Monday, May 30, 2011

Bill Daly's Year in Review

Last week I had the great pleasure of attending the Sports Lawyers Association conference in DC. General counsel for the four major sports (NHL, NBA, MLB, NFL) presented. They were followed by the Union heads, who offered sharply contrasting views.

These were the speakers:


- William Daly, Deputy Commissioner, NHL
- Richard W. Buchanan, Executive Vice President and General Counsel, NBA
- Gary Gertzog, Senior Vice President–Business Affairs and General Counsel, NFL
- Dan Halem, Senior Vice President and General Counsel, Labor, MLB


- Billy Hunter, Executive Director, NBPA
- DeMaurice F. Smith, Executive Director, NFLPA
- Michael Weiner, Executive Director and General Counsel, MLBPA
- (Donald Fehr was attending Derek Boogaard’s service)

The Union heads were profoundly compelling. As far as the lawyers for the leagues, Bill Daly stood apart with a candid and comprehensive review of the NHL year.

In this column, I report on Daly’s comments. I will also report on the talks given by Union chiefs Hunter (NBA), Smith (NFL) and Weiner (MLB) in separate columns. Their talks were riveting (but then again I find Doogie Howser riveting).

Bill Daly Breakdown

On the Hockey Business

Daly opened with the line “business is good”. He cited a “record year both in terms of viewers and households”.

He also noted that the most recent TV deal was the “most lucrative U.S. national deal in the league’s history”. He added that the deal was unique because for the “first time ever we will have a national platform for all our playoff games”.

On the Winter Classic

“We haven’t made a decision with respect to the Winter Classic for this coming season…but certainly we expect it to happen …on Monday January 2 as I expect the NFL will play on Sunday January 1”.

On the Upcoming Expiration of the CBA in 2012

Daly stated that “we have been working several months with Donald Fehr to establish a good working relationship”.

He also noted that there will not be any “substantive negotiations” until the new year, although the NHL is “prepared to engage in the process at any time”.

On the NFL litigation

“We are very interested in the ongoing NFL litigation”.

With the NFL and NBA CBAs up first, followed by MLB, Daly said “in some cases it’s not great to bat last in the batting order. However, in this case, we are pleased to be in that position”.

Translated - the NHL is watching very carefully to see if the NFL players are successful in establishing that the lockout is not legal on the basis that it constitutes an antitrust violation. The NHL is also watching what the NBA will do (i.e., will the NBA decertify and try and block a lockout too?). And of course the NBA is watching the NFL situation very carefully. Everyone is watching everyone else. MLB, though, doesn't expect to encounter any serious issues, so they're probably just watching Perfect Strangers starring Bronson Pinchot.

On Increase in Revenue

The NHL is looking at another significant increase in revenue of 7 to 8%, which is over $200 million. The NHL should be close $3 billion in revenue for this year, which is an increase of "35% since the lockout".

On the Salary Cap

The salary cap for this year was $59.4 million with floor at $43.4 million. The cap has gone up $20 million in 6 years from $39 million. The salary cap will be going up again next year to somewhere between $60.5 to $63.5 million. The final cap number will be determined at the “end of June”.

On Phoenix

The NHL spent 2 months trying to restructure the bond deal and continues to look at “multiple alternatives”. Daly added that “we were going to need more time than we had” and Phoenix “came to the NHL asking if it was interested in extending the deal” and committed another $25 million to cover losses.

The “Governors remain committed to the market”.

Looking forward, the future of the Coyotes is “assured next year in Glendale”. The NHL made “a lot of progress this year” in understanding what a transaction should look like and the NHL hopes to be “successful in transitioning the franchise to a private buyer” by the start of next season.

On "Kovalchuk" Contracts

In negotiating the last CBA, the NHL did not negotiate term limits. It was discussed, “but not agreed upon”. Therefore, long term contracts were “not unanticipated” and it was “a function of the system”.

However, the NHL started to see “extreme front loading on contracts” and there was no doubt that certain clubs had the ability to front load more than others, thereby “creating a competitive imbalance”.

The NHL warned "clubs and that they had to be careful” and that the league “might pursue one of these cases as a circumvention”.

On Player Safety

As a result of the speed of the game and size of players, the “environment is more dangerous”. Brendan Shanahan and Mathieu Schneider are looking at reducing the size of equipment. The thought is that players would be less aggressive if the equipment was smaller. No mention if the equipment wouldn't be as hard.

Surely to the satisfaction of Max Pacioretty, the league is also looking at the design of hockey rinks to make them safer.

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