June 22, 2012; Pittsburgh, PA, USA; NHL Commissioner Gary Bettman on stage at the 2012 NHL Draft at CONSOL Energy Center. Mandatory Credit: Charles LeClaire-US PRESSWIRE
With the September 15 deadline looming, the NHL and NHL Player's Association are meeting once more this week as CBA negotiations continue across four days in New York City. After the NHL's initial proposal was made public a few weeks ago, a prevalent fear has been spreading that due to the nearly outrageous terms proposed by the NHL we'd be in for a long and arduous process that would see the NHL season delayed and possibly lost. Again.
Yet it seems both sides are optimistic that a deal can be reached, with NHLPA Executive Director Donald Fehr and NHL Deputy Commissioner Bill Daly stating that plenty of time remains for an agreement to be made before September 15.
"There's no law that says you have to lock out," Fehr said. "If both parties are both really interested in trying to reach an agreement, and if we both really care what the people watching hockey games think, then we ought to be doing everything we can to avoid that eventuality. And that includes not short-circuiting the process."
Daly would not comment on what the plan would be should an agreement not be made by the deadline, with the players already on the record as stating they'd be more than willing to start the season under the old CBA guidelines.
The two sides have already met for two days this week, with several players negotiation with the NHL over supplementary discipline and other peripheral issues. With Fehr in Europe for the first part of this week discussing the CBA with players across the Atlantic, it's expected that today and tomorrow will be when the NHLPA will discuss their stance on the big issue of the negotiations -- economics -- and possibly make their formal counter-proposal by the end of the week.
That's when things could get ugly.
Yesterday the players met with the NHL regarding supplementary discipline, likely unhappy with how the NHL has run this particular area of the league for sometime -- especially after what happened last season with Brendan Shanahan. The NHL made strides to make the program more transparent but it became clear the same subjective reasoning was still being used, with incredible inconsistency occurring from incident to incident.
The NHLPA had presented their proposal to changes in the process and on Wednesday the NHL responded with questions and concerns about the ideas put forth by the union. Bill Daly did not seem enthused by the NHLPA's proposal, stating that he doesn't see many changes being made to the process.
"I think the objectives they have in their changes are objectives that we share," Daly said. "We just believe that the supplementary discipline process is a tough process, but it works fairly well and I'm not sure some of the changes they've proposed would necessarily improve it. But, again, I'm not prejudging that. That's something we have to talk through with them and we come at that with an open mind."
On Thursday is when the big guns come out, however, with the NHLPA apparently preparing to discuss their take on the economic issues with the CBA negotiations and their take on the initial proposal from the NHL. The NHL's initial proposal was one that fell on the far side of the spectrum, likely in an effort to create the best "compromise" situation possible. The Globe & Mail sums up the inherent issues associated with the proposal:
What's clear is that Fehr and the players have expressed disappointment regarding the NHL's initial offer made last month. The NHL is proposing to cut players' share of revenues from 57 percent to 46. That translates into as much as a $450-million change in revenue.
The league's also seeking to restrict free agency on several fronts. That includes limiting length of contracts to five years (there are currently no limits in place); lengthening the time a player must wait to be eligible to become an unrestricted free agent from seven years to 10; and eliminating players' rights to salary arbitration.
The NHL has also made it known they'd like to change what is considered "hockey related revenue" and how that relates to the revenue share between teams and players. The league also just saw the NBA negotiate with their players on a 50/50 agreement with revenue, something the NHL is likely aiming directly for while the players are likely not willing to take much of a cut from the current 57 percent they have now.
The NHL is asking the players to take a 24 percent cut on revenue sharing when profits and revenues are at their highest point since the 2004-05 lockout. The league is also asking for massive changes to free agency, that would create an even more restrictive environment for the players to be able to enjoy the market created by free agency in the first place. All of these proposals by the NHL show that the league feels the NHL is in danger financially, of contracts getting so out of control once more that most teams simply cannot afford to keep up.
As it stands now, the salary cap ceiling is expected to rise once more, which means the cap floor will go up as well. Several teams over the past few years have struggled to reach the floor, further adding to the thought that there is too much growing disparity between the "haves" and "have nots" in the NHL. Except recent history says otherwise.
Just this summer, as the negotiations loomed on the horizon, traditional "small market" teams went on spending frenzies. The Minnesota Wild ponied up for Ryan Suter and Zach Parise, to the tune of matching $98 million contracts, while teams like the Nashville Predators and even the Carolina Hurricanes showed a willingness to add significant amounts of payroll to their roster. Even our very own Dallas Stars have made it known they're willing to spend money.
One big issue the players will be discussing will be linked to the proposed changes to hockey-related revenue -- the escrow system. Agreed upon after the last CBA negotiations it initially seemed like a great idea for the players and the league -- a way for the players to possibly get a nice bonus check at the end of the year. David Shoalts has a great article on this major issue and sums up the underlying problem of the NHL's proposal well:
As Bettman noted with obvious satisfaction in his 2009 memo, once the numbers were in and the escrow was paid, the average team payroll was $47-million. That, the commissioner pointed out, compared well with 2002-03. In those days, the owners were just starting to complain loudly about rising player salaries and the need for "cost certainty" as they called a salary cap.
In 2002-03, the average payroll was $47.2-million. But league revenue was just under $2-billion, while in 2008-09 those $47-million payrolls were paid out of total NHL revenue of $2.6-billion.
So a lot more than the players' $207-million in escrow money flowed into the owners' bank accounts that summer.
The players lost nearly 13 percent of their salaries to revenue sharing in 2009, with that figure dropping to 9 percent in 2010 and just 2.5 percent last year. Meanwhile, the league's overall revenue has continued to rise with the owners pocketing extra player salaries at the end of the season on top of record overall revenue. It's tough to take sides so soon in this process but it's tough to not understand the players' frustrations with these initial proposals.
We should find out later this evening or tomorrow just how drastically different the NHL's proposal on the new CBA differs from the league's, especially on the economic issues. While both sides feel confident a delayed season won't be necessary, we'll find out just how difficult these negotiations will truly become very soon.