NHL collective bargaining: The issues | Hockey | CBC Sports

Hockey Night in CanadaNHL collective bargaining: The issues

Posted: Thursday, June 28, 2012 | 01:15 PM

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It's been reported that NHL commissioner Gary Bettman would like to bring the players' percentage of hockey-related revenues down to 50 per cent from its current 57 per cent. (Kathy Willens/Associated Press) It's been reported that NHL commissioner Gary Bettman would like to bring the players' percentage of hockey-related revenues down to 50 per cent from its current 57 per cent. (Kathy Willens/Associated Press)

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We all debate who deserves what or who's going to get what, but negotiations usually come down to "who blinks first," as one NHL executive says. Here are some thoughts and ideas into where we're going as collective bargaining is about to begin between the league and players' union.

We all debate who deserves what or who's going to get what, but negotiations usually come down to "who blinks first," as one NHL executive says.

The intent is to show no bias here. Spent a lot of time over the past season talking about labour and solutions with people in the game, and here are some thoughts and ideas into where we're going.

WHAT SHARE DO THE PLAYERS GET

Right now, they receive 57 per cent of all hockey-related revenues. It's been reported on many occasions that commissioner Gary Bettman would like to bring it down to 50 per cent. That's in line with the recent NFL and NBA deals. (MLB does not have a salary cap.)

Each percentage point is worth about $30 million US.

But, as one of the smart people involved in all of this has said, "It's not just the size of the pie, it's what's in the pie." And that is the key. How creative are both sides willing to be?

The NFL players agreed to go down to 47 per cent (from approximately 50) -- but received some other concessions that will increase their overall pool of cash.

Previously, teams only needed to spend to 75 per cent of the cap. In 2011 and 2012, the league committed to 99 per cent of the max. According to NFL.com, it drops to 95 per cent for the remainder of the 10-year agreement. (Teams only need to spend 89 per cent of that in cash, but there is a league-wide guarantee it will get to 95 with bonuses and incentives.)

Also, the players agreed to different kinds of splits for different sources of revenue: 55 per cent of national media revenue, 45 per cent of NFL Ventures revenue, and 40 per cent of local club revenue. (The massive national TV cash drives everything.)

Like their NHL brethren, the NBA players also had 57 per cent of the share in their previous CBA. That's now on a sliding scale, from 49-51 per cent.

But, as a concession, they also have a higher floor. It went from 75 to 85 per cent this season, and stays there for another year. Then it goes to 90 (some hockey teams must be shivering at these numbers).

The NHL's Hockey Related Revenue system is spelled out in Article 50 of the current CBA. There are loopholes and exceptions you can expect the NHLPA to examine.

But, a couple of other situations could create fireworks. For example, if the NHL was to expand, players don't get a share of the new franchise fee(s).

If it's brought up, can't imagine the league would be happy to split it. And, will the NHLPA look at Real Sports (the tremendous sports bar next to Air Canada Centre) or LA Live (the impressive restaurant area outside Staples Center) and say, "My, those places would be awfully empty on 41 other nights if there was no hockey." (Vancouver is considering something similar, too.) I asked a member of one of those organizations about sharing that revenue and he told me to do something that's anatomically impossible.

This is probably the biggest fight.

ESCROW

Players hate this. It's the amount removed from every paycheque to make sure they don't get more than 57 per cent of the pie. (If not, it's paid back early the next season.) The more players on one-way contracts are sent to the minors, the worse it is. The more guys get injured and have to miss games, the worse it is.

The league isn't thrilled the NHLPA usually sets the amount high, believing it's artificially done to infuriate players and guarantee a return. This year, the union did start at 8.5 per cent, the lowest since 2005-06. It was at 22 per cent a couple of years ago.

You can't expect the players to be able to undo this one, but the NBA did something interesting in its new deal. There is a cap on the amount that actually went up from eight to 10, but any shortfalls are now taken off post-career benefits instead of next year's pay.

THE FLOOR/REVENUE SHARING

Obviously, the lower-revenue teams hate this. In 2005-06, the first post-lockout season, the salarycap was $39 million. Now, the floor is 40 per cent higher than that.

The thing is, though, you can't have a cap without a floor. If the NHL is going to say, "Look, NBA players are only getting 50 per cent and NFL guys 47, you're going to have to go there too," the players will fire back with, "Well, look at where their floors are."

MLB doesn't have one, but teams that actually do try (hint: not Kansas City or Pittsburgh) to spend whatever they want, providing a willingness to pay the luxury tax. The NHL is not going to go backward and drop the cap system for a luxury tax. It's won that battle already.

The problem with the NHL's current revenue-sharing plan is that teams that qualify (not one of the top 15 revenue-generating teams, not in a market of 2.5 million homes, average attendance of 14,000) must have a year-to-year growth rate ahead of the league average. Teams like Buffalo, Nashville and Florida can't hope to grow faster than Toronto or Montreal or the Rangers, an argument that does have merit. (That market-size issue is painful, too. Just ask the Islanders or Ducks.)

Fehr is going to propose something which deposits the billions saved in players' salaries to the teams that need it. To give you some idea of what he's done, the MLB revenue-sharing system he helped create consists of team and league responsibilities. The last CBA he did was 2006, which worked in two parts. First, each team deposited 31 per cent of its local revenue into a pool. All of that money was split 30 ways, so the New York Yankees, for

example, wouldn't get back what they put in. The-then Florida Marlins (now Miami), at the time, were making a killing. Then, MLB's "Central Fund" (national revenues) sent a cheque to each team.

In 2009, Baseball America reported that amount to be $30 million apiece. Overall, the same magazine said $433 million was moved from the high-revenue teams to the lower clubs that year. It was at a time when MLB revenues were $6.6 billion, double what the NHL is at now.

The danger is having some NHL owners do what the Royals and Pirates do -- keep a tiny payroll while making profits because they cash massive revenue-sharing cheques. But there is now protection against that. In the latest MLB CBA, a new rule was added. Your payroll must be at least 25 per cent larger than your revenue-sharing cheque. (So, if you get $50 million, you must spend at least $62.5.) And you have to prove the money's been spent to improve your team.

You can expect Fehr to try something along these lines.

FREE AGENCY

"This has been the most inflationary part of the new CBA," said one exec. "I bet the league had no idea it was going to work out the way it did."

As free agency for the best players dropped from age 31 to 27 (or after seven years in the NHL) it led to a series of long-term, big money contracts.

The exec is right, it was great for the players.

A couple of people suggested the NHL might try something as simple as changing "age 27 or seven years" to "age 27 and seven years." Or it might try to raise it closer to 31 years old.

Can't imagine the NHLPA would be so eager to change that. Ilya Kovalchuk got $100 million and Zach Parise/Ryan Suter are about to hit the market in their primes. But what about ...

CONTRACT LENGTH

No one in the NBA can sign for more than five years. Will the NHL try that one?

GUARANTEED CONTRACTS

This is an educated guess on my part, but I don't think Bettman is going to go after these. If he did, the players would have no choice but to sit out forever. (I would.) Non-guaranteed contracts may look great to NFL owners, but look at the side-effects now, especially in the concussion era. It's so dangerous.

It's going to go one of two ways: players won't play after the slightest injury or they'll be so scared to lose their jobs that they'll play when they shouldn't. Yes, it happens to some degree now, but it will happen to even worse extremes going forward.

And, now that concussion lawsuits are a big fear in NFL circles, I'd be even more leery of eliminating such contracts in the NHL. Some of the lawsuits are coming because players feel cheated by non-guaranteed deals.

But ...

BUYOUTS

Could teams push for a different type of "skill guarantee?"

There are two buyout periods now: after the season and after arbitration. A couple of team executives said they've heard compatriots talk about a third - just before the regular season.

Say a player totally bombs in camp/exhibition play, shows up out of shape, or, for whatever reason, looks like he's lost it. What if a team could buy him out then?

Right now, the buyout formula is two-thirds the cash owed over double the term remaining. So, if you cut a guy who has three years and $6 million left on his contract, you must pay $4 million over six years. (There is a less-onerous model for younger players.)

I do think the owners will target the current formula, for sure. Will they go one step further, too, and try for an extra buyout period?

CAP LOOPHOLES

Some teams go bug-eyed crazy when the Rangers put Wade Redden in the AHL or Ian Laperriere doesn't retire until his over-35 contract expires. It's a way around the cap. (And, if I was a GM, I'd be doing it, too.)

Don't know how the NHLPA feels about this, but there is internal debate among the league to end this. I'm against it -- and here's why: If you're a smaller-budget team, you have to be able to jettison mistakes. Two bad contracts (and everybody has them) will cripple you.

Take Nashville. The Predators wanted to move Matthew Lombardi last season. Toronto agreed, providing Cody Franson was included. It didn't work out, but it seemed like a good move for the Maple Leafs. And it really helped Nashville create some flexibility.

If Toronto can't put other people in the minors, it can't happen and the Predators are stuck.

Same when San Jose wanted to move Brad Lukowich with Christian Ehrhoff. If the Canucks can't take Lukowich, it never gets done. And it doesn't help the Sharks.

Trading is impossible enough already. And, you're only hurting the teams that really need assistance.
 
SUPPLEMENTARY DISCIPLINE

It's no secret the players want change. Maybe it's a committee, maybe it's a different appeals process. In baseball, Fehr's former sport, an independent arbitrator can hear appeals. We've assumed it will be different.

Committees are useless. The competition committee, once a great idea, is now just two groups voting as a bloc and a complete waste of time. It has to be one person, maybe with a term limit. That's a brutal job to keep for a long time.

And, what if the NHL, seeing the power held by NFL commissioner Roger Goodell, decides it wants a similar setup. Goodell makes suspensions and hears appeals.

The league will fight the maximum $2,500 fine, but it should be remembered this low amount is because of former NHL president Gil Stein. Stein, Bettman's predecessor, wouldn't suspend offenders. They could play in games, but pay larger fines and be forced to miss practice.

The NHLPA felt the players were being punished, but not the teams and fought back.

The players have talked a lot about this, but I'm not sure it's going to be so easy.

DRUG TESTING/SLEEPING PILLS/THE SCHEDULE

Lou Lamoriello's wanted drug testing "with teeth" for awhile. As it stands, players can only be randomly checked three times during the season, never beforehand and never during the playoffs.

Don't see it being a huge deal (unless it becomes a trade-off for something else), but think the players will take it one step further. If several sources are correct, Fehr is going to make sleeping pills a major issue and point the finger at the schedule.

Sadly, it took Derek Boogaard's death to thrust a spotlight on the problem. The combination of players being wired after games, having a beer or two, a lot of travel and a morning skate/practice equals men needing help to get to sleep. Too often that help comes with Ambien.

As we know now, it's a dangerous mix.

The easy thing to do is ban it, and that may very well happen. But, Fehr apparently believes that if the schedule doesn't ease up, it won't matter. The NHL is sensitive to this, and is looking at ways to ease things but not (as of the last I checked) willing to go to a "baseball model" or two or three games in a row in one city. There are legitimate feasibility problems with multi-purpose arenas.

I do wonder if the solution may be later morning skates (or none at all) and afternoon practices. This is something that needs to be addressed, similarly to how the Canucks make sure their players always have an eight-hour block to sleep.

At least one agent hopes this gets done because he's worried about what's happening at the AHL and junior levels.

EQUIPMENT
 
Not the usual debate about tank-like shoulder pads.

Several GMs are pushing hard for greater control over what their players wear. From goalie masks to socks to gloves, they feel their multimillion competitors are not properly protecting themselves from injury.

They want better testing on masks and mandatory thicker padding between the mask and the face. Some goalies refuse it because they want their eyes as close to the cage as possible.

Kevlar socks protect against accidental skate cuts. The Rangers made their players wear a Kevlar "plate" on their gloves because of all the shotblocking they do.

And, in what should be an interesting discussion (if it actually comes up), one GM said he'd like players to have to pay for their own sticks. A team's stick budget can reach $500,000 per year, and they tend to break a little more often than everyone likes.

INTERNATIONAL PLAY

Fehr loves this kind of competition, having helped create the World Baseball Classic in 2006. Fans love it, players love it and the NHL/NHLPA love it - as long as they control it.

The idea of a permanent World Cup every four years has been discussed for awhile now, but there's been debate over whether it should be before the season or at the all-star break. It's a 50/50 split.

Bettman knows how much the players want to go the Olympics and he may use that as a bargaining chip. It should happen, but the NHLPA does agree with him that they don't get enough out of it.

They don't get access and can't use footage on their websites. That's as big a hangup as this labour issue is for nailing down Sochi. Can't see it not happening, though.

RETIRED PLAYER BENEFITS

This usually gets forgotten, because people tend not to think about quitting hockey or those who already have. But, both the NHL and NHLPA have a responsibility to continuously consider those who've retired and those who will retire (the current players).

It's not just financial, although that is important. It's also about making certain players who are in the process of retiring are given counseling on how difficult that challenge can be.

For some reason, this Forbes.com quote from Kris Draper really stuck with me and he's probably one of the more well-adjusted people.

The goal should be to make sure everyone who needs help gets it.

MINIMUM SALARY

As I wrote in the companion piece, I think the league will try to raise it from the current $525,000. It's a pretty smart strategy. I'm not saying making that money is a hardship, but it is harder with taxes, escrow and agent fees.

How high? Not sure. Everything's negotiable.

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