This season, NHL battles will be fought on the ice and at the negotiating table. The league's collective bargaining agreement expires in September 2004, and the two sides can't even agree on whether the talks have formally begun. A lockout in one year seems a distinct possibility.
The NHL says the basic system needs to change because teams have collectively lost $1.5 billion over the nine years the current CBA has been in effect -- a figure challenged by the NHL Players Association. Bill Daly, the league's chief legal officer, has the task of convincing the NHLPA that new rules need to be put in place.
Daly recently sat down to discuss the league's perspective with Mercury News staff writer David Pollak. Here are excerpts from their conversation:
Q Some players acknowledge NHL teams may have legitimate financial problems, but see questionable management, not the CBA, as the problem. They say teams own a player's rights until age 31 and that should be enough to keep costs under control.
A I don't agree with the premise. What I would say is that there are elements of the CBA that essentially force clubs to pay more than maybe the local market realities would support. If they choose not to do that, they become non-competitive and risk business consequences. There are also inflationary pressures built into the CBA that require clubs to do things they might not otherwise do.
And there is a tendency for the most talented players in the league to migrate to the high revenue clubs at an earlier point in their careers than 31. You see financially motivated trades, salary dumps at the trade deadline -- all of this is a product of a system that is not working.
Q The NHL uses the phrase cost certainty to describe what owners are insisting in any new CBA. Can you elaborate on what that means?
A There are a lot of options. That's very intentional. What I mean when I use the term cost certainty is an enforceable relationship between expenses and revenues. There's got to be a sensible and fixed relationship between those two categories, and once you can agree on that concept, the form that can take is almost limitless.
The most obvious one and the one everybody talks about is a salary cap. But you can have wage scales -- fixed salary levels based on years of experience or maybe performance -- or some third-party arbitration based on them. How you get there, there really are a different number of ways. But you have to get there.
Q As far as a salary cap, payroll numbers have been floated out there -- $32 million, $40 million -- that would require many teams to do some serious trimming. Are those numbers legitimate and where do they come from?
A We've talked with the owners about hypothetical systems. In terms of numbers and thresholds, that's really speculation. Again, I come back to the principle. We still need to be negotiating as to what percentage of our overall hockey revenues we owe to the players. Once we get to that point, we'll listen to them how they want to cut it up -- whether part of it's in payroll, part of it's in the pension, part of it's insurance.
Q Baseball went to a luxury tax where teams with payrolls over a certain point pay money to a fund distributed to other teams. Is that a possibility?
A It's hard to analogize to other sports. I'm not going to try to speculate whether baseball's system works for it.
But I will say I don't think the baseball system will work for us, given our economic circumstances, given where we are as a league right now. But I'm not saying any other system that's out there would necessarily work for us either. I think we've got to sit down and tailor a system that works for the National Hockey League and its players.
Q Why won't it work?
A I don't think it provides the level of cost certainty that we need.
Q The NHLPA advised its players to hope for the best and prepare for the worst. What message has the NHL delivered to the ownership?
A That's not a bad way to put it. Obviously preparation is key. I would say that our ownership is very unified and prepared for the worst. That having been said, we don't have to cross that bridge for 12 months.
This may surprise you, but I've never seen a more unified ownership. And that differs from where we may have been in 1994-95 and where other sports have been.
Q The league has told teams not to discuss any CBA-related issues and fined those that do. Why does the league itself have to be the lone voice?
A We're clearly the closest to the situation and instead of having people talk based on partial knowledge, you might as well come to the source. It's a policy that's been in place for some time, not just this collective bargaining.
Q What happens if the present system is allowed to continue?
A We would be in serious danger of losing more than a couple franchises. And that couldn't happen. Four years ago we might have been more than amenable to experiment with less than cost-certain systems that we hoped would have had the types of effects we needed to add some balance and keep things viable. Now we don't have that margin for error.
Q If fans are getting frustrated over the CBA negotiations, would the league consider opening the books to the public. The Los Angeles Kings, for example, let fans see for themselves how dire the situation was.
A I don't know if it serves any purpose. It's a negotiation that we should have privately, between the league and the players. One, I don't know if there's interest on the fans' part to know what the gory details are. But, two, I don't think there's a need. Some clubs have chosen to do that. Each club controls its own financials and is free to do that. It's been more than Los Angeles -- St. Louis has done it, the Islanders and at least one other team that shared its financial with the public. It's really up to them.
Q Players point to salary caps in the NBA or NFL that force teams to trade or jettison players for reasons that have nothing to do with strengthening the team. They say that hurts a team's identity and they don't want to see it in hockey. How do you respond?
A Players are changing teams for financial reasons today. So whether it's financial reasons based on a salary cap or financial reasons based on disparities, it has the same effect. We're very fortunate that the system has somewhat maintained competitive balance over the nine years that it's been in effect, but to suggest that there aren't tensions and they're going in the direction of competitive disparities would be turning your back on the facts.
Q Other leagues, like the NFL, use the word parity a lot. Is that a big part of what's really going on here?
A The term I like to use is competitive balance. And I think that's a goal of every sports league, not just the NFL. Basically, what you're selling is competition and you want that balance. When you see consistent signs of imbalance, that should worry you.
http://www.bayarea.com/mld/mercurynews/sports/6944217.htm
The NHL says the basic system needs to change because teams have collectively lost $1.5 billion over the nine years the current CBA has been in effect -- a figure challenged by the NHL Players Association. Bill Daly, the league's chief legal officer, has the task of convincing the NHLPA that new rules need to be put in place.
Daly recently sat down to discuss the league's perspective with Mercury News staff writer David Pollak. Here are excerpts from their conversation:
Q Some players acknowledge NHL teams may have legitimate financial problems, but see questionable management, not the CBA, as the problem. They say teams own a player's rights until age 31 and that should be enough to keep costs under control.
A I don't agree with the premise. What I would say is that there are elements of the CBA that essentially force clubs to pay more than maybe the local market realities would support. If they choose not to do that, they become non-competitive and risk business consequences. There are also inflationary pressures built into the CBA that require clubs to do things they might not otherwise do.
And there is a tendency for the most talented players in the league to migrate to the high revenue clubs at an earlier point in their careers than 31. You see financially motivated trades, salary dumps at the trade deadline -- all of this is a product of a system that is not working.
Q The NHL uses the phrase cost certainty to describe what owners are insisting in any new CBA. Can you elaborate on what that means?
A There are a lot of options. That's very intentional. What I mean when I use the term cost certainty is an enforceable relationship between expenses and revenues. There's got to be a sensible and fixed relationship between those two categories, and once you can agree on that concept, the form that can take is almost limitless.
The most obvious one and the one everybody talks about is a salary cap. But you can have wage scales -- fixed salary levels based on years of experience or maybe performance -- or some third-party arbitration based on them. How you get there, there really are a different number of ways. But you have to get there.
Q As far as a salary cap, payroll numbers have been floated out there -- $32 million, $40 million -- that would require many teams to do some serious trimming. Are those numbers legitimate and where do they come from?
A We've talked with the owners about hypothetical systems. In terms of numbers and thresholds, that's really speculation. Again, I come back to the principle. We still need to be negotiating as to what percentage of our overall hockey revenues we owe to the players. Once we get to that point, we'll listen to them how they want to cut it up -- whether part of it's in payroll, part of it's in the pension, part of it's insurance.
Q Baseball went to a luxury tax where teams with payrolls over a certain point pay money to a fund distributed to other teams. Is that a possibility?
A It's hard to analogize to other sports. I'm not going to try to speculate whether baseball's system works for it.
But I will say I don't think the baseball system will work for us, given our economic circumstances, given where we are as a league right now. But I'm not saying any other system that's out there would necessarily work for us either. I think we've got to sit down and tailor a system that works for the National Hockey League and its players.
Q Why won't it work?
A I don't think it provides the level of cost certainty that we need.
Q The NHLPA advised its players to hope for the best and prepare for the worst. What message has the NHL delivered to the ownership?
A That's not a bad way to put it. Obviously preparation is key. I would say that our ownership is very unified and prepared for the worst. That having been said, we don't have to cross that bridge for 12 months.
This may surprise you, but I've never seen a more unified ownership. And that differs from where we may have been in 1994-95 and where other sports have been.
Q The league has told teams not to discuss any CBA-related issues and fined those that do. Why does the league itself have to be the lone voice?
A We're clearly the closest to the situation and instead of having people talk based on partial knowledge, you might as well come to the source. It's a policy that's been in place for some time, not just this collective bargaining.
Q What happens if the present system is allowed to continue?
A We would be in serious danger of losing more than a couple franchises. And that couldn't happen. Four years ago we might have been more than amenable to experiment with less than cost-certain systems that we hoped would have had the types of effects we needed to add some balance and keep things viable. Now we don't have that margin for error.
Q If fans are getting frustrated over the CBA negotiations, would the league consider opening the books to the public. The Los Angeles Kings, for example, let fans see for themselves how dire the situation was.
A I don't know if it serves any purpose. It's a negotiation that we should have privately, between the league and the players. One, I don't know if there's interest on the fans' part to know what the gory details are. But, two, I don't think there's a need. Some clubs have chosen to do that. Each club controls its own financials and is free to do that. It's been more than Los Angeles -- St. Louis has done it, the Islanders and at least one other team that shared its financial with the public. It's really up to them.
Q Players point to salary caps in the NBA or NFL that force teams to trade or jettison players for reasons that have nothing to do with strengthening the team. They say that hurts a team's identity and they don't want to see it in hockey. How do you respond?
A Players are changing teams for financial reasons today. So whether it's financial reasons based on a salary cap or financial reasons based on disparities, it has the same effect. We're very fortunate that the system has somewhat maintained competitive balance over the nine years that it's been in effect, but to suggest that there aren't tensions and they're going in the direction of competitive disparities would be turning your back on the facts.
Q Other leagues, like the NFL, use the word parity a lot. Is that a big part of what's really going on here?
A The term I like to use is competitive balance. And I think that's a goal of every sports league, not just the NFL. Basically, what you're selling is competition and you want that balance. When you see consistent signs of imbalance, that should worry you.
http://www.bayarea.com/mld/mercurynews/sports/6944217.htm
