Based on pretty much everything I've read about Thursday's events, a major sticking point for both sides is the issue of the current contracts held by the players. All three proposals sent by the NHLPA contained previsions that would allow for the players to keep the face value of their contracts. I don't believe that's an unreasonable request, as long as the union is willing to compromise in other areas. A novel approach, I know.
With the way Gary Bettman reacted following the meeting, such a request from the union is simply unconscionable. Why the hell should the owners be forced to honor contracts they allowed their GM's sign players to?
The Minnesota 'effing Wild screwed everything up.
My conspiracy theory all along has been that both Zach Parise and Ryan Suter were signed to their massive contracts pre-CBA because Wild ownership banked on a rollback on salaries. It happened in the last two lockouts, why would this one be any different?
Thanks to our friends at CapGeek, we know without the rollback, the Wild are on the hook for an approximate salary expense of $71.8M in the 2012-13 season. The total is not figurative salary cap dollars, this is actual, out-of-pocket expense by Wild ownership.
In 2011-12 season, the Wild spent approximately $55.8M on actual player salaries. From one season to the next, the Wild increased it's salary expense by $16M or 22%.
After the 1994-1995 lockout, the rollback was 19%. How much was the rollback on salaries of the 2004 lockout? 24%, an increase of 5%. Should the NHL keep with trend and increase the percentage by 5%, the players would receive a 29% clawback; therefore, saving the Wild even more. This would negate the 22% uptick in spending, plus pick up an additional 7% in actual savings.
The Wild are owned by Minnesota Sports & Entertainment by majority owner, Craig Leipold. As he was described to me by Bryan Reynolds, editor at the Wild SBN site Hockey Wilderness, Leipold has "more money than God". Seeing as he's married to S.C. Johnson heiress in addition to his fortune from starting AllTel and other ventures, I'd say he's OK and doesn't need the extra savings.
The signings of Parise and Suter are contrary to the income statement of the Wild. After the 2010-11 season, Forbes reported the Wild had a negative EBITDA of $173M (an operating loss) and might need to get some cash from all investors or the banks. Leipold didn't dip into his personal fortune to cover the loss. I don't have the exact figures for the 2011-12 season, but it's hard to go from that big of a loss to a gain in one year. Assume they lost money - again.
I haven't even mentioned that Phillip Falcone, a 30% stake owner, has been sued by the SEC. The Wild say his lawsuit will have no effect on the team. That is correct, but they won't be able to get cash for operations from him because of the investigation.
We know Parise and Suter coming to town will definitely increase the revenue from attendance at games; revenue Leipold is losing large amounts of as the NHL continues to cancel games. If the team doesn't make the playoffs, they'll be hit with a massive loss, with a majority of it driven by player salaries. If Leipold wasn't willing to open the checkbook to cover the losses in 2010-11, it's doubtful he'll change it up because he's so effing poor.
Leipold is described as a somewhat hands off owner; nowhere close to being like Jerry Jones. When asking Reynolds at HW about who has the final call on contracts, he said the honor generally lands solely on GM Chuck Fletcher. He does meet with Leipold, but the personnel decisions are that of the GM's.
My theory is, Fletcher sold Leipold on the idea of Parise and Suter's Scrooge McDuck swimming in his money vault level contracts by banking on the rollback. Now that the NHLPA is demanding a freeze on face value of current contracts, it's threat level midnight.
Why would such a hands off owner as Leipold be a part of the NHL ownership contingent attending Thursday's meeting with the players? Because he's going to be handing out a truckload of money if that freeze goes through. Don't forget the automatic loss he's going to take because of the Wild's offer to pay 10% interest on the money collected from season seat holders, barring they don't ask for refunds.
One has to wonder if Leipold has the commissioner's ear more than the other owners. Dangling a sponsorship from one of S.C. Johnson's many companies (owned by his in-laws) would be something the Commish would be happy to have, especially after losing money on all the cancelled games.
They may be all coincidences; however, I'm looking for some place else to put my anger since it's been maxed out by the NHL & NHLPA. I've decided to direct it at the state of Minnesota.
I will put my tinfoil hat back into the closet now.