Potential Storm Clouds on NHL CBA Horizon

by | Sep 11, 2016 | Soapbox | 3 comments

NHL deputy commissioner Bill Daly doesn't foresee any CBA issues on the horizon.

NHL deputy commissioner Bill Daly doesn’t foresee any CBA issues on the horizon.

 Earlier this month, NHL deputy commissioner Bill Daly told SiriusXMNHL there was “a general satisfaction” from the league with the current collective bargaining agreement.

 From time to time, tweaks are needed. I think the sign of any healthy collective bargaining relationship is, particularly when you’re talking about tweaks, you try to deal with them mid-term and try to make adjustments. I think we’ve been successful with the [NHLPA], at least during the first four years of this agreement, in being able to do that, on both sides of the table.”

Daly admitted it was early, but he didn’t see “any storm clouds” on the horizon, “at least not yet.”

Considering the league and the NHL Players Association can opt out of the current CBA in September 2019, making 2019-20 the final season under the agreement, Daly’s forecast should be reason for optimism. Still, there are some possible clouds that could brew into a potential labor storm by 2019, or when the CBA expires in September, 2022.

Escrow’s been an issue in recent years for the players. With the decline in the value of the Canadian dollar since 2014, the increase in league revenue has slowed. That’s led to higher escrow from the players’ contracts that they won’t get back at season’s end. .

Over the last two seasons, there were reports of grumbling from the PA membership over the escrow clawbacks. That generated speculation they wouldn’t vote to approve their annual five percent salary-cap escalator clause. That conjecture came to naught, as the players voted in favor of the escalator for both seasons so as not to hamper free agents from getting the best possible deals.

While the players are undoubtedly unhappy over escrow payments, their recent decisions to approve the salary-escalator clause could suggest a potential unwillingness to exercise their right to bring this CBA to an early end.

Should the Canadian dollar remain a drag on league revenue, however, those expensive escrow clawbacks could become a serious sticking point for the players. Perhaps enough to exercise their CBA opt-out in 2019. 

Some team owners and general managers could disapprove of the recent trend of teams trading away the dead cap space of players on permanent long-term injured reserve. The most notable example is former Boston Bruins center Marc Savard, whose career was cut short by concussion in 2010-11.

Since 2015, Savard’s $4.021 million annual cap hit was dealt twice. The first trade occurred on July 1, 2015, when the Bruins bundled Savard’s contract with right wing Reilly Smith and shipped both to the Florida Panthers in exchange for winger Jimmy Hayes.

Nearly a year later, the Panthers dealt the final year of Savard’s contract, along with a 2018 second-round draft pick, to the New Jersey Devils for minor leaguers Paul Thompson and Graham Black.

In both cases, Savard’s contract was dealt from teams wishing to clear up salary-cap space to a club with the payroll room to absorb the dead cap hit. There’s nothing in the CBA that prevents such moves. However, some team owners and GMs could consider it salary-cap circumvention akin to the extremely long-term, heavily front-loaded contracts handed out to several players under the previous CBA.

On April 9 and July 9 of 2015, I listed several other issues that could become contentious in the next round of NHL labor talks. They include the right for a team to renegotiate a player’s contract, a player’s request to terminate a contract (neither exist under the current CBA), limits on no-trade/no-movement clauses and payment of the bulk of a player’s salary as signing bonuses.

Much can happen in three years’ time. Some of these aforementioned issues could fester into potentially acrimonious problems, perhaps enough to trigger the early opt-out by the league or the PA. 

The league and the PA both had early opt-outs in the previous CBA by 2009, but they ultimately decided not to go that route. Both sides could prefer to let the current agreement play out until its expiration six years from now.

That’s what I’m hoping for. In the meantime, I’ve already started building up my lockout fund. Just in case.







3 Comments

  1. It is a cap circumvention but I personally don’t see a problem with the Savard trades or moves of that sort. Arizona was able to turn cap space they will never use into a 2nd round pick. Florida dumped a bad contract but they had to pay a significant price to do so. It opens up another job for an nhl player…

    The signing bonus thing however is one that all sides should want cleaning up. The fact that bonuses are exempt from escrow should motivate the players. The fact that they make contracts vitually buyout proof can’t be appealing to the owners. Heck if contracts are moving to all signing bonus they’ll have to pay the players during the next lock-out! No no, that will not do.

  2. The only real issue I can see being a real pain is if they somehow bring up or try to fix the loop hole that allows contracts which seem to circumvent paying towards escrow by making most of the contract bonuses due on August 1st (or whenever) such in the case of O’Reilly’s in Buffalo.

  3. The biggest issue as always will be money & the profitability of NHL teams. Far to many teams in the NHL can’t turn a profit. 2015-16 figures haven’t been released yet but here are 2014-15.

    http://www.statista.com/statistics/193744/operating-income-of-national-hockey-league-teams-in-2010/

    What this shows is 8 teams lost money including the TB lightening who went to the Stanley Cup & averaged over 19K fans a game. Another 8 made limited profits. The top 3 NHL teams raked in more than the remainder of all NHL teams combined.

    This is not a good business model. A lock out is coming. The CBA won’t be opted out of early by either side but come Sept. 2022 we will have armageddon yet again.

    The NHL will want the revenue split changed from 50-50 to about 53% owners, 47% players & the players will want far greater revenue sharing so the serious have teams help support the have not’s far greater than they are today.That will be the meat of it & numerous other issues & posturing will come into play but you shouldn’t have to make the playoffs to have any hope of turning a profit but as TB showed even going to the cup doesn’t guarantee a profit.