With the Columbus Blue Jackets hiring John Tortorella and being forced to choose a 2nd round pick to send Vancouver's way within the next three years for freeing them from the burden of paying a guy not to coach their team, the topic of NHL front office compensation is back in the news again. Tortorella's in-season hiring made what would have been a third rounder into a second instead. Detroit is still owed a third-rounder sometime in the next two seasons for Mike Babcock leaving the Wings prior to the official end of his contract this summer.
This is already starting to sound complicated, isn't it? Well here are some things to know about why the system exists, why fired coaches aren't really fired, and why Gary Bettman wants the whole thing to go away.
Coaches/GMs are Assets
Most around here nodded approvingly at the outset of this rule being announced, knowing already that Detroit had lost Steve Yzerman to Tampa and Jim Nill to Dallas for nothing, despite having spent years developing these assets within the Red Wings organization. Much like how restricted free agents require draft pick compensation to hire away, it makes sense that teams should be able to get something for how well they develop people to lead hockey teams.
While teams who have these assistants under contract are entirely within their rights to simply refuse other teams the ability to interview these people for jobs, the realistic side is that everybody knows assistant GMs want to be GMs and assistant coaches want to be head coaches. For the most part, the "hiring away" portion for front office personnel is a realization that teams can't protect those assets meaningfully.
If you think about the sheer level of trust teams must have in their front office personnel, there's a lot of trouble with keeping somebody around who clearly wants to be given an opportunity elsewhere. With players, you can punish or trade them for acting like they don't want to be there. You can't really suspend an assistant coach and there's currently no mechanism for trading your cap guru. You can only keep these assistants around in lesser roles for so long before you simply have to let them go. This is why the compensation rule came into effect.
Fired Doesn't Mean Fired
So far, I haven't seen much complaining about the concept of the Wings getting compensation for Babcock while he was still under contract. The problem here arises with the fired employees: Chiarelli in Boston, Bylsma in Pittsburgh, and now Tortorella in Vancouver. These are guys their teams no longer wanted, why should there be compensation for that?
One of the big problems is simple semantics. When a coach is removed from his position, the media and fans all like to say he's been fired. It's a quick and easy way to get the point across that this person isn't the coach or GM anymore. However, you'll rarely see the team use the word "fired" for a very good reason. Each one of the three men listed above were never "fired" under a strict legal sense. They were removed from their positions, sure, but all of them remained under contract with his team.
The reason? Well compensation is one of them. Knowing that this person is an asset, it's worth his (relatively low) salary to keep him within the organization and either give him lessened responsibilities or simply let him go do his own thing, as long as his own thing doesn't run afoul of any non-compete clause his contract may include. It's little more than a business consideration. Pittsburgh was willing to keep paying Dan Bylsma for the chance he'd turn into a 2nd or 3rd round pick.
The other reason most coaches and GMs aren't simply fired? Contracts. this leads us to our final point.
Complexity Breeds Arrangement
Looking at the way things are, the solution is simple, right? You give teams compensation for people they want around and you don't give them compensation for people they've fired. Easy, right?
Great, now write a document that clearly lays out how exactly all of that stuff is going to work. Make it airtight, because you know people are going to find ways to exploit anything you didn't do perfectly.
Ok, now all you have to do is create an industry-wide standard contract for coaches/GMs and any other front office personnel who may become a coach/GM. They have to voluntarily approve of this standard and you have to do so in a way that doesn't look as though all 30 teams are working as a cartel to limit the mobility/earning power of their workforce. You have to do it like this because there's no Coaches/GMs union, so you're not granted the same kind of antitrust protection you're given when dealing with how player contracts work.
Ok, now that you've effectively created a collective bargaining agreement without having a union with which to agree on all of that, prepare for the lawsuits coming from coaches/GMs/other front office personnel who will be complaining that you have drastically altered their work environment and even the contracts they signed by throwing a lot of complex rules at an issue which gives the appearance that you haven't been signing their contracts in good faith all this time.
Next up, prepare for the beginning of a union to form among front office personnel who argue that your complex set of rules governing how valuable they are gives them reason to better define their collective value to your league. Prepare to write a long, codified CBA with them and prepare for a big part of that to center around how much they get paid.
None of this sounds very fun for the NHL, does it?
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As a fan, I'm not worried about all of these things. I think it makes sense for teams to be compensated for front office personnel who have been hired away while still in their jobs and for them not to be compensated for a team hiring away a coach or GM who has been relieved of his duty. However, the complexity of making a seemingly simple rule work the way it's supposed to do is a big headache for the league and I feel it's a big reason that the NHL would rather simply go back to the old no compensation for anybody system than to push forward.
When the GM meetings take place this December, they will have this system on the docket to discuss. Don't expect Gary Bettman to explain to the GMs that the possible slippery-slope outcome of tweaking these rules ends in them having to take up a legal position against the NHL, but you definitely should expect him to remind them that constant fighting over these assets and tweaking the rules is not a road the NHL wants to go down.