The NHL’s initial proposal

The only thing we have to fear is Fehr himself

There’s already some absurdist alarmist sentiment when dealing with the NHL’s initial proposal to the NHLPA, details of which were leaked Friday night. 

The good news for hockey fans is that, unlike the lockout of 2004-05, the NHL’s one major demand, a salary cap, was considered a non-starter for the PA. The season was missed, the PA suffered some leadership changes, and they reluctantly agreed to a deal that was a clear winner for the league at the time.

Fast-forward seven years, and the real big issue is how to split a $3 billion pie.

That’s not necessarily the only issue. According to Renaud Lavoie of RDS, the nuts of the deal involved:

  1. A decrease in the overall share of hockey-related revenue (HRR) for players to 46%. Currently 57%, if there is over $2.7 billion of HRR.
  2. An increase in the number of years a player must play in the NHL prior to being eligible for unrestricted free agency to 10. Currently seven.
  3. Contracts limited to five years. Currently no maximum.
  4. Elimination of salary arbitration. Currently an option for both players and teams.
  5. An increase in the length of entry-level deals to five years. Currently it’s three for players below the age of 21.

Obviously, these are starters in negotiations. The PA will work out a counter-proposal of similarly outrageous expectations and not expect that deal to be accepted. Not every deal is accepted on first blush. Not every negotiating opponent is Kevin Cheveldayoff.

The NHL, in my mind, has left a number of possible concessions on the table. Obviously, the rule changes on entry-level deals and unrestricted free agents grossly tilt the needle in favour of teams who wind up in the draft lottery every season. Taylor Hall and Jordan Eberle, for example, become restricted free agents at the end of this upcoming season, a year that they could possibly get a pretty sizeable pay-day rather than the bargain entry-level deals they’re on right now.

Another card the NHL has up its sleeve is the right for the players to play in Sochi 2014.

For practical purposes, the salary cap is at $70.3 million this season, which assumes a certain amount of HRR. Nations crack graphic comments and math geek petbugs13 estimated that the NHL’s proposal would bring the “new” salary cap of $54.2 million, although Larry Brooks of the New York Post estimates a lower salary cap thanks to the NHL’s re-definition of what is considered hockey-related revenue:

This $52.5 million off a “midpoint” of $48.5 million is the result of a calculation based on the ramifications of slashing the players’ share of the gross to 46 percent from the current 57 percent, coupled with the redefinition of Hockey Related Revenue with the express written intent of dramatically reducing the amount in the pool.

Hockey-related revenue is anything from merchandise sales to gate receipts to parking to signage, although they’ll want to clarify that as there has been some bickering in the past about what is considered “HRR”.

What does this all mean?

Well, I hate to say it, but the NHL season probably won’t start on time, simply because there is no urgency for the league. The first few months of the NHL season are apparently not where the NHL makes its money.

The NBA had its lockout halted when a collective bargaining agreement was signed in time for the NBA’s first real cash cow on the season: the Christmas Day games. The NHL has placed a similar importance on its Winter Classic game on New Year’s Day.

The educated guess is that an agreement will be signed at some point between the scheduled start of the season in October and the January 1 game between the Toronto Maple Leafs and the Detroit Red Wings.

I’m confident we’ll be able to see Mikhail Grabovski’s excellent two-way play between now and a year from now, but maybe a bit later than anticipated.

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  • BurningSensation

    Obviously the Bettman and the owners are asking for the Sun and the Moon to start negotiations. Here is how it will ultimately workout:

    50-50 split of HRR with no chage to criteria of HRR
    Entry level contracts of five years with increased salary Maximums
    Arbitration unchanged
    Free Agency after 8 years
    5 year maximum for guaranteed contracts plus 3 years Max. of player/club options. And no front or back loading of contracts. Signing bonus not to exceed annual salary of the contract.
    Modest Revenue sharing criteria established