Greed, Stupidity and A Question and An Answer

My last post, entitled "Greed, Stupidity and A Whole Lot of Nothing," was an indictment of the NHL Players' Union's unwillingness to compromise for the betterment of the sport, as well as the League's unwillingness to try and find a middle ground between a cap and instant financial meltdown in each of the 30 hockey teams' cities.

I got a few interesting responses from people, many of whom reside, both geographically and emotionally, very close to the heart of this particular issue. Either by default, lack of intelligence, or simple distrust of the monetary factor in the equation (ie the owners must be "dishonest because they wanna cheat the players out of their hard-earned pay"), most of what I've received in response is vehemently supportive of the players and similarly vehemently opposed to the League's position. Unfortunately, many of the people who are such fervent supporters of the players in this confrontation have ignored the fact that without a viable profit system, a team (and subsequently, the League) will just go out of business. It happened with Oldsmobile (and it might happen with Buick if they keep running those damn "Dream On" commercials). Huge conglomerate entities can disappear if the money dries up, and apparently a lot of people supporting the players' position have dried up as well because they're not factoring in the fact that a business will soon go out of business if it is losing and not earning money.

A few of my respondents gave me a virtual shove and suggested that if I was right, then complaining about it wasn't enough; instead, I should be offering a way for the League and the players to kiss and make up and get back to losing teeth and the ability to chew solid food. So here we go:

The League has indicated that it requires "cost certainty," ie a hard number which, at the end of the day, can be budgeted and which cannot be exceeded (at least not without significant, prohibitive penalties). The players have offered a rollback of 24% of salaries across the board, but without a long-term commitment beyond that. So combine the two aspects but make it attractive to both entities for both short- and long-term growth.

Implement a staggered, three-year rollback of salaries for players whose contracts will not expire during the next three seasons. In other words, any player whose contract will not expire until the conclusion of the 2007-08 season will have his annual salary, as determined by the current contract, decreased by 8% over each of the next three seasons. That means that, if John Doe is being paid $1,000,000 annually this season and his contract remains at $1,000,000 for the next five seasons, next season he would be paid $920,000; the season thereafter he would be paid $840,000, and the season thereafter he would receive $760,000. Keep in mind, of course, that most contracts, much like typical corporate annual salaries, increase annually, so this hypothetical player would actually not be getting such a significant decrease in salary so much as he would probably be kept at the same salary. In other words, a player's contract is usually structured so that he'll earn $1,000,000 this year, $1,500,000 next year, and $2,000,000 the year thereafter. So the numbers won't be appallingly shocking.

Simultaneously, the League would implement a salary cap of x dollars, where x represents whatever amount is an average of the salaries of all 30 NHL teams. That means that there will be, for the most part, 15 teams that are paying too much, and 15 teams that are paying too little, to keep their clubs' roster. Set it up so that in the three years of the staggered rollback, teams can use the salary cap as a guide, but without penalties. However, once the third year is up, there will be a hard cap installed for the year following so the pocket-protector GM's (more likely their accounting departments) can ascertain exactly how much they can afford to spend while keeping the club under the cap. In essence, give each team a three-year head start to figure out how to make themselves cap-effective and cost-effective, all the while getting some relief by the staggered salary rollback.

This is a wonderful plan to implement a salary cap, you're muttering to yourself with your right hand on the mouse and your left hand stuffing a strawberry pop-tart between your lips, trying to avoid crumbs. Alas, as you notice the stain on your shirt (you need to do laundry, by the way), you ask the question: "the plan you've suggested is good for implementing the cap and the owners will get what they want on both ends, a roll-back AND the salary cap...what do the players get?"

Good question.

Since it's clear the players could care less about the future of the game and are almost solely worried about how much they will be earning while playing the game of hockey, the long-term viability of the league isn't in their interest. However, establish a system where the monies current players forfeit through the staggered rollback, as exemplified above, are accounted for down the line. So John Doe, in theory, forfeit $480,000 in salary, thanks to the rollback. Mark down that $480,000 and, as the salary cap rolls on and teams eventually exceed the cap (even if by a little by stretching to obtain a really "special" player), said teams will be penalized. Normally, the monies collected by the league as over-the-cap penalty revenue could instead be in part distributed to the current players, either in small sums or larger ones. This could be a short-term pension for players that are willing to concede this. And players that are not would simply have their current contracts voided with their current clubs retaining their rights. Odds are, however, that most players whose contracts would be affected by rollback would be willing to do so knowing they would get the money back, even if without interest, in order to get back on the ice as opposed to get on the ice in Russia or the Czech Republic (for a tenth of the dollars over which they're currently squabbling).

I'm sure this model is somewhat confusing, but overall, it's a simple problem: how do you re-cast the deck so that no one entity benefits but all involved entities benefit equally, both in the short- and long-term? As long as you insure that everyone gets paid, that cost viability is paramount for League stability, and that everyone involved realizes the NHL is entertainment, not necessity, the recipe for success is back on the table. That in and of itself will allow both the players and ownership to meet in the middle, get things rolling, and get the game back where it should be -- out of the spreadsheets and back onto the ice.

Although I must admit I was kinda looking forward to spending my former hockey time in bed, on the couch and everywhere else with my other half. That, and, if there was any time left over, ogling Katarina, Maria and Holly.

But only if there was any time left ;-)