The Stage For The Next Labour War?

In the wake of the firing of Paul Kelly by the NHLPA executive board, Michael Russo of the Star Tribune interviewed the player representative for the Minnesota Wild to find out why. While Nick Schultz wasn’t overly forthcoming about the reasons for Kelly’s dismissal, he did identify the issue which will likely be the key battleground between the owners and the players when the current CBA expires.

Russo’s excellent (and rather lengthy) interview with Schultz can be found here – for anyone interested in this subject, the entire interview is a good read -and I’m only going to excerpt one question from it:

Russo: How much are you guys worried that the league will go after guaranteed contracts?

Schultz: Bigtime. You see that in other sports where they can just get rid of you. It’s something that would be pretty hard to give up. There are different things that both sides will have to give a little bit to get something done, maybe working on the buyout structure or things like that. It’ll take some time, but it’ll eventually get sorted out.

The second item Schultz mentions is the key one: guaranteed contracts.

For a lot of teams, the end of guaranteed contracts would solve a lot of problems. For example, the Rangers horrible signing of Wade Redden (6.5MM per year until 2014) could disappear overnight, freeing them up to lob ridiculous money at the next shiny object to catch Glen Sather’s gaze.

It’s a similar story for the Canadian teams. Sick of paying Dustin Penner better than 4MM per season? Feel that Robert Nilsson and Steve Staios are almost 5MM in combined dead-weight? Situations like last season, where the Flames had to dress less than a full roster, wouldn’t need to happen either – because players like Warrener and Primeau could just be disappeared when the need arose.

From a player’s perspective, it’s a fairly hellish idea – suddenly, all of those free agents who have sought the security of a long-term contract would lose that security. No contract would be safe.

I tend to side with the players on this particular issue – for a number of reasons. First, I think a contract is a contract is a contract; I’ve always been bitter about players like Alexei Yashin, who have held out hoping to make more money. That principle works both ways. Second, I think that star players would push for major signing bonuses to ensure they got their money – meaning that clubs with extra dough to throw around (read: Glen Sather and the New York Rangers) would have a more pronounced advantage. A club like Columbus might be able to offer Rick Nash a long-term contract for good money each season, but if they suddenly need to front-load that contract via signing bonuses it becomes a much more difficult proposition. Third, I think bad managers should have to wear the price of their mistakes. Many clubs – including the Oilers – have thrown money around in an irresponsible manner, and the only way to discourage such lavish spending is by ensuring these teams have to live with their mistakes.

And it is essential that there be repercussions for lavish spending. People like Tony Gallagher talk about how it puts their teams (in his case, the Canucks) at a competitive disadvantage, but it’s worth remembering that only five years ago teams like Vancouver, Edmonton and Calgary desperately needed the salary cap. Good hockey markets like Columbus and Minnesota need spending to be restrained – and there will always be good hockey markets with either poor owners or high taxes or some other restriction that means they can’t compete with the New York’s and Toronto’s of the league. Such markets need protecting.

Regardless of my feelings though, many of the most powerful teams in the league will be pushing for an end to guaranteed contracts. Certainly a man like Lou Lamoriello in New Jersey – a man who sent Alex Mogilny to the minors and gave San Jose a first round pick to take Vladimir Malakhov off of his hands – would be in favour of such a measure. One would imagine that the big markets – Philadelphia, Toronto, Boston, etc. – would be of a similar mindset.

Hopefully what will happen is that the players and owners will find a middle ground – one that sees the buyout system restructured so that it only costs 50% of a player’s salary to buy him out, rather than the current 66%, or something similar – rather than each side sticking to the extremes. However, given the track record of both the league and the NHLPA, that’s hardly assured – especially since both have shown a willingness to burn a season of hockey to get what they want.

Kelly Spying on Players?

Charges emerged yesterday that may explain some of the reason for the NHLPA’s dismissal of Paul Kelly. According to Tim Wharnsby at the Globe & Mail:

Some details began to leak out yesterday, including charges that Kelly peeked at a confidential transcript from a private session at the NHLPA summer meetings in Las Vegas two months ago…

When an executive board member was contacted yesterday to confirm the private session was part of the reason for Kelly’s dismissal, the phone line went silent. He then said, “The players have agreed not to say anything.” The player was given a chance to refute the story and did not deny the allegations.

The main purpose of the meeting which Kelly is supposed to have spied on was to discuss Kelly’s leadership. Additionally, the meeting led to the executive board awarding Ian Penny a five-year contract extension – without Kelly’s input.

It seems to me though that this particular charge is largely irrelevant – even if correct. Obviously, there were already different concerns about Kelly’s leadership – since that was the main topic of the Las Vegas meeting. Since Kelly could not have looked through the minutes of that confidential meeting until after it occurred, it stands to reason that his supposed snooping could not have been the driving reason behind his dismissal.

Rather, it seems clear that a power struggle inside the NHLPA office between Kelly and Ian Penny led to Kelly’s dismissal – a theory that gained some more evidence today.

Healy Resigns

Glenn Healy, widely seen as Paul Kelly’s lieutenant at the NHLPA, has resigned from his position as Director of Player Affairs. Healy’s the third Kelly loyalist to leave the NHLPA – Pat Flatley resigned within minutes of Kelly’s termination and accounting consultant Bob Lindquist quit yesterday.

Essentially, this means that every member of Paul Kelly’s support group within the NHLPA front office has now left the organization.

  • lj

    I don't think it matters for the union as a whole if contracts are guaranteed or not. if the players are getting 54.7% of hockey revenue every year they are getting 54.7% of hockey revenue. It doesn't matter what the spread is. When it comes down to individuals. Well then its nice to have a guaranteed contract.

    Thats why the NHL and the PA aren't the biggest fans of the Luongo, Pronger and Zetterburg deals. The more money that is payed out that doesn't go against the cap just means more money in escrow.

  • lj

    I'm in favor of guaranteed contracts. Nobody ever forces a GM to offer a contract to a player and if we all expect the player to live up to his end of a contract then the least we should expect is for the team to do the same.

    As for buy-outs on contracts, I'd be comfortable with 50% buy-outs on contracts, but am comfortable with how it is now although I'd prefer a simplified formula rather then the convoluted one we see now.

    One thing I'd probably be in favor of as well would be the end of front loaded or escalating contracts. If a player signs a 12 year deal for 64 million, i'd want him to get the 5.33mil per year rather then 8 mil for a few years then 1 mil at the end. That alone would probably stop the silliness of some of the current contracts that are out there to get around the cap (That said, I'd grandfather it in so players that have those deals now can keep them).

    Trading money in deals also seems fair by me. Should also be fair to the PA as in the end the dollars available wouldn't change to them, it just allows some teams to pay their way out of the odd bad contract.

    NMC and NTC can stay as they are in my eyes as again, its up to the team to offer any of these type of contracts.

  • lj

    Librarian Mike wrote:

    King Mob wrote:

    who is this Joe Shmo? Can he play LW? Can he pull the trigger?
    Of course he can! He’s Joe F$$king Shmo!

    Then lets get this guy on a 12 year $19 billion front loaded contract! stat!

  • lj

    Why do I feel so apathetic about the stupid NHLPA and their stupid management? Oh yeah, it's because they're a bunch of dumb greedy jocks trying to find someone who won't screw them over/tap their phones and e-mails while they try to amass ludicrous amounts of money for playing a game, even when they're "not that into it."

    And as an aside, when does the season start already? I can't wait to watch my ice-warrior heroes for another roller-coaster season of emotional highs and lows.

  • lj

    dyckster wrote:

    Jonathan,
    Can you (or someone else in the know) explain the buyout process in a little more depth?
    If a team chooses to buy a player out of his contract what figure is the payout based on? Is it 66% of the remaining salary cap hit (average of the total over the entire term) or is it 66% of the actual salary remaining due? Example, Joe Shmo is about to begin the 3rd year of a 5 year $35 mil contract. The contract was heavily front loaded for the 1st 2 years ($12.5 mil per). This leaves $10 mil remaining. Is the Buyout based on $21 million (cap hit times years remaining) or the remaining $10 million?
    Thanks in advance!

    who is this Joe Shmo? Can he play LW? Can he pull the trigger? Get on the phone Tambo!

  • lj

    @ Jonathan:

    Shocking. Absolutely shocking…I can't believe there is actual video of Glenn Healy making a save. I guess he didn't make it to the NHL with his personality.

  • lj

    smiliegirl15 wrote:

    As for the players and their contracts, they (the players) should be held accountable for their performance. Being able to release them for nonperformance would be one thing; releasing them because you need the cap space and have buyer’s remorse because you paid too much shouldn’t be allowed.

    I really agree with this. I think being able to release them is slightly drastic. What about some way to adjust player salary based on performance within the confines of the contract term. It could benefit the player if they're willing to pull their weight, and could benefit the teams in terms of freeing up cap space.

  • lj

    Giving the NHL clubs that non gauranteed contracts axe when needed may not happen in the next agreement, the NHLPA may be better off to significantly reduce the buy-out percentages/amounts. Troubled times have arrived for the league and the players assn and now is the time to ram something like this through.
    We wanted a more level playing field in 2005 and we recieved it…and somehow we still managed to screw things up with some very poor decisions that have landed us in this summer of discontent.

    Are our Oilers the proverbial Plaxico Burress of the NHL?

  • lj

    Something I've always wondered about NFL contracts is, if they're not guaranteed—if a player can be cut at any time—then what's the reasoning behind signing a long-term contract? We see these so often (Eli Manning, etc.), but, aren't they actually CONTRARY to the best interests of the player? I mean, wouldn't it be more logical to sign a series of one-year contracts? Have a bad year, you could be cut, regardless. Have a series of steady years, and you're an attractive free agent at the end of each season. Other than being able to insure the value of a longer term contract against the risk of career-ending injury, it doesn't seem to make any sense to me. I wholly admit my ignorance of such matters, though, so, if anyone knows what the point of long-term, non-guaranteed contracts would be, I'd appreciate an education.

  • lj

    @ Chris.:

    Some interesting ideas. A few thoughts:

    a) What would constitute a 'trade request'? Most requests are informal, behind-closed-doors things between a player's agent and the GM. It's not a formal, signed 'trade-me-or-this-will-happen kind of thing. How could you possibly regulate that? As for one-per-team, that seems kind of arbitrary. I understand the face-of-the-franchise mentality behind the proposal, but many teams have two or even three long-term players that have payed their dues to the team and 'earned' the right to that kind of deal. How do you say to those guys 'Sorry; just signed Billy to that deal yesterday. Can't help you.' It would be a circus. May I suggest that if you didn't live in Edmonton and/or Heatley never happened here, this wouldn't have been something you came up with as an important point to include.

    b) While it's obvious that some teams are finding a way to create a soft cap out of long-term front-loaded contracts, that doesn't mean that longer contracts are a bad idea completely. Can you imaging what a genius Tambo would look like if he signed, say, Gagne to a 9 year deal worth $36M, after which Gags went on to lead the team in scoring over the next 7 of those years? It can work; the key is just controlling how the cap hit operates. If the cap hit matched the actual salary per year, let's say, then a team no longer stands to benefit by lopping off the less productive and less expensive years off the end of the deal when the player retires 'prematurely'.

    c) I kind of like this idea. A really inventive and motivated team could in theory add several million dollars to their cap by accepting player deals from other clubs where small portions of the players' salaries were coming in already covered. Thus, if the cap is $60M, I can spend my $60M plus 5 or 6 other teams could be contributing a bit of their $60M towards players on my team. Good management beats bad management. I like it.

  • lj

    Jonathan,

    Can you (or someone else in the know) explain the buyout process in a little more depth?

    If a team chooses to buy a player out of his contract what figure is the payout based on? Is it 66% of the remaining salary cap hit (average of the total over the entire term) or is it 66% of the actual salary remaining due? Example, Joe Shmo is about to begin the 3rd year of a 5 year $35 mil contract. The contract was heavily front loaded for the 1st 2 years ($12.5 mil per). This leaves $10 mil remaining. Is the Buyout based on $21 million (cap hit times years remaining) or the remaining $10 million?

    Thanks in advance!

  • lj

    I think the cap has been a good thing in that all teams can now be competitive. It's become a case of who can manage their money the best, not who has the most.
    As for the players and their contracts, they (the players) should be held accountable for their performance. Being able to release them for nonperformance would be one thing; releasing them because you need the cap space and have buyer's remorse because you paid too much shouldn't be allowed.
    Somehow there needs to be checks and balances. Players earning their money because they are accountable for their performance to their teams and their fans would not be a bad thing and then maybe Dustin Penner and Shawn Horcoff's contracts might seem like a deal rather than an albatross.

  • lj

    Buzz Hargrove must have been salivating while standing at the front of the NHLPA's player reps in Vegas to give his "take" on the situation.

    A bunch of uneducated, largely ignorant of the real world, late 20's early 30 year olds with a multi billion dollar industry at their finger tips didn't stand a chance with a guy like that.

  • lj

    My CBA wish list:

    a) One NMC per team. Trade requests nullify the NMC. Accepting a trade to a team where a player already holds an NMC voids your NMC.

    b) Term restrictions on contracts. (five year max)

    c) Ability to trade salary (under the cap) Let Sather pay a percentage of Gaborik's contract in three years when he trades him… I personally don't care as long as the roster 23 man roster he ices is still under the cap. Small market teams and their fans may actually benifit from this kind of stupidity. Win-Win.

  • lj

    Regarding guarenteed contracts, things are fine the way they are. I can't see it changing because some managers don't want to sleep in the bed they made. Even the owners will realize that risking a labour dispute over that lottery ticket just isn't worth it.