On the Wings

With the sides amassing an amazing 75 hours of talks over five days of negotiations in Toronto this week, it is believed that we will have new CBA agreed in principle next week or the first week in July. Words of optimism from Bill Daly:

“It was a very long week but I think both sides are working really hard to resolve and move the process forward. We continued to make progress this week but there are still some issues that we need to talk about. We’ve made significant progress on most of the critical areas but that’s all contingent on everything being resolved.”

The collective guess of the hockey community is that a salary cap system is already hashed out, and the major roadblocks that remain are salary arbitration, player rights, what to do with old contracts (Yashin deals) and a surge in free agency, and whether to participate in the Turin Olympics.

I’ve been waiting for players to start making peace with the process, and hopefully more come out than Jeremy Roenick, Jaromir Jagr, and player/owner Mario Lemieux. Quotes follow.

Roenick:

“What we could’ve got in February is probably 10 times better than what we’re going to get now. A lot of us knew that, but we did what we did and that’s what you’ve got to live with. It’s too bad that we’ve had a year off. For a lot of us, especially guys like myself, it’s going to be a hard year to come back from. It is what it is. We’ve got to live with it, get the game back on the ice. But we could’ve had a better deal back in February.”

Jagr:

“We started the fight because we didn’t agree with the introduction of salary caps. Now, we’ll be happy to get them. We didn’t expect the owners to be so tough and persistent. It was a risk that didn’t pay off.”

Lemieux:

“They should have taken the deal back in February. The cap was at $42.5 million, that was the offer from the owners, now it looks like it’s going to be a lot less than that.”

Now obviously it’s no surprise that Lemieux is saying those things in the interest of his dual role as player/owner of the Penguins. Even Roenick mouthing off isn’t very notable considering he’s been pretty outspoken during the lockout, occasionally taking statements back after the NHLPA sends men with bats to meet him at his front door. But for Jaromir Jagr to say that is a huge turn of events. This is the man who made $11 million during the 2003-2004 season, tied with Peter Forsberg as the highest paid player. Jagr has followed the money a lot during his career, including during the lockout when he decided to play for oil-rich Russian Super League team Avangard Omsk, rather than play for a native Czech club. And he’s already signed to return there if NHL play doesn’t resume as planned.

I find it amazing that players like Jagr didn’t realize the conclusion of this lockout was many paths leading to one CBA, the NHL’s version. Either that or they kept their lips sealed because the NHLPA was censuring any player comments not in line with Goodenow. But for Jagr to give us that statement now is basically a PR stunt. He’s trying to save face and be one of the first player’s to apologize or express their anger that a deal wasn’t reached when it should’ve been. Because it’s frankly an obvious statement to make.

The NHLPA’s “sticking by principle even if wrecking the Game” attitude made this lockout for the worse. The NHLPA was either grossly misinformed or very idealistic or both if they thought waiting five months (after February deadline talks) was going to make the NHL budge more towards their cap number at $49 million. No chance. The NHL’s best offer was at $42 million, and even then NHL owners said they would be in the red and struggling. You can question the Levitt Report and NHL accounting all you want, but I don’t think anyone should question that the NHL owners honestly felt that the system was slanted towards the players and the owners just weren’t going to make concessions on this issue. Even if the owners were all ignorant in this belief, they were not budging on the cap numbers enough for the NHLPA to “win.” And that’s where Goodenow misled his player clients.

I find it admirable to stick by principles and the NHLPA’s principles were that a cap was not an option in their vision of the league. Fine. But when you’re in the passenger seat of a truck, and Bettman and the owners are crazy-eyed in the driver seat racing towards the edge of a cliff, I don’t think sticking by principle is much consolation for the potential destruction of a league, loss of a season, and career suicide for a number of NHL veterans. And a black eye for the Game. It’s kind of like defensive driving. When you see a wreckless driver, you give them the space to avoid an accident. Even if that accident had been their fault, it’s no consolation knowing you’re “right” when you’re at the side of the road filling out a police report. Sometimes you have to give in. Especially for the health of the Game. Unless you want that accident. Unless it’s worth the chance of you “winning” even if the Game loses. That attitude really bothers me the most.

In that truck over the cliff, the NHLPA can say they were not of fault for the situation, that it was Gary and his buddies. But is it worth it? The NHLPA may say in the end they were fighting in the interest of the fans so the NHL wouldn’t turn into a socialist league, but I don’t buy it. That’s saving face. It was all about giving money back now and in the future. The 24% rollbacks offered by the PA were one-time only, and the league likely would’ve found itself with the same inflated salaries in five years. Yes, that is due to a spiderweb of problems in the NHL economic system, but my only acceptance of the cap system comes from knowing it may get a majority of struggling teams out of the red despite the owner’s economic disabilities.

I know the owners have been wrong with the economics. It only took a few of them to have the situation snowball. But I didn’t see very much willingness for the players to resolve the problem. They said, why don’t the owners share their revenues? Well, how do you share collective debt in the majority of the league. There just isn’t enough profit-making to make a difference for all the teams in the red. Making 75% of a business’ revenue is not the standard for most employees I know.

Maybe I’m being too hard on the players and their leadership. But maybe that reflects how I hold them to a higher standard. Bettman and his gang are businessmen, the majority of them don’t know the Game and many don’t even love it. But I really thought the players would avert disaster because they understood the importance. Maybe the owners really aren’t as crazy-eyed/ignorant as I think and it was a conspiracy to break the PA. But I have a hard time believing most owners are that smart in tactics and then in the red because they enjoy losing hundreds of milions of dollars over the course of their ownership, as the St Louis owners did and are now selling. It could also be possible that the NHLPA is a crazy-eyed bunch just like the NHL leadership, but this rant in the NHLPA’s direction is a testament to my belief that they know what’s up. And it’s criticism in believing they are able to do the right thing.

Guy Lafleur: “The players took advantage of the situation in 1994. They won the lottery for 10 years in a row. I have nothing against the guys who have taken advantage of the system for 10 years, I’m very happy for them. But it makes no sense. These guys have to be realistic. I know it’s going to be tough for them to leave this money behind, but they were lucky to have it for 10 years. From the beginning, the owners said they were going for a salary cap and they stuck to their plan. That’s why there’s no hockey today.”

I plead naivety on behalf of the owners. And I ask the players to consider an economic system that may be a lighter load on the intellect of the owners, at least for the time being. This CBA should be corrective, not permanent precedent. If the owners are meaning for this to stay, I’m inching back to the fence between us.

–Credit to HockeyBird for inspiring this unedited rant. I read Jim’s take on the recent quotes and got in the mood to rant. If I started to edit it down and make it into essay form, it wouldn’t be a rant anymore. And frankly, the NHL doesn’t deserve any more time than I’ve already given them tonight!

Buyouts

Among the issues a new CBA will bring up is what happens to current player contracts? Will salaries be rolled back? What happens to teams’ player rights? Free agency will be widespread. And if teams are already committed to payrolls above the maximum salary cap, what can they do? One of the options is player buyouts, where teams can pay a fee that releases their legal obligations to pre-lockout contracts. This is something all Wings fans will have to live with. Currently, the Wings have 15 players signed for the 2005-2006 season, making for a whopping $49.475 million payroll with key Wings still unsigned (Datsyuk, Yzerman, Zetterberg). At the numbers getting thrown around, $36 million looks to be the ceiling cap level, in addition to luxury tax penalties. And even if league-wide salary rollbacks happen, the Wings will be above any cap mark. So in the below analysis I name current market prices, and they could very well be scaled down salaries post-CBA. Either way, a $10 million dollar salary is going to be a dinosaur, whether it’s scaled down to rollback level or not.

So what players will the Wings buyout? I say Derian Hatcher ($6.5 million) and Ray Whitney ($3.5 million) are the likely candidates. That would leave Lidstrom ($10 million), Lang ($5 million), and Shanahan ($3 million) as the top paid Wings. And depending how rule changes go, the Game might become more offense-oriented and it might make sense to dump Lidstrom’s $10 million salary. Or the Wings could just use the logic that the money they aren’t spending on goaltenders ($1.5 million for Manny) is figured in with Lidstrom’s high pay. I know it’s heresy for me to suggest dumping Nick Lidstrom, but unless he re-negotiates a deal I just don’t see how the Wings could afford him with a cap, salaries rolled back or not. A franchise player exception to the salary cap might be the only way Nick stays around. Either that or weighted salary rollbacks on the highest paid players, something the NHLPA would never agree to.

So once the Wings dump two or three contracts, what’s next? First, offer Yzerman a front office position, or, if he insists on returning to the ice, a reduced player salary of $1 million, with performance bonuses up to an extra $1 million. We will not be able to afford the $4 million Yzerman was slated to make in the 2004-2005 un-un-cancelled season. Sure, the Captain demands a sort of sentimental salary that you can’t pay him based on his performance but his legacy, but I don’t think we’ll have room for that business practice anymore. Yzerman hasn’t played organized hockey since Game 5 versus the Flames, other than a charity game in Ann Arbor, and let’s face it, he’s 40 years old and is still suffering the effects of a serious eye injury. I’d love to see him back with the Wings but not at a super-star salary.

Then, the top priorities are bringing back Datsyuk and Zetterberg. They are the future of the team. Use money freed up to give them what they want, with performance bonuses built in so their base salaries are not over $3 million each. Then go down the list and sign bargain players like Dandenault, Mowers, Williams, Woolley, and for heaven sakes don’t forget AHL MVP Niklas Kronwall! Dumping Lidstrom might not hurt so much if we can get this kid on the active roster.

UPDATE (Matt) 23. June): Carole Lee Sussman has some observations on buy-outs that are well worth reading here.

Blues selling

After all the first/second round losses to the Wings in the playoffs, and having a competitive payroll the entire time, it looks like the St Louis Blues are hurting. Bill and Nancy Laurie are selling the entire franchise (team and the Savvis Center) based on losses of $225 million since 1994. If you read down towards the end of the FoxSports.com article, you even see Lyle Richardson (aka “Spector”) make mention of always-opinionated hockey blogger Tom Benjamin. When I was at the point of gouging my eyes out before writing another CBA rant, Tom was pumping out 2-3 rants daily. I’d like to see the bullet he’s been biting this past year of the lockout, because I don’t see how you maintain your drive to write about NHL hockey with all they’ve put the fans through. I admire Tom’s dedication to hockey blogging.

Quote of the Day

I ripped this off Sharkspage, but I think it’s a great quote for Wings fans. When Brian Burke (then GM of Vancouver, now rumored to be future GM of Anaheim) was asked whether he would try and sign free agent Sergei Fedorov in 2003, he replied “We already have a Fedorov [Fedor]. That’s one Fedorov too many.” Ahhh, now I wonder how Sergei feels about Burkey? If it really bothers him, Sergei can take a hike. His 5 year, $40 million contract signed in 2003 ($10 million for 2003-04, $6 million in 2004-05, and $8 million for 2005-06 through 2007-08) includes a player option to become a free agent after years two and three of the deal. FYI Sergei, we don’t want you in Detroit.

Disclaimer: Before you read this and get excited, remember what happened on Black Friday when The Hockey News and ESPN’s E.J. Hradek told us that the sides agreed in principle to a $45 million dollar cap and the season would be un-cancelled. The next morning we woke up only to learn that the sources who leaked that story turned out to be totally wrong. It took me until just recently to recover from that weekend. Take a breath and read below:

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According to The Globe and Mail, the NHL and NHLPA have agreed on a salary cap system that uses a formula for team-by-team revenue. After day-long negotiations the past two weeks, often without Gary Bettman and Bob Goodenow, it looks like the major hurdle before a new CBA has been cleared. Issues left to be agreed upon include arbitration, free agency, and what to do with current contracts and player rights.

The Globe’s league and player sources informed them that a salary floor and cap will be based on a percentage of each NHL team’s revenue, in effect a variable cap that will avoid punishing teams like the Wings as much for their success. But it does limit the gap between small market teams and Hockeytown, so it’s definitely a semi-controlled, semi-comunistic system. The salary cap would range from $22-24 million to $34-36 million in the first year, based on projections of team revenues. And this is what confuses me and apparently Bob McKenzie too:

“Say for argument’s sake, one NHL team has revenues of $100 million and another team has revenues of $50 million. If, as an example, the teams are permitted to spend 54 per cent of revenues on salaries, one team would have a cap of $54 million, while the other team would have a cap of $27 million. That is a $27 million spread between the two teams’ caps and you can rest assured it will be a frosty Friday in hell before NHL teams sign off on that type of discrepancy.”

He’s right. Sure, in the first year, the range might (I repeat, might) be from $22-36 million with revenues down and the league recovering. But what about down the road when profits increase steadily for some? Theoretically, the system could have no effect on the Wings if revenue is high enough. So buy some Red Wings jerseys and take the family down to Hockeytown Cafe! Such could mean the Wings’ continued success. I think.

And then I start to question how the cap could only range from $22-36 million. If it’s really based on a percent of team revenues, I’d think the Wings would be more than $14 million above a team like the Columbus Blue Jackets in the cap. Unless it’s a weighted system, a piecewise formula that would have teams in a range of revenues get X% as their cap and teams in another range of revenues get Y% as their cap. But surely it can’t just be a straightforward, league-wide percent and produce such a small range for a cap (unless they really think profits will be equally down at the same level for all teams, which I doubt).

And there’s more. The system also includes a a dollar-for-dollar luxury tax that is triggered at the halfway mark between the lowest and highest caps in the league. For example, if the floor on the lowest team is $24 million and the cap on the highest team is $34 million then the tax level will be $29 million. Another control on how much teams like the Wings can spend.

Just like what happened on Black Friday, the report is being denied by the NHLPA. Union spokesman Jonathan Weatherdon:

“The NHLPA and NHL discussions this week continue to cover a range of issues such as controls on team salaries, revenue sharing, Olympic participation, the amateur player draft and player retention rights. While the parties continue to have discussions to reach a common ground no agreements have been reached.”

Sources told the Globe that there’s a possibility a deal could be signed in the next three weeks. But before I get excited, I’m still really confused about how this cap system would work, and I’m left with more questions than anything. Another question is why the NHL would agree to such a system after all they’ve held out for: a hard cap at approx $36 million. This system is a soft, soft, cushy cap. It leaves room for teams like the Wings to spend relatively freely and is a victory for Mike Illitch after the NHL pushed for a hard cap for so long. And a victory for the NHLPA, if you really call a year-long negotiations stalemate a victory for anyone. I just don’t buy this story at all. I had a feeling the sides were coming closer as they spent 10-12 hours a day together, but this just doesn’t seem legit. Maybe parts of the leaked system are accurate, so hopefully more news will come out…

UPDATE 6/9, 6:45 PM

TSN has updated its story on the Globe and Mail report. Reports are mixed as to the accuracy of the Globe’s story. The Toronto Sun, quoting an anonymous source, reported today that salary cap figures had yet to be finalized but progress was made. The Vancouver Province, on the other hand, reported that a general salary cap formula had been accepted for some time. Other than mysterious, unnamed sources leaking questionable information, the NHL and NHLPA have stayed quiet, with the latter group confirming that discussions were continuing this week (Tuesday through Thursday). Stayed tuned.

UPDATE 6/10, 7:30 PM

The NHL and NHLPA are set to meet again on Monday, according to TSN. Still, there has still been no official confirmation of reports that a salary cap system has been agreed on. According to NHLA senior director Ted Saskin:

“We spent the last four days in small group meetings continuing to review and negotiate various systemic and economic issues. The two sides will resume small group discussions on Monday in Toronto.”

NHL Executive Vice President and Chief Legal Officer Bill Daly on the talks and progress:

“There was healthy dialogue, and progress continued to be made on many operational issues relating to a new collective bargaining agreement. We will resume meeting early next week [Monday].”

Revealing a bit more information than Ted. If you read into Daly’s quote, it could mean that a cap system has been agreed on and only “operational issues” remain. Or not. Quoting an unidentified GM, the Toronto Sun had this exclusive dialogue:

“I asked him quite clearly is (the cap), in fact, true? He said: ‘No.’ I asked ‘Is there any kind of team-by-team cap?’ Again, he said ‘No.’”

Even if the cap issue is behind us, the sides still have to agree on free agency, player rights, salary arbitration, drug testing, Olympic participation, proposed rule changes, etc. Hopefully they have a good start on those issues or will just call back on a previous proposal and agree to it for those points.