Prolonged Labor Negotiation Is The Best Friend To The Phoenix Coyotes

While the NHL Owners led by Gary Bettman have submitted their proposal for a new CBA, Donald Fehr has been flying around the world to meet with the players. The current deal expires September 15. If a new deal is not reached by this time, the owners will lock out the players. This will in turn lead to a cavalcade of events. The last lockout led to a cancellation of a season and the delayed opening of People see it as a negative. This may be the only time it is a positive. Here is why.

  1. The delay allows Mr. Jamison to ensure he has the financing to buy the team from the NHL at fair market value. Without revenue coming into the NHL via televised games and ticket sales, the majority of owners will need a revenue stream to pay their support staff. Once owners have to make a decision to lay off staff in the front office or reach into their pockets to keep them on payroll, you find out how quick you can break the owners. The breaking will come in their desire to avoid their pockets. The owners will move to ratify Mr. Jamison as the owner (if this has not been done) or the price of the team the NHL publicly states will fall. This keeps more money in Mr. Jamison’s pocket and money flowing into the NHL. It also removes the Coyotes from the NHL payroll, giving even more money to the league (not the players).
  2. Without guidance on length of contracts allowed (Shea Weber and his decade deal will be the last) the owners are not going to sign a top UFA to a contract length that could be voided and allow other teams to bid on his services.
  3. Without knowing the salary cap, no team is going overpay for a player. Even though the player may be worth the dollars,  the contract could put the team into salary cap jail. This will result in salary cap tax and fine. And there is not an owner outside of Toronto that will throw away good money on a salary cap tax and get nothing in return.
  4. If the length of NHL service is extended until a player is eligible to achieve restricted free agent and then unrestricted free agent status, players currently under contract obtaining a better deal NOW would benefit the them and their agent. Allowing new rules to be in place and taking longer to reach your first payday is not in your best interest.

How does this benefit the Coyotes? It gives Mr. Jamison time to get his financing straight (which I think he does). It allows the NHL to drop the purchase price and not face owner resistance. They’ll get paid in terms of $140 million flowing into the NHL for distribution to the owners and no longer have to pay for team operations. Bonus win for them.

The delay in understanding contract length and salary cap gives the Coyotes the edge. With the NHL proposed salary cap being the median team amount (60.7M in 2011 dollars), the Coyotes would have to get to the floor of 52.7M. Per Capgeek, they currently sit at 44.8M. This is with 12 forwards under contract with Nick Johnson on a 2-way deal. That includes forwards not named Shane Doan and Daymond Langkow. Meaning, there is 8 million dollars needing to be spent before the floor is reached. If you don’t reach the floor,  the NHL could withhold some of the redistributed funds from national tv contracts. The NHL will  not going to let a team not spend to the floor.

So you could sign Shane to a four year deal as he desires, pay him 7 million a season, and have at least 1 million left over for any other UFA. Like Daymond Langkow. Since most teams have filled their rosters and reached the proposed salary cap floor, it benefits the Coyotes. They have the money to sign Shane. Shane wants to stay here. We the fans want Shane to stay here.

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Tags: Greg Jamison NHLPA Phoenix Coyotes Salary Cap

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