NHL, NHLPA can't agree on revenue formula for shortened schedule
With the NHL lockout heading into its ninth week, a new issue has cropped up at the negotiating table.
In addition to sorting out the division of revenue and player contracting rules, the NHL and NHL Players' Association must also decide how to deal with the financial implications of playing a shortened schedule once an agreement is reached.
"It has an impact [on talks]," NHLPA executive director Donald Fehr acknowledged Friday night.
That hadn't been a concern as recently as late last month, when the league believed an 82-game season could still be squeezed in. Now it's looking like the best-case scenario is a regular season beginning on Dec. 1, which would likely see each team play just 68 games.
If that ends up being the case, a total of 210 games — and all of the accompanying revenue — would be lost for good. When you couple that with the undeniable damage another lockout has inflicted on the NHL's overall business, it's clear that whatever can be salvaged of the 2012-13 season won't generate anywhere near as much as the record $3.3-billion US brought in last year.
The issue reared its head this week when the sides exchanged offers, not to mention some harsh words, while failing to gain any real traction during five straight days of meetings. That included an informal session over lunch on Saturday which attempted to move the process forward after Friday's meeting ended with a heated exchange across the bargaining table.
According to Fehr, the NHLPA is pushing for the sides to draft the framework of a CBA as though a full season is going to be played before later determining how to account for the shortened schedule in Year 1. The offer put forward by the union on Wednesday called for the players' share to jump in fixed increments of 1.75 per cent each season starting from the $1.883-billion they took in collectively last year.
That would put the starting point at $1.915-billion for the 2012-13 season — subject to any reduction for cancelled games that would need to be worked out.
"Based on their reaction [Friday], for some reason that I don't quite understand, they're unwilling to do that," said Fehr.
A request for comment from deputy commissioner Bill Daly wasn't immediately returned on Saturday.
The NHL would prefer to work off percentages rather than fixed increases because they come with built-in protection, particularly if business is slow to recover from the lockout. Its latest offer stuck with a 50-50 split of revenues across the board and promised the players $211-million in deferred payments, plus two per cent interest, to cover anticipated losses to escrow over the first two years while the league transitioned from a system that paid out 57 per cent in salaries.
However, the NHLPA estimates that it would take $590-million in extra payments to cover all existing deals — an assertion that reflects the union's belief that players signed beyond 2013-14 should be "made whole" outside of the system and includes their full salaries (based on an 82-game season) for the current year.
That's where things get tricky.
As each day ticks by, the damage to the sport gets a little bit worse and the potential schedule gets tightened a little bit more. There had been some within the league who entered the week hoping a deal could be reached in time to drop the puck as early as Nov. 21 — the day before U.S. Thanksgiving — a starting point that would have allowed for a 74-game season, according to multiple sources.
Barring an unforeseen breakthrough in the days ahead, that will be the next projected target to fall by the wayside.
So while the "make whole" provision and rules governing players contracts need to be worked out, so too will the transition out of the lockout itself. A slew of cancellations have been made since it was enacted on Sept. 15, and the fight is now over a different sum of money than when negotiations began.
And the pot will only keep getting smaller.