2012 NHL Lockout: Talks Hit Critical Stage As NHLPA Requests Federal Mediation Once More

Bruce Bennett

Negotiations have reached a critical stage and nearly broke off on Thursday. What's coming next?

A quick update on where we stand heading into the afternoon...

The NHL and NHLPA are scheduled to meet once more at 4 p.m. CT in New York City, this time with Gary Bettman and Donald Fehr involved, as all of the optimism and good spirits of the past few days have all but completely vanished. This is the point in time where thing reach their most critical point, where the two sides fight tooth and nail over a deal they both perceive as "bad" for them and haggle over finite details that threaten to derail the entire deal.

We are so close to a deal being reached, but at the same time so far away.

The NHLPA has requested once more that federal mediators become involved in the talks, while the owners feel that such a maneuver is yet another stalling tactic to delay a decision by the players. On top of that, the owners are frustrated with the feeling that the union is presenting a "moving target" in negotiations, coming to an agreement on one issue only to reach a standstill on another.

The most recent of these issues is the $300 million in "make whole" that the NHL put on the table on Wednesday. The point of contention is that $50 million of this would go to a pension fund and not directly to the players themselves. I'll allow the great Elliotte Friedman to explain:

With "make-whole," there were reports last night (one of them mine) that the NHL upped its offer from $211 million to $300 million. That's closer to the NHLPA's last known request of $393 million. But later, there was a catch -- that $50 million of it would be for pension funding. That's a tricky one and sure to annoy the players. Here's why:

Due to differing pension laws in the United States and Canada, players based in the U.S. can receive approximately $20,000 more per year in tax-free contributions from their clubs. It's a nice little selling point for the American squads because if you play north of the 49th, you lose a good chunk of that difference to taxes. Not every player is a multi-millionaire, so that future protection really means something.

The owners have, under the guidance of the "moderates" present for these meetings, apparently attempted to address the concerns the players have with the current proposals on the table. Reportedly the fact that the NHLPA continues to find new issues to contend with has raised tensions and created some very intense moments on the owners side, as well as on the players' side and this almost led to talks completely breaking down Thursday morning.

Unfortunately, two of the moderate owners have left the meetings and have left Gary Bettman and his group of hardliners at the table with Penguins owners Ron Burkle. Let's hope that Burkle remains the voice of reason with the owners. As of now, it's unknown if mediators will get involved. The NHL won't make a decision until after this next meeting, as the owners feel this is just another stalling tactic by the players.

Time is the only leverage the players have left, aside from decertification. While this week, or even next week, are far from what should be considered the "drop dead date," there's no question that the owners are pushing to get a deal done now. The players feel that this moment is the time the owners had in mind all along, and likely feel that if they can string things out further that a better deal can be had.

Why is the league pushing now for a deal? Because they are likely nearing the tipping point where financially it no longer makes sense to continue without games being played. Consider this fact, from Jeff Klein of the New York Times:

Any season of less than 62 games entitles sponsors to pay a prorated percentage of the money they would normally have paid the league, according to a person who has been involved in major sponsorship deals with the league. For example, a 56-game schedule would be 68 percent of an 82-game schedule, meaning sponsors need pay the N.H.L. just 68 percent of what they otherwise would have paid; a 50-game schedule would entitle sponsors to pay just 61 percent.

So, we're reaching a point where the players likely won't receive a better deal from the owners but want to push them as far as they can. Unfortunately, they run the risk of nuking the whole thing with that strategy over what is essentially some very, very finite details.

More to come this evening.

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