Oldfield: NHL sides not far apart
Divides on key issues can be bridged
A media blackout, an undisclosed location and mediation — music to my ears. And it should be music to anyone who wants to get this thing over with.
In 2005 the NHL Board of Governors announced "a new era of cooperation and partnership" with its players. It’s been rather short as eras go. In seven short years we’ve gone from that to dying on hills.
But a good thing about hills is they allow you a better view of the landscape.
Hopefully when Bill Daly and his NHL colleagues climb that hill they will be able to see that the divisions between them and the players aren’t as deep as they seem to think.
This latest standoff between the parties seems to have come down to a few key issues. Issues that with a little imagination and a little give and take are not insurmountable.
Length of agreement
The owners are seeking a 10-year deal with a mutual re-opener after eight seasons. The players say they will accept an eight-year deal with a re-opener after six. (A re-opener means the deal stays in place for the full term unless either party wants to renegotiate the terms.)
The league wants as long a term as it can get for obvious reasons. Longer terms mean longer stability and less unpredictability. Players get the same advantages.
However, the problem with long terms is that if problems arise, they can’t be resolved until the next round of negotiations. (Such as the lengthy player contracts the league now wants to eliminate; more on that in a moment.)
When problems arise during a long deal, resentment builds, and getting the next deal done is even harder.
Additionally, given the average NHL career is less than five years, a long-term deal means that many future players will be playing under conditions they’ve had no role in creating.
A simple mathematical split might make sense (a nine-year deal with a re-opener after seven).
But regardless of how long the CBA runs, one way of addressing some of the concerns might be to allow certain issues to be revisited during the life of the agreement, with the ability to use binding arbitration where a negotiated agreement cannot be reached.
Player contract lengths
The league demands a five-year term limit on individual player contracts, and seven years for a player who re-signs with his team. It also wants to narrow the salary variance from year to year to five per cent. That is, no front- or back-loaded contracts.
The players are prepared to accept a similar set-up, but with a six-year limit, and eight years for a player who re-signs with his team. It also wants a bigger variance.
This issue is a little harder to resolve because individual contract lengths have a domino effect on entire teams. That's because the greater number of years used to average a contract, the smaller the impact on overall team cap space.
In other words, if the annual impact on cap space can be reduced by signing higher-paid players to longer deals, the team has more money to pay other players. Likewise, the shorter the contract length, the less flexibility, which means downward pressure on all player salaries.
But this issue is a bit overstated. Very few players have contracts longer than five years now, and those could (and should) be grandfathered. The number falls again to between 40-50 players who have signed longer contracts with a new team.
Given the relatively small impact and the small differences between the parties, a pure compromise should be possible here.
The league says it will not agree to compliance buyouts as the NHL and NHLPA transition from the old CBA to the new one. This is the obvious way for teams to reduce their overall salary in order to get under the salary cap.
These issues are a little trickier. But the idea of compliance buyouts was agreed to in the last collective agreement when the salary cap concept was first introduced.
Here's that agreement: "Clubs may buy out player contracts at no charge toward the Club's Upper Limit from July 23, 2005 to July 29, 2005 at 5 p.m., ET. A player who is bought out may not rejoin his old club during the 2005-06 season."
The players are asking for the same thing this time, as they move from a 57/43 share to a 50/50 share of revenues.
Given that it was done last time, that it is a one-time event, and that it will help with the transition to the new agreement, this should not be a deal breaker.
No cap on escrow
Each season a percentage of player salary is put into an "escrow account." This money is held until there is an accounting of hockey-related revenue (HRR) to ensure the split of revenue meets that set out in the collective agreement.
The league wants no limit, or cap, on the percentage of salaries that go into this account.
Last season, about 8 per cent was held back and eventually paid out. I believe it has been paid out in every year of the just expired agreement.
The players are concerned that the move to a 50/50 revenue split, along with uncertainty about revenues, will result in significantly higher amounts being held back from their income.
Calculating hockey-related revenues is a hugely complex issue involving actuaries, accountants and lawyers, so it is done once a year. Doing that formal process more frequently is not reasonable. However, the current rules adjust the amount four times a year, so a cap on escrow would simply be a method to perhaps pay less. Escrow is a fact of life for players and 50/50 will mean just that, so expecting the league to accept a proposal that would artificially reduce its effect is not a hill the players should die on.
Those are the issues that appear to remain as a block to a new agreement. It won’t be dead easy, but it’s hard to believe an entire season would be lost because of them.
I’m betting it won’t be.
Dan Oldfield is the lead negotiator for the Canadian Media Guild, a former journalist, and a longtime hockey fan.