SBD/August 15, 2012/Leagues and Governing Bodies

NHLPA Unveils "Imaginative" CBA Proposal; Does Not Ask For End Of Salary Cap

Bettman says league needs time to evaluate NHLPA's CBA proposal
The NHLPA yesterday unveiled its CBA proposal to league owners in Toronto during a meeting that lasted just under two hours. The union asked for a three-year deal with an option for a fourth year that would return to the current CBA if the owners decide they do not like it. The union’s proposal does not include the elimination of the salary cap and calls for no changes to player contracts under existing rules. The players would agree to take a reduced share of hockey-related revenue, but the union wants more aggressive and targeted revenue sharing among the clubs. In a two-minute briefing with reporters after the meeting, NHL Commissioner Gary Bettman declined to address specifics of the union’s presentation. “We need time to evaluate it and make sure we fully understand it,” said Bettman, who added that he expected his group to “respond appropriately” to the proposal when the sides meet today in Toronto. Bettman was joined at yesterday’s meeting by Deputy Commissioner Bill Daly and outside labor counsel Bob Batterman and team owners Jeremy Jacobs (Bruins), Murray Edwards (Flames), Craig Leipold (Wild) and Ted Leonsis (Capitals). The current CBA expires on Sept. 15 -- one month from today. “Our hope is that we can take care of business in the next month,” said Bettman. “That’s our goal.” There were 23 players in attendance, and Penguins C Sidney Crosby and Capitals LW Alex Ovechkin flanked NHLPA Exec Dir Donald Fehr as he spoke to the press. Fehr refused to predict how the owners would respond to the proposal, saying, “I’m out of the prediction business” (Christopher Botta, SportsBusiness Journal).

TAKING A CLOSER LOOK: Fehr said that based on "how revenue has grown, players could be giving up $465 million under the union's proposal." He added that if the "revenue growth rate is as strong as it has been the last two years, the reduction could be as much as $800 million." Fehr said that under the NHLPA proposal, "team revenue sharing could reach $250 million." USA TODAY's Kevin Allen notes according to the NHLPA proposal, "players would receive a 2% increase in their take in the first year of the deal, a 4% growth in the second year and a 6% rise in the third year." Since the NHL's "annual revenue increase has averaged 7.1%, there is potential for owners to keep more of the revenue in those three years." If revenue growth "tops 10%, players would get the 57% they currently receive." Players would "have the option to revert to the 57% share in the fourth year" (USA TODAY, 8/15). In N.Y., Pat Leonard writes the proposal "is a success in its absence of a bombshell -- their plan retains a hard salary cap, the disagreement over which led to the 2004-05 lockout and cancelled season -- and its clear intent to find a middle ground, as opposed to the NHL's extreme initial demands delivered July 13" (N.Y. DAILY NEWS, 8/15). Also in N.Y., Mark Everson reports the NHLPA "voted last weekend to fix the oft-disparaged salary cap, rather than blow it up." Given the choice "of demanding an end to the salary cap, negotiating against the NHL's proposal or repairing the current system, the Players' Association chose the final option via conference call" (N.Y. POST, 8/15).

SENSE OF OPTIMISM: The GLOBE & MAIL's David Shoalts writes there was a "palpable sense of optimism among those on the players' side of the table that the proposal was creative enough that Bettman and the owners would consider it seriously rather than dismiss it outright." The "surprise was that the players did not suggest a luxury tax on clubs who want to spend beyond payroll limits" (GLOBE & MAIL, 8/15). In Toronto, Mark Zwolinski writes the union's proposal is "an imaginative one." Crosby said, "I like it a lot. It's addressing the issues." The union said that "some 200 players -- roughly one-third of the membership -- had reviewed the proposal" (TORONTO STAR, 8/15). The CP's Chris Johnston wrote the NHLPA "presented itself as a partner looking to help fix the league's problems -- but not one willing to bear all the burden." The belief from the NHLPA "is that owners would be able to pocket more profits over the first three years of the deal, some of which could be dispersed to struggling franchises in an effort to strengthen the league overall." The most "surprising part of the union's proposal was that it didn't call for the removal of the hard salary cap." Fehr indicated that the union "decided to work with that concept because the owners felt strongly about the need to keep it" (CP, 8/14). In N.Y., Jeff Klein writes the NHLPA "made a surprising initial proposal ... offering significant salary concessions combined with a reformed revenue-sharing plan" (N.Y. TIMES, 8/15).

THINKING LONG TERM: On Long Island, Steve Zipay wrote there "may be a light in the forest." Zipay: "I'm sure the top six or eight blue-chip ownership groups will want to reduce the amounts of the major revenue-sharing proposal from the PA, and perhaps tweak the term of the 'transition' to five years or more." The NHLPA "may have to stretch some on the league's free agency, contract limits and arbitration elimination ideas," but that is "do-able" (NEWSDAY.com, 8/14). Both sides "acknowledged negotiations are firm and constructive" (AP, 8/14). CSNNE.com's Joe Haggerty wrote, "One interesting byproduct of introducing the luxury tax/increased revenue sharing system to the talks: It will pit owner against owner on the NHL side of the bargaining table." On the "other hand, it's pretty clear that all NHL players are on the same page" (CSNNE.com, 8/14). SPORTING NEWS' Jesse Spector wrote under the header, "Donald Fehr's Union Counterproposal A Forward-Thinking Stroke Of Genius." The "basic principles put forth by the union do more to foster lasting labor peace than management's proposal." By "changing the framework of the conversation, Fehr and the NHLPA showed that they are thinking not only about how to maximize their take-home dollars from this deal, but how they can put hockey on a path to a healthy future, building from existing strengths to take the game into a new era" (SPORTINGNEWS.com, 8/14). In Detroit, Gregg Krupa writes NHL owners and players "might not be on a course that inevitably leads to disaster." It appears Fehr "refused to respond to the grenade" Bettman and the owners "tossed into the room July 13 by tossing one of their own." The players are "making concessions and, if Fehr's words are true, plotting a course for the continuing growth of revenue in the NHL." The owners' response, "probably coming in the next day or two, will be telling." Krupa: "I expect Bettman to be tough. But he can not afford to be dismissive. And that is some progress" (DETROIT NEWS, 8/15).

WILLING TO WORK TOGETHER: In Toronto, Terry Koshan writes, "Finally, true negotiations can begin." In their offer, the players "made it clear they are willing to take a financial hit, geared toward a greater revenue-sharing system that would help the NHL's bottom feeders." There is "no doubting the support Fehr has from the league's young stars," as Crosby, Ovechkin and Lightning C Steven Stamkos were "among the 23 players in attendance" (TORONTO SUN, 8/15). Stamkos said, "It just shows that we're in support of the union. ... We're trying to be in partnership with the teams that are really doing well financially and trying to partner with them to help some of the teams that are maybe struggling" (TAMPA BAY TIMES, 8/15). In DC, Stephen Whyno notes the players "aren't willing to give back as much as they did last time, but leverage clearly belongs to owners, who will receive TV revenue checks regardless of whether there's a full season." NHL Network analyst Craig Button: "It's trying to come to an understanding, the players trying to come to an understanding amongst themselves that says, 'OK, what's palatable for us?' Not, 'What are we willing to accept as our bottom line.' It's what's palatable that creates a value proposition where they feel valued and they can get invested in growing the game" (WASHINGTON TIMES, 8/15).

CHECK THE CALENDAR: The TORONTO STAR's Zwolinski notes "several drop-dead dates for a new deal have surfaced, but many observers believe mid-December is most likely." Others "believe the league could return from a lockout as late as Feb. 1 and still operate a viable season." But a "pivotal concern is the Jan. 1 Winter Classic featuring the Maple Leafs and Detroit Red Wings, which could be worth hundreds of millions of dollars to the league and players" (TORONTO STAR, 8/15).
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