"Pipe down, boss. Im only on level 2. I dont fight you until the last level. Deflex, you'll hurt yourself, Joel878 -- systemtool"
Madison, WI • United States • 41 Years Old • Male
The fallacy of "only 57%"
Posted 9:20 PM ET | Comments 1
As we all await (some eagerly, some for morbid curiosity) news of how the latest round of negotiations between the NHL and NHLPA have gone, I thought I'd discuss an oft-mentioned point in both the 2005 CBA and this year's CBA's discussions: the Players Share of HRR.
Many people have asked why various items aren't included in HRR, ranging from game-used merchandise to proceeds on the sale of some attached business units to player endorsements. This post won't touch those items, though I may return to the topic down the road (especially if talks grind to a halt). The key point is "there's HRR, and the players get a percentage of it" and for the last few years of the prior CBA, the players got 57% of it.
But did they really? Well, yes and no. The players did in fact get 57% of HRR - but that 57% only represents the portion of salaries and bonuses paid out to players who were playing in the NHL. That doesn't include things like salaries paid to players signed to NHL contracts who were playing outside the NHL, or signing bonuses paid to entry-level players who were returned to juniors or were playing in the minors. Tally those items up, and the players definitely received more than 57% of HRR.
In the NHL's current proposal, the 50/50 split of HRR wouldn't explicitly count those items either. Those 1-way contracts of players assigned outside the NHL would count against the cap (in certain situations); that would leave less money available for players actually in the NHL. However, the salaries of those 1-way contracts wouldn't actually count against the Players Share. That increases the chances that the owners end up cutting a check to the players at the end of the year. The 2-way portion of player salaries, and the signing bonuses paid to players would also still not count against the Players Share, meaning the players would still end up with more than their guaranteed percentage of HRR.
Now ... should all of that count? Probably not. When the NHL was asking for "pie in the sky" ideas, it should have thrown in "count all money paid to all players signed to a SPC" for good measure (especially if "we're all losing money, we need the players to give back" was the rallying cry), but a more reasonable request would have been "count all salary from 1-way contracts paid to players in the minors." They haven't done that; instead, they're suggesting changes that might actually increase the amount they would pay from if they just said "50/50 split, no other changes." If anything, I'm shocked that the owners haven't considered the impact of what they're proposing. Then again, I'm shocked they think "if we shorten contract lengths, salaries will magically decrease."
So ... are the players really being screwed over by being asked to go to 50/50? If the baseline comparison is "they got much more previously" then yes. However, as illustrated above, they not going to be getting "only" 50% of HRR. They'll actually be getting more than 50%. In fact, the more of them play outside the NHL on 1-way deals (especially if it's on a contract that the league says has to count against the cap), the better off the NHLPA will end up being as a whole.
Remember that as the 50/50 discussion continues to rage on.
Many people have asked why various items aren't included in HRR, ranging from game-used merchandise to proceeds on the sale of some attached business units to player endorsements. This post won't touch those items, though I may return to the topic down the road (especially if talks grind to a halt). The key point is "there's HRR, and the players get a percentage of it" and for the last few years of the prior CBA, the players got 57% of it.
But did they really? Well, yes and no. The players did in fact get 57% of HRR - but that 57% only represents the portion of salaries and bonuses paid out to players who were playing in the NHL. That doesn't include things like salaries paid to players signed to NHL contracts who were playing outside the NHL, or signing bonuses paid to entry-level players who were returned to juniors or were playing in the minors. Tally those items up, and the players definitely received more than 57% of HRR.
In the NHL's current proposal, the 50/50 split of HRR wouldn't explicitly count those items either. Those 1-way contracts of players assigned outside the NHL would count against the cap (in certain situations); that would leave less money available for players actually in the NHL. However, the salaries of those 1-way contracts wouldn't actually count against the Players Share. That increases the chances that the owners end up cutting a check to the players at the end of the year. The 2-way portion of player salaries, and the signing bonuses paid to players would also still not count against the Players Share, meaning the players would still end up with more than their guaranteed percentage of HRR.
Now ... should all of that count? Probably not. When the NHL was asking for "pie in the sky" ideas, it should have thrown in "count all money paid to all players signed to a SPC" for good measure (especially if "we're all losing money, we need the players to give back" was the rallying cry), but a more reasonable request would have been "count all salary from 1-way contracts paid to players in the minors." They haven't done that; instead, they're suggesting changes that might actually increase the amount they would pay from if they just said "50/50 split, no other changes." If anything, I'm shocked that the owners haven't considered the impact of what they're proposing. Then again, I'm shocked they think "if we shorten contract lengths, salaries will magically decrease."
So ... are the players really being screwed over by being asked to go to 50/50? If the baseline comparison is "they got much more previously" then yes. However, as illustrated above, they not going to be getting "only" 50% of HRR. They'll actually be getting more than 50%. In fact, the more of them play outside the NHL on 1-way deals (especially if it's on a contract that the league says has to count against the cap), the better off the NHLPA will end up being as a whole.
Remember that as the 50/50 discussion continues to rage on.
Leave a Comment
You must be logged in to leave a comment.Blog Archive
17 Critiquing the NHL's proposal [Part 1]
24 Unfounded Optimism
26 The questions (still) not being asked
24 Unfounded Optimism
26 The questions (still) not being asked
Interesting analysis. I didn't know about the circumstances that allow player salary to be excluded from their portion of HRR. Thanks for the informative article.I imagine that the PA is willing to ignore revenues that don't get included in HRR, as long as the owners ignore the salaries that don't count against the percentage. I wonder what the 50/50 split would actually look like if everything was included?