Hockey

How to g et a deal

IT’S A LONG SHOT, BUT OPTIMIST JAMES DEACON SAYS SOME OF THIS NHL SEASON CAN BE SAVED

JAMES DEACON September 27 2004
Hockey

How to g et a deal

IT’S A LONG SHOT, BUT OPTIMIST JAMES DEACON SAYS SOME OF THIS NHL SEASON CAN BE SAVED

JAMES DEACON September 27 2004

How to g et a deal

Hockey

AT LUNCHTIME on the day Canada would win its first World Cup, Colin Campbell, the NHL’s harried head of hockey operations, walked into the league’s Toronto offices and stopped to say hi to a colleague who was heading for the elevator. They didn’t talk about the exciting prospect of that night’s game against the Finns, or about the upcoming season. Campbell instead looked concerned, and asked her: “You packed up yet?” “Not quite,” the woman replied, “but I’m getting there.” A few minutes later, another long-time staffer emerged from the elevators to meet a visitor in the lobby. Was she going to take time off when the lockout began? the visitor asked. “No, I’m gone, done, outtahere,” the staffer said, then added with a forced smile: “The years of loyalty have really paid off, don’t you think?”

Who cares about billionnaire team owners and millionnaire players. They’re rich enough to survive an ice age without seriously depleting their wine cellars or running out of $100 cigars. The NHL lockout will be inconvenient for TV networks and radio stations, and fans will miss their game. But the real casualties of this bitter standoff are thousands of team and arena staff in 30 North American cities whose jobs disappeared last week when the league locked out its players. Among them are 50 per cent of the NHL’s office employees in Montreal, Toronto and New York—administration personnel, salespeople, the folks who don’t get rich off the game—who were told back in July that they’d be terminated as of Sept. 20 if a deal didn’t get done. This isn’t like the 1994 lockout when people were kept on in hopes a deal would get done. There is no deal that’s close to completion here. So now it’s thanks, nice knowin’ ya, good luck finding a new job.

This isn’t a negotiation. It’s a war of attrition. The opportunity for compromise passed more than a year ago, leaving a philosophical divide between players and owners that can only be bridged if one side caves. Don’t

hold your breath—there were no talks planned for the days before and after the Sept. 15 deadline because both sides had their positions pretty much etched in stone eons ago. The NHL says its business can only be saved by major restructuring because payrolls eat up three-quarters of all revenues. The 30 teams claim that, as a result, they lost US$500 million in the last two seasons, so commissioner Gary Bettman wants to cap salaries to just over 50 per cent of revenues, reducing the average player salary to US$1.3 million from US$1.8 million, or about 28 per cent.

IT’S A LONG SHOT, BUT OPTIMIST JAMES DEACON SAYS SOME OF THIS NHL SEASON CAN BE SAVED

JAMES DEACON

Players association boss Bob Goodenow, who blames league losses more on mismanagement than on salaries being driven higher by a free market, vows he’ll never agree to a cap. He did offer an immediate five-per-cent rollback in salaries and some other concessions, but none of that promises the cost certainty teams say they absolutely must have. So you can bank on there being no NHL hockey for a year.

Unless . . . Nothing’s impossible. Pigs could fly. The Leals could win the Stanley Cup.

’s to say there won’t be half a season starting in January? In that optimistic spirit,Maclean’s offers this eight-step plan for getting negotiations on the fast track.

1. BRING IN THE BEAN COUNTERS

The league has repeatedly offered to open its books and let the union perform its own audit, but Goodenow has just as repeatedly declined the offer. He refuses to tie salaries to a percentage of revenues, so why bother? But he should reconsider. The players’

resolve is based on a well-established distrust of team owners and dates back to the days when guys like Maurice Richard and Gordie Howe were paid peanuts while making their owners rich. Even a decade ago, hockey salaries lagged well behind those in other top pro sports. If players saw what was really happening on the bottom line, they might be more trusting and less willing to put weaker franchises—and colleagues’ jobs— at risk with an extended dispute.

But then, the league might bring in some number crunchers of its own. Seems some of the less detail-oriented owners, in their hurry to finish the financial statements being submitted to the union, forgot to include little items like luxury box rentals and rinkboard advertising revenues. No doubt, in the postEnron-WorldCom-Nortel business world, these oversights were honest mistakes. After all, faulty reporting just gives the union more reason to distrust the owners’ claims.

2. GET LOUD

Fans respond to scoreboard exhortations to make noise, so why not this: don’t take it anymore. Baseball’s last collective agreement was hurried along by fans making it very clear they’d be seriously ticked if yet another World Series was lost to a labour dispute. So irate hockey fans ought to bombard the league and players union with emails and phone calls. Badger the home teams. Tell them you’ll find something else to do on Saturday nights if they don’t strike a deal soon. Say what you really think about adults who aren’t happy with US$ 1.3 million a year. Use strong language if you must.

3. BOOT THE BOSSES

There’s a far better chance of reaching a semi-amicable conclusion if Goodenow and Bettman get kicked out of the circle and their lieutenants take the faceoff. Ted Saskin and Bill Daly, respectively, know the issues, are less dogmatic and have more respect for

one another. They’re also more charming, although that’s not a terribly high bar.

4. LET OTHERS IN

No one knows the NHL business better than the players, their union and the league itself. Still, some disputes need third-party intervention to get fixed. Former Vancouver Canucks president Brian Burke outlined a complex plan on CBC’s broadcast after the last World Cup game. And an investment banker who once played hockey for an Ivy League college dropped a proposal into the Maclean’s suggestion box, the gist of which was this: make 20 of 21 players on every roster fit into a defined salary cap, and allow each team one designated “franchise player” whose contract is determined by whatever the market will bear. When told about it, Saskin rejected the notion because it subjected most players to a cap. Daly said unrestricted spending on franchise players wouldn’t provide cost certainty. Since both hated it, it must be a good idea.

5. DEFINE ‘PRINCIPLE’

Goodenow says the union’s fight isn’t about greed; it’s about principle. But really, what principle is he talking about? Maintaining the free market? There is no real free market in hockey. Players can’t become true free agents until they’re 31. The just-expired agreement already had several mechanisms that limit (rookie salary cap) or enhance

(qualifying offers) player contracts. And if union members are talking about the principles that Ted Lindsay fought for back in the 1950s, well, think again. The current union leaders have turned down a guarantee of 54 per cent of all league revenues. Old-timers asked only to be treated fairly, and 54 per cent seems pretty fair.

6. IT WORKS FOR TIM HORTONS

This isn’t fast food, but Bettman needs to conduct a remedial franchise management class for a few of his club owners. Without guns to their heads, these guys do the stupidest things, like agreeing to pay Alexei Yashin and Bill Guerin and Bobby Holik US$9 million a year. Each. No wonder the union scores big points with the argument that the league is losing money because some owners aren’t very smart businessmen.

7. REMEMBER WHO REALLY COUNTS

It bites that hockey-loving kids are denied their seasonal TV fix. But fans aren’t the ones you union and league people need to

FANS USED to

support players because players didn’t get their fair share of the pie. Now, players do get a fair shake.

keep in mind. It’s the unemployed. Don’t forget all those young, talented, willing-towork-for-less-because-they-love-hockey wage earners you pink-slipped because you couldn’t share US$2 billion a year without bickering. Think of what it’s like for old friends now trying to support families in expensive cities like New York and Toronto on unemployment benefits. If that isn’t motivation for getting a deal done quickly, nothing is.

8. THE PENDULUM SWINGS BACK

Fans usually support players in contract talks because, traditionally, the guys in skates didn’t get their fair share of the pie from the guys in suits. But players do get a fair shake now, while the NHL has maxed out its sponsorship and licencing revenue potential, and its U.S. broadcasting income is going down. Some teams may fudge their numbers, but there’s no doubting the NHL is in dire condition. Many players acknowledge this, although few of them speak up as New Jersey’s John Madden did last week. They don’t have to accept the league’s current offer; they can negotiate better terms. But it’s the players’ turn to make the first move, and to kick-start serious negotiations, they’ll have to accept a system, be it a stringent luxury tax or an actual cap, that offers more cost certainty. This isn’t about capitulation. It’s about doing what’s right for the game, lifl

james.deacon@macleans.rogers.com