Attention, NHL Players: DO THE MATH

  • Let’s say you make an even $1 million in annual salary.
  • The league wants (may want) you to take a pay cut, down to $750,000.
  • You say no way.
  • As a result, there is no 2012-13 season, so your salary in that year is zero.
  • Eventually, a compromise is reached, where you only have to take half the proposed pay-cut, down to $875,000.
  • Hey, you saved yourself $125,000! Good going!
  • Let’s say the next CBA lasts for 8 years. Eight times $125,000 is a cool million in savings.
  • And all you had to give up to get that is…$750,000, your salary for 2012-13 after the rollback (provided that you fold now and take the crappy offer).
  • Oh, and you lost a year of your career.
  • So you’ve given up $750,000 NOW, because you would like to earn an extra $125,000 a year for the following eight years.
  • You could invest your $750,000 and at 5% you’d end up with $1.1 million after eight years. If you wait a year and then invest that extra $125,000 a year at 5%, it comes to about $1.18 million.
  • So you’ve got yourself an $80,000 windfall there.
  • Or, $10,000 a year over the life of the next CBA.
  • That’s 1% of your current million dollar salary.

FOLD NOW.

 

  7 comments for “Attention, NHL Players: DO THE MATH

  1. jmsalsa
    August 31, 2012 at 10:36 PM

    awesome.

  2. September 1, 2012 at 10:06 AM

    That’s pretty good, can you do the math for the owners now?

    Perhaps they think the owners have more to lose and think they will fold first.

  3. September 1, 2012 at 11:15 AM

    This would be great logic IF annual contract price was the only issue. Sadly it’s not. I don’t see the players folding and I don’t think they should. Until the owners make some rules that they will actually live by and not circumvent, I hope the players stonewall them. This mess was created by the owners because they can’t control themselves. They’re the ones that have allowed player salaries to escalate like they have. The owners have no one but themselves to blame, so I have no tolerance for them crying poor when they’re a huge part of the problem.

    • September 1, 2012 at 7:01 PM

      Well, it DOES come down to salary, since all of the issues come down to salary in various forms (revenue split is salary, escrow is salary, free agent age is salary, term limit is salary, etc.). Because the owners have all the power. The players can either fold now (and have more money now) or fold later (and have less money now and the promise of slightly more money later) or hold out for a length of time that would actually cause the owners to cave, by which I mean more than one full season, 1.5-2 seasons. The players simply can’t hold out for two full seasons, which is probably what it would take, and the owners know they can’t. So the owners will wait, and the players will fold. So the smart (and logical) move is to be coldly rational and pick the best of the horrible options.

      The owners don’t have to be consistent or fair. Because it’s their league. I’m not “on the side” of the owners. That’s just reality.

      On the other hand, if the NHLPA wants to form its own league from scratch, I would into that, maybe. I don’t know where they would get coaches from (since the good ones are under NHL contract and aren’t repped by the NHLPA). And of course they would have nowhere to play, since the owners own the rinks.

      I agree with you that the owners are to blame. But there’s no justice in business.

      • USHA#17
        September 2, 2012 at 10:09 AM

        I’d be willing to drive to Culver City, Pasadena, or Van Nuys to see the Kings play. Even if it means midnight face offs.

        Meanwhile a season (or two) without sports (gave up the others 20 years ago) might do my tan some good.

        I think a good place for a negotiating starting point for negotiating would be at Kevin Lowe’s lynching.

      • Kings of Hockeywood
        September 2, 2012 at 10:36 AM

        Starting their own league is an interesting idea that no one ever really talks about. There’s really no reason they couldn’t do it.

        As for the owners owning all the rinks, the players could find different ones. The Kings could play at the Forum again. Or the teams could move to nearby cities where NHL ownership doesn’t control arenas. Enough arenas are owned at least in whole or part by cities too that they could pass ordinances to break leases if pro leagues lockout their players. The cities lose so much revenue from missed games that it would absolutely make fiscal sense for them to do that.

        As for a lack of coaches, they could always have player-coaches or plum the ranks of the junior leagues across North America for guys who’d be willing to jump ship. There are also plenty of coaches who have emigrated to the KHL and other European leagues who could get a shot in a PA-run league.

        Nevertheless, there is less than a Coyotes’ chance in Phoenix of it happening. Which is too bad.

        • September 3, 2012 at 11:36 PM

          There is one big reason: Someone has to put up the capital to make the new league work. I agree that a new players’ league could find new venues, although they wouldn’t be much compared to the NHL arenas. But there’s also the question of travel and who is going to administer the new league. Who is going to pay for all of that, including the new venues?

          I suppose you could make the argument that the wealthier players could pool funds. Or new investors could step it. But whoever steps in to provide the initial investment in the new league becomes — guess what — team owners! With the same bothersome concerns over profitability that the current owners have. You’re just replacing one set of team bosses with another set of team bosses, and the issues that divide players and owners will never truly go away.

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