Renaud Lavoie of RDS has reported on the league’s initial offer to the players in CBA negotiations (link is in French). Now I realize that negotiation is a process, and you start out asking for the moon and settle somewhere in the middle. However this 5 part offer is quite frankly an insulting one. If the NHL takes a hardline stance on these issues, we can expect another long and protracted lockout and that clearly won’t be good for the game. Lets examine this 5 part proposal and what it would mean.
1) The Players share of revenues reduced to 46% from 57%.
This would lead to a a 19.29% drop in player salaries immediately. Very similar to the 24% rollback the players took in the 2006 agreement. While the players probably wont stay at 57% after seeing the NFL and NBA CBAs reach agreements that are much closer to 50%, such a drastic move is out of line and unnecessary IMO. This is a league whose revenues have nearly doubled since the last CBA was signed. With all these revenues coming in, I have a hard time believing the League’s claims that teams are in such financial trouble. In a multi billion dollar business with player costs set at 57% there is no reason that they can not create a healthy economic environment for every team. If certain teams can not survive in this climate, perhaps they are in the wrong markets, or perhaps the league should institute better revenue sharing from the big market clubs to the small market ones.
I have a hard time believing that the small market teams cannot survive when we see the Minnesota Wild drop 196 million on two players just a couple weeks ago. Or last summer watching the Buffalo Sabres spending spree. Or the Columbus Blue Jackets last summer. Or watching the Devils drop a mega contract on Kovalchuk. Or the Tampa Bay Lightning’s spending spree in 2009. Or Florida’s last season. Or Carolina having both Staal brothers on massive deals. And on and on and on. These owners are smart business men, no one is holding a gun to their head with these contracts, and yet
We see big market teams like the Leafs paying Jeff Finger in the minors, or New York paying Wade Redden in the minors, or the Blackhawks paying Cristobal Huet in Europe, or the Capitals paying Michael Nylander in Europe. All moves that were made during the lockout. All moves that were made to clear cap space so these teams could go out and spend even more money.
To illustrate how big of a move this is. It would result in the NHL’s salary cap dropping from 70.2 million, to a number in the 58 million dollar range. Such a huge drop would put the new cap barely above the current NHL salary floor.
Update: Larry Brooks of the New York Post is suggesting that there would also be major changes to what is included in Hockey Related Revenue. With such major changes, this could mean that the net effect is even greater than a 19.29% hit to the players. Without knowing the exact details the numbers are unknown at this time.
However this isn’t the biggest issue. The next two issues are the big ones.
2) Players would need 10 years of service to become Unrestricted Free Agents.
3) Arbitration would be eliminated
4) ELCs to be 5 years instead of 3 years in length.
Basically these three moves in tandem would seriously depress salaries of guys under the age of 30.
Extending the ELC would mean that young players would be getting around 1 million dollars in base salary for a lot longer.
The extension of RFA years, coupled with the elimination of salary arbitration would create a huge number of RFAs while at the same time completely eliminating the bargaining power of those RFA players. We all know that the league’s GMs loathe offer sheets and just do not use them. The removal of arbitration rights would take away almost all the bargaining power of an RFA. If a team lowballs an RFA, he will be stuck with three options… 1) Hold out for a better deal, 2) see what you can get in Europe 3) sign the lowball offer.
These clauses are quite simply things the players cannot possibly even consider accepting.
Which brings us to the 5th Request of the NHL
5) A five year max contract length
While I certainly think that something will be done to limit the long term contracts we are seeing in the NHL, I think this is going a little too far. 5 year contract limits are just another limit on the bargaining power of players under the CBA. I’m of the belief that if a GM is willing to take the risk with a long term deal, no one should be able to stop him. And if a star player is willing to commit to spend the rest of his career in one city, he should also be able to do so.
Update: Larry Brooks is also stating that all contracts must be for the same amount in every year. They can not be front-loaded or backloaded in any way… even if its just something done for tax reasons.
Now sure, we don’t want the players and teams circumventing the cap with long term deals that feature low salaries in the final years where players retire and never play them out, but there is an easier way to deal with this. Quite simply set up a system that works in a similar way to a buyout, where even if a player retires, his entire cap hit does not disappear, but the team must make up for a portion of the deal.
What do I have in mind?
Lets say a player has the following contract… 7 years, 49 million (7 million dollar per year cap hit).
It is structured as follows. 10 million 10 million 9 million, 9 million, 5 million, 4 million, 2 million.
If a player retires before year 7, his team has saved 5 million in cap hits during the first 6 years due to the structure of the contract… (Ie they paid out 47 million in salary, but only took 42 million in cap hits in those 6 years). As a result in year 7, they take on a 5 million dollar cap hit if the player retires.
This would be a deterrent to the mega contracts with clear “retirement years” at the end and would allow teams to still be able to lock up a good young player for the rest of his career.
Overall this proposal is one I see the players being adamantly opposed to, and I see it being rejected. Like I said earlier, yes its an opening proposal, and the league is asking for more than they will end up settling for. However this opening position is so far out there, it is such a ridiculous request that it carries with it real danger of creating animosity in the process. I feel that while the league obviously should be opening here with an offer that is in its favour, it should also be a realistic offer. Something that creates some starting points and areas where movement would be meaningful towards a resolution. This is such a lowball offer that it doesn’t provide for that.
Now I know what many will say. The players are overpaid, and that they are playing a game, and they don’t deserve this money. But lets remember a few things. This is a battle of billionaires, and hundred millionaires owners vs the Players. This is not a battle of the common fan vs the players. The last lockout should have proved to everyone that even if player salaries drop, ticket prices will not follow. In fact one of the reasons the cap keeps growing is the continued inflation of ticket prices. So even if the owners get lower salaries, they will still continue to raise prices and it will just mean more money in their pocket.
What do you think about this? Feel free to leave your comments and follow me on twitter @LastWordBKerr.