A myth about the NHLPA and stars' contracts

[Fourier]

On the Oiler board and on the main boards I regularly see claims that the NHLPA would never allow star players to take a discount on their deals. The narrative is that when stars take more everyone else gets more as well. Of course, this comes from classical union negotiations where success for one bargaining unit helps everyone else. But the NHL has a collectively bargained fixed pot so this is impossible in this situation. In fact, every dollar one person gets effectively comes out of the pocket of everyone else. Yet claims persist that the NHLPA has stepped into negotiations to prevent stars from taking less. My questions are these:

1) Does anyone know of any instance where the NHLPA has actively discouraged a star player from taking a discount from what they might otherwise have been able to get? (Of course there have been many examples of stars taking less than they probably could have gotten without NHLPA interference.)

2) Is this narrative as frequent on other boards as it seems to be on the Oilers board and if so how successful have people been in countering this perception?

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[Three On Zero]

Star players typically take a discount to help build the team around them. It’s a crazy notion that the NHLPA would care if a player took less, like you said the pot is a fixed amount so it makes no difference to the NHLPA how much a player signs for.

 

[dahrougem2]

I'm pretty sure Paul Kariya in 2004 was chastised by the NHLPA for taking an extreme discount well below market value to sign with Colorado, but that was pre-cap so not as much of a negative IMO as post-cap for the NHLPA.

 

[Fourier]

I'm pretty sure Paul Kariya in 2004 was chastised by the NHLPA for taking an extreme discount well below market value to sign with Colorado, but that was pre-cap so not as much of a negative IMO as post-cap for the NHLPA.

Pre-cap changes everything because there was no fixed pot. So the notion that higher salaries for stars floats everyone's boat would have made sense. This is not the case now.

 

[tornadowarning33]

I'm pretty sure Paul Kariya in 2004 was chastised by the NHLPA for taking an extreme discount well below market value to sign with Colorado, but that was pre-cap so not as much of a negative IMO as post-cap for the NHLPA.

It was harmful to the PA's position. By the time Kariya signed, there was a palpable feeling that a lockout was inevitable after the season, and it was likely that a new CBA would include a player salary rollback. The league's first proposal included a 5% rollback. It ended up being 24%, so one could argue that Kariya's discount ended up playing into the league's hands.

As an aside, its been apparent since the 04-05 lockout that the PA is run by and for the star players. Fourth liners, bottom-pair dmen, and tweeners are just supposed to be happy to be there. When players like that have their salaries inflated beyond their on-ice value, its because of idiot GMs and owners, not because of anything the PA has done.

 

[Voight]

When MackInnon was negotiating his new deal, Friedman mentioned that the NHLPA always prefers the top players to raise the bar per se, and that they constantly push them to do so.

So they wanted him to make more than McDavid, because that would mean Matthews, McDavid and Draisaitl would all possibly raise the salary bar for the best players. Hence why he signed for 100K over McDavids yearly salary.

 

[Fish on The Sand]

On the Oiler board and on the main boards I regularly see claims that the NHLPA would never allow star players to take a discount on their deals. The narrative is that when stars take more everyone else gets more as well. Of course, this comes from classical union negotiations where success for one bargaining unit helps everyone else. But the NHL has a collectively bargained fixed pot so this is impossible in this situation. In fact, every dollar one person gets effectively comes out of the pocket of everyone else. Yet claims persist that the NHLPA has stepped into negotiations to prevent stars from taking less. My questions are these:

1) Does anyone know of any instance where the NHLPA has actively discouraged a star player from taking a discount from what they might otherwise have been able to get? (Of course there have been many examples of stars taking less than they probably could have gotten without NHLPA interference.)

2) Is this narrative as frequent on other boards as it seems to be on the Oilers board and if so how successful have people been in countering this perception?

The NHLPA doesn't understand the fixed pot thing very well I find, the perfect evidence of this is how they don't wish to do anything about LTIR abuse which puts more hands in the pot without growing it. So I don't think that's a particular strong place to stand.

I suspect where the NHLPA cares most though is with arbitration eligible players. That's really the only time it matters.

If an arbitration eligible player leaves money on the table he's lowering the arbitration value of similar players.

 

[StreetHawk]

When MackInnon was negotiating his new deal, Friedman mentioned that the NHLPA always prefers the top players to raise the bar per se, and that they constantly push them to do so.

So they wanted him to make more than McDavid, because that would mean Matthews, McDavid and Draisaitl would all possibly raise the salary bar for the best players. Hence why he signed for 100K over McDavids yearly salary.

NFL has a cap as well and every time a new QB is up, they push the bar up. Doesn't matter that they are not a top 3-5 QB. In the NHL, they tend to hold that bar. Right now only, the likes of Drai, McDavid, would push past Mathews $13 mill and change cap hit on their next deal.

 

[Tawnos]

On the Oiler board and on the main boards I regularly see claims that the NHLPA would never allow star players to take a discount on their deals. The narrative is that when stars take more everyone else gets more as well. Of course, this comes from classical union negotiations where success for one bargaining unit helps everyone else. But the NHL has a collectively bargained fixed pot so this is impossible in this situation. In fact, every dollar one person gets effectively comes out of the pocket of everyone else. Yet claims persist that the NHLPA has stepped into negotiations to prevent stars from taking less. My questions are these:

1) Does anyone know of any instance where the NHLPA has actively discouraged a star player from taking a discount from what they might otherwise have been able to get? (Of course there have been many examples of stars taking less than they probably could have gotten without NHLPA interference.)

2) Is this narrative as frequent on other boards as it seems to be on the Oilers board and if so how successful have people been in countering this perception?

I really don't think the narrative is especially prevalent amongst hockey fans. I've seen it come up only a few times.

I also think it's much more complex of a situation than the fixed pot you described. A guy signing for $13m on 7/1 doesn't change anything about the salary for the vast majority of players who are under contract for next season already. Pushing for the max doesn't take anything out of their pockets.

For those players who are already under contract for next season, any piece of the pie that the larger contract takes up is going to be offset by the cap increasing for at least the next few years as the lag from the $1m Covid increases normalizes. While you can't always rely on the cap increasing even outside the Covid circumstances, it has happened more often than not. In fact, plenty of teams signed guys to contracts expecting that their value would decrease over time relative to the ceiling, but that obviously didn't happen as much as they'd planned over the last few years.

 

[Fourier]

I really don't think the narrative is especially prevalent amongst hockey fans. I've seen it come up only a few times.

I also think it's much more complex of a situation than the fixed pot you described. A guy signing for $13m on 7/1 doesn't change anything about the salary for the vast majority of players who are under contract for next season already. Pushing for the max doesn't take anything out of their pockets.

For those players who are already under contract for next season, any piece of the pie that the larger contract takes up is going to be offset by the cap increasing for at least the next few years as the lag from the $1m Covid increases normalizes. While you can't always rely on the cap increasing even outside the Covid circumstances, it has happened more often than not. In fact, plenty of teams signed guys to contracts expecting that their value would decrease over time relative to the ceiling, but that obviously didn't happen as much as they'd planned over the last few years.

It is certainly a frequent topic of discussion on the Oiler board and has been a frequent topic on the main board as well over the years

I think you are missing my point concerning my comment about "taking money out of others pockets". In fact, every additional dollar one player takes in nominal salary literally does take money out of everyone else's pockets. This is simply basic math as each individual's relative share of the pot decreased with each dollar of increased nominal salary. Of course the actual magnitude of that decrease will be small on a per player basis, but the point is the argument that stars taking more floats everyone's boat is simply false. Moreover beyond the collective impact their can and have been many instances where higher star's salaries have significantly impacted individuals in ways such as RFA's not being qualified or forced to take hits to their pay to fit stars demands in, and to vets that are priced out of the market totally.

Hypothetically, if McDavid was to push for the max at roughly $18M for example or if he was to take a discount of say $13.5M which is better for the NHLPA. The additional $4.5M in salary that McDavid gets nominally has to come out of the fixed pot. Where would that come from if not from the share that every other player gets. Moreover, that additional cap space would have significant consequences for other players on the Oilers including almost surely resulting in player movement, lower salaries for RFA's and some players possibly losing their jobs all together. How does that benefit the NHLPA?

Again, the narrative is based on the belief that all unions see it as being in their best interest to have one segment of their bargaining group push for as much as possible with the belief that this will increase the rewards for everyone else. In this respect the NHLPA's relationship with its employer is very unusual. I am not claiming that the NHLPA would take an active role in discouraging individual players from negotiating larger contracts. Just that the argument that they should take an active role in encouraging it has no merit either.

 

[Fourier]

NFL has a cap as well and every time a new QB is up, they push the bar up. Doesn't matter that they are not a top 3-5 QB. In the NHL, they tend to hold that bar. Right now only, the likes of Drai, McDavid, would push past Mathews $13 mill and change cap hit on their next deal.

We have seen a number of scale resets over the years as star players deals come up. This is natural particularly in a rising cap world. I have no issue with this happening and I certainly expect McDavid will be the highest paid player in the league the day he signs his next deal. That may not last for long with Matthews contract expiring at the end of 2027-28. That is not really the issue I am talking about though. The issue that question is would the NHLPA actively push for McDavid to squeeze every penny out of his next deal and discourage him taking less to help the team manage its cap?

 

[LadyStanley]

I recall union not happy with Mario Lemieux when he returned and had a league minimum contract

 

[Tawnos]

It is certainly a frequent topic of discussion on the Oiler board and has been a frequent topic on the main board as well over the years

I think you are missing my point concerning my comment about "taking money out of others pockets". In fact, every additional dollar one player takes in nominal salary literally does take money out of everyone else's pockets. This is simply basic math as each individual's relative share of the pot decreased with each dollar of increased nominal salary. Of course the actual magnitude of that decrease will be small on a per player basis, but the point is the argument that stars taking more floats everyone's boat is simply false. Moreover beyond the collective impact their can and have been many instances where higher star's salaries have significantly impacted individuals in ways such as RFA's not being qualified or forced to take hits to their pay to fit stars demands in, and to vets that are priced out of the market totally.

Hypothetically, if McDavid was to push for the max at roughly $18M for example or if he was to take a discount of say $13.5M which is better for the NHLPA. The additional $4.5M in salary that McDavid gets nominally has to come out of the fixed pot. Where would that come from if not from the share that every other player gets. Moreover, that additional cap space would have significant consequences for other players on the Oilers including almost surely resulting in player movement, lower salaries for RFA's and some players possibly losing their jobs all together. How does that benefit the NHLPA?

Again, the narrative is based on the belief that all unions see it as being in their best interest to have one segment of their bargaining group push for as much as possible with the belief that this will increase the rewards for everyone else. In this respect the NHLPA's relationship with its employer is very unusual. I am not claiming that the NHLPA would take an active role in discouraging individual players from negotiating larger contracts. Just that the argument that they should take an active role in encouraging it has no merit either.

I'm not missing your point at all, I just don't agree that it's as simple as you portray it. The real argument that McDavid's new salary takes money out of other player's pockets is that it potentially increases the amount over the midpoint that teams are spending. And that, in turn, potentially changes how much the players get back from their escrow withholding. But at least for now, escrow is capped as it is and the limiter on salary cap increases further prevents there from being much impact from it.

I don't think the NHLPA is against player movement for larger salaries where teams have cap room. And it's not going to push anyone out of the league because rosters still need to be filled. Players can make their own choices in this regard, but no one whose main goal is to maximize dollars is accepting a minimum range contract with the Oilers if there's someone offering more.

In regards to RFAs, forcing a player into lower dollar short term bridge deals ultimately increases a player's career earnings. Compare these two scenarios:

Age 20: 3 x $0.925m + Age 23: 3 x $3m + Age 26: 8 x $8m + Age 34: 3 x $4m = $87.775m career earnings
vs
Age 20: 3 x $0.925m + Age 23: 8 x $6.5m + Age 31: 6 x $5m = $84.775m career earnings

The NHLPA isn't necessarily doing a bad thing for the players by pushing higher salaries in UFA forcing more players into bridge deals. Players like to take the second scenario because of the risk of injury before they've had a chance at a lot of earnings, but it's a conscious sacrifice of some career earnings to hedge against that risk.

 

[rsteen]

The NHLPA doesn't understand the fixed pot thing very well I find, the perfect evidence of this is how they don't wish to do anything about LTIR abuse which puts more hands in the pot without growing it. So I don't think that's a particular strong place to stand.

Stars can, per the CBA, sign at up to 20% of the cap at the time of signing. The superstars tend to sign at around 15% to 17% of the cap. The majority of the NHLPA are not superstars or even stars, so it would be in the interests of the PA as a whole to suppress salaries at the top so there's more to go around at the bottom. (And this does already happen, you can make the argument that Matthews's on-ice value is more than 13X Joe Fourth Liner/Healthy Scratch).

The LTIR is different as any member could imagine himself in the scenario of wanting to LTIRetire, while most will not be signing for anything like 15+% of the cap.

 

[Fourier]

I'm not missing your point at all, I just don't agree that it's as simple as you portray it. The real argument that McDavid's new salary takes money out of other player's pockets is that it potentially increases the amount over the midpoint that teams are spending. And that, in turn, potentially changes how much the players get back from their escrow withholding. But at least for now, escrow is capped as it is and the limiter on salary cap increases further prevents there from being much impact from it.

I don't think the NHLPA is against player movement for larger salaries where teams have cap room. And it's not going to push anyone out of the league because rosters still need to be filled. Players can make their own choices in this regard, but no one whose main goal is to maximize dollars is accepting a minimum range contract with the Oilers if there's someone offering more.

In regards to RFAs, forcing a player into lower dollar short term bridge deals ultimately increases a player's career earnings. Compare these two scenarios:

Age 20: 3 x $0.925m + Age 23: 3 x $3m + Age 26: 8 x $8m + Age 34: 3 x $4m = $87.775m career earnings
vs
Age 20: 3 x $0.925m + Age 23: 8 x $6.5m + Age 31: 6 x $5m = $84.775m career earnings

The NHLPA isn't necessarily doing a bad thing for the players by pushing higher salaries in UFA forcing more players into bridge deals. Players like to take the second scenario because of the risk of injury before they've had a chance at a lot of earnings, but it's a conscious sacrifice of some career earnings to hedge against that risk.

The new CBA did not change the revenue sharing agreement. Player still receive a total of 50% of revenues after adjustments. Escrow caps don't change this in the aggregate even if the immediate impact might be mitigated. If the escrow amounts owed exceed the cap the players still owe that money and will have to pay it back at some point. Now in a given year the impact might not be felt because of the escrow cap but at some point they have to pay the piper. Moreover, right now it seems that revenues are high enough that the players will receive money back on the escrow payments so even now your scenario where an extra dollar to one player does not impact others at all does not seem to be valid.

I am also not arguing that the impact on everyone of a marginal dollar to one player is uniform or even significant. Simply that the counter-argument that higher salaries for stars floats everyone's boat makes no sense in the current system. Of course some others will benefit from such a move, but in what is effectively a zero-sum game it's pretty hard to argue otherwise.

Rosters may need to be filled but that does not mean players are not forced out of the league due to cap constraints. Many teams in a tight cap environment run rosters under the maximum 23. The Oilers last year had a 20 man roster much of the year and next year the amounts that Draisaitl and Bouchard take will dictate whether or not that happens again. Each player taking $1M less than they could force out of the team could mean an extra roster spot. For a guy like Raphael Lavoie that could be the difference between an NHL job and a much smaller salary in the AHL.

You can't say that forcing a generic RFA to take less ultimately leads to higher career earnings. Certainly there are scenarios where that might turn out to be the case. But it is definitely not a given. A guy like Dylan Holloway for example would be getting a 1 or 2 year deal this year regardless of the Oilers cap situation. But there is no justification to say that having Holloway take say $300-500K less this year on that one or two year deal than he otherwise might have gotten if the Oilers had more cap space is to his benefit. Whether he makes $900K this year or $1.4M won't automatically impact whether his next deal is a bridge or a longer deal. But it does matter to his career earnings. Moreover, it still does not change the fact that if a star takes more there is simply less left in the part for others collectively. You have presented no compelling evidence to me to negate this or to show why the NHLPA would pressure a star to push for as much as possible. .

 

[Beukeboom Fan]

I recall union not happy with Mario Lemieux when he returned and had a league minimum contract

That was during the pre-cap era when there wasn't any "linkage" between player salary and revenue. In that environment, every player "victory" from a contract perspective established a precedent in which the next player could use as a comparable.

Today's cap is a completely different environment. As the pie is fixed to 50% of HRR - there is no incentive from the NHLPA perspective for the stars to push for max salary. Theoretically as total player salary exceeds 50% of HRR escrow increases to keep that in balance. With that said, there is a significant incentive for a player's agent to push a players compensation as high as possible as they get a piece of the contract they negotiate.

 

[credulous]

On the Oiler board and on the main boards I regularly see claims that the NHLPA would never allow star players to take a discount on their deals. The narrative is that when stars take more everyone else gets more as well. Of course, this comes from classical union negotiations where success for one bargaining unit helps everyone else. But the NHL has a collectively bargained fixed pot so this is impossible in this situation. In fact, every dollar one person gets effectively comes out of the pocket of everyone else. Yet claims persist that the NHLPA has stepped into negotiations to prevent stars from taking less. My questions are these:

1) Does anyone know of any instance where the NHLPA has actively discouraged a star player from taking a discount from what they might otherwise have been able to get? (Of course there have been many examples of stars taking less than they probably could have gotten without NHLPA interference.)

2) Is this narrative as frequent on other boards as it seems to be on the Oilers board and if so how successful have people been in countering this perception?

not quite the same thing but the nhlpa intervened to prevent the canucks and luongo from mutually terminating his contract when he wanted out of vancouver but his contract made him virtually untradeable

 

[Beukeboom Fan]

not quite the same thing but the nhlpa intervened to prevent the canucks and luongo from mutually terminating his contract when he wanted out of vancouver but his contract made him virtually untradeable

Part of the CBA was to ensure the "sanctity" of the player contracts. Historically, if a player was overperforming a contract, they could "not report" in an attempt to get the contract renogiated. The NHL & NHLPA built the buy-out into the current structure and require it to be followed except for specific exceptions (breach of contract, leaving the NHL to play in a foreign league, etc.).

 

[patnyrnyg]

NFL has a cap as well and every time a new QB is up, they push the bar up. Doesn't matter that they are not a top 3-5 QB. In the NHL, they tend to hold that bar. Right now only, the likes of Drai, McDavid, would push past Mathews $13 mill and change cap hit on their next deal.

NFL cap can be manipulated and the contracts are not fully guaranteed. But I do agree on the QBs. I am convinced the QB conracts are just a **** measuring contest for the owners.

Edit: The Daniel Jones contract is a perfect example of the ability to manipulate the cap. People see $160MM for 4 years, and think $40MM per year. When you look at it though, it is a 2 year deal with two 1 year team options. The last year is a $58MM cap hit, but he will never play on it. If they want to keep him, they will restructure and extend as it is about $10MM in guaranteed and $48MM non-guaranteed. If they dont want him, they cut him and eat the $10MM.

 

[Golden_Jet]

Moreover, right now it seems that revenues are high enough that the players will receive money back on the escrow payments

if you look at the MOU coming back from the pandemic, escrow is a fixed number for payback. Was higher at the beginning, and currently is set at 6% regardless of revenue, until the MOU expires. Then at end of year, figure out if one side paid more. Possibly the players get some back , will likely leak out eventually.

 

[Riptide]

I'm pretty sure Paul Kariya in 2004 was chastised by the NHLPA for taking an extreme discount well below market value to sign with Colorado, but that was pre-cap so not as much of a negative IMO as post-cap for the NHLPA.

That was the first example that came to mind as well. But even then it shouldn't have mattered. Colorado had a budget, and that's what they could afford if Kariya wanted to play there.

 

[DEANYOUNGBLOOD17]

That was the first example that came to mind as well. But even then it shouldn't have mattered. Colorado had a budget, and that's what they could afford if Kariya wanted to play

Anahiem did not want to pay the qualifying offer to keep Kariya.( which was insanely high based on his last year of his last contract)

They (Anahiem) were counting on getting draft pick compensation… if Karyia signed with another team… at market value.

Karyia through a wrench in the plan by signing for the minimum
1 million x 1 year with Colorado and at that value no draft pick compensation was awarded.