Friday, September 3, 2010

The CBA is Broken

I hate to even think about it, but things do not look good for avoiding another work stoppage next time the NHL and NHLPA meet to write up a collective bargaining agreement.

Donals Fehr is soon to be named as the new head of the players union. He is the "mastermind" behind the players' strike in Major League Baseball that killed my interest in the professional game back in the 1990's.

More importantly, the current CBA can now be classified as a failure.

The CBA orchestrated between the union and the league (and owners) had two major goals: 1) cost certainty and 2) parity among the league's 30 teams.

After sacrificing an entire season to a lockout, the players finally gave in to the league's demands to institute a salary cap in order to achieve those two goals. The cap put a variable limit on both team salary and salaries of individual players. It was a good idea, as it based those limits on percentages of total revenues and were adjusted as needed yearly.

However, disease that created the need for such a cap has persisted. That disease is the inability of the owners and general managers to police themselves. Players are self-interested and want to draw the highest dollar figures that the market will yield. It is up to those who run the teams to say no.

The salary cap under the current CBA was meant to say "no" for those owners and GM's who couldn't bring themselves to say it for themselves.

I do not know if it was intentional or not, but a loophole was left in the CBA wherein the cap hit of a particular player was measured by the average of the total cost of the contract divided over the total number of years.

I suspect that this was a shortsighted move intended to address the kind of long term deals that were common in the years prior to the lockout. Those deals were backloaded by demand of the players who wanted to negotiate for new contracts while coming off the highest paid year of their careers. That served two purposes for the player. First, it allowed them to make extra money in the last year of their contract in case they either decided to hold out or couldn't find work. In addition, it allowed players to negotiate from the standpoint of "well, I made three million last season" rather than the 1.25 he made in the first year of the deal.

If that is the case, the attorney who drew up that contract should really be sued for legal malpractice.

The best players and their agents are still demanding the most money that the market can possibly provide them. Thanks to that clause which determines cap hit based on the average over the total length of the contract, teams are able to structure contracts in which players earn far more in the first few years of a contract than their cap hit.

Marian Hossa will be paid 7.9 million dollars each year between 2009 and 2016, but his cap hit is only 5.23 million. That saves the Blackhawks 2.67 million dollars per year. Duncan Keith's contract is similarly structured such that he earns 8 million per year 2010-2013, then a little less each year until 2022. For the next three seasons, Chicago will pay Duncan Keith 2.449 million more than his cap hit.

That 5.119 million dollars per year in cap space allowed the Blackhawks to re-sign Towes and Kane for deals averaging 6.3 million per year.

Without that salary cap falsehood, one or more of those four superstars would either have to take a hometown discount, or get shipped off to another NHL team in exchange for cheaper prospects.

The point of a salary cap is to create parity. When teams pay players what they are worth, no team will be able to afford to have a stacked roster. If a team has three prospects who all develop into high priced talent at the same time, they will have to make tough decisions and trade one for draft picks and younger prospects who don't yet command the high dollars.

We have seen some of that, but most of it has been a result of teams shooting themselves in the foot by signing Wade Redden and Brian Campbell to outrageous contracts that no one else will take off their hands.

In a perfect world where all teams have equal financial resources, the league could have parity without a salary cap. Teams would rise and fall based on luck and the skill of their general manager. However, in the real world, the Atlantas, Phoenixes, Floridas, Columbuses, Minnesotas, and Edmontons can't afford to throw the same kind of money at prime players as the Detroits, Torontos, New Yorks, New Jerseys, and Colorados of the league.

The loophole exploited by the Kovalchuk, Hossa, Keith, and Luongo contracts allows wealthier teams to throw money at players just as they did under the old CBA without regard for the salary cap. Does anyone think the Coyotes or Oilers could afford to shell out more than the league maximum to their players if they were able to circumvent the cap? Of course not. They don't have the cash. Neither do many teams in the NHL. But the New Jersey Devils do. The Chicago Blackhawks do. The New York Rangers do. The Philadelphia Flyers do. So those teams can circumvent the cap and throw money at high caliber players to lure them away from smaller markets and kill parity.

For the sake of growing hockey in America, we need parity. We have seen what happens in most markets when a team isn't competitive over a long period of time. Empty seats here, in Sunrise, in Phoenix, even Denver attest to that.

To keep fans interested, they have to have hope that their team can compete. The NFL has that now. A team can go from dismal to the Super Bowl in just a couple of years if they have the right coach and they draft well.

That parity should exist in hockey as well. We've seen teams rebuild through the draft. Ottawa built up from the expansion draft days to a team that appeared in conference and Cup finals year after year. The Penguins and Blackhawks won the cup within five years of earning first overall picks from basement finishes.

Those teams were able to make those kind of turn arounds because they had good management who drafted well and made shrewd moves, but also because they were able to pay high end players the money they demanded.

Bottomless money pits aren't a guarantee of success of course. You could let Glenn Sather hand pick any players he wants off every roster and disregard the cap entirely and he would still ice a team only slightly better than the one Don Waddell would compile in the same scenario.

The CBA is broken. The loophole must be fixed and that means teams suffer a cap hit each year that is equal to the money they pay to that player in the same year.

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