WHEN THE CONVENTIONAL WISDOM ISN’T
Howard Roark is a guest writer of lakingsnews.com. He brings you this article of his opinions for your reading pleasure hoping you may look at the events unfolded and upcoming not with the sometimes unfortunate current state of conventional wisdom (or lack thereof) but outside the proverbial box
Yesterday, we saw the next page unfold in the Ilya Kovalchuk saga. A ‘neutral’ arbitrator ruled for the NHL, agreeing the contract should be voided and flinging Ilya back into UFA status. The move caught quite a few observers and commentators by surprise as the conventional wisdom had the arbitrator, Richard Bloch, ruling in favor of the NHLPA and the New Jersey Devils. But, let’s take a closer look at what really happened. How does conventional wisdom get formed? Why were so many smart and connected people wrong? And, finally, why has this drama continued so long with no end in sight? Much of what I write is informed speculation, but careful and considered analysis untainted by other people’s agendas often yields different conclusions. So let’s take a closer look.
The first thing to understand is that journalism in this country is a lost art, the profession as we knew it growing up no longer exists. It has been a long time since reporters do the job we expect them to do, dig up facts, treat press releases with skepticism that they deserve and write strong and unbiased pieces about what they uncover. Today, newspaper and mainstream reporters across the country are content to stay at their desks and detail what they learn from their ‘sources’. In fact, talking to these sources is 95% of what constitutes journalism today. Everything we hear or are told on the nightly news comes from these sources, confirmed to one degree or another. Very little time is spent fact checking the information provided because that actually takes getting out of the office and going into the field. It is much easier to do the job by picking up a phone or sending a text.
The problem is that these sources do not provide an unbiased form of information. Like all humans, the sources that shape the stories we read about in the press or in blogs have personal agendas that they are trying to advance. The tidbits of information they release are often incomplete or colored in such a way as to further that agenda. A responsible reporter should then fact check what they are being told before disseminating it, but that requires work. It is much easier to share the information with the credulous public knowing that it came from a credible source.
That, my friends, is how conventional wisdom is created.
Several people, all with similar agendas leak supposedly private information to their favorite reporters who then circulate it to readers and viewers who then think they are informed. Very little analysis and prudent skepticism is applied after all the information has been released multiple times by ‘credible sources’. As I make my living analyzing available information and hoping to profit from where the conventional wisdom is incorrect, I would like to take another look of what may be happening behind the scenes in l’affaire Kovalchuk.
Unlike most observers, I thought the NHL was going to win its case. In fact, I knew this would happen because the decision had been made not yesterday when Bloch released his decision but last Monday when the arbitrator was selected. Take a look back to the last time Richard Bloch rendered a significant decision regarding a sports dispute. Back in 2005, Terrell Owens had completely disrupted the Philadelphia Eagle locker room and had been suspended and then placed on the inactive list without pay. The NFLPA cried foul claiming the team did not have the right to stop paying Owens. The case went to arbitration and Richard Bloch ruled that the Eagles were within their rights not to pay their wide receiver. The NFLPA was furious with Union Chief, the late Gene Upshaw, saying they would never agree to use Bloch again.
Now, fast forward five years. The NHL voids the Kovalchuk contract, and the NHLPA appeals. Why then would the Union then agree to use Bloch when he had a demonstrated record of siding with the League over the Union? The answer is relatively simple. I believe- the NHLPA did not want to win the case. Yes, the Union had to go through the motions and pretend they were backing up one of their players but the reality is that had Kovalchuk’s contract gone through, it would have been bad for many other players. Remember, the salary cap, which is derived from total hockey-related revenues, is based on the average of a salary over the length of a contract. Teams, however, have to lay out actual cash today if a contract is front-loaded like the Kovalchuk contract was. To protect themselves against a fall in revenues, the owners withhold a certain percentage of the players’ pay in an escrow fund. That way if revenues fall short in future years, the owners can recover the money. If the actual cash payments for player compensation swells, the amount withheld in escrow also has to increase, something that can be devastating for the NHL’s so-called middle class players who make up the bulk of the Union. At the same time, the NHLPA is in the process of hiring a new head, Donald Fehr. Fehr has a long history representing the baseball players and is violently opposed to the concept of a salary cap. My guess is that this battle was fought on ground he did not care to defend.
To augment this charade, the NHLPA likely began leaking to ‘sources’ how confident they were going to win this dispute. In this, they were aided by the Devils who wanted to sell more tickets. The NHL, knowing that they had already won the case, had no reason to disrupt this narrative. Neither did Lou Lamoriello who made it very clear at the press conference that this was not his idea. Jay Grossman desperately wanted the contract to be approved and wanted his client to think so as well even though he may have known the fix was in. Hence, was everyone’s agenda was to create the impression that the Union would win the case at the same time they knew how the ruling would turn out?
Looking forward, one can draw certain conclusions, each of which merits a future article. Has Jay Grossman violated his fiduciary duty to his client? Let’s take a look. He may have placed him in an untenable position. It is hard to see how this relationship survives. Ilya Kovalchuk must be scared to death. Not only does he not have a long term contract, he doesn’t have a team with training camp just around the corner. He has to know that most teams are already up against the cap or at their self-imposed spending limits and have their rosters set. The lone exception is the Kings that have both cap space and the need for a top six forward, yet his agent may have burned that bridge at the press conference. Kovalchuk is not an independent actor in this drama as (I have advocated before) he lacks the education and business experience to navigate through this morass.
Yet to be decided is what, if any penalty, will be imposed on the Devils and if the Kings will receive compensation. I will go on record stating both will happen or, at minimum, should happen. Gary Bettman, I believe, has always wanted Kovalchuk in a major market to leverage his talent into a national television deal. Add to that he wants to end this practice of salary cap circumvention. What better way to accomplish these twin goals than by coming down hard on the Devils while at the same time legitimizing the Kings’ offer by giving them compensation for losing out to an illicit deal from New Jersey.
Finally, one man is laughing his butt off right now, and that is Lou Lamoriello. He is now freed from the anchor of the Kovalchuk contract and his owner has decisively lost a power play. I would not be surprised to see Lou at the head of a group that purchases the team. More on all this later, but what is clear to me (and as the cliché goes, my humble opinion) is the NHL has finally figured out a way to make the offseason entertaining to the fans and keep the League mindshare among the continent’s sports fans.