Thursday, September 23, 2004

Meanwhile, back at the Corral

(Updated)

Colby Cosh is musing a bit on the NHL muddle, and makes a point which is plainly true, but generally drowned out by the salary cap/luxury tax discussions.
The league has a problem controlling salaries in the long term, because, like baseball, it was unwisely counting on arbitration to help control them.
Wage arbitration, in pro sports, has the unavoidable consequence of driving salaries up. It gives the notion of a player's "market value" an assignable dollar figure, whereas the economics definition of that value is surely "the most money some team is willing to pay that player". If Glen Sather pays Player X $7M per year, then suddenly Player Y, with identical stats, has a market value of $7M per year, even if there's only one (or zero) of 30 teams willing to pay Player Y that salary. In the NHLPA rhetoric about wanting a free market, you don't hear much about this.

I personally think eliminating arbitration and greatly loosening restrictions on free agency is good solution, in conjunction with a luxury tax of whatever threshold and severity the two sides inevitably agree on. I dispute the CW that teams need to be able to hold on to their drafted players for 2/3 of their career; most people cheer for the jersey, not the players. I doubt that more player movement would have much of a negative impact on fan interest, as long as every team has a chance to hire some good players.

It really is hard to know which side to despise more in this. When you hear that the Bruins and the Blackhawks organizations are two of the real hard-liners on the owners side, it reminds you that for at least some owners, this dispute is about creating themselves a highly profitable business with virtually zero risk. On the other hand, you have Bob Goodenow saying things like this:
Actor R.H. Thomson, in the studio audience, said ticket prices are too high and wanted to know where consideration for fans comes into play. Goodenow brushed that one off by saying there is no correlation between ticket prices and players' salaries. Supply and demand determines ticket prices and not team payrolls, he said.
No correlation? I'm no economist, but I understand that demand for a product has a pretty fucking direct correlation with the quality of said product. And since his entire existence rests on the assertion that the NHL needs his PA members, and not a bunch of beer-leaguers, out there wearing the CH, Flaming C, etc. in order to be a valuable product, I'd say it's a rather bizarre position for Bob Goodenow to take.

UPDATE/CLARIFICATION: I got a bit carried away there, and should elaborate slightly. I should certainly concede to Mr. Goodenow that if there was no one out there willing to pay more than $5 for an NHL ticket, obviously player salaries would be nowhere near what they are today.

However, it is still terribly disingenuous of Goodenow to make this argument, as there is little evidence that he acknowledges:
(A) Supply and demand balances out at 30 different price points in the NHL
(B) Demand for the product in a given city is further diminished when the team cannot afford to hire the quality of players which would allow them to be regularly or consistently competitive (vicious circle yada yada)

Add on the fact that a given team's ability to pay, in the context of individual player contract negotiations and arbitration, is a topic somewhere between irrelevant and out-of-bounds as far as the NHLPA is concerned, and you end up with a thoroughly unsympathetic figure.

3 Comments:

At 10:00 AM, Anonymous Anonymous said...

R.H. Thomson is ignorant. I was there too. I studied Sport Management. As much as I hate Goodenow, and I hate him as much as anyone else out there, I agree with him on supply and demand. We studied that all last year. Look to the business aspect, not from a fans view point. And just because I may be a couple decades younger than him, doesn't give him the right to give me all this attitude.

 
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At 10:58 AM, Anonymous Comodo Internet Security 8.2.0.5027 said...

I agree with him on supply and demand. We studied that all last year. Look to the business aspect, not from a fans view point. And just because I may be a couple decades younger than him, doesn't give him the right to give me all this attitude.

 

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