On October 16, the NHL made a new CBA proposal to the NHLPA which caught many observers, including the PA leadership, by surprise. Here’s my take on the salient points of the league’s offer.
The length of the proposal is reportedly six years. No change from the league’s previous offers.
Fifty-fifty split across the board of hockey-related revenue, with no salary rollbacks.
PA director Donald Fehr stated such a quick reduction in players share of revenue would result in “a very large escrow” in the early years of the league’s proposal. Thus, if the players are to accept this 50-50 split, they’ll prefer it be phased in gradually, to lessen the escrow hit.
ESPN’s Pierre LeBrun reported the league’s proposal would allow teams to go over the salary cap for the first season, up to $70 million max, as part of a transition period before the cap would be reduced the following season. That would certainly address the sticky issue of how clubs currently sitting with payrolls currently close to that figure (hello there, Boston Bruins, Minnesota Wild, Vancouver Canucks, among others) would get compliant this season under the league’s plan.
Larry Brooks of the NY Post observed via Twitter, “Escrow has been under 2.5% in 5 of 7 years of last CBA. 12.78% in 08/09, 9.41% in 09/10. Players got added 4.64% in 05/06 and 0.66% in 07/08.”
As James Mirtle of the Globe and Mail observed, escrow could come in at between 7-11 percent, depending upon the annual growth of revenue, which is why it’s an issue for the players. He suggests, however, if the league were to pay that back over time, it could alleviate the problem.
So, without a salary rollback, how does the league get to that 50-50 split in the first year?
According to Tom Gulitti of NorthJersey.com, “money on salaries above that point would be deferred and paid back over the life of the contract”.
Michael Russo of Startribune.com added: if a player on a ten-year deal had $1 million trimmed from his contract, he would get an additional $100K per season for the next ten seasons.
It does, however, come with some risk. As Katie Strang of ESPN.com observed, “if deferred payments rely upon future growth, what happens if future growth not sufficient to support those payments?”
Another issue, as noted by David Shoalts of The Globe and Mail, is if the definition of hockey-related is to remain as it was under the previous agreement, or if the league is seeking changes in their recent proposal.
That, however, appears a detail which will have to be determined between the two sides in future talks.
Eligibility for unrestricted free agency at age 28 or eight years of NHL service.
That represents only a one year increase from the current eligibility for UFA (27, or 7 years of service), which is a decline from the league’s initial proposal of age 30. I consider this a notable concession on the league’s part. PA will likely push to keep the current eligibility criteria, but I can’t see this being a significant show-stopper.
Entry level contract term remains at three years.
The league initially sought to extend that to five years, which I’ve frequently suggested since July could make it difficult for the league to attract the best young European talent. Good to see them showing some common sense with this.
**Update** ESPN.com’s Pierre LeBrun reported entry-level offers for rookies would be two years instead of three. If so, looks like the league understands the potential damage it could do by pushing those ELCs beyond three years.
Contract lengths would be capped at five years.
No change to what the league has initially sought, and which the PA might not be keen to accept. I still don’t foresee this to be a significant sticking point, as only a handful of players get contracts longer than five years (the average is just over three years). If push comes to shove, I don’t see this as a deal-breaker.
Salary arbitration rights remain in place.
The league initially sought to eliminate the players’ right to salary arbitration, so this is a significant concession on their part.
Salaries for NHL players demoted to the minors would still count against salary cap.
This one could be a sticky one. Some pundits believe the PA aren’t going to be keen on that point, but I also think a number of NHL players don’t like teams burying high-salaried players in the minors simply to become cap compliant. See Wade Redden of the NY Rangers for a notable example.
If anything, such a move would handcuff those few big market, free-spending teams which have employed that tactic to rid itself of costly salary cap mistakes.
Revenue sharing would be $200 million. The NHL initially sought $190 million, the NHLPA $250 million.
This is one where I could see some more negotiating between the two sides, as the PA could try to push that number a little higher toward between $210-$220 million.
The League’s offer would be contingent upon a full 82-game schedule beginning on November 2.
That would mean training camp would have to open on October 26 to allow the teams a full seven-day preparation period before the November 2nd start date. The NHL has already cancelled games up to October 24th, so I daresay that’s to be the deadline for a new deal to be implemented in order to reach that November 2nd season opener.
One final point: it’s interesting the NHL’s deal comes on the heels of the revelation of the league employing a noted American pollster to determine the best way to conduct its spin in the PR campaign regarding this lockout. Cynics are suggesting the offer is little more than a PR gambit designed to force the PA into rejecting the offer and thus painting the players as the bad guys and the team owners as the fair and reasonable ones.
Then again, as the Globe and Mail’s David Shoalts suggested:
“Possible reasons could be the adverse fan reaction in many of the league’s U.S. cities, where indifference seemed to be the most noticeable feeling.
This may have frightened more than a few owners in a league that has long waged a battle for mainstream acceptance in the U.S. Several U.S. teams, such as the Dallas Stars, St. Louis Blues, Tampa Bay Lightning, Florida Panthers and the Stanley Cup champion Los Angeles Kings saw the lockout stall their chances to build on encouraging signs in their markets due to ownership changes and/or playoff success.”
The league’s offer certainly puts the puck firmly into the NHLPA’s end. If the players reject it outright, the backlash from the fans will be significant, killing off whatever support they previously enjoyed.
That being said, Fehr’s remarks in the press conference immediately following yesterday’s offer from the league suggest the PA views the league’s offer as a solid “starting point” for further negotiations, which suggests the PA will likely make a counter-proposal soon.