Wednesday, March 07, 2007

The end has arrived for Ted Saskin and the NHLPA

The last 48 hours have become a living nightmare for Ted Saskin the beleaguered executive director for the National Hockey League Players Association has been under fire over the last two days facing a series of allegations that will result in his inevitable resignation or firing. What began as allegations coming from a small group of dissident former and current NHL players following the NHLPA’s collapse that ended the year-long NHL lockout and led to a league mandated salary cap, has mushroomed into a series of allegations that if proven to be even remotely true will radically change the face of the NHLPA in the near future.

The most serious charges being directed at Saskin first reported by The Toronto Star’s Rick Westhead in Monday’s edition involve an ongoing investigation being conducted by the Toronto Police Department. Westhead reported the Toronto Police Department received complaints that executives at the NHL Players Association accessed NHL players e-mail’s and in some cases according to Westhead blocked e-mail’s players were sending each other. Westhead reported Saskin and Ken Kim, the union's senior director of business ordered technical support staff at the union to access player email accounts hosted by the union.

The NHLPA intranet (internal password protected Internet site) was originally set up by Bob Goodenow, Saskin’s predecessor. Goodenow replaced Alan Eagleson as the NHLPA’s executive director in 1991, and led the NHLPA through a series of successful labor actions against Gary Bettman and the NHL. In the late 1990’s players who attended NHLPA meetings were given free laptops by Goodenow and often received computer training by computer technical personnel hired under Goodenow’s regime. One of the key communication strategies Goodenow used throughout the lockout was the ability to communicate via the Internet.

The Internet was in its infancy during the last major NHLPA labor/CBA battle with the owners, that began in September 1994 and ended with the players and the owners agreeing on a new CBA in January 1995. As common place as emailing is today as a means of communications, back then the NHLPA likely had to fax the 30 NHL player representatives and then hope the player representatives would communicate with the players on their teams. Throughout the most recent labor lockout (September 2004 through July 2005) with more than half the NHLPA membership playing hockey in Europe during the hockey season and many European born NHL’ers staying in Europe before the lockout was settled, Goodenow and the NHLPA used email and the NHLPA intranet as their prime source of communicating with each other.

The current allegations being reported by the Toronto Star focus on suggestions Saskin is at the center of a growing storm relating to whether or not Saskin has been reading emails (both personal and professional) from NHLPA members. It’s important to understand technically Ted Saskin works for the NHLPA membership. While the checking of emails in the workplace is a legal ‘gray area’ that extends to relationships between employer and employee, in this case the role of the employer are the players and the role of employee is Saskin.

Saskin has remained tightlipped refusing to talk about the email allegations choosing to release the following statement to the media that focuses not on the latest controversy but on the internal review that is well underway: “The NHLPA is fully co-operating with the internal review process currently being conducted,” Saskin said in the statement. “As we have previously advised, we will not be making any comment until the review process is complete.

“We remain confident that there have been no illegal activities at the NHLPA and are looking forward to responding to these allegations once the internal review has been completed and reported on to the membership.”

That hasn’t stopped a steady parade of NHL players from offering their thoughts on if proven will indeed be a dark day for organized sports labor.

"There would be trust lost, for sure," said Keith Ballard of Phoenix Coyotes.

Ottawa Senators defenseman Chris Phillips told The Toronto Star: "If something was going on like that, a lot of guys are going to be upset. There's an assumption that our email accounts are private."

The report suggests the emails and email accounts that have been targeted involve the group of dissident players who remain as upset today as they were in the days, weeks and months following the NHLPA’s settlement with the NHL which resulted in Saskin replacing Goodenow days after the settlement was reached.

"Union staff would see a player's email and know they were mad and pick up the phone and call them and say, `Hey, do you want to talk about this?'" one source close to the investigation told the Star.

"They basically tried to take the wind out of the sail of any complaint by illicitly tapping players' emails."

Former Boston Bruins forward Sean McEachern since retired told the Toronto Star he for one believes the suggestions e-mail’s from rebellious players were targeted.

"It makes sense to me," McEachern said. "I remember last year getting a call from Ted out of the blue. I had never spoken to him in my life, but I'd just sent an email to people like Trent Klatt (one of the key dissidents) who were challenging his hiring. I was wondering, `Why is he calling me?'"

If there is a problem it’s in part propelled by the lack of understanding many NHL’ers seem to have when it comes to understanding the Internet. Toronto Leafs defenseman Bryan McCabe one of the leaders on the NHL’s most financially successful franchise didn’t seem to care or understand if his e-mail was being read.

"I haven't seen anything or read the paper," he said. "I've really got more important things on my mind. The summer's the time to deal with that stuff. I don't get too bothered with it right now."

Asked about people monitoring his emails, McCabe said, "I don't have anything to hide. I'm lucky if I can turn the computer on, never mind check my emails."

One of the issues Saskin has to deal with, the avalanche of media coverage from Toronto. The Globe and Mail Canada’s national newspaper published the text of a letter Windsor lawyer Patrick Ducharme sent Saskin in December. Similar letters where sent from Detroit Red Wings defenseman Chris Chelios and former player Ed Olczyk. The points raised in Ducharme’s letter raise a number of very important issues – few of which relate to Ted Saskin’s tenure.

"1. Did you know that over a three-year period (2000 to 2003), $27,044,000 [all figures U.S.] was invested in a single U.S. mutual fund instead of being distributed to current and former players? Why was only one mutual fund used? Was any thought given to the consequences if this fund failed?

"2. Did you know that during fiscal year 2002, $76,611,000 was invested in corporate bonds and $10,132,000 was invested in government of Canada bonds instead of being distributed?

"3. Did you know that in fiscal year 2003, $32,654,000 was invested in corporate bonds?

"4. Who selected these investments and who received commissions on these investments?

"5. Did you know that the funds distributed during the lockout amounted to $57,778,000 and that the balance of the $146,450,000 in investments is still being held rather than distributed to members?

"6. Did you know that the exchange rate for Canadian dollars declined from $1.5162 in 2003 to $1.12035 in September 2006 resulting in currency translation losses of $35,000,000? If the money had instead been distributed to the members, this loss would have been avoided.

"7. Did you know that in fiscal year 2002, a loan of $2,970,000 was written off as a bad debt? Who borrowed this money? Who approved the loan?

"8. Did you know that in fiscal year 2005, $9,417,000 was spent on collective bargaining negotiations? How much did the NHL spend? If the amounts are significantly different and the NHL's expense was significantly lower, what is the reason?

"9. Did you know that the association is holding $165,982,000 in cash and 'long-term investments' instead of distributing this to its members? Why does it take the NHLPA close to $7,000,000 annually to operate? What is the NHLPA doing with the rest of the money it holds? Why is it holding such significant amounts?

"10. Has the committee considered that an accumulation of this capital might endanger the tax-exempt status of the NHLPA? Has the committee discussed and considered that a loss of its tax-exempt status might endanger a large portion of the accumulated funds? Has the committee been provided with my letter dated March 20, 2006, seeking confirmation of the information provided to me by Ted Saskin, Stu Grimson and Ian Penny on March 9, 2006?

"11. Do the committee members know that the executive director [of the NHLPA] promised that there would be a distribution of funds to the entitled past and present members by July 2006?

And is Patrick Ducharme out of line, yes and no:

He is no longer a certified NHL agent having given up that right following the end of the lockout. Certainly members of the union (Chris Chelios) and former member impacted by some of the issues raised in the letter (Ed Olczyk) have the right to ask questions, but a former agent – sorry Saskin doesn’t have to acknowledge your letter. If you were an agent, Saskin would have to answer the letter if it was sent at the behest of players the agent represented.

However that isn’t the ‘real’ issue behind the allegations Ducharme raises in his letter. The man in charge of the NHLPA during the years Ducharme raises in his letter occurred when Bob Goodenow and not Ted Saskin was in charge of the NHLPA. Furthermore a source told SportsBusinessNews that Ted Saskin’s job description before he replaced Bob Goodenow did not include any of the financial issues Ducharme raised in his letter.

And it’s not as if Goodenow or anyone at the NHLPA has done anything wrong in terms of the handling of the PA’s finances. Sources told SportsBusinessNews the NHLPA’s leadership (under the leadership of Bob Goodenow) made only safe investments on behalf of the players. Remember the growth and then collapse of technology based stocks between 1999 and 2001? Smart investors stayed away from risky investments.

Each year NHL players sign an agreement with the NHLPA giving the NHLPA the right to use the image and likeness of NHL players. NHL players sign the agreement before the start of each season. No where in that agreement does it state how (or if) the money generated by the NHLPA (and the use of the players image or likeness) will be distributed to the players. The money was interned as a ‘war chest’ for the players to be used during the lockout. A formula for distributing the money is being established and it is expected the money will be dolled out in the near future.

However if really attempt to look at what the issues are with the NHLPA, The Hockey News’ Adam Proteau’s interview with St. Louis Blues goalie Manny Legace illustrates how deep the pain remains throughout the NHLPA as a result of the management team (led by Goodenow and Saskin’s) failed lockout strategy.

“The (union) cut us off from everything,” Legace said, referring to the last days of negotiations to end the lockout. “That’s what I didn’t like. Guys had no idea what was going on. You call the PA and they’d say, ‘Don’t worry about it, don’t worry about it, there’s too many leaks.’ . . . You couldn’t get information, they weren’t posting anything for guys anymore, everyone was in the dark.”

For those who likely don’t remember Legace voiced concerns about a lack of communications throughout the lockout.

“I called the (players) who called me out (for earlier comments regarding a salary cap),” Legace said. “I told them, ‘This is the way guys feel.’ They said, ‘You’re right, you’re right, but you don’t know what’s going on.’

“I said to the guy, ‘You’re right, I don’t know what’s going on. You guys cut me off from The Source (the union’s secure online forum) and no one from the PA will call me back, so what am I supposed to do?’

“For a guy who was supposed to be on the inside, I knew of nothing that was going on. And I was one of the player reps!”

What’s important to note – the so called “Source” Legace is referring to was managed by Bob Goodenow. If there was a culture of censorship about the NHLPA’s paid leadership according to Legace and a source who spoke to on the condition of anonymity believes long before the allegations that are being directed at Ted Saskin were made relating to the alleged reading of e-mail’s, the same practice allegedly existed throughout the lockout while Goodenow was leading the NHLPA

All of those issues raised and answered clearly the most serious allegations being raised in Saskin’s direction relate to the possibility the NHLPA’s staff has accessed the memberships e-mail’s. If proven to be true, it would be one of the single greatest breaches in sports labor history. Its unimaginable in this day and age paid employees of a union would be reading (or potentially censoring) the communications of the membership. Legalities aside, it would certainly be unethical.

One of the biggest challenges the NHLPA has always faced as a organized sports union is the image Alan Eagleson left on the NHLPA. In 1994, Eagleson was charged with skimming off money intended for the NHLPA pension fund and disability insurance money. The NHLPA, it turned out, had unknowingly footed the bill for expensive clothing, theater tickets and a luxury apartment in London.

In 1998, Eagleson pleaded guilty to three counts of mail fraud in Boston and was fined $700,000. Later that year, he pleaded guilty in Toronto to three more counts of fraud and embezzling hundreds of thousands of dollars of Canada Cup proceeds in 1984, 1987 and 1991. He was disbarred and sentenced to 18 months in jail, of which he served six months. Eagleson elected to the Hockey Hall of Fame in 1989 resigned from the Hall of Fame in 1998. Eagleson left a terrible legacy on organized sports labor, a price the NHLPA and its employees appears continues to pay to this day.

Any “suggestion” or in this case Ducharme’s letter being published by a national newspaper raise the ugly specter of the ghost of the NHLPA’s dark past rising once again. It would appear there exists within the National Hockey League Players Association so much distrust on both sides of the issue(s) the NHLPA is on the verge of imploding. It’s no longer a matter of the hawks vs. the doves, who won, who lost the lockout but a lost of trust on every level when it comes to the day-to-day management of the NHLPA. Bob Goodenow and Ted Saskin are both honorable men, who may be guilty of nothing more than bad judgment. That said at the end of the day Goodenow is gone, and now it’s time for Ted Saskin to dust off his resume and look for another opportunity in the immediate future.

For this is Howard Bloom. Sources cited and used in this Insider Report: The Toronto Star, The Hockey News and The Globe and Mail

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