More Thoughts On The NHLPA’s Bullshit

Apparently, with no hockey to watch, I am passing the time running numbers in Excel. I was thinking a little bit more about the NHLPA’s bullshit claim that the NHL should have used either their ten year revenue average of 9.4% or five year average of 7.8% instead of the 3% number they used when determining the impact of the NHLPA’s last proposal. I debunked that a few days ago, but I thought of another interesting angle -  if the players association really believed that revenue average, then I think they would be willing to accept a salary cap. Here’s why:

Based on the NHLPA’s proposal, it’s pretty clear they want the average team payroll to be around $50 million. Their proposed payroll tax doesn’t even start until you get to $45 million and is a pretty lame 20% until you get to $50 million (at that rate, a $50 million payroll would be taxed only $1 million) The current average team payroll is around $50 million and would be $40 after the NHLPA’s proposed 24% salary rollback. (Note – I realize $40 million appears to be a rollback of 20%, but there are some components of team payroll like benefits and payroll bonuses that are unaffected by the rollback.) Now, under the NHL’s proposal, the salary cap would be linked to overall revenue – as revenue goes up, salary cap goes up too. If revenues really went up by 7.8% per year, in three years the team salary cap would go up to $49.7 million. At 9.4% growth, the salary cap in 07-08 would be $51.7 million! So you get the NHL’s cost certainty while still driving salaries up to a level that the players want.

This disparity is really obvious when you look at the NHLPA’s revenue projection using five year historical league averages of revenue and player cost growth. In this model, revenue increases at 7.8% per year and player costs at 7.3%. If that were really true, wouldn’t the salary cap system actually be better for the players? Since their share of the overall revenue would stay the same, that would mean the total paid to players would also grow at 7.8% per year. At those rates, the NHL’s plan of linking player costs to revenue would mean nearly $20 million more for the players in 07-08 than their own plan.

So either the NHLPA is really bad at math, they want the owners to make more or even they don’t believe their own bullshit. I’m guessing door #3.