NHL proposals to change revenue formula would be significant | Hockey | CBC Sports

NHLNHL proposals to change revenue formula would be significant

Posted: Thursday, August 30, 2012 | 09:11 PM

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NHL forward Manny Malhotra, seen talking to reporters in July in New York, has expressed frustration with how revenue is being calculated. (Jason DeCrow/Associated Press) NHL forward Manny Malhotra, seen talking to reporters in July in New York, has expressed frustration with how revenue is being calculated. (Jason DeCrow/Associated Press)

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When the NHL made its most recent proposal to the players on Tuesday afternoon, initial reports indicated it included a revenue split starting at 51.6 per cent to 48.4 in favour of the NHLPA, eventually moving towards a 50-50 split over the course of the deal.

When the NHL made its most recent proposal to the players on Tuesday afternoon, initial reports indicated it included a revenue split starting at 51.6 per cent to 48.4 in favour of the NHLPA, eventually moving towards a 50-50 split over the course of the deal.

Upon further review, the players argued that changes to Hockey Related Revenue actually decreased their share to 46 per cent under current rules. Commissioner Gary Bettman later confirmed this.

Canuck forward Manny Malhotra told The Vancouver Province's Ben Kuzma: "It would be nice to have a standard set of rules and know exactly what we're calculating from."

What were those changes? Apparently, there were four:

1) In the existing CBA, teams can deduct the cost of doing business from HRR. But there are limits. For example, deductions from preseason games or "special games" such as European openers, "shall not in the aggregate exceed fifteen (15) per cent per League Year on a League-wide basis" of the revenues. You can find all of the examples, if you wish, in Article 50 of the current document. The NHL is arguing that costs far exceed these caps.


2) One area of HRR the NHL cannot deduct ANY costs from is luxury suite sales (e.g., paying people to sell them). Everything must be thrown into the pot. Mistake, oversight, whatever - the league would like a re-do.


3) Lightning owner Jeff Vinik spent $35 million US last summer to upgrade The Tampa Bay Times Forum. Meanwhile, Rangers owner Jim Dolan committed an estimated $977 million to a massive renovation of the Madison Square Garden. (Say what you want about Dolan, but doing that without public funding is extremely impressive.) As it stands, teams receive no financial credit for that. The league would like that changed. The model is probably the latest NFL CBA, which allows the league the option of taking 1.5 per cent from the NFLPA's 47 per cent share to build new stadiums. Larger revenues from newer buildings, the reasoning goes, benefits the players, too.


4) When players on one-way deals like Wade Redden or Jeff Finger are sent to the minors, their salaries no longer count. Not only is the NHL trying to eliminate this loophole from the salary-cap portion of the discussion, it is trying to make those contracts tied to HRR, too.

Obviously, all of this stuff is negotiable. Just because you demand it doesn't mean you get it.

But this should give an indication of what's being asked. The potential changes are significant.

It's going to be interesting to see the NHL's reaction to the NHLPA's next proposal, which may be delivered Friday.

On Wednesday, agent Anton Thun told the radio show Prime Time Sports that he saw Oct. 11 -  the scheduled start of the season - as a more important date than Sept. 15, when the CBA expires.

It seemed innocuous because Thun, unlike most, was generally positive and optimistic. Csnphilly.com's Tim Panaccio wrote on Thursday that three agents told him something similar. Some league and team executives didn't like that message, because it threatens lucrative (at least in some markets) pre-season games, and indicates their deadline isn't being taken seriously. Players are not paid for exhibition games, but still get 57 per cent of the revenues under the current CBA.

For his part, Thun said it was his own opinion and not any kind of NHLPA/agent messaging.

But it makes sense: Oct. 11 is a true pressure point for both sides. But I found the reaction interesting, because it illustrates the tension bubbling under the surface.

If the important games get missed, do the NHL's offers get worse?

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