The CounterproposalPosted: 16/08/2012
So back on Tuesday the NHLPA came out with their own plan for the new collective bargaining agreement.
Let’s just say that it looks a lot different from the owner’s plan. The specific document has not been made publicly available, but so far we know the following:
- The players are willing to take decreases to salary cap revenue sharing. Their plan calls for a multiplicative reduction each year starting with the 2013-14 season. The plan calls for keeping the 57% configuration this year (probably because several teams have already spent to the cap and a cap reduction would hurt the players). For next year though, the cap would decrease by 2% to 55% of the league’s profit. In the following year it would decrease by an additional 4% (to 51%), and possibly by 6% after that (limiting salary cap space to 45% of the league’s revenues, pretty low really). I’ve also heard that the players don’t want to go below 48% so I might be mistaken on exactly how the reduction mechanism works.
- Of course the players don’t want to mortgage their livelihood to the same league that struggled to make any profit at all as little as a decade ago: their plan links the percentage reduction to the continued financial viability of the league. The reason why the cap jumped so high this year was because of record profits, the players will only accept a cap reduction if the league continues to make more money (in other words the cap won’t go down, it will stay at the same real dollar amount while being derived from less revenue sharing). In order to do that the players want the option to accept their own reduction, or to choose to keep the current 57% share on a year-by-year basis. Of course the owner’s don’t want this at all, they want the players to give back their money upfront, and the last thing they want is for the players to have the power to choose whether the cap will be reduced or not. In other words the players are in agreement with the owners to shrink their own percentage of revenues, beyond that though, the demands are vastly different.
- The next issue at stake deals with “hockey related revenue.” The PA plan calls for what can best be described as the “MLB-strategy.” We all know that the biggest spenders in MLB, (the Yankees, the Red Sox, etc.) pay for half of the payroll of the Pirates and other teams with low profitability. The NHLPA wants to attempt to extend the same benefits between “big” and “small” owners in their league. The trouble with this is that in MLB, the fees that pay for small market teams are based off of player payroll, which in MLB is limitless, something that can’t be replicated in the salary-capped NHL. In MLB, when your payroll exceeds a certain figure you pay a penalty equivalent to how far you exceed that number. That money then goes back into a pot that is distributed to the teams that need it to be “competitive.” Well what happens when you have a hard cap that you cannot exceed? The PA has provided that large market teams should have the ability to exceed the cap by upwards of 5%, so long as they pay the appropriate penalty, and presumably they cannot use money that was distributed to them from other franchises.
- Although I think this is a beautifully intelligent solution, only using 5% cap exceptions will likely not be enough to even influence the profitability of one team, let alone the bottom 10 franchises in the league. As we hopefully all know, the salary cap is currently slated at $70.2 million for next year. If teams were allowed to exceed that total by 5% that would amount to an extra $3.5 million to spend on players. Let’s assume that only the league’s 12 most valuable franchises chose to use the extra $3.5 million (and we’ll assume that they will use all of the $3.5 mil, not just some of it). Let’s further assume they had to pay an exact match penalty, in other words, give up exactly as much money as they spent above the cap (again, we’ll assume it’s the full thing: $3.5 million) to the league fund. That’s only $42 million to be split among the league’s poorest teams.
- If the NHL really wants to embrace revenue sharing based on profitability, they’ll need more than small cap penalties: they’ll need something dramatic. But at this point I’m sure the big market owners will object to any further changes. They don’t want to have to give up profits from concessions so that the Florida Panthers can spend to the cap floor. In order to see this kind of revenue sharing between rich and poor owners, the league will really have to create some very specific and very rules regarding what is “hockey revenue” and what isn’t. Further, this determination needs to be made by the owners who will likely try to minimize the kinds of hockey revenue in every way possible, which could still lead to shrinking revenues in the NHL.
Those are the really big points but they do trickle down into the other issues: limiting contract lengths, limiting signing bonuses, etc. The owners want to limit contracts and force players into longer entry-level contracts with especially longer RFA periods. The players are on the exact opposite side of the issue. The PA plan does not limit contract length nor does it limit front-loading, these techniques have been instrumental in improving player prosperity in the salary capped era, even though it costs many smaller market teams the opportunity to sign the biggest free agents.
As far as I know, all the information surrounding the NHLPA CBA proposal so far has to deal with financials so I don’t know if my prediction that player safety will be an important component is true or not. The NFL made it a big point of contention during labor negotiations and I think their efforts were well worth it. Yes, it is boring now that almost every kickoff goes for a touchback and players can get penalized for tackling too hard, but I think it did make for a safer league, which ought to be the most important part.
To summarize the NHLPA’s CBA proposal in one word, it would be “smart,” rather than just retaliating with an equally insulting offer to the owners. The NHLPA really did its homework and presented something that was cohesive and informed. It needs to be noted though that this is an entirely unilateral proposal and it creates all measure of benefits to the players and very regularly takes them at the expense of the owners. Whether or not you think NHL owners are evil and whether or not you think that Gary Bettman is the Anti-Christ, the players are not 100% “right” in what they want. Now that both sides have outlined what they think needs to happen, it’s time to see if a resolution can be reached before the start of training camp on September 15. Scary thought, we’re less than a month away from that now. A couple more news bits below.
Wayne Simmonds signed a new 6-year contract extension with the Flyers that will pay just under $4 million per season. Wayne Simmonds has one 20-goal season to his name and is probably a third line forward on any team that isn’t as devoid of top-6 forwards as the Flyers. WOW. Of course this ultimately means that Simmonds will be traded before the deal runs out, just as the Flyers did with Mike Richards, Jeff Carter, and James van Reimsdyk who were all given “franchise player” contracts before Simmonds. If you’re going to hate on the NHL owners Ed Snider swimming in a pool of money is the only thing that should come to mind.
Eric Tangradi was in Pittsburgh to help out with some youth hockey camp. Because there hasn’t been a drop of Penguins news in over a month, a bunch of local beat writers decided to post a million comments from him on Twitter, you know where I stand when it comes to the Big Dawg so I won’t say anything about the comments he made. No doubt, this is do or die time for Tangradi, he won’t get a better opportunity to crack the Pens top-6 forwards, and again, it seems like the media is starting to put a lot of weight behind him as a potential top-6 forward. Only time will tell.
Apparently a bunch of foreign teams have been saying that famous NHLers will come play for them when the NHL locks out, the players have denied it, let’s see that there isn’t a lockout at all. (Never mind, can’t be bothered to find the link).