My Two Cents for October 22nd, 2012
“No Deal”- Last week it appeared that the NHL lockout seemed to perhaps have some hope about ending, with the possible restoration of a full 82 game schedule and a season starting date of November 2nd. The NHL presented a proposal to the NHLPA calling for a 50/50 split of hockey related revenues. This proposal greatly differed from what the league originally wanted, which was to decrease player revenue to 43 percent. However, Donald Fehr and the NHLPA quickly dismissed the proposal a day after it was given thus giving the lockout a new life and almost guaranteeing that any hope for a quick resolution is now gone and that this labor dispute will continue into the immediate future. In a nutshell, we are back to square one here. To make matters worse no new talks are planned, and even if they did resume chances are very little if anything will be accomplished. To add insult to injury for you and I the hockey fan, the NHL has also announced the cancellation of all games thru November 1st with more cancellations expected to be announced soon. It seems that a number of players may have even been willing to do the 50/50 deal which certainly at it’s core seemed reasonable enough to get the season going, and maybe even put in place for lack of a better term a CBA that would be temporary for this season with a permanent solution to be sought out after the end of the 2012-13 Stanley Cup Finals. Right now, almost all fans and especially the season ticket holders for all teams would love for this to be accepted and have a season played. Donald Fehr sees it differently, and it appears he along with Commissioner Gary Bettman if not able to agree here may not be able to focus on key items now or in the near future.
The bottom line here is that as of today the NHL is still in the dark of a lockout. No games are being played, and it’s starting to get to the point where everyone’s patience is running very thin. NHL Commissioner Gary Bettman, though doing his best by putting out the 50/50 proposal, may deserve credit for at least putting this on the table. However at the same time the fact remains that under his watch this is his fourth lockout which includes the loss of the 2004-05 season only makes it clear that his legacy will be that of strong controversy as he has allowed for games and an entire season to go by the wayside. Bettman is certainly not the only one to blame here. Donald Fehr who 18 years ago demonstrated how much power a labor head can have by basically shutting down a sport at will and destroy a season (MLB in 1994). Fehr seems fairly determined to demonstrate again how far his power as a players representative can extend. When this is all said and done whether it’s today, tomorrow, next week, next month or even next year, neither Bettman or Fehr will be the losers and they know this as an iron clad fact. The losers will be the players below the NHL level as they lose a year of development, and the fans who support the game and the season ticket holders who are in effect the share holders. Right now if you are a season ticket holder, your tickets for games up thru November 1st are worth about as much as shares of Enron stock. You have both Fehr and Bettman to thank for that.
The Proposal- Here is what was on the table this week by the NHL for the NHLPA to either ratify or decline (per NHL.com):
NHL PROPOSAL TO SAVE 82-GAME SEASON
• Six-year Agreement with mutual option for a seventh year.
2. HRR Accounting:
• Current HRR Accounting subject to mutual clarification of existing interpretations and settlements.
3. Applicable Players’ Share:
• For each of the six (6) years of the CBA (and any additional one-year option) the Players’ Share shall be Fifty (50) percent of Actual HRR.
4. Payroll Range:
• Payroll Range will be computed using existing methodology. For the 2012/13 season, the Payroll Range will be computed assuming HRR will remain flat year-over-year (2011/12 to 2012/13) at $3.303 Billion (assuming Preliminary Benefits of $95 Million).
• 2012/13 Payroll Range Lower Limit = $43.9 Million Midpoint = $51.9 Million Upper Limit = $59.9 Million
• Appropriate “Transition Rules” to allow Clubs to exceed Upper Limit for the 2012/13 season only (but in no event will Club’s Averaged Club Salary be permitted to exceed the pre-CBA Upper Limit of $70.2 Million).
5. Cap Accounting:
• Payroll Lower Limit must be satisfied without performance bonuses.
• All years of existing SPCs with terms in excess of five (5) years will be accounted for and charged against a team’s Cap (at full AAV) regardless of whether or where the Player is playing. In the event any such contract is traded during its term, the related Cap charge will travel with the Player, but only for the year(s) in which the Player remains active and is being paid under his NHL SPC. If, at some subsequent point in time the Player retires or ceases to play and/or receive pay under his NHL SPC, the Cap charge will automatically revert (at full AAV) to the Club that initially entered into the contract for the balance of its term.
• Money paid to Players on NHL SPCs (one-ways and two-ways) in another professional league will not be counted against the Players’ Share, but all dollars paid in excess of $105,000 will be counted against the NHL Club’s Averaged Club Salary for the period during which such Player is being paid under his SPC while playing in another professional league.
• In the context of Player Trades, participating Clubs will be permitted to allocate Cap charges and related salary payment obligations between them, subject to specified parameters. Specifically, Clubs may agree to retain, for each of the remaining years of the Player’s SPC, no more than the lesser of: (i) $3 million of a particular SPC’s Cap charge or (ii) 50 percent of the SPC’s AAV (“Retained Salary Transaction”). In any Retained Salary Transaction, salary obligations as between Clubs would be allocated on the same percentage basis as Cap charges are being allocated. So, for instance, if an assigning Club agrees to retain 30% of an SPC’s Cap charge over the balance of its term, it will also retain an obligation to reimburse the acquiring Club 30% of the Player’s contractual compensation in each of the remaining years of the contract. A Club may not have more than two (2) contracts as to which Cap charges have been allocated between Clubs in a Player Trade, and no more than $5 million in allocated Cap charges in the aggregate in any one season.
6. System Changes:
• Entry Level System commitment will be limited to two (2) years (covering two full seasons) for all Players who sign their first SPC between the ages of 18 and 24 (i.e., where the first year of the SPC only covers a partial season, SPC must be for three (3) years).
• Maintenance of existing Salary Arbitration System subject to: (i) total mutuality of rights with regard to election as between Player and Club, and (ii) eligibility for election moved to five years of professional experience (from the current four years).
• Group 3 UFA eligibility for Players who are 28 or who have eight (8) Accrued Seasons (continues to allow for early UFA eligibility — age 26).
• Maximum contract length of five (5) years.
• Limit on year-to-year salary variability on multi-year SPCs — i.e., maximum increase or decrease in total compensation (salary and bonuses) year-over-year limited to 5% of the value of the first year of the contract. (For example, if a Player earns $10 million in total compensation in Year 1 of his SPC, his compensation (salary and bonuses) cannot increase or decrease by more than $500,000 in any subsequent year of his SPC.)
• Re-Entry waivers will be eliminated, consistent with the Cap Accounting proposal relating to the treatment of Players on NHL SPCs playing in another professional league.
• NHL Clubs who draft European Players obtain four (4) years of exclusive negotiating rights following selection in the Draft. If the four-year period expires, Player will be eligible to enter the League as a Free Agent and will not be subject to re-entering the Draft.
7. Revenue Sharing:
• NHL commits to Revenue Sharing Pool of $200 million for 2012/13 season (based on assumption of $3.303 Billion in actual HRR). Amount will be adjusted upward or downward in proportion to Actual HRR results for 2012/13. Revenue Sharing Pools in future years will be calculated proportionately.
• At least one-half of the total Revenue Sharing Pool (50%) will be raised from the Top 10 Revenue Grossing Clubs in a manner to be determined by the NHL.
• The distribution of the Revenue Sharing Pool will be determined on an annual basis by a Revenue Sharing Committee on which the NHLPA will have representation and input.
• For each of the first two years of the CBA, no Club will receive less in total Revenue Sharing than it received in 2011/12.
• Current “Disqualification” criteria in CBA (for Clubs in Top Half of League revenues and Clubs in large media markets) will be removed.
• Existing performance and “reduction” standards and provisions relating to “non-performers” (i.e., CBA 49.3(d)(i) and 49.3(d)(ii)) will be eliminated and will be adjusted as per the NHL’s 7/31 Proposal.
8. Supplemental and Commissioner Discipline:
• Introduction of additional procedural safeguards, including ultimate appeal right to a “neutral” third-party arbitrator with a “clearly erroneous” standard of review.
9. No “Rollback”:
• The NHL is not proposing that current SPCs be reduced, re-written or rolled back. Instead, the NHL’s proposal retains all current Players’ SPCs at their current face value for the duration of their terms, subject to the operation of the escrow mechanism in the same manner as it worked under the expired CBA.
10. Players’ Share “Make Whole” Provision:
• The League proposes to make Players “whole” for the absolute reduction in Players’ Share dollars (when compared to 2011/12) that is attributable to the economic terms of the new CBA (the “Share Reduction”). Using an assumed year-over-year growth rate of 5% for League-wide revenues, the new CBA could result in shortfalls from the current level of Players’ Share dollars ($1.883 Billion in 2011/12) of up to $149 million in Year 1 and up to $62 million in Year 2, for which Players will be “made whole.” (By Year 3 of the new CBA, Players’ Share dollars should exceed the current level ($1.883 Billion for 2011/12) and no “make whole” will be required.) Any such “shortfalls” in Years 1 and 2 of the new CBA will be computed as a percentage reduction off of the Player’s stated contractual compensation, and will be repaid to the Player as a Deferred Compensation benefit spread over the remaining future years of the Player’s SPC (or if he has no remaining years, in the year following the expiration of his SPC). Player reimbursement for the Share Reduction will be accrued and paid for by the League, and will be chargeable against Players’ Share amounts in future years as Preliminary Benefits. The objective would be to honor all existing SPCs by restoring their “value” on the basis of the now existing level of Players’ Share dollars.
Here’s the Link to the Proposal:
Sergei Kostitsyn & Alexander Oveckin’s Latest Takes On The Lockout- The Nashville Predators’ Sergei Kostitsyn, who is playing for the KHL’s Avangard Omsk expressed his displeasure with the NHL’s lockout. Kostitsyn told TSN (via Russian publication Sport-Express) that if the NHL’s lockout lasted the entire season that it would probably be for the best of all concerned. Kostitsyn expressed his desire for the NHL to make up their minds and let players know more sooner than later whether or not they are going to be playing this season. Kostitsyn expressed his desire to remain in the KHL for the rest of the season barring an agreement to end the lockout fairly soon.* Meanwhile Alex Ovechkin called the owners’ offer “A Fraud” and said he would stay in the KHL if his contract gets cut.
“The NHL gave fans and media hope. But in reality it is a deception,” said Ovechkin. “The league is trying to show that it is working to try and save the season, but they are not offering anything new. It’s all the same. Owners and players are at war,” Ovechkin continued. “(Gary) Bettman is under heavy pressure and trying to protect himself from criticism. Yes he made an offer and said it was good. But good for who, for Bettman?”** Ovechkin has also previously intimated that he may very well play the remainder of this season in the KHL.
Out of all of this one thing seems certain, the longer this drags out the more likely you will see players possibly stay away from the NHL this season even if a deal is eventually done. A deal can’t be done soon enough, and likely won’t be done soon enough either. As of this writing we are now 37 days into the lockout with a season which should have started almost two weeks ago. If this can happen eight years after the first lost season, it becomes clear that the wrong people are running the show and they are sitting on both sides of the table.
San Francisco Bulls Update - The Sharks ECHL affiliate has gotten off to a 2-1-2 start this season and had an interesting week and weekend in Ontario and Bakersfield. In Ontario, the Bulls dropped a tough 5-4 shootout loss to the Ontario Reign (The Los Angeles Kings ECHL affiliate) this past Wednesday (10/17). The Bulls held a 4-1 lead late the third period which included them killing off a five minute major only to see their three goal lead disappear in the games final few minutes. The late three goal rally included two in which the Reign had an empty net in exchange for an extra attacker. Justin Bowers, Sacha Guimond, Kris Belan and Jordan Clendenning scored for the Bulls. Ontario scored 16 seconds into the game as CJ Stretch tipped in a rebound past Bulls goalie Thomas Heemskerk. The Reign tied the game with three goals from Dan DaSilva, Derek Couture and Vincent LoVerde in just under a two minute span, before winning in the shootout period.
In Bakersfield on Friday, the Bulls rebounded from the tough shootout loss in Ontario with a solid effort and a 5-3 win over the Condors. Jordan Morrison’s two third period goals were the difference makers for the Bulls who earned their first road win in franchise history. Dean Ouellet also scored twice for the Bulls and also added an assist. Justin Bowers gave the Bulls a 1-0 lead late in the first period on a delayed power play. However Bakersfield would tie the game with just 46 seconds remaining in the period as Levi Nelson was able to get one past Bulls goalie Thomas Heemskerk. Ouellet would put the Bulls up midway through the second period as he drilled a wrist shot past Condors goalie Brian Stewart. The Bulls would get two quick strike goals in the third period after Bakersfield tied the game with goals from Ouellet and and Morrison. Heemskerk would make 32 saves on the evening.
Saturday Night was a different story as the Bulls would suffer their second shootout loss in three games as Bakersfield took a 2-1 decision. After an early first period Condors goal, the Bulls seemed to get plenty of rubber on the Condors net. However, for much of the first two periods it was to no avail. It wasn’t until Bulls Captain Justin Bowers’ game tying goal in the third period that the Bulls could finally locate the back of the Bakersfield net. Taylor Nelson was strong in goal for the Bulls, stopping 29 of 30 shots in regulation and the overtime period. The Bulls will be continuing their nine game road trip this next weekend with three games versus the Alaska Aces in the 49th state.
AHL Sharks Slow Start- The Worcester Sharks of the AHL meanwhile have gotten out of the starting gate with a rather slow 0-3-1 start in their first four games. The Sharks opened their home schedule this past Friday (10/19) with a 4-0 loss to the Albany Devils. It’s been a bit of a rough go for both goalies Alex Staylock and Harri Sateri. It was Sateri who endured this loss for Worcester Friday Night, making 23 saves on 27 Albany shots on goal. As for Staylock, the start of the season has been a little tougher for him as he was drilled for seven goals in his last start as the AHL Sharks dropped a 7-4 decision to the Portland (Maine) Pirates. Staylock made 22 saves but was shelled otherwise. Sebastian Stalberg leads the Sharks with three goals while Yanni Gourde has two. Matt Tennyson, James Sheppard, Sena Alcolaste, and Tim Kennedy also have scored for the AHL affiliate. The Sharks return to action at home this Friday (10/26) against the Bridgeport Sound Tigers.
Non Hockey Item: Sweet Torcher-The San Francisco Giants Post Season Run- To say the San Francisco Giants have had an interesting post season is to say the least. The Giants, left for dead after losing the first two games of the NLDS to the Cincinnati Reds, somehow found a way to come back and win this series taking three in the southwest Ohio city. The Giants then drew the St Louis Cardinals, who have had arguably the best luck of any major league baseball team over the last two years, in a match up for the National League pennant. The Giants and Cardianals split the first two games at AT&T Park. The series goes back to St Louis where the Cardinals dominate games three and four, winning game four by a decisive 8-3 count. In Game 5 with the Giants on the brink of elimination, they turn to Barry Zito to see if they can force a sixth game back in San Francisco. All Zito does is allow just four hits and struck out six in 7 2/3 innings as the Giants string together a four run fourth inning which stands up for the rest of the game in a 5-0 victory.
In Game 6, Ryan Vogelsong strikes out nine in seven innings as the Giants again put the game out of reach early with a four run second inning in route to a 6-1 win. With the series tied at 3-3 the Giants have a legit shot at taking St Louis and advancing to the World Series versus the Detroit Tigers. The Giants have their ace pitcher Matt Cain going in Game 7 Monday Night (10/22). Regardless of the outcome, the Giants deserve a ton of credit for never quiting on the challenge and playing their best baseball during elimination games. The Giants are 5-0 in elimination games this post season and seemingly have all of the momentum going into Monday Night’s show down. We shall see what happens here. Either way, good job by the San Francisco Giants who have taken their fans on another unforgettable thrill ride. (Note: This was obviously written prior to Game 7). UPDATE: The SF Giants defeated the St Louis Cardinals in Game 7 with a 9-0 rout as the Giants finished the last three games of the series outscoring the Cardinals 20-1. St Louis allowed 10 unearned runs in the series. Matt Cain pitched 5 2/3 Innings before the bullpen took over and slammed the door on St Louis. The Giants will face the Detroit Tigers in Game 1 of the 2012 World Series starting Wednesday (10/24). Good Luck Giants, you’ve earned this.
…Just My Two Cents…
The King Shark
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* Kostitsyn: http://www.tsn.ca/nhl/story/?id=407902