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[beba91]

On June 25, 2004, National Hockey League Commissioner Gary Bettman held an informal question and answer session with media attending the 2004 NHL Entry Draft in Raleigh, North Carolina. He answered a variety of questions on the status of collective bargaining. To keep our fans informed on the collective bargaining process, following are excerpts of his comments:


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Re: Union contention that their proposal made in June and again in October would save the League $200 million:

I will give you the same response that I gave you the two times the Union made the proposal -- the proposal doesn't address our problems. The proposal is flawed in many respects including the assumptions that it makes. But the most telling thing is that when you go through the union's proposal, it comes to a conclusion which says you can save $200 million in year one and $300 million in year two; to which I said both in June and October and the owners said on October 1 unprompted: 'if in fact you are serious about this and you can live with these numbers, and this is the result you are prepared to guarantee, we have something to talk about. We don't think the methodology works, but if this is a framework in terms of results, you can live with, then we have something to talk about'. The union's response was, 'We're not guaranteeing anything -- this is only a model.' To which I said: 'What if it doesn't work?' And the response was, "we'll do something else in a few years". We don't have a few years. We are out of gas. So my response remains the same.

Re: League attempts going back several years to reach a solution to economic problems facing the League:

It's interesting, when I went to the Union in 1999 and said the economics aren't working and that I was worried we're going to have some bankruptcies -- now I am sorry that I was accurate in my prediction. I also told the Union in 1999 that if we don't do anything and you just continue to let it go, which is something the Union had an absolute right to do, by the time we get to 2004 the problems will be so great we're going to have to retrench and that's going to make it more likely that there's going to be a conflict.

And three years ago I made a proposal to try and avoid this problem. Then I did it again two years ago to try and avoid the problem. The deal that we could have made would have been less difficult for the players three years ago. Two years ago it wouldn't have been as good as the deal three years ago. And as we got closer to the end it has gotten more and more difficult because the problems got worse and worse. I have a concern that once the work stoppage begins, if it begins, and I hope it doesn't begin, then we're going to be in a situation where we're going to need, as a League, even more tools to repair the damage. It becomes tougher and tougher. And nobody is looking forward to that. A work stoppage works to nobody's advantage.

Re: Your view on the union's desire of maintaining a marketplace system:

You know, the Union says they want a free market. Well, they don't have a free market now. They have never had a free market. The market for players' services in all professional sports is defined by Collective Bargaining. That's what the law says. That's the reality of it. There is no such thing as a free market. The only market in any sport for individual negotiations is the market that's defined by Collective Bargaining. The market has been defined in one way for the last decade -- qualifying offers with 10% increases; an entry level system which hasn't worked very well; arbitration, on and on and on. That's a defined system. All we have been seeking to do is have a different defined system. That's not revolutionary. That's actually very consistent with what the labor laws require.

Re: The union's contention that the League offered a $31 million hard team salary cap:

Let's be clear on what we discussed with the Union because the Union has consistently said that we have demanded an individual hard team salary cap. All we said to the Union is we want to link revenues and expenses. And, using last year's (2002-03) numbers, we said these are the gross revenues; these are the expenses to take out; here's how much we think is a fair profit for the League as a whole -- which was $150 million, an average of $5 million per team. And what that leaves is over a billion dollars for the players. That would, doing those economics, result in an average team salary of $31 million. How anybody can, in good faith, tell you that that was the proposal of an individual hard team salary cap, I question.

Re: The union's contention that Arthur Levitt's report did not adequately define revenues:

We think there's absolutely no legitimate dispute about that. Mr. Levitt did an exhaustive thorough study. His results are unassailable and have never been assailed and he defined our revenues quite comprehensibly. And so there really is no legitimate dispute on that point.

Re: Why negotiations are not happening on a more regular basis:

Bob Goodenow and I have no trouble getting together. But it's not about spending time together -- I am available to be any where at any time. It's really about the union's belief that it has to have the current system with some band-aids and our belief that that won't come close to addressing the problems that we have. The Union refuses to talk about a new system even though that system would be a partnership that would directly entitle them to share in the growth of the League. At any point in time that the Union comes to us and says, 'okay, we're going to address the problems in a meaningful way', this will move quickly.

Re: An update on 2003-04 economics:

We can't go on the way we are. A year ago we lost $273 million with 19 teams losing money. We're going to lose well over $200 million again this year and I think 20 teams lost money. There's no rational basis for this business to continue on this footing. Particularly, keep in mind, we generate $2.1 billion in revenue. There's no reason that this can't be shared fairly so that we have 30 healthy competitive teams and the players make a great living. Even under the inaccurate estimation of some media that there has got to be a 30 or 35% cut, instead of having an average annual salary of $1.8 million that would mean a $1.4 million average salary -- that wouldn't be a crime if the end result was a healthy game. We owe that to our fans.

Re: On whether this CBA was better for the owners than the players when signed in 1995:

It's interesting because most people thought that at the time (1995) because this is the most restrictive Collective Bargaining Agreement in professional sports absent a link between revenues and players' salaries. The Union got very good at managing it (the CBA), at managing the agents; at managing the marketplace that was defined by the Collective Bargaining Agreement and it was, inherently in retrospect, inflationary. Having said that, we have had labor peace for a decade since this Collective Bargaining Agreement was signed. We believed that, with labor peace, we could grow revenues -- which we did dramatically. But players' salaries increased at an even faster rate; which is why we need a new economic system.

Re: The potential rule changes (specifically the reduction in the size of goalie pads) tied to a new CBA:

The Union objected to the reduction of goalie pads from 12 inches to 10 inches. My own view is I am not looking to pick any fights with the Union right now over issues that aren't essential to getting a new Collective Bargaining Agreement. I think our attention and our energies can all be better addressed to the core issue. And so we gave the General Managers an update (at their June 25 meeting). The Game Committee, which is scheduled to meet in July, will continue to meet and have a good open discussion on the state of the game. But in terms of moving forward, I want to slow things down a little bit so I can make sure that we don't get offsides with the Union and create any other disputes other than the primary one. We have slowed things down because I don't want to get into a situation where they think we're moving too fast so they have any objections -- whether or not they are entitled to have any objections. In other words, whether or not they were entitled to object to the goalie pads, I don't even want to get into that fight. I am not looking to get distracted on issues that we can resolve in Collective Bargaining.

Re: The negotiations being all about leverage:

It's not about leverage. It's really about addressing the problem. You know, don't think of it in terms of leverage. Nobody here is looking, at least from our side, to pick a fight. We have got a real problem. We have lost too much money for too long and that's what's got to get fixed. The game needs better competitive balance than it has. We need 30 healthy, competitive teams. We need affordable ticket prices. The future of the game, for the benefit ultimately of our fans, depends upon it. We're looking to fix a problem that's undeniable and has reached critical proportions.

[Kilted Duck]

Great read, thanks for sharing!

[PortBeach13]

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