The issue
A limit on how much each team can spend on players' salaries. There are different types of salary caps. Some sports, like the National Football League, have an inflexible cap that must be adhered to or else teams must pay high penalties. The National Basketball Association, on the other hand, has a soft cap, which has exceptions that allow teams to exceed the salary ceiling. In the NBA very few teams are actually ever under the cap during a season.
Owners
Commissioner Gary Bettman says growth in salaries has outstripped the growth of revenues and in order for the NHL to survive and thrive the new CBA must give owners "cost certainty."
According to Bettman, the NHL's teams collectively lost $300 million collectively last season. The league wants to turn that negative into a positive. The NHL is targeting future profits of about $150 million.
"What we need to achieve is a system that enables all of our clubs to be economically stable and competitive," Bettman said.
"My own belief is we need "cost certainty" in order to achieve that,"
What "cost certainty" is exactly is open to interpretation. From the NHL's point of view it's a fixed relationship between revenues and player salaries.
Last season, according to the owners, 76 per cent of total revenues went to player costs.
By comparison, the National Football League spent 64 per cent of its total revenues on player costs, Major League Baseball 63 per cent. About 58 per cent of the National Basketball Association's revenues went to play players.
It is believed that the NHL wants a system that will guarantee no more than 60 per cent of its revenues are spent on player costs. Based on last year's league numbers, and factoring in profit targets, that would put team payrolls at about $40 million.
According to Bettman, the NHL's teams collectively lost $300 million collectively last season. The league wants to turn that negative into a positive. The NHL is targeting future profits of about $150 million.
"What we need to achieve is a system that enables all of our clubs to be economically stable and competitive," Bettman said.
"My own belief is we need "cost certainty" in order to achieve that,"
What "cost certainty" is exactly is open to interpretation. From the NHL's point of view it's a fixed relationship between revenues and player salaries.
Last season, according to the owners, 76 per cent of total revenues went to player costs.
By comparison, the National Football League spent 64 per cent of its total revenues on player costs, Major League Baseball 63 per cent. About 58 per cent of the National Basketball Association's revenues went to play players.
It is believed that the NHL wants a system that will guarantee no more than 60 per cent of its revenues are spent on player costs. Based on last year's league numbers, and factoring in profit targets, that would put team payrolls at about $40 million.
Players
From the NHLPA's perspective, any system that fixes the percentage of revenue that can be spent on players is a cap system.
And union boss Bob Goodenow has been crystal clear on this point:
"There will never be a salary cap."
"I've told the players to be prepared for a long lockout by the owners. It may last a year, it may last two or three years, but we will never accept a salary cap," Goodenow said.
The NHLPA steadfastly opposes the idea of an artificial the salary inhibitor. They argue the free market should determine players' salaries and that the owners should be their own salary controllers.
"The players believe -- and the league has operated this way for more than 80 years -- in a market-based system whereby the owners decide what the players are worth and pay them accordingly," Goodenow explained.
The union also believes that salaries have risen at approximately the same rate as team revenues over the past decade.
"They say they want a relationship between revenues and player costs," said union boss Bob Goodenow. "We say it already exists."
The players also refuse to accept the Bettman's demand for "cost certainty" because they are suspicious of the NHL's accounting.
According to the NHLPA, teams have under-reported the money they bring in by ten of millions of dollars. In a interview with the Los Angeles Times, Ted Saskin, the union's director of business affairs, said the financial numbers being put out by the League are "garbage in and out."
All 30 NHL teams are required to provide a detailed list of hockey-related income and expenses. Saskin claims some of those reports weren't comprehensive.
"There are a number of significant categories missing," he told the paper. He also added that "a number of teams understated cable revenues and didn't report concessions.
The NHLPA is reluctant to accept a system that fixes how players' salaries relate to a percentage of revenue when they aren't sure whether the NHL's numbers are accurate.
And union boss Bob Goodenow has been crystal clear on this point:
"There will never be a salary cap."
"I've told the players to be prepared for a long lockout by the owners. It may last a year, it may last two or three years, but we will never accept a salary cap," Goodenow said.
The NHLPA steadfastly opposes the idea of an artificial the salary inhibitor. They argue the free market should determine players' salaries and that the owners should be their own salary controllers.
"The players believe -- and the league has operated this way for more than 80 years -- in a market-based system whereby the owners decide what the players are worth and pay them accordingly," Goodenow explained.
The union also believes that salaries have risen at approximately the same rate as team revenues over the past decade.
"They say they want a relationship between revenues and player costs," said union boss Bob Goodenow. "We say it already exists."
The players also refuse to accept the Bettman's demand for "cost certainty" because they are suspicious of the NHL's accounting.
According to the NHLPA, teams have under-reported the money they bring in by ten of millions of dollars. In a interview with the Los Angeles Times, Ted Saskin, the union's director of business affairs, said the financial numbers being put out by the League are "garbage in and out."
All 30 NHL teams are required to provide a detailed list of hockey-related income and expenses. Saskin claims some of those reports weren't comprehensive.
"There are a number of significant categories missing," he told the paper. He also added that "a number of teams understated cable revenues and didn't report concessions.
The NHLPA is reluctant to accept a system that fixes how players' salaries relate to a percentage of revenue when they aren't sure whether the NHL's numbers are accurate.