Category Archives: Sports – Hockey

Hockey returns to San Francisco

We’re thrilled to be able to congratulate Pat Curcio and the Bulls on a successful opening night. Laurie and I have been watching them put the franchise together, and I have to admit I’m impressed. It looks like a good first night and a good starting crowd.  

Now the hard part begins….

Hockey returns to San Francisco as Bulls open with 4-3 loss:

The Bulls announced an impressive crowd of 8,277 on Friday night, so they’re off to a good start in that regard. They had a stated goal to reach 1,000 season ticket holders, and a team spokesman said they are close to reaching that number.

[….]

The Bulls’ first game marked the return of hockey to the Cow Palace for the first time in more than 15 years. The San Francisco Spiders of the now defunct International Hockey League lasted only one season, shutting down operations after reportedly losing more than $6 million in 1995-96.

The way Curcio sees it, the Spiders were victims of playing in an unstable league, as the IHL shut down operations after 2001. He points out that the Spiders drew more than 5,000 fans per game, which in minor league hockey, is a respectable number.

A few bits of history on the Spiders, since Laurie and I were two of the few that actually were there for that little mini-drama. We were the Spiders web masters, running their web site for the entire season. We were also season ticket holders, and in fact had the same seats we had when the Sharks were in the Cow Palace (because it amused us to return to the scene of the crime). We did all of the online material for the team and dealt with getting their marketing info and press releases online as well as team info and stats, and for game days, also made sure the game note package and summaries got posted. Laurie also did most of the photography for the web site and as the season went along (and spiraled) was for some games the only photographer there. 

So we were there before opening night, for opening night, for closing night, and for about home games in between, and were interacting with various people in the front office throughout. In fact, it becomes a bit of a running joke that whoever was assigned to be our contact ought to update their resume, because that was a sign they were the next to get laid off. which was unfortunately, as the season went on, more often true than not. 

(I should really write more about that majestic, crazy year. Maybe later, especially now that enough years have passed that lawsuits are really unlikely and the bankruptcy stuff is long settled.. except I’m not sure anyone really cares, or that it matters in the grand scheme of things…)

The Bulls need to be really careful about that 5,000 fans a game number. It’s — somewhat fanciful. Attendance early in the season was pretty good, but it trailed off quickly. As the season went on, the team started liberally distributing free passes through organizations as a promotion, similar to the “merchant night” passes you can get for the San Jose Giants minor league team. That 5,000 a night number is some combination of paid, free attending, and distributed but not really used. I’d say that the last ten games of the season the real in-house, butt-in-seat number was under 2,000 consistently. By then, of course, it was obvious that the franchise had spiraled and it wasn’t coming back to San Francisco.

The Spiders were a team with great intentions. To be honest (and I hope they take this as a cautionary tale), life with the Spiders leading up to opening night  sounds a lot like what I’ve seen with the Bulls. There was no idea that lurking just out of view was this iceberg… It was the season just after the first NHL lockout of 1994-95, and revenues and attendance numbers for the IHL were boosted. The IHL sold these numbers as part of a plan to expand the league, and the Spiders were one of those expansion teams. They paid, if I remember correctly, about $6m for the franchise. Dave Pasant bought the team; he had made a big push to buy the NBA Minnesota Timberwolves but that deal didn’t happen, and he ended up going for a minor league hockey team instead. 

Things started out well when the team traded for a starting goalie who had a solid NHL tenure, and he categorically refused to report. We ended up going into the season with Stephane Beauregard, another ex NHL goalie, and Corrado Micalef, a goalie that had seen some time with the Red Wings and had spent a number of years in the Italian leagues; he was originally brought in mainly to be an emergency backup and/or practice goalie but he backed up Beauregard pretty well. Beauregard was a pretty good goalie — I’d say NHL-backup caliber — but was in the AHL because, well, your backup goalie can’t be high maintenance. Stephane was. And occasionally hilarity ensued, like when he tossed a water bottle at a referee. The team celebrated that later by having bottle-tossing contests during intermission…

The Spiders caught a break when Dean Lombardi and Sandis Ozolish (technically, Lombardi and Sandis’ agenthad a spat over a contract and Sandis sat out. He ended up signing with the Spiders and was in uniform opening night and scored the franchise’s first goal. He also signed quickly and only played two games as as Spider, ending that PR fest. The Spiders knew the Sharks were part of the draw, so they signed a lot of ex-Sharks, including the legendarily infamous Link Gaezt and a personal favorite with Dale Craigwell. Gaetz survived three games (no points, 37 PIM. any questions?) and Craigwell had suffered a nasty ankle injury and had lost a couple of steps off his speed. The fond memories of these guys were attractive, actually watching them play again? A bit sad for the most part. 

There were some definite positives to the season — I got to see Rod Langway play hockey. Late in his career or not, he was still Rod Langway. John Purves was one of those classic career minor leaguers who went off and had a career year and scored 105 points, 20 more than his career best and a tally he’d never match again. He really bloomed that year and carried that team. 

For Laurie and I, it was one of those things we always wanted to do, work with a pro sports team. I wouldn’t trade it for anything, and I’m happy to say it also cured me of any real thought of doing it again. But damn, I’m happy I did. And I’m sorry it didn’t work out better, but the Spiders were set up to fail from the start by unrealistic revenue expectations from the league, an owner who didn’t know the league was blowing smoke at him and talked about building a franchise as a long-term investment (but as soon as it didn’t start making money right away, ripped apart the organization to save money and ultimately put it into a death spiral), a lousy media market for minor league sports, and a building that, well….

It took some work to make the Cow Palace, built in 1941, ready to house a team again.

“Here at the Cow Palace, every time we opened a door to correct something, we found something else that needed to be corrected,” said Curcio, who spent 10 years playing in the ECHL and Europe. “It was tiresome, it was stressful, and a lot of times we thought, can this really be fixed?”

At first glance, they did a good job. There is a new scoreboard that is much more high-tech that those found at most minor league arenas, but there remains a certain charm about the old place, which was home to the San Jose Sharks for their first two years of existence.

Our motto on the Cow Palace was “It’s a pit, but my god, it’s OUR pit”. I do wish the Bulls luck, but it’s got lousy sight lines, parking is expensive (and not under their control unless they pulled off a miracle deal), transit is between lousy and nonexistent, and there’s a fine line between “eccentric” and “my god, what is THAT SMELL?” and the Cow Palace was far too often on the wrong side of that line. You can, to a degree, market a barn like that for its character, but only to a degree. Especially in the spring when things warm up. 

He’s confident that the Bulls can keep drawing fans on a regular basis after what can only be considered a successful opening night, despite the one-goal loss.

“We had a vision, and I think for the most part it’s pretty much in line with what we imagined.”

 I agree, but it’s not going to be easy. the Bulls are actually much further along the path than the Spiders were on opening night; they have broadcast agreements, something the Spiders didn’t get until mid-season (and at that point, it was on a university “around the neighborhood” station). The shift from news reading on paper to news reading online has improved things — the simple fact that CSN Bay Area is talking about opening night indicates the landscape for coverage has changed for the better. Back in the Spiders days, this region and the newspapers had a huge “we are a MAJOR LEAGUE market” mentality, one that went to the two baseball teams, two football teams, the Warriors, Sharks, UC Berkeley and Stanford — even San Jose State was more or less shunted off as irrelevant, so a minor league team had real struggles getting coverage and the online universe was just starting to open up as a new opportunity.

I’ve long thought there’s an opportunity for a team like this in this market. When San Jose and the county were fighting over the right to build a new entertainment building (12,000ish seats, concert focus) I did some informal chatting with a few Sharks staffers and some of the people involved with the city about whether the building might be ice compatible, but the day of the general purpose “do 12 things sort of okay, do none of them well” building are dead (and I don’t miss them!) and that building was going to be a concert hall, not something convertible. Of course, once the county won the legal fights and killed the city’s idea on the building, it didn’t matter. And then the economy tanked and killed the county building, so we ended up with neither. 

The Bulls are heading into a price point where I think there’s a market. We found out (the hard way) with the Spiders it wasn’t an easy market to crack; it takes time, and patience and consistent marketing and promotion. The Spiders suffered from an owner who thought it’d be easy and panicked when it wasn’t. It sounds like Curcio understands this is a multi-season challenge. 

To me, though, the Cow Palace will continue to be the big challenge. There’s only so much makeup you can put on that pig. If I’m Curcio, to be blunt, I’m starting quiet friendly chats with Oakland NOW about moving into their arena if and when the Warriors build their new building in downtown SF and move out (but you do not, repeat, do not, want to be second tenant in that building to an NBA team, even if they’re remotely interested in having you). That building is actually too big for the Bulls, and the footprint is a challenge for hockey, but it’s on transit, I’m guessing Oakland would love to cut a deal to have a tenant, and it’s an improvement over the Cow Palace, which if you haven’t figured out by now, I think should have been torn down years ago. 

And at some point this season, I expect Laurie and I will head up there and take in some games. With two seasons of Sharks hockey there, and a full season of Spiders hockey, there are probably few people alive who’s seen more hockey than us in that building, and I’d hate to lose an opportunity to put a third franchise on my life list there… And I’m curious what they’ve done with the place. 

When I do, I promise I’ll show up with my Spiders jersey, if I can get it out of storage… 

 

 

 

My second blog post on the NHL lockout

Unlike many of you, I’ve been trying to mostly ignore the NHL lockout. As you may remember, way back in August I predicted they wouldn’t settle this before the start of the regular season and suggested it was likely to settle in October and we wouldn’t see hockey until the end of October. Nothing that’s been said or done since then has changed that for me one bit, and in fact, it all lines up with what I expected to happen a lot more than I wish it did. 

So I see no reason to put a lot of time or energy into worrying over the NHL negotiations or the season (or the league, for that matter) until we get a lot closer to them solving this and putting hockey back on the ice and playing some NHL games. Instead, I’ve been watching the SF Giants more, and even a few football games, and, like, having a life. 

I’ve been asked by a few people what fans can do to influence this and help encourage the NHL to settle this dispute. The answer: basically, nothing. Both sides know that when this is solved, the fans will be there, so the fans don’t have much, if any, leverage. Now, if everyone could agree to stop talking about the NHL — don’t blog about it, don’t tweet about it, don’t retweet other tweets, don’t post in hockey forums, don’t read writers talking about the NHL — if fans could generate absolute “we don’t care any more” silence about the league and the lockout, it might get some of the owners nervous and push them. Of course, it’d scare the living crap out of the people paid to write about hockey (or more correctly, paid TO BE READ writing about hockey), and so not only won’t they not go to radio silence on these issues, the silence would likely freak them out and get them even noisier. Not what I’d be looking forward to… But the best thing fans can do is sit back, relax, and let this all work itself out without wasting a lot of time or energy on it. Go enjoy something else until the owners and players work it out. There’s some damn good baseball going on this year, and at least where I live, fall is just swinging into play, and the outside world has been fun and enjoyable. Try it. You might surprise yourself. Life is too short wasting it on this, unless your livelihood depends on writing about it (and/or generating page views over it).

A big reason I saw no purpose in writing about it is because I couldn’t without putting a bunch of work into studying the financial numbers, and to be blunt, I’d rather cut off my hands with a cold chisel and force feed them to iguanas than do the kind of number crunching needed to have a decent financial discussion here on my blog. 

But fortunately (or unfortunately), someone else has done that work for me over at the nhlnumbers.com web site. I can’t decide if I want to thank them or hurt them. I’ll settle for thank. For now. If you look at the numbers they’ve generated, it helps answer some of the questions that are being asked about this lockout, such as “didn’t the owners win the last lockout? and why didn’t it solve all of their problems?” and “The NHL claims to be making lots more money? How can they still need to take it away from the players?”

If you read the three part article, they’ve done a good job of breaking down both costs/expenses and revenues for the league and why we’ve gotten to this point again. For those of you who would rather poke out your eyes than try to deal with the financial details, here’s a very quick summary:

The league is making a LOT more money than it was before the last lockout. It is also spending more money to make that money (which is expected). Most importantly, that new revenue is not evenly distributed: the richest teams have gotten a whole lot richer, the poor teams have struggled to keep up with increased expenses, and the teams in the middle are more or less where they were before — in the middle. 

At the end of part three is an interesting chart where he breaks down revenue (relative size of the dot) and profitability (color of the dot): 

 Google ChromeScreenSnapz0012 My second blog post on the NHL lockout

  • The yellow dots (money makers) are NY Rangers, Toronto, Chicago, Montreal.
  • The green dots (money losers) are Detroit, St. Louis, Carolina, Buffalo, Phoenix, Anaheim, Washington. 

I’m going to right up front flag Detroit as a special cast, because as you can see, their revenue is high, but it’s a team that has been consciously spending at very high levels because it’s been at a peak of a serious winning cycle, and they have an owner that can afford it and is willing to fund losses to keep the team winning. With the retirement of Nick Lidstrom, that cycle is ending, and I wouldn’t be at all surprised if they cut back spending over the next couple of years and perhaps finally go into a rebuilding cycle vs. a reload cycle through free agency. 

In the blue dots, the biggest dots belong to Philadelphia and Boston, which should surprise absolutely nobody. And both of those teams have been spending more heavily recently but not to the degree detroit has. 

This more or less defines the battle lines WITHIN the ownership groups.

There are seven teams with really good revenues that are profitable (or have chosen to spend it now): NY Rangers, Toronto, Chicago, Montreal, Boston, Philadelphia, Detroit.

There are six teams that are losing money and who’s revenue streams make it a challenge for those teams to stop losing: St. Louis, Carolina, Buffalo, Phoenix, Anaheim, Washington. 

If you go back and look at the state of the league prior to the last lockout, it was generally believed that there were 11 or twelve teams that would have qualified for that “green dot” status. So it can be argued that the league really is in a much better shape than it was prior to the last lockout, so the CBA that’s just expired did help the league and a number of teams. It’s just that there are still a number of teams struggling. 

Two big factors in this was the way revenue sharing was structured in the last deal (time limited in many situations, for instance) and that the salary cap floor was tied to the salary cap limit by a pure number and not a percentage. That meant that the floor grew dollar for dollar as revenues grew, even if those revenues didn’t go to the teams at the bottom of the revenue pile. 

So what’s happened since the last CBA is fairly simple: league revenues have gone up a lot. league expenses have also gone up a lot. A number of teams that struggled before the last lockout are now doing okay, but aren’t necessarily thriving, and some teams are simply unable to dig out of the revenue hole and are still struggling.

This is because revenues are not spread evenly among the teams: the richest teams got even more rich, and the poor teams had to fight just to stay competitive. 

A second factor here: as the teams figured out how to — let’s use the word finesse — the new CBA, they were able to issue contracts or find loopholes they could use to their own advantage. The ultra-long contracts with the low cap hit is the poster child of this. 

And so that’s how we got to this point. Basically:

  • The rich teams have no incentive to keep costs down, as long as they can stay under the salary cap (in a legal way if not in reality). 
  • The poor teams are forced to pay market rates for talent, even if they can’t afford it. Those market rates are set by the rich teams.
  • The rich teams don’t care if what they do hurts the poor teams. In fact, if it makes the poor teams uncompetitive, that’s good, because that’s fewer teams fighting for the playoff spots with those rich teams. Of course, that’s not what the rich teams will say in public….

And this is why we never had a chance for the lockout to end before the season started.

Let me explain.

Stop thinking of this as “players vs. league”. It’s not. 

“the league” is 30 owners, each with their own agenda. Broadly speaking, there are three groups:

  • The seven rich teams.
  • The six poor teams (five, actually, since Phoenix is run by the league office itself).
  • The 17 teams “in the middle”, which align to each other, or to either the rich or poorer teams as it benefits them. But since they aren’t really hurting, it tends to be easier to align with the powerful group (the rich teams) than the weaker group. 

The league’s solution to the problem of those six poor teams is to take it out of the player’s share. This serves the purpose of the rich teams because they don’t actually have to give any of their profits up. In fact, they’d make even bigger profits. 

The player’s solution is revenue sharing: having a chunk of the money that currently goes to the richer teams and re-allocate it to help out the poorer teams. 

  • If you think about the NHL as “the league”, then that kind of solution makes sense; after all, it’s based on the NFL model. 
  • If you think about the NHL as “30 franchise owners”, well, if you were the franchise owner of a Subway restaurant in Times Square and making good money, how would you react to being told to give up some of that money to prop up a Subway franchise in Cody Wyoming? 

Exactly. And there’s just as much enthusiasm for that kind of revenue sharing in the offices of the Rangers or Leafs as there would be in the owner’s office of that Times Square Subway. 

So we have impasse. And that impasse won’t break until one side or the other starts hurting enough to make concessions. 

The players have to hold out long enough for the rich owners to say “okay, we’ll throw some money into the pool to end this, but you have to make it worth it with other concessions”. The key here are those “blue dot” teams, and when the lack of gate revenues are going to hurt enough for them to switch from backing the rich teams to joining the poor teams and say “let’s cut a deal” — a simplified way to look at this is that the poor team needs to swing over enough owners to take over the majority position within the ownership group. 

Or the owners hold out until the journeyman players (who have shorter careers with lower-pay contracts) start sweating out losing too much income and align together to force the union to move to get games (and paychecks) flowing again.

This entire lockout is designed to make it hurt enough that players accept the pay cut; in return, the players are trying to make it hurt enough that the different owner fractions realign and force the rich owners to agree to revenue sharing. 

In both cases, there’s zero incentive for anyone to change positions or force a deal until the revenue and paychecks aren’t happening and the lack of money hitting the bank starts to hurt. So there never was any reason to think this would get solved until real games get canceled and real tickets get refunded and real paychecks don’t show up — and then it’s a matter of which side is willing to take the pain longer before deciding to cut a deal.

And so it’s going to take a while. And the fan’s ability to influence any of this is, well, zero

And that’s why I’m going to watch baseball and football and go outside and play until they settle it. And why you should, too. They will, and then we can watch hockey. Until then, our only leverage as fans is to try to pretend we don’t care, and hope that makes them nervous. And the only way to do that is to be quiet. And now, having wasted 2000 words breaking my own recommendation to shut up, I’m going back outside into the fall sun… Join me. 

(my private agenda: this is to me a fairly clear-cut situation where revenue sharing is the “right” answer, as long as player expenses are comparable to other pro sports. And overall, hockey’s are. But I also don’t see that the rich teams will go their easily, or without a “pound of flesh” out of the players. And this is a massive oversimplification of a very complicated situation, where I’m only trying to cover the basic financial issue; the real CBA has dozens of issues, but this is the one that’s driving the lockout, and which has to be solved before there’s a hope of a new agreement. And it won’t be easy, or quick. The only saving grace: both sides are being cordial and professional, and that only helps keep the anger out of the negotiations, which should make the agreement easier — someday.)

 

Speaking of the CBA and the upcoming NHL lockout….

Okay, well in my case, trying desperately to not speak of the CBA, the on-going negotiations, and the upcoming lockout…

I’ve consciously avoided digging in to the CBA and negotiations so far because there really hasn’t been a lot to talk about. We’ve heard the NHL position, which is that the universe will fall into a black hole and we’ll all die unless the NHLPA gives back even more money. In fact, the NHLPA needs to start paying the owners for the privilege of playing, because otherwise, the game is doomed. 

Something like that. The Owners want more restrictive free agency, reduced salaries, shorter contracts, and a pony. 

The player’s response has been pending, but at least some of the details are now starting to hit public view. They’re calling for the removal of the salary cap and replacing it with a luxury tax. That luxury tax will fund revenue sharing from the higher-revenue teams who are willing to spend money to the lower revenue teams that are struggling to meet the current salary floor. The players also want a partridge in a  pear tree.

Typically when I start talking about sports labor negotiations I tell people two things: first, ignore everything both sides say in public, because they are lying, and second, nothing will happen to solve the problem until the last possible second, if then. In this case, surprisingly, both sides have been surprisingly honest in their comments (for a labor negotiation) and beyond that, the discussions are unusually amicable. There are definitely strong disagreements about what the new CBA needs for approval — but at least both sides are acting professionally and seem committed to finding that middle ground. 

That is encouraging to me. That might be surprising to some given the players hired Donald Fehr, but remember, in professional baseball, the owners were so anti-union for so many years that they were found guilty of collusion (to the tunes of hundreds of millions of dollars) multiple times. Not only were the baseball owners willing to break the law to break the union, they did it again and again after getting caught. No wonder the baseball player’s association didn’t exactly cut them any slack… Fehr and Bettman, at least, seem to be keeping this civil and businesslike, and that, at least, is a good starting point.

It should also be noted that even though the new CBA is an agreement between two groups, the players and the owners, there are actually three groups at the negotiating table: the players, the rich owners, and the poor owners. 

Gary Bettman’s role in this is to figure out a way to steer the rich and poor owners to a consensus both sides can live with that the players will agree to. My honest opinion: fans don’t appreciate just how hard his job is and what he does to keep the owners from screwing this sport up massively. Also, whatever the owners pay him, he’s underpaid given the crap they put him through. 

Donald Fehr has a lesser problem: the wishes of the rich players vs. the needs of the journeymen. Hockey, fortunately, has players with a strong sense of working for the greater good of the game, as opposed to a sport like basketball where the rich player’s view of the depth guys is “hey, there are lots just like you in europe waiting, so shut up”. In the case of basketball, there’s some validity to that, too, where in hockey, it really is more of a team game, and the player’s union attitudes match that.

Fehr’s bigger problem is that his negotiating stance isn’t really about what the players want, it’s about presenting a set of demands that force the two owner factions to come to that compromise position. In some ways, his job is help Bettman beat sense into the owners in a way that the players get a deal they like. Or will tolerate.

Donald Fehr’s negotiating position is intended to push the owners to revenue sharing: his view is there’s lots of money in the game, and that the rich owners need to help out the less rich owners. The rich owner’s position is that the less rich owners can suck on it and that the proper way to solve this problem is to take more money out of the players, which will make the less rich owners richer, and the rich owners even more richer. 

That is the core issue in this CBA negotiation: the owners want the players to make them richer. The players want the rich owners to help out the less rich owners. The less rich owners generally don’t get to air their opinions in public, but I think it’s safe to say they want some kind of improved revenue sharing, but they don’t have a big enough faction to make that happen on their own. Bettman and Fehr will use all of the other issues on the board (the ones highlighted so far are free agency, contract length, the salary cap, the luxury tax, length of contracts and various player discipline issues) as chess pieces on a complex board where the rules are, at best, fluid. 

My prediction for most fans: try not to pay attention to this, especially early in the game. Definitely pay little or no attention to sports pundits writing about it. Most don’t put in the time needed to study the issues and take over-simplistic positions without really understanding what’s going on. Most of the rest are mouthpieces for one faction or another and are pushing some aspect of some agenda. I would put myself in the “don’t pay attention” pool as well, and I hope to not feel the need to talk about this much. 

My next prediction: the league will miss opening night. The owners will lock the players out when the current CBA expires in September. The player’s offer to continue playing under the existing CBA isn’t really acceptable, because all that does is transfer the timing of the work stoppage into the hands of the players. Of course the players want to play in October, even under the old deal. The old deal wasn’t bad for the players, and that gives them the ability to call a strike when it hurts the owners most. The owners won’t allow that to happen, so they’ll force the issue at the start of the season when incoming revenue is weakest and it hurts the owners less. 

I don’t expect this negotiation to drag on too long, though. I believe there will be hockey by November 1. There are significant issues to solve, but I don’t see this as a serious war. It’s hard negotiation and it’s a very solvable situation. For all the owners quiet pretensions of impending disaster, it’s not in their best interest to let this drag on, the amount of money involved isn’t worth it. 

Yes, this is millionaires arguing with billionaires over how to carve up a pretty big pie. That’s life in professional sports. Fans, get used to it. That’s how it is.

In a perfect world, I’d like to see the teams split gate revenue 60-40; the home team keeps 60%, the away team gets 40%. Over the length of a season, a team with weaker home revenues would see it balanced out by stronger revenues from away games in strong cities, but a home team with really good revenues still gets an advantage so there’s motivation for all teams to push for their own revenues to thrive (my goal: all teams get enough of a safety net to be viable, but not so much revenue parity they can be lazy or incompetent and still be profitable. That’s been a problem in the NFL over the years where so much revenue is shared). 

In the Rich owners perfect world, they would keep 100% of gate (and all other) revenues, and pay the Washington Generals a flat fee to come in and lose home games on a regular basis. that may sound like Hyperbole, but I do believe there’s a core group of owners that would love a ten team league, if they could only avoid the repercussions of doing away with the rest of the league from the fans, press, politicians and the player’s union. And, of course, they could keep all of the revenues for themselves. and hopefully stop paying the players… 

What do I think will happen? 

Nothing, until the owners agree to some modification of the revenue sharing rules to balance out revenues across teams in some way. Fehr’s luxury tax is probably dead on arrival, at least in this initial form, but in baseball, seems to help some of the lesser teams without slowing down teams like the Yankees that are willing to spend the money and pay the tax. It’s not a bad starting point (but it’s not really an optimal financing form; it is, however, a lever that can be used against the rich owners towards other revenue share options). 

The owners demands are simply to push hard against the player’s position from the start, and try to make the negotiation a case of the player’s limiting their losses. Fehr’s response seems oriented more towards ignoring that and pushing the owners off in a different direction. How well that’ll work I don’t know yet, but it makes sense. To respond directly to the owners would be to agree that some set of take-backs are going to happen. Fehr’s goal is to reshape how revenues move between owners. He’ll be happy if nothing really changes in player compensation.

The other big issue seems to be player discipline, and the union clearly wants more say in how players are disciplined, especially suspensions and appeals. I don’t expect the owners are at all interested in allowing the union any new powers here. I would not be surprised if this is the big wedge that halts negotiations from finishing and that the players ultimately give it back to the owners when the owners make enough concessions elsewhere. It seems a perfect issue for the players to refuse to compromise on until they get what they want elsewhere. 

Ultimately, the owners really do need more rational revenue sharing. This isn’t a “greedy player” problem, it’s a revenue disparity problem between the richer teams and the less rich teams. Player compensation isn’t unreasonable when you compare it with other major sports leagues, and the NHL isn’t exactly revenue poor. There are definitely issues with the current CBA — I think free agency was made too liberal, leading to salary escalation too early in a player’s career, and contract length has extended way too long, and there have been too many abuses of contract length to circumvent the salary cap. I don’t think the luxury tax is a bad idea, personally, but Id’ rather see a more honest revenue share setup in place. 

I would like to see most contracts capped at 3-5 years, with some exception for franchise players. I agree with the owners that salary arbitration is inflationary to salaries, but I haven’t seen them put out an alternative to solve the problem (“let’s kill salary arbitration and restrict free agency even further” is not a rational alternative). There needs to be some way to let player’s salaries grow as they prove themselves in the league without the current massive bumps after the initial three year entry deal, but I haven’t seen a good proposal how to fix it. 

One way I’ve considered to deal with the franchise player contract length is to cap how many years of contracts you can have with a franchise at any time. If you have (say) 25 players under 1-way contracts and the average contract length is capped at 3 years, that means you can only have 75 years worth of contracts signed. If you choose to sign your star goalie for 15 years, that means the other 24 players have to have contracts totaling 60 years or less. That gives teams some flexibility as to how to structure deals, and new and interesting ways to screw themselves over with stupid contracts. I see that as a feature. It also gives a team an opportunity to bring in another longer-term contract player — as long as they stay under the team cap. (I admit to liking team caps more than individual player caps for a lot of things because it gives a smart team opportunities to be inventive, and incompetent teams opportunities to shoot themselves in the foot). Having to wedge contract length into a cap along with salary caps will give capologists (pro and amateur) even more reasons to grab the Maalox; also a feature in my eye.

I think the league needs to move to longer restricted free agency; players are going unrestricted too young, given top players now routinely play into their late 30′s and 40′s. Some of the existing rules were framed when players careers were ending at 32 or 33. Now it’s more likely to be 35 or 37. 

So my plan? something like this:

  • Owners share revenue more equitably. If they can’t work it out, then some kind of luxury tax for the Rangers and Leafs to complain about. I won’t get 60-40, but the richer teams need to get over it and help out the less rich teams more. (they will be allowed to whine and pout about it, though). 
  • Players accept four year rookie deals instead of three.
  • Longer terms for restricted free agency, and push unrestricted free agency for most players out two years. 
  • Teams can not exceed a total of three years of contract per player, capped on a team-wide basis. (with lots of details to work out about how to handle injuries and etc). 
  • Player discipline and suspension unchanged. That system isn’t broken, so ultimately, let the owners have it back in favor of other concessions on revenues.

And lets see if they can get it done by October 20th. 

At least, one can hope…

 

 

 

 

 

Minnesota wins the lottery

Or maybe, the anti-lottery, because they’ll be handing out lottery-winning class stacks of money to Ryan Suter and Zach Parise.

I like this deal for Minnesota, for the players, and for the NHL, for a lot of reasons (and I dislike it for a few, too. nothing’s perfect).

What I really like about this deal: they guys didn’t go to (a) the team willing to give them the most money and (b) the team where they thought winning the Cup would be easiest. They went to a team that’s struggled to make the playoffs. While it’s easy to say “I didn’t do it for the money” when the choice is really which pile of money to choose, I’m happy to see these players went to a place where they are interested in building a winner.

I also really like this deal because it’s another case of top NHL talent coming to the Western conference. This, of course, annoys the hockey media in places like New York and toronto that seem to believe that all of the good players by definition should be in those cities, and the rest of the league ought to realize they only exist for light dates. This is especially true whenever these media types have to leave the eastern time zone or when games start at times that interrupt their beauty naps. Anything that honks off the parts of the media that think that the league should go back to small, NYR-Toronto-centered universe, well, I love it.

And I like this deal because it’s really, really honked off some of the fans in entitled places like Detroit and Philly (and yes, rangers and leafs fans, you, too), where there’s a belief that of course every free agent worth having is going to play for their team, because, well, that’s how it should be.

Signings like this are good for parity, and parity is good for the league, unless you believe the league starts at MSG and ends (or should) in Detroit. It’s good to see the league increasingly becoming a continent-wide league and not east-coast centric with outposts. Add in the Jagr signing in Dallas, and those east coast pundits are going to have to actually figure out what channel on their TV these other teams are broadcast on, and maybe stay up late to watch some of the hockey out here on the other coast. Oh, no, just joking. We know they won’t. they’ll just keep watching Rangers/Devils and whining about how the best players are hidden from the real fans out in the wilderness.

This isn’t a good signing for the Sharks and other western teams, because the west gets harder and more competitive. It’s good for western conference fans, because more of the elite/name players are ending up in the West where we’ll see them visit our home arenas more often than every other year. And I’m thrilled to see the Wild step up to become a serious contender, given how seriously they love their hockey there. That’s good for hockey, too.

What don’t I like about the deals? The length and size of the deals. they’re legal under the CBA, but these ten year and longer deals are bad for the game and manipulate the salary cap in ways that are bad for teams in the long run. Eventually, these kind of “sub prime mortgage” deals come home to roost, and then them team ends up struggling to compete until they dig their way out from under them. Part of the math behind these deals tend to assume the cap will always rise, which implies revenues will continue to rise. We felt that way about housing prices here in the States, remember? And when that came crashing down… well, among other things, the problem in Phoenix happened.

So my hope for the next CBA is this: cap length of contract. Five years, max. And limit the NUMBER of max-year contracts per team. I think teams need the ability to lock up their franchise players and compensate them fairly for being franchise players, but it’s bad business to commit too much to too many players over too long a term. So here’s my suggestion: two active contracts per team at five years, three more at four years. That will kill these ten and twelve year deals that spreads the cap hit out — and it doesn’t preclude a team from simply signing up a player to another five year deal in the year their existing deal is going to expire, if they really feel they’re going to be franchise-quality for ten years.

The problem is that these deals are paying players now with cap space that won’t come due for five or six years. I don’t blame teams for doing this — it’s legal. I don’t blame players for taking the money; I know I sure would. But is that really healthy for the league in the long run?

No. So I hope the league will find a way in the new CBA to remove this temptation and put contracts back in a “pay you for what you’re worth now” mode. this is a “hack” of the CBA that needs to be cleaned up.

update: Elliotte Friedman (one of the hockey writers I have great respect for) takes the idea of capping contract length and explains why it’s a lousy idea. He suggests limiting signing bonuses to a percentage of the salary in the year the signing bonus is issued. It’s an interesting concept, and the issues he brings up that could come along with a length cap are real and need to be considered. What the league needs to get away from is that the extended contract effectively gives teams a chance to “borrow” from future salary caps to pay players now, and that kind of credit card mentality eventually blows up in your face. Something needs to be done to keep spending in line with the cap on a year to year basis, and limit team’s abilities (not completely, but mostly) to suck up future cap into the present.

Wilson trades for Stuart’s rights: not surprising but kind of odd

KuklasKorner : Petshark: Talking Stick : Wilson trades for Stuart’s rights: not surprising but kind of odd:

News that Doug Wilson had traded a conditional 7th round pick and talking rights with Andrew Murray for talking rights with Brad Stuart was met with general approval by Sharks tweeters. To me it seemed odd. When I say “odd” I don’t mean wrong or crazy, just less straightforward than it appears to be.

Brad Stuart will be a free agent on July 1, unless he signs a contract with the Sharks before that.  If, as was strongly rumored, Stuart had expressed a specific desire to come back to San Jose, why did Wilson have to trade anything at all to talk to him before July 1?  Why did he have to officially talk to him before then?  Because the market would swallow Stuart up with grand offers? 

This is a good deal for both sides. The Sharks get a couple of weeks to work out a deal with Stuart without time pressures. Stuart gets a chance to figure out if that deal can be made, since he clearly wants to avoid free agency if he can.

The Sharks give up Andrew Murray, an older July-1 free agent depth player that the organization wasn’t going to re-sign anyway, and if they sign Stuart, a 2014 7th round draft pick. That’s a minimal expense for a chance to take this deal off of July 1 and get it squared away ahead of time.

Think about this from the organizational standpoint, and it’ll be obvious why they did it. As of midnight July 1, the Sharks are going to have a number of players they’re contacting, and each of those players will have a number of teams contacting them. It gets really insane really quickly — not difficult to see them trying to coordinate talks with six agent/player combos all at once, and deals with some of those players contingent on what’s going on with other deals (or non-deals) with other players. 

Given that my feeling was that Dean Lombardi in LA was likely to be one of those July 1 bidders, and playing for the Kings isn’t quite as convenient to the family as playing for the Sharks, but it’s still pretty darn convenient (especially if the team gives him permission to visit family on off days and miss some of those practices), a team like the Kings or the Ducks could potentially force the Sharks to pay more for Stuart, or steal him away completely. 

So for minimal cost, Wilson brings Stuart in, gets him signed, or knows he can’t get the deal done, and on July 1, he’s reduced the number of players he’s chasing and simplified the strategy for the team so he can focus on other key needs. In return, Stuart gets what he wants — a return to San Jose — probably at some discount to what he’d get if he offered himself to all bidders, but he can settle in and not worry that something else might pop up and make a return to San Jose impossible. And since he wants to come back to San Jose, he loses nothing by doing this because he’s under no pressure to sign a deal he wouldn’t be willing to sign on July 1. Since he has the option to just go to July 1 and see what happens, Even if the deal doesn’t get made, it’ll set a floor value for him to use July 1, and that’ll help his agent if they need to find another team to work with. 

This deal is not a “hockey deal”, in that it’s not really about trading for talent. it’s about shifting time and risk around they make July 1 a less crazy day for the team management, which means they can (hopefully) focus more on solving other needs that day as well. 

So this deal works in small ways for everybody. We shouldn’t over think it, since it’s really the Sharks trading some mostly-disposable assets to make their life easier on July 1. It just happens Brad Stuart is at the center of that, but this deal isn’t about Brad, it’s about dealing with the business of July 1. 

Some notes on the Phoenix Coyotes situation

Glendale shares details of deal with potential Phoenix Coyotes buyer:

A proposed 20-year agreement with a likely Phoenix Coyotes buyer may cost Glendale more than $45 per resident each year over the life of the deal. The city appears poised to pay a group led by former San Jose Sharks chief executive Greg Jamison nearly $325 million over 20 years to operate and make improvements to the city-owned Jobing.com Arena.

[….]

But such success may not translate into smaller payments for Glendale. A Republic analysis revealed that even if the Coyotes went to the Stanley Cup Finals for the next 20 seasons and the arena booked 30 sold-out concerts each year for the next 20 years, Glendale could still expect to lose about $9 million annually.

Among the many pieces that have been written about the Coyotes, one thing typically missed is that even if the Coyotes leave Glendale for another city, the arena stays, and with the arena, the debt the city took on to build it. That was $180 million of a $220 million price tag (Look at this article for a good overview of the building financing and the assumptions and dreams of the time).

Looking back at the deal through hindsight, it’s clear now that the deal was a combination of bad assumptions and this dogged belief that somehow the deal had to be made. One key assumption that was made (and Glendale and the Coyotes ownership at the team wasn’t alone in this) was that the economy would never stop growing — no air pockets allowed or planned for. Once the economy went into recession and notes’ other businesses faltered as well, all hell broke loose (this is not the first time this has happened in the NHL, either. Peter Pocklington’s ownership of Edmonton ended when his oil businesses faltered, and that was part of his reason he traded Gretzky; the old Atlanta Flames team failed primarily because of the owner’s other businesses faltering as well).

The old Winnipeg Jets moved to Phoenix with everyone seeing the potential, but they needed a new building. Glendale decided they’d build the building, but the ability for everyone involved to find a deal everyone could live with — this was a difficult set of negotiations before everyone had numbers they could sign a deal one. We realize now that deal was a house of cards; everyone just kept rolling the numbers until they “worked”, but at some point, they moved into “unworkable” territory. The first economic windstorm toppled the whole charade.

In reality, it seems clear now the Glendale building shouldn’t have been built, and the Coyotes, after a stay in Phoenix, should have relocated again. That goes against so many of the built in assumptions of deals like these that it didn’t happen, and now everyone is paying for it, and will continue to. It’s a great case study of how NOT to make these deals happen; at some point, someone needed to pull the plug and say “this can’t work”. but nobody did, not within the City, not within Noyes’ management, not within the league. If there’s a lesson to learn here, it’s that “make a deal at any cost” usually leaves you with a cost you regret.

But knowing that now doesn’t fix the problem. And nothing will. If the city of Glendale decides to cut the Coyotes loose, that doesn’t make the building go away, and doesn’t remove the debt from their obligation. They could, I suppose, default on the bonds, but that creates other massive problems for them that I can’t see a city wanting to face.

So the question in Glendale really isn’t about “do we pay to keep the Coyotes or not?”, it’s “Will we lose less money if the Coyotes stay or if they leave?” — will having an NHL team cost more or save more? Either way, the debt on the building exists and has to be paid, and all the wishing you can upgrade parks won’t make those bonds disappear.

They way an arena makes money is light dates — how many events does it have a year? A decent building might have 150 dates a year, a really busy building over 200, maybe closer to 230. A hockey team fills 40 light dates a year. The big question for Glendale is really whether they’ll net more money with or without the Coyotes. If you replace 40 Coyotes games with 5 monster truck rallies and two weeks of RV flea markets, the answer is going to be a major “no”.

To make money in an arena, it needs to be managed by a team that knows how to fill those light dates, and more importantly, fill them with higher value, higher-grossing events. That doesn’t happen overnight, and it takes understanding the business of booking events, and having the right connections to bring in the right events.

Being here in San Jose, I got to watch Greg Jamison and his team make the San Jose Arena work. Over the years, I ran into Jamison at times and we would talk, and I even interviewed him once (there are some interesting comments in there that give some illumination to how he’ll work to improve things in Glendale if he ends up there).

My belief is that if Greg Jamison thinks he can turn the arena around, they should let him. The core to build that around is a major sports team, so you won’t get someone like Jamison or his management team in there without a sports team. This looks to be a 3-5 year process of adding events, boosting revenue surrounding the team, and stealing higher profile and profit events from the other arena in the city. Oh, sorry. not stealing, convincing them to come to Glendale.

If you don’t have someone like Jamison running the operation, that’s going to be difficult to impossible. If you don’t have the Coyotes, you won’t have someone like Jamison. If you don’t have Jamison, you’ll still have the bills; will you have a team in place that can get the revenues up to pay for them?

That’s the big issue here — not whether the Coyotes stay or go, but that there’s a big wad of financial pain in Glendale, and how can the city put things in place to limit that pain and hopefully over time create enough revenue for those bills to get paid. Decisions made ten and more years ago have come home to roost, and the Coyotes are not the answer no matter what they do; but the Coyotes might be part of an answer that brings in a team that can, over time, figure it out.

And I know from watching Greg Jamison and how he managed the San Jose Arena that if he thinks he can figure out how to fix the Glendale Arena, it’s probably worth a shot to let him try.

 

 

And now we’re down to two

And now we’re down to two: New Jersey Devils and the Los Angeles Kings. 

Which just goes to show nobody this year should be betting based on my picks. I thought the Kings would prevail in a tough fight. In fact? the Kings were clearly a dominant team, and the Coyotes never really had a chance. And I was convinced the Rangers were a lock, and in fact, while it was a really close, tight series, the more I watched the Devils, the more I saw a team building confidence and believing. Even if the Rangers had gotten game six to go their way, I don’t think the Rangers would have won game seven. The Devils deserved it. 

Still, I was 1-1 in the conference finals, which makes me 6-8 this year in calling series. All things considered, that’s not too bad. I don’t think many pundits picked the Devils and Kings in the finals, and the few who did are having entertaining talks with their bookies. 

I can admit to a couple of things: I’m really looking forward to this Cup Final, and I’m ready for hockey to end for a while. I’ve really enjoyed the playoff hockey, but I won’t mind not having hockey around for a few weeks. Still, a few more games won’t suck. 

In this round? I think there are reasons to pick both teams; I love the Kings youthful enthusiasm and Jonathan Quick in goal. I respect the Devils’ veteran poise and work ethic, and Brodeur has impressed me (more than I expected to. I do believe he’s at that point where he needs to place fewer regular season games to play well in the playoffs.)

I do think I’m going to pick the Kings here. They have more reset, and I’ll take rest over rust in this situation. I think they’re better suited to handle the travel, being from the West and knowing how to pace themselves. And I think Quick can AT LEAST duel Brodeur to a draw, and if he can, then I think that bodes well for the Kings.

And I have a soft spot in my heart for Lombardi and Sutter. I’d really like to see them win this. 

So let’s say… Kings in six. 

Good luck to LA starting Wednesday. (and bonus points if they put the series down faster…)

Predicting the conference finals..

Well if there’s ever need of proof of why I don’t make a living betting on hockey, the second round can be used. I was 4-4 in the first round (and happy to get there, given how unpredictable the playoffs have been). Luck wasn’t so kind to me in the 2nd round. 

In the West, I predicted the Blues and the Predators. Please stop snickering. 

In the east, I thought it would be the Flyers and Rangers. 

So I’m 1-3 in the second, and 5-7 for the playoffs. 

I don’t feel too bad. I expect whoever wins the major hockey fantasy pools this year is doing so with a dartboard. So it goes…

So now, we’re down to four teams, and the conference finals. Let me place the kiss of death on a couple of teams and predict them to win:

In the west: Phoenix and Los Angeles. Goalie Smith and the mission from god squad, vs. Goalie Quick and the Lombardi mob. Much as I’d love to see the Coyotes continue to confound the critics who wish they’d shut up and fail already, I have to give this one to the Kings, primarily because I think Quick is on a mission from god just like Smith is, but I think the Kings are playing better hockey. We’ll find out starting in about 30 minutes…  Call it six games.

And in the east? The more I watch the Rangers, the more I believe in them. More importantly, they believe in themselves. And the more I watch New Jersey, I won’t take them lightly, but I just think Lundquist can and will out duel Brodeur, and the Rangers are playing better hockey. So Rangers in five. 

So my call for stanley cup final: Rangers/Kings. Which should make NBC happy, and generate some really good (and low scoring) hockey.