"Net Worth" -- excerpt 2

zodiac zodiac at interlog.com
Tue May 21 06:10:21 MDT 1996


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                         FOR THE GOOD OF THE GAME
                                 (part 2)

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At the core of the players' anger is the NHL pension plan. Since it was
introduced by Clarence Campbell in 1947, the players have believed that
whatever improvements in salaries, working conditions and benefits
forfeited would be offset by their pension -- touted first by Campbell,
then Eagleson, and then Ziegler as the best in professional sport.

For more than thirty years, many players -- including Gordie Howe and
Bobby Hull -- have hesitantly asked questions about their wretched
pensions. The response retired goalie Glenn Hall got from the Pension
Society in 1988 began "Dear Contributor #413" and answered not a single
one of his questions.

Many of the players at the Ramada tonight were around in 1957 when Ted
Lindsay of Detroit and Doug Harvey of Montreal formed the first,
ill-fated players' association. The NHL owners, led by Toronto's Conn
Smythe, ruthlessly smashed the association, ruining many careers and
embittering many players. The main purpose for that association was to
find out how their pension plan operated and how the funds were
invested. Thirty-four years later, the same questions remain
unanswered.

Red Kelly and Gordie Howe had a lot to do with the 1957 failure. Under
tremendous pressure from Red Wings general manager Jack Adams and owner
Bruce Norris, they dealt the players' association its death-blow by
leading the Detroit team in withdrawing from it.

Kelly -- former member of Parliament, Hall of Fame member and
eight-time All-Star player -- is an honourable man, and what he did was
for the best of reasons. Although most players, in their hearts know
that not one of them would have responded differently, some still blame
him for what happened in 1957.

Gordie Howe holds a special place in hockey. There's no one in the room
who doesn't smile when he is around. Yet Howe is answerable to these
players for more than the events of 1957. Gordie Howe's contract
negotiations were probably the simplest in the history of sport. (His
salary was so low it served as a cap on other players' contracts for
nearly two decades.)

Each year during training camp, the Red Wings' GM, Jack Adams, would
offer Howe a completed contract, with only the salary left blank: "Just
fill in what you're worth, Gord." Every year, regardless of his growing
list of records and awards, Howe dutifully added a mere $1,000 annual
raise. Adams, never deigning to look at the contract, would utter some
variation of "You're a good fella, Gord," clap him on the back and, if
he were in a particularly expansive mood, take him out to lunch. Adams
always warned Howe to keep his salary secret. "It would make the other
players jealous," he said, with a conspiratorial wink.

For his part, Gordie Howe trusted Adams and owner Bruce Norris to look
after him. "I'd always had an agreement with the Red Wings that,
because I was one of the best players in the game, I'd always be the
highest paid player of the team -- in fact, the highest in the league."

A lesser man than Howe would have been jolted in 1966 when Bobby Orr, a
raw rookie, signed with the Bruins for a widely publicized $25,000
annual salary and $25,000 bonus. After nineteen years in the game, Howe
had only worked himself up to $27,500, including bonuses. Bruce Norris,
who had taken over the signing ritual from Jack Adams, soothed Howe by
telling him that the press reports were vastly exaggerated. Even so, he
jumped Howe's salary by $10,000.

When Bob Baun was traded to Detroit in 1968, one of the first things he
did was set Howe straight.

"You've held us back for ten years and perhaps longer," he told a
surprised Howe. "Some of the older fellows would probably say you'd
held the league back twenty-five years. You set the standard and we all
have to live by it and it's from you not negotiating properly. If
that's what you think you're worth, then you put a very low price on
your ability."

Nonplussed, Howe asked how much Baun thought he was making. When Baun
guessed within $500 of his $45,000 salary, Howe was dumbfounded. And
when Baun revealed his own $67,000 annual contract, the great number 9
simply gaped in amazement.

Pointing a finger like a bulging bratwurst at the legend before him,
Baun asked, "Mr. Norris just gives you a signed contract and tells you
to fill in the figures, is that right?"

"Yes," agreed Howe.

"Well, Gord, you're luckier than the rest of us. If you thought more of
yourself, you'd get what you're worth. Why don't you try, this year,
filling in $150,000 and see what he does?" challenged Baun.

That year, an angry Howe negotiated his 1969 contract with Bruce Norris
over the phone. He had considered demanding $150.000, but at the last
minute backed off and asked for $100,000, still expecting the sky to
fall. Norris, annoyed at being pushed into a corner by his formerly
docile star, agreed, but added snidely, "I hope that makes Colleen
happy." [Colleen Howe is a favourite target of criticism in hockey. She
asks questions boldly, demands answers incessantly and runs the Howe
hockey enterprises with a firm hand. But in those days, she knew little
more about the underside of the game than Howe. Still, Norris assumed
it was she who had put Howe up to demanding more money.]

What neither player knew was that Baun's old defense partner, Carl
Brewer, had just signed with Detroit for $126,000. Nor did they know
that the club had netted $1 million annually on hockey operations since
1946, plus another $1 million running the rink, making it one of the
most lucrative sport franchises of the time. [ ... ]

Another irony of this night, and a mark of the division in the player
ranks, is the absence of Bob Baun. The All-Star Toronto defenseman
stood up to management in a thousand small ways during his career and
again in retirement. Like Brewer, Baun was a close friend of Alan
Eagleson's and was instrumental in setting up the NHLPA. But Baun no
longer sees Eagleson as the players' saviour.

Baun was one of the first players to become convinced that the
munificence of the NHL pension plan was a lie, and one of the first to
try to do something about it. In the early '80s, Baun, as determined
and immovable off the ice as he was on, spent over $100,000 of his own
money to form an NHL alumni association. He wanted to discover why,
after sixteen years and 964 games, his pension amounted to only $7,622
a year. "It's a scandal, a criminal scandal," Toronto actuary Lorraine
Mahoney told him. Years later, having fought obfuscation, misdirection
and stonewalling, he reluctantly gave up.

"I wanted to see whether those boys are putting their money where their
mouths are," Baun said of his absence. "They wouldn't spend a nickel to
see the Pope go down Yonge Street on a white horse. They wouldn't stick
together when I started this alumni association. I was looking for
support from within ourselves. We had some of the best pension people
advising us, but the players said, 'What's in it for Baun?'"

Since Alan Eagleson became head of the NHLPA in 1967, virtually all of
the significant advances he has negotiated for players have been tied
to the pension plan.

The players' associations in football, basketball and baseball have all
won major concessions or improvements in the areas of free agency,
television revenue, grievance procedures or profit-sharing. In hockey,
the NHLPA has willingly shelved these crucial issues or traded them
away for pension plan gains. [ ... ]

A surplus of $25 million was sitting in the fund. Though it had been
created by interest earned on the retired players' contributions, only
a small percentage had been earmarked to improve those players'
benefits.

[A surplus is defined as money that is not needed to service the plan's
current or future commitments. Actuaries tend to be conservative when
estimating what Pension funds will earn over a given number of yeans.
In the case of the NHL, the pension's earning esfimates were extremety
low, around 4 or 5 percent, while the money was actualty earning twice
that or more. Actuaries normally reevaluate their figures tri-annually
to bring them in line with current earnings. But, according to the NHL
Pension Plan Society, actuaries have never done a formal reevaluation
of the plan's investments.]

The plan's members, the players, had never known about the surplus --
and for good reason, as it turns out. NHL Pension Society documents and
collective-bargaining agreements from 1967 to 1983 clearly state that
surplus funds can be allocated only to benefit the plan's members. But
the owners have used over $13 million to reduce their own required
contributions to the plan between 1980 and 1989 -- in pension circles,
this is quaintly called a "contribution holiday."

Only $4.6 million of the $25 million was used to increase the pensions
of retired players.

The second problem was more complex. It appeared that money that should
have gone into the fund from profits on international hockey might
never have made it there.

International hockey has long been trumpeted as the great "cash cow" of
the sport, pouring millions into the pension plan. A decade after the
seminal 1972 Russia/Canada Series, more than a few players were
wondering just whose cash cow it was. "There are some things that have
bothered me about that series," its hero, Phil Esposito, remarked in
1982. "I've always wondered where all the money it made went, and I
never really have found out." [ ... ]

Perhaps the biggest bombshell was inadvertently dropped by
secretary-treasurer of the NHL Pension Society, Ken Sawyer himself, in
a letter to Mark Zigler. "All-Star game proceeds are not contributed to
the Pension Society. Rather, such proceeds are used to pay a portion of
pension administration costs incurred by the plan sponsors [the
twenty-one NHL clubs]." In many ways, that was the nastiest blow of all
to the retired players. The annual All-Star game had been a tradition
since then, and though the players were never paid for their
appearances, they believed that a substantial portion of the proceeds
>from each game had been going into their pension plan since 1947.


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                     From _Net Worth: Exploding the Myths of Pro Hockey_
                                    by David Cruise and Alison Griffiths
                                                          (Penguin 1992)


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