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THE LOCKOUT: IS THERE ROOM FOR COMPROMISE? Originally posted December, 2004
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The NHL lockout will not end any time soon. And the blame for that should fall squarely on the shoulders of the players.The players are frequently heard to utter that the owners are unwilling to "compromise". But in refusing to consider a "salary cap", the players are being at least as intractible as the owners. Why can't it be said that the players are refusing to compromise? The NHL Players Association has defined its terms in such a way that no "compromise" is possible without the players winning the battle. The problem is not the owners' "unwillingness" to negotiate. The problem is that the players have defined the term "salary cap" so broadly that it encompasses anything and everything that the owners have legitimately proposed. From the player perspective, a "compromise" is a proposal that perpetuates the status quo -- nothing else. If there is a "compromise" on those terms, the players win -- but the game loses. On the players' terminology, any proposal that links salaries to revenues is a salary cap. The NHL owners -- with the support of most hockey fans -- believe that salaries should be linked to revenues. That only seems to make abundant sense. Such a mechanism is necessary for the game to survive. Whether the owners numbers are accurate or not, anyone who follows hockey knows that the game is in big trouble. There can't be any doubt that most teams are losing money (even NHLPA lead negotiator Ted Saskin admits this). There is no U.S. television contract with "up-front" money, as there was in 1994. There are the ESPN and Canadian television deals, but they bring in a mere pittance. The NHL contract with NBC brings in no up-front revenue. Most teams rely primarily on gate revenues to survive. That is why this idea that there needs to be revenue sharing is a "red herring". The owners have not rejected the notion out of hand, but clearly this is not where the problem lies. The owners have to accept some of the blame for the state of the NHL, but this is not entirely their mess. Arbitration and automatic raises that accompany qualifying offers have had an inflationary impact on salaries. I doubt the owners could foresee the impact when they agreed to the deal. This is a systemic (i.e. CBA) problem. Rich owners who can afford to pay high salaries dictate the salary scale for the rest of the league. Other owners who want to be "responsible" have little choice -- they pay their stars the going rate or they allow them to become free agents and lose whatever fan base they have. It's not much of a choice to the owner who wants to bring in fans and make the game popular in his market. To call the owners "irresponsible" for doing what every fan wants them to do -- sign and keep their stars -- is going a little too far. (Was it irresponsible for Calgary to re-sign Iginla?) Of course, if all the owners acted "responsibly" and refused to sign free agents, they would be accused of acting in collusion. Yes, the NHL expanded into markets where it probably shouldn't have gone. But it is highly doubtful that the NHLPA wants to see contraction and the loss of jobs. So it is in the union's best interest to make sure that all 30 teams are viable entities. Both sides are on the record as NOT wanting contraction, so the fact that we now have 30 teams is not relevant to any workable solution. The players' proposal to reduce their salaries across the board by 5% is disingenuous. The players know that if the inflationary mechanisms that are in place remain, future pay raises will simply eat up that 5%. Since none of the other player proposals will cost the players anything, this one was simply included as window-dressing. The one area where compromise is possible is in the realm of the "luxury tax". Unfortunately, the players' luxury tax proposal is laughable. To point to Major League Baseball as an example of a luxury tax that works is to ignore reality. The luxury tax threshold in baseball is set so high that only one team -- the New York Yankees -- pays any tax. If Ted Saskin and Trevor Linden really want to watch the Yankees, Red Sox and Braves year after year, that's fine, but no one will persuade me that baseball has a good set up or one that will work in hockey (ask Expos and Blue Jays fans). The players' proposal is a very modest tax and a high threshold. It is a "tax" that would cause little or no drag on salaries. The players have rejected a strong luxury tax (one that taxes dollar for dollar or more) as tantamount to a "salary cap". In fact, as far as the players are concerned, everything seems to be a salary cap if it links revenue to salaries. It is a game of semantics to them -- everything except the status quo is a "salary cap". How is compromise possible if the players define the term "salary cap" so broadly? While the NHL has rejected the idea of a luxury tax, it has done so in the context of player proposals that are guaranteed to maintain the status quo. If a proposal was delivered to them that included a sufficiently strong luxury tax, one might be forgiven for thinking that they might actually take it seriously. So what is left? The owners will do the game a large disservice if they agree to anything that does not link salaries to revenues. That likely means that the only solution to the NHL problem is that this matter reach a legal impasse. It means we have to suffer for a year without hockey, but it also means the problem will be fixed. That is better than having to go through this again in four or five years because of some stupid compromise (as defined by the players) made merely to "save the season". A compromise may save the season, but it will not save the game. If there is a legal "impasse", Bettman can then unilaterally impose his terms and conditions (as long as they were contemplated by the owners' previous offers). This would include not only a salary cap but, possibly, NO guaranteed contracts. Gary Bettman has pushed teams for years to sign players to "two-way" contracts only. Once an impasse is legally declared, Bettman can then reopen training camps and end the lockout. Of course, the NHLPA will then declare a strike, but without a doubt that at least half of regular NHL players will cross the line immediately to join replacement players. Eventually they will all come back, because they cannot make more money anywhere else. (And this is the so-called "principle" that the players are fighting for, isn't it -- their right to make as much money as they can.) Impasse is a messy road down which to go, but if the owners elect to go that route, the players will lose, not the owners. Virtually every poll taken shows the fans supporting the owners by an overwhelming margin. This is not because the fans are stupid or lack knowledge, as Mr. Saskin likes to imply. It is because the fans are properly relying on the evidence of their senses.
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