Wednesday, May 09, 2007

Today could be end for Ted Saskin

With the National Hockey League conference finals set to begin Thursday night in Buffalo, the NHL Players Association is expected to conduct a conference call sometime today where the NHLPA will make it official – Ted Saskin on paid leave since he was put in that position by the NHLPA in early March, is expected to fire Saskin. The NHLPA hired Toronto lawyer Chris Paliare to look into various charges leveled at Saskin.

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, mushroomed into a series of allegations that will cost Saskin his job and places the NHLPA in a very dangerous position – vulnerable to NHL owners if they decide to reopen the current NHL CBA.

The most serious charges directed at Saskin were first reported by The Toronto Star’s Rick Westhead in the paper’s March 5 edition involving 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 had accessed NHL player’s e-mails and in some cases according to Westhead blocked e-mails 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. Both Saskin and Kim were placed on paid leave by the NHLPA on Sunday March 13. However, how the NHLPA ended up where they are today is an important lesson in the dangers athletes can face if they place too much faith in their leaders.

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’s firing is a certainty. What exactly he may or may not have done may remain a mystery if both sides (the NHLPA and Saskin) reach an agreement on the remaining monies owed to Saskin, but if Saskin and the NHLPA do not reach an agreement its almost certain whatever is left of the NHLPA will be in a terrible position.

Detroit Red Wings defenceman Chris Chelios, Edmonton Oilers goaltender Dwayne Roloson and former player Trent Klatt filed a lawsuit in Chicago (U.S. Federal Court) demanding that Saskin be fired because alleged fraud and breach of contract.

On Monday January 22, 2007 U.S. Federal Court Judge Suzanne B. Conlon dismissed the lawsuit that Chris Chelios, Trent Klatt and Dwayne Roloson filed against the NHLPA, Ted Saskin, Trevor Linden, Vincent Damphousse, Bill Guerin and Bob Boughner.

The Court told the NHLPA that Ontario, not Illinois, was the proper place for Chris to bring any complaints that he has. The NHLPA is based there, most witnesses live there, Canadian law applies and the case would be much cheaper in Canada. The Judge didn’t so much rule in the NHLPA’s favor and against the lawsuit but said the dissident players had chosen the wrong venue.

At the same time Chelios and his minority put together a DVD that featured highlights of the speeches Chelios offered at the NHLPA’s July meetings where Linden agreed to step down as president of the NHLPA. Saskin offered his own version of what had transpired over the 18 months since the NHL lockout ended in his own DVD. Each NHL player representative received copies of the two DVD’s and copies were shown in meetings to the more than 700 current NHLPA members in late January.

In his DVD Chelios allegedly suggests Saskin was illegally hired as executive director of the union in July 2005 and that since then, he has illegally used union funds to battle his adversaries within the union. Saskin defends himself in his DVD.

Four days after his latest setback on January 25, 2007, Chelios succeeded in convincing the 30 individual player representatives to hire Toronto litigator Sheila Block to investigate the charges Saskin was illegally hired as executive director of the union in July 2005 and that since then, he has illegally used union funds to battle his adversaries within the union. The seven member NHLPA executive board did not participate in the vote and Saskin wasn’t a part of the discussion or the vote that moved the examination of Saskin’s hiring forward. Then NHLPA President Trevor Linden signed a five-year, $10 million contract with Saskin on behalf of the PA at the end of July 2005 when Saskin was hired to replace deposed and former NHLPA executive director Bob Goodenow.
If Chelios and his group are satisfied with Saskin’s firing and whatever settlement is reached the battle could at long last be at an end. However the allegations and innuendoes being tossed around are very serious.

The Globe and Mail Canada’s national newspaper published the text of a letter Windsor lawyer Patrick Ducharme sent Saskin in December (the paper published the letter on March 8 days before Saskin was placed on paid leave). Similar letters were 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?

The optics of the allegations raised in the letter harkens back to an era when the NHLPA was an organization run amok. One of the biggest challenges the NHLPA has always faced as an 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 raises 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.

Late Tuesday The Globe and Mail’s Allan Maki reported one of the points raised in Ducharme’s letter is no longer an issue. According to the report NHLPA members began receiving checks from the money the NHLPA accrued during the lockout but never distributed to the players.

"I wrote to Ted Saskin for a year and half and rarely heard back from him," Ducharme said Tuesday. "They would not give me an answer directly."

Ducharme hasn’t been a registered NHL agent for the last three years. Regardless of what Ducharme suggested about sending letters to Saskin, given that Ducharme was no longer an NHL agent, Saskin nor anyone had the legal responsibilities to deal with Ducharme. Again, it’s important to appreciate the perception. Saskin and the NHLPA knew Ducharme was no longer an NHL agent, but chose not to muddy the waters by dealing with Ducharme’s decision to make his letter and allegations a matter of public record.

NHL owners or the NHLPA have the right to reopen the CBA after the 2008-09 season. There have been suggestions in some circles the more hawkish owners could seize upon an NHLPA very much in a state of flux and try and hammer out an even tougher CBA. That would be as big a mistake as the NHLPA not understanding how unified the owners were in their resolve at the end of the 2003-04 season to break the NHLPA and force a salary cap upon the players.

The current CBA guarantees NHL players 54 percent of all hockey generated revenues. National Football League players receive 60 percent of all football related revenues and National Basketball Association players receive 58 percent of all basketball related revenues. Drafted basketball players can become a free after four years and NFL contracts are not guaranteed (players are free agents after their contracts have been fulfilled). Drafted NHL players have to wait at least seven years before they can become free agents. MLB players have to wait at least six years. Bottom line – the current CBA is pretty good for the owners and not so great for the players (at least when compared to the CBA’s enjoyed by their union brothers in other sports).

To take advantage of the NHLPA when they might be at their weakest would open the door to the hawkish players who were never interested in the terms and conditions that are keys to the current CBA, a salary cap and free agency after seven years. Better NHL owners respect what they’ve accomplished, respect the NHLPA and focus on one of the cornerstone statements NHL commissioner Gary Bettman made when the year long NHL lockout ended and the new CBA was signed – creating a true partnership with the NHLPA. It’s important if NHL owners really believe in what Bettman said they should understanding and let the NHLPA work out their leadership issues.

For Sports Business News this is Howard Bloom

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