done, at least to Roloson, the moment that trade transaction was completed. I also think the CBA was violated.

2) The harm may have been deemed minimal, and was therefore ignored by the NHLPA. But my sense from reading Cosh's story is that it hadn't even crossed their mind.

3) I agree with your point about picking spots. But as Matt said, Roloson's agent should have been all over it. Unless, again, he is an agent with a ton of clients, and he is also picking his spots.

4) I think this has had to have happened before, too. Where is our resident historian, James Mirtle, when we need him? If it has happened in the past, I'm going to assume a) the NHPLA again deemed the harm too minimal to bicker over, or b) they never picked up on it.
 


I believe actual "harm" was done, at least to Roloson, the moment that trade transaction was completed. I also think the CBA was violated.

I disagree. Edmonton did have another factor to consider when setting a price for Roloson, sure. But the consideration was Edmonton's own doing, not an external restriction imposed on Edmonton.

Could Roloson take grievance because he couldn't negotiate freely with Lou because of NJ's cap situation? No, because NJ willingly restricted itself by spending as many dollars as possible, it wasn't done externally by the CBA.

Likewise, Lowe created his own circumstances with the 3rd round pick (it wasn't done to Edmonton, but by Edmonton). This might change what EDM pays vs. what MIN pays, but that is not 'restriction', that is 'repercussion'.
 


I just read Cosh's story over again, and am stuck on this point:

Currie reported back, after conferring with an NHLPA lawyer, that the clause was merely intended to extinguish the old system of league-specified compensation for teams that lost players to unrestricted free agency, not to prevent teams from seeking an extra conditional reward in a trade of a soon-to-be UFA.

That really irritates me, for a couple reasons:

1) The differentiation between the leagues and the teams is non-existent. Gary Bettman works for someone, and it certainly isn't the players or the public.

2) I fail to see the difference between "the old system of league-specified compensation" and what I guess is a "new system" of teams acquiring compensation for a UFA signing. The result is exactly the same: owners and teams receiving compensation for a player they no longer have to the rights to.
 


I half-wonder if many of my messages are being posted, because no one is addressing the question of whether or not the pick would have transferred if he signed after noon, and the impact thereof.

Currie reported back...that the clause was merely intended to extinguish the old system of league-specified compensation for teams that lost players to unrestricted free agency, not to prevent teams from seeking an extra conditional reward in a trade of a soon-to-be UFA.

Emphasis mine. I ask again: until Roloson becomes a UFA, does the pick still transfer? If the answer is no, none of this fucking matters. If the answer is yes, the point is still irrelevant, given that Edmonton would essentially be paying extra to be the highest bidder in an open marketplace, and therefore, any "compensation" to Minnesota is external to the actual signing.
 


Riv -

At the very least, failing to contest these things leaves open the possibility of the other guy saying when you do try to contest it that the words have an accepted meaning and that if the PA thought otherwise, they would have challenged it long ago.

Of course, now there's a record of a PA media spokesperson explaining to Colby that the PA's understanding of the clause is that it allows this sort of thing. That'd be a bit more tricky to get around should they ever want to contest it.
 


Doogie -

I checked it out. The pick transfers and would have transferred anyway.

It still matters though because there's more to this than dollars. I'm editing a post on the subject now, so I won't get into it here.
 


This discussion seems to have been sidetracked for a while by the details of the Roloson example.

The amount of money at issue, the the value of the pick, the details about Roloson himself, or the question of who pays for damages shouldn't be relevant.

I haven't seen an argument in this thread that counters the observation that Roloson's rights were restricted because Edmonton and Minnesota contracted that if Edmonton signed Roloson it would have to pay an additional cost.

That only one team was restricted, and there were 29 others, is beside the point: in a meaningful sense, Roloson was no longer an unrestricted free agent.

The agreement the teams entered into is tough, or impossible, to reconcile with the CBA's requirement that any Club shall be completely free to negotiate and sign an SPC with such Player, without penalty or restriction.

In this case, the clubs have voluntarily entered into an agreement to create a penalty or restriction. That might be fine if the rights in question only involved the well-being of the clubs, but in this case it affects the players.

If you buy the logic of this deal, then what is to prevent Minnesota from entering into agreements with 28 other clubs under which the clubs would have to provide Minnesota compensation if they signed Roloson? [Sideline: we can entertain ourselves with the practical question of what Minnesota would offer as consideration, but it doesn't really matter.]

Allowing this because the dollars/players involved are relatively minor undermines the PA's position if it disputes a later deal that includes more substantive restrictions.
 


I disagree. Edmonton did have another factor to consider when setting a price for Roloson, sure. But the consideration was Edmonton's own doing, not an external restriction imposed on Edmonton.

Likewise, Lowe created his own circumstances with the 3rd round pick (it wasn't done to Edmonton, but by Edmonton). This might change what EDM pays vs. what MIN pays, but that is not 'restriction', that is 'repercussion'.

Who the hell cares? I'm not complaining about the harm done to the Oilers. In fact, I think a system where teams can get back compensation for someone they no longer have the rights to works in their benefit. Teams will never complain about that sort of deal. They get to exploit and milk an asset they no longer have any control over.

The point is this: owners and teams (companies) have the rights to players for a long time. It is a time much longer than what the rest of us have to put up with in our own jobs. We all accept it for "the good of the game." But at a certain point--known as unrestricted free agency--the players have done their part, given their time, and are completely free to go. The company no longer has ANY say in what that player does or where he signs, and should receive nothing back for what that player ultimately decides to do. If I was a player, I'd be insulted by the Oilers/Wild transaction. They Wild already got their pound of flesh. Why they hell should they get any more?

Could Roloson take grievance because he couldn't negotiate freely with Lou because of NJ's cap situation? No, because NJ willingly restricted itself by spending as many dollars as possible, it wasn't done externally by the CBA.

Huh? I don't even know where to start with that point, because it is so irrelevant to the conversation. It's like we were just talking about fighting crime, and you went, "did you know that red licorice makes my ass itch?" It has absolutely nothing to do with anything. A non sequitur. The salary cap was not attached to Roloson. The conditional pick was. It's a piece of unwanted baggage HE had to bring with him to the bargaining table.

I'm actually flabbergasted, now.
 


I'm editing a post on the subject now, so I won't get into it here.

God, finish it already.
 


The amount of money at issue, the the value of the pick, the details about Roloson himself, or the question of who pays for damages shouldn't be relevant.

I haven't seen an argument in this thread that counters the observation that Roloson's rights were restricted because Edmonton and Minnesota contracted that if Edmonton signed Roloson it would have to pay an additional cost.

That only one team was restricted, and there were 29 others, is beside the point: in a meaningful sense, Roloson was no longer an unrestricted free agent.


Finally! This is why I tried to get away from the Roloson example last night.
 


My thing on NJ was that Roloson being 'unrestricted' does NOT mean that teams cannot bind themselves to a position where they can no longer meet Roloson's contract desires.

Maybe it's irrelevant, but it seems you were saying that Edmonton, by putting an additional cost consideration, was harming Roloson's contract value. Teams tying their own hands isn't really what 'unrestricted' protects against.
 


Andy:

Because what if Roloson wants to stay in Edmonton, but the Oilers are unwilling to part with the pick. Then Roloson takes the loss.

If Roloson doesn't want to move, than he eats the loss. So sorry, but that's life.

I'm sorry, but meditating that the conditional pick somehow restricts Roloson is absolutely incorrect. He is a free agent who can go where he wants. As long as he can negotiate with any non-encumbered team, he's made whole and the Oilers must make him whole if they want him.

RiversQ:
P.P.S.: Correct me if I'm wrong (maybe someone here is an economist) but this situation could be treated as a sales tax...

Cosh said that my MBA shit would make Oiler fans smarter, so I hope that I'm as close to an economist as you need. I've done acquisitions and restructurings as well as economic analysis of investments, if that helps.

Your analysis is mostly correct, except that the sales tax analogy is incorrect. The sales tax is passed on to the consumer to the extent that the market permits it. For example, if Los Angeles County increases sales tax by 1% but Orange County does not, then the degree of passthrough depends on the merchant's geography... the closer to Orange County, the less the passthrough and the more the merchant eats.

In Roloson's case, he can go anywhere in the league, subject to his own preferences. So the Oilers eat the third rounder.

Vic:
To my mind a lot of valid points here, but am I the only one that sees this as arguing over pennies here?

In this case, yes. But bad economic analysis is like a brushfire and must be stamped out at the earliest stages. Otherwise bullshit like "rent control helps the poor" and "BC's selective transferable voting reform sounds like a good idea" gets started. This is the role of sports minutiae...to sharpen our skills to build a better society. Some do it by being bigger and stronger, some through superior character, and some of us by sitting in the stands and carping.

I mean, I'd hate to think that my words have no redeeming social value.
 


If you buy the logic of this deal, then what is to prevent Minnesota from entering into agreements with 28 other clubs under which the clubs would have to provide Minnesota compensation if they signed Roloson?

The logic is that only one team could negotiate with Roloson prior to July 1st. Edmonton bought that right, with a variable price that became cemented when Roloson signed with a team.

Any of the 28 other deals Minnesota would try to make would be objectionable, in that they are trading a forbidden commodity.
 


macndub, I've liked your economic analysis, and it's true that "That's Life" is sometimes the way to end a discussion.

But Roloson is a party to a collective bargaining agreement that, in letter and in spirit, forbids what has happened. If you don't care, you don't care, fine, but that doesn't make it right.
 


I'm sorry, but meditating that the conditional pick somehow restricts Roloson is absolutely incorrect. He is a free agent who can go where he wants. As long as he can negotiate with any non-encumbered team, he's made whole and the Oilers must make him whole if they want him.

Actually, it is absolutely correct. Assuming he wanted to stay in Edmonton, he couldn't go anywhere he wanted, if the Oilers had decided that the 3rd round pick was too much of a cost. And he has to be able to negotiate with every team non-encumbered, which was not the case once the Oilers agreed to send the conditional pick.
 


Tyler's thoughts are on his site.
 


>>The point is this: owners and teams (companies) have the rights to players for a long time.<<
Nice fantasy world. As we know extremely well in Edmonton, owners only have players rights as long as the player wants to provide them.

There was some bleating over how the new CBA meant teams had a player for eight or nine years instead of 13 (under older CBAs). Comrie played for the Oil a whopping 2.5 years. He had enough, and was gone. Eight or nine sounds good in comparison.

Then under the new CBA, the Oilers extended Pronger to a total of five years. Yeah, that bought 'em a lot.

So don't give me the owners have the players for a long time tripe. It's entirely at the player's whim.

- Rod
 


I checked it out. The pick transfers and would have transferred anyway.

Good to know. I've posted a response on your site.
 


responding to various earlier posts:

>>That only one team was restricted, and there were 29 others, is beside the point: in a meaningful sense, Roloson was no longer an unrestricted free agent.<<
How so? An RFA can't go anyhere within the NHL for "free". Roli could have. To 29 other teams (30 teams in CBA terms). That sets a very real and "meaningful" market place, such that the Oilers could not--if they wanted to sign him--lower their offer. If they want to sign the player, they have to pay the "market" value. Consequently, Roli was entirely an unrestricted free agent.

Besides, market value is what the PA is generally worried about. They couldn't care less where it happens, just as long as the player gets market value.

>>The agreement the teams entered into is tough, or impossible, to reconcile with the CBA's requirement that any Club shall be completely free to negotiate and sign an SPC with such Player, without penalty or restriction.<<
Not tough, let alone impossible. *any* club could go after a UFA. Doesn't say *all*, simply *any*. And any could. Any of 29.

*without penalty or restriction*
OK, unlike RFAs, there isn't a defined, prescribed penalty mandated in the CBA. So that makes 30 teams. The Oilers were not prevented from negotiating. There was no penalty. There was no restriction. The only way it doesn't equate to a market is if the other 29 teams are at the cap. But then, the 3rd rounder is moot. The player would be squeezed regardless...

>>They better have considered it. If they didn't, I don't want them running my team. As much as I make fun of the Oilers drafting prowess, a draft pick is still an asset that can yield an amazing return.<<
Nobody said the 3rd rounder was completely worthless. Point is, they couldn't lower their offer in consideration of the pick. Either they make an offer or don't. Either way, the market exists.

>>Mark Messier was a 3rd round pick, #48 overall.<<
Course these days that's a mid-2nd round pick. 3rds aren't what they used to be...

>>Like I said before, they better have had a thought process like this. It's the same as yours, outlined in a reasonable manner.<<
Sure, weigh which of the two is more valuable. Perfectly reasonable. However, that doesn't change the size of the offer. Which is what you've maintained in earlier posts.

Also consider what they gave up unconditionally for the player. A 1st rounder. For 20 games. Pretty difficult to argue that a 3rd rounder is too expensive for 3 years of the same player...

>>Assuming he wanted to stay in Edmonton, he couldn't go anywhere he wanted, if the Oilers had decided that the 3rd round pick was too much of a cost. And he has to be able to negotiate with every team non-encumbered, which was not the case once the Oilers agreed to send the conditional pick.<<
Uh, so you're saying that George wasn't a UFA either (seeing as how he couldn't go where he wanted). If they decide the 3rd rounder is too steep, then explain the 1st rounder for 20 games?

Beyond that, in CBA terms, why would unencumbered mean anything beyond CBA mandated compensation? The CBA said *any* team. Any team could, regardless of the conditional draft pick. No team (Oilers included) was encumbered by articles in the CBA. Therefore, in CBA terms (which are the only terms that matte), Roli was an unrestricted free agent. Nothing more, nothing less.

Next, you'll start complaining that he wanted to go to Vancouver, was unable to negotiate with them because they were encumbered by their trade to obtain Luongo...

- Rod
 


All THIS for a third-round pick?

I guess that's why they call these the dog days.
 

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