After over 300 days of labour discord, the NHL and its players' union finally found common ground, agreeing on a collective bargaining agreement that will ensure hockey for the 2005-06 season.
On Feb. 16, 2005, NHL commissioner Gary Bettman made history by cancelling the NHL season and playoffs. It was a move unprecedented in pro sports history, and has plunged a $2-billion industry and Canada's unofficial national pastime into unknown territory.
Coming up in October, 2005: A new-look, financially-responsible National Hockey League with rules designed to increase scoring and lure back disillusioned fans.
(FULL STORY: NHL owners approve new deal)
The new deal
The agreement includes:
- the union holds the right to re-open negotiations on the six-year
contract after the fourth year. The NHLPA also has the option to extend the deal for one year at the end of the scheduled term.
- a 24-per-cent salary rollback on all existing player contracts.
- a team-by-team salary cap with a payroll range of $21.5 million to
$39 million US (in the first year), based on projected revenues of $1.7
billion.
- no player can earn more than 20 per cent of the team cap. For
2005-06, this means no player can make more than $7.8 million.
- the minimum salary is increased from $185,000 under the last agreement to $450,000 in 2005-06. It rises to $500,000 for the final two years of the deal.
- the league's total expenditure on player costs can't exceed 54 per
cent of defined hockey-related revenue. Also, the salary cap and payroll
range will increase or decrease as revenues rise or fall each year of
the deal.
- a percentage of salaries will be put into escrow until the new
salary cap can be calculated at the end of each season.
- an entry-level system with a rookie salary cap of $850,000 for 2005 and 2006 draftees to a high of $925,000 for 2011 draftees.
- players entering the league will now qualify for unrestricted free
agency after seven years.
- the age of unrestricted free agency drops to 27
by the end of 2007-2008 season.
- teams will be able to buy players out of their contracts at
two-thirds of their value to fit under the cap. Clubs, however, won't be
able to re-sign those players for 2005-06.
- restricted free agents who don't sign a contract by Dec. 1 of a given year aren't eligible to play that season.
- a revenue-sharing scheme where the top 10 money-making clubs
contribute to a fund shared by the bottom 15 teams. Clubs are eligible for subsidies if they rank in the bottom half of league revenues and are in markets with 2.5 million TV households or fewer.
- two-way salary arbitration where the players and owners both have
the power to go to arbitration. Only the players had that right in the
previous deal.
- NHL participation at the 2006 Torino Olympics and 2010 Vancouver Olympics; there will be no all-star games held in Olympic years.
- the entry draft has been reduced from nine rounds to seven, effective immediately.
It's over. Let's drop the puck on a fresh start and a wonderful future for the National Hockey League.
