Saturday, July 14, 2012

Have Plenty Of Canned Food and Rock 'Em Sock 'Em Videos: Lockout Watch, Part 1

This begins my series on the impending lockout - I wrote two articles on the CBA earlier in the year, but realized that the last thing anyone wanted to hear about during the season is collective bargaining disputes.  Now that it's July, I can either write an article about how undervalued Alex Semin is, or this.  

According to Ren Lavoie of RDS and Larry Brooks of the New York Post, the owners have made a proposal to the players which consists of the following:

1.  The players would get 46% of league revenues, instead of the current 57%.  Furthermore, the cap would decrease further - it would be only $4 million over the midpoint rather than the current $8 million.

2.  A player would become an unrestricted free agent after 10 years NHL service, as opposed to at 27 or with 7 years of NHL service.

3.  The maximum length of an NHL contract would be 5 years.  Signing bonuses would be eliminated, as would the ability to pay players differing amounts in different years of a contract.

4.  Salary arbitration would be eliminated.

5.  Entry-level contracts would be 5 years instead of the current 3.

Larry Brooks is also reporting that the way in which hockey-related revenue is tabulated would be significantly altered, leading to a further diminishing of NHL revenue that would go to the players.  

Now obviously, this proposal is largely a sham, and there's little doubt in my mind that it was the Players' Association who must've leaked this information to journalists.  The NHL cannot expect to get any of these things, but this is just the beginning of negotiations.  It is interesting, therefore, to see what the NHL considers important:

- The 'Second Contract':  Brian Burke has lamented the disappearance of the so-called 'second contract', and no doubt Lou Lamoriello is right behind him.  The second contract is the deal a player signs after his ELC expires.  Under the current rules, a player is eligible for UFA after 7 seasons in the league and eligible for arbitration after 4.  The current ELC lasts 3 years.  While there are a few NHLers who've received a relative pittance in their second contract - Karl Alzner, for one - for the most part, teams with excellent players are signing them to long-term deals that would take them until they would be unrestricted free agents.  These players are still underpaid relative to what they would receive as UFAs, but they are still earning very significant money.  We just saw two such players be exchanged in the Luke Schenn for James Van Riemsdyk swap - each team signed their guy to a long-term deal figuring that the player would still provide massive cap savings, but both players had disappointing years and the teams soured on their long-term potential.  Under a scenario where arbitration either disappears or is pushed back, teams would once again have the right to hold players' feet to the fire after their ELCs expire - take this contract or else. 

- The Entry-Level Contract:  Entry-level contracts are typically the first thing that owners can limit or reduce in negotiations, because there's no player in the union who has yet to sign one.  Therefore, there's little incentive within the current union membership, other than 'solidarity' or the like, to hold on the present structure of entry-level deals.  In fact, there may be incentive among the union to push for cheaper and longer ELCs - cash saved from longer entry-level contracts will go into the pockets of veteran players.

- Arbitration:  Almost no one actually goes to arbitration anymore, but the NHL still is considering eliminating it.  I could actually see arbitration disappearing if the league kept the UFA age where it is now, but with the NHL pushing the majority of players back into being restricted free agents, it will have to stay.  

Since, again, I think the players leaked this, there's no talk of revenue sharing and the like, but that and the revenue split are to me the central issues.  Some of these items may end up altered - UFA age may rise, arbitration age may rise, entry-level contracts may get longer, but the central issues are still about how the smaller-market teams can survive in the system as is and what portion of the dollars are due the players.  Everything else right now is merely distraction.

Tuesday, July 10, 2012

Welease Woger! And Why The Trade Market May Not Be As Robust As It Appears

In scouring the very helpful team salary breakdowns, and cursory knowledge of teams' prospect bases, it sure looks like there are a lot of trades ready to go down in the NHL.  There's not many free agents available, and there's holes on rosters that don't seem like they can or should be filled by a club's prospect.  Still, I wouldn't be entirely surprised if the trade market totally dries up in the summer heat, and here's why:

A.  Labor uncertainty.  Scuttlebutt is that the NHL wants to cut back on the players' share of revenues which would in turn decrease the salary cap.  The cap right now is based on a 57/43 player/owner revenue split; rumors have placed the owners' initial offer of a revenue split below 50% for the players, which if accepted would drop the salary cap by over 10%.  Teams might not want to make trade offers based on the uncertainty of the cap and thus the uncertainty of certain players' value - if the cap decreases significantly, young (and thus cheap) players' values rise and older players' value falls.  Right now under a 70M cap, many veterans who signed UFA deals under the 59M cap of 2 years ago are a significant bargain.  That could change in the coming months.

B.  Amnesty buyouts.  If the cap does decrease significantly, it's hard to imagine that it would happen without the possibility of amnesty buyouts, where a team is released from its contract obligations with a player for an amount of money that won't appear on their salary cap ledger.  Imagine a second Free Agent Frenzy after the dust settles from the upcoming labor dispute; guys like Scott Gomez, Daniel Briere, Mike Komisarek, Wade Redden, Ryan Malone, Keith Ballard and so forth could become free agents, with plenty of cash in their pocket from their buyout.  Sure, none of these guys are likely to propel a team from a fringe playoff team to a championship contender, but they could help shore up holes on team's rosters, and they won't cost anything besides money.

It'll be a hard summer for fans who know their team should, by all means, make a trade to improve their circumstances, but depending on how the new CBA shakes out, the wait could be very well worth it.