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Sunday, October 03, 2004

Suggestions on how to end the hockey lockout 

The NHL lockout now has its own radio show. I take this as a sign that some fresh input is needed to help end the lockout so here are some of my thoughts on a solution. Comments and additions welcome.

The 'free market' system is the major cause of the current impasse. Teams bought into a dysfunctional business model (mainly the holy grail of US TV contracts) and there's no formal way to put the brakes on salary expenditures. The teams bid ever higher for the players (who can hardly be blamed for accepting more money for their services) hoping to attract TV contracts that never materialised. Teams have been forced to gouge the fans to the point where going to a game is now the province of the rich and the grassroots fan has little or no hope of ever attending a game (or being able to afford a hot dog if they do).

Private team ownership may be a luxury the NHL can no longer afford. One way to resolve the current crisis and prevent a recurrence is to restructure team ownership. If the players or the NHLPA were smart they would start buying up NHL team stock and in effect become at least partially self-employed.
Having player representation on team boards would eliminate things like the pissing contest over the financial viability of various teams in the league. Players and teams could negotiate using the same set of numbers.

I don't know what the case is now but if all teams were publicly traded companies then the league could mandate a block of voting shares be set aside for fans so they have constant input. The way things are I don't see anybody speaking for the fans. This may not be important in the U.S. but here in Canada the game is part of the national social fabric and is to important to be left to only some of the vested interests. The fans have a stake in this too since they are the ones who ultimately finance everything but any representation they do have has no relation to the role fans play in the NHL.

Making players part owners of the teams for which they play and having part of their compensation tied to the financial performance of the team is one way to implement revenue sharing NHL commissioner Bettman has been talking about recently. Maybe make team stock or a pension plan a standard part of retirement packages taking the edge off the need for the players to make all of their money over a short period (relative to non-athletes) by expanding the money-making window beyond their playing time. This would be especially effective for players who suffer injuries that end their careers early.

This may be robbing Peter to pay Paul but maybe player compensation could be amortised over a longer period. The teams could pay some of the salary into a pension fund

Once players have a greater vested interest in the financial performance of the team they play for the wisdom of revenue sharing would become clearer to them. Maybe then they could accept a reasonable limit on a team's salary budget. The salary budget then gets divided up among the players according to their rating. There may be a need to pro rate compensation according to games played and/or ice time for this to work.

Another part of the problem as I see it is that teams are still essentially engage in horse-trading - has the scouting system ever fundamentally changed since the beginning? Maybe they use computers for stats and record-keeping but don't the teams essentially make judgement calls on each player? I'm not saying human judgement and experience can be replaced - it can't - but it can be enhanced if everyone is using standard tools and measurements to find, sign and compensate players.


The rating system could be used in conjunction with a free market component like leaving space for players to negotiate signing bonuses on top of their rated compensation.

Player compensation should be set by a formula based on skills, capabilities, experience and a pay-for-performance component. This would be complicated but hopefully would lead to giving teams some cost control and ensuring value for the contract dollar. This probably happens to some extent now. What I am saying is to formalise the process so that everybody is measured with the same yardstick and compensated accordingly. Players would then know in advance how much they could make and, if they want more, know what the criteria are to achieve that.

The compensation formula would start with a rookie's qualities and add money for performance, and experience.

For example rookie players are rated by the league(s) they played their junior hockey in and their performance there.

Educated players make more than un-educated players. Having a degree or diploma shows the player is willing to work within a system to achieve predefined goals.

Players that maintain good health and conditioning habits are more likely to play better and sustain less injury so they get more money.

Once a player is in the league they are formally assigned roles and goals and are compensated according to how well they fulfill their assigned role and achieve their goals. This ensures that both the grinders and the snipers have a chance to make perormance bonus money. For example, a defensive player could be given a bonus for plus/minus, bodychecks and shot blocks while an offensive player gets compensated for goals, assists and completed passes. It's critical to rate soft criteria (e.g. stupid penalties vs. good penalties) as well as hard criteria like goals and assists.


Once an effective player rating system is worked out it would be easier to tell if the league is balanced by totalling and averaging each team's player ratings. Expansion might be less risky if new teams have a skills target to aim at and maybe there's a way to help bring them up to the league standard faster.

Pardon the cliche but the free market chickens have come home to roost and they are crapping all over the fans. The league, teams and players have got to stop laying rotten eggs and get on with the game.

PB


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