Thursday, August 09, 2007

The collective bargaining agreement
Disclosing what you know

James,
Got a question for you... Some clubs have a policy of not disclosing the details of their signings. My question is whether this is just for public consumption or whether teams are able to withhold widespread knowledge of their signing, and therefore cap, information within the NHL brotherhood. Given the new willingness for clubs to aggressively pursue other RFAs with offer sheets, sometimes with the full knowledge (and leveraging) of the "owning" team's position relative to the cap, I would expect that more clubs would prefer to treat their cap situation like key corporate information. I understand the need for the NHL to know everything to ensure compliance with the rules but do the rules require that every team gets to know every other team's cap situation?

Any insight you can offer on this would be greatly appreciated.
— Valerie
ARTICLE 26: NO CIRCUMVENTION
Preamble. It is the parties' intention that there be full, accurate and timely disclosure and reporting of all revenues and financial information as required by Article 50, as well as of any and all agreements involving payments to Players, and that such disclosures and agreements be consistent with this Agreement, including but not limited to the provisions of Article 50. This Article 26 is designed to prohibit and prevent conduct that Circumvents the terms of this Agreement...
— The NHL's CBA
In 1989, against the strenuous efforts of Eagleson, the NHLPA voted in favour of salary disclosure 469-49 (Adams 1989:H2). Salary Disclosure has had a substantial impact on all facets of the collective-bargaining arrangement between the NHL and NHLPA. Allowing the NHLPA to openly publish what all the players in the league were being paid in salary meant that information was no longer the preserve of one side at the table. Agents and players now had valid, comparable data on which to base their cases for a specified salary, and owners had to respect those data.
As far as I understand it, the NHL has a Montreal-based central registry office and database for all of its salary information, a resource that is fully accessible by all GMs, player agents, and team officials.

(Media members have yet to gain direct access to this veritable pot o' gold, but one can hope. My email address is available at right for anonymous tips.)

Salary disclosure was one of the big wins for the NHLPA back in the pre-Goodenow era, a victory that become more pronounced following the 1994-95 lockout; with everyone's numbers suddenly 'out there', agents were able to negotiate up their clients' salaries using comparables.

Now, the only way that can work is if every GM and agent in the league has access to every other player salary, something that's become one of the pillars of the league's wonky arbitration system.

With that in mind, it would be impossible for any club to somehow "cloak" their salary structure, regardless of their desire to do so. Teams are always going to be aware of how tight up against the cap others are, and that's really become much more powerful knowledge now that offer sheets are on GMs' radar.

The Kesler/Vanek/Penner offers could be just the tip of the iceberg; imagine a scenario where a key division rival manages to skew an opponent's salary structure significantly enough that it affects the division's competitive balance the following season? Or where a top team loses it's starting netminder due to an inability to match?

It very well could happen, and short of locking up their youngsters early on, there's not a heckuva lot teams can do about it.

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2 Comments:

At 9:26 AM, August 09, 2007, Anonymous david said...

Locking up your young stars should be much easier than some might think, however. There aren't many players in the league worthy of an offer sheet substantial enough to have a significant impact on a $50 million salary cap. Teams need a substantial amount of cap space and a certain amount of desperation to make an offer sheet worth it for any but an elite player. In other words, teams with a Sidney Crosby or Alex Ovechkin need to get their butts in gear but those players are few and far between.

 
At 10:37 AM, August 09, 2007, Blogger BlackCapricorn said...

What about a full reporting of the compensation for players? NHLPA.com gives me the basic salary but what about bonuses? Sure we know about Shanahan's 'easy" bonuses in NY and Lindros' concussion clauses but is there anywhere that has the full scope of compensation including any T&E perks, bonuses, appearance requirements, etc.?

 

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