SBD/August 30, 2012/Leagues and Governing Bodies

NHLPA Preparing Its Counterproposal, Could Present As Soon As Today

Fehr characterized NHL’s latest proposal as a 19.3% pay cut rather than the initial 24%
The NHLPA today "could offer a counterproposal" for a new CBA, "although numerous issues remain unresolved as a Sept. 15th expiration date -- and perhaps a lockout -- looms," according to Steve Zipay of NEWSDAY. Among the "snags that surfaced publicly Wednesday: How to agree on what is included in hockey-related revenues before that pie is divided and a proposed increase in escrow set aside by players, rather than a salary rollback, which was part of the 2004-05 contract." After yesterday's negotiations, "about the only thing to which both sides agreed was that under the NHL's most recent counteroffer, the players' share of the current overall revenues would be 46 percent, up from the initial NHL offer of 43." But NHLPA Exec Dir Donald Fehr said that if hockey-related revenues "are redefined, with some monies being removed as the NHL wishes, the pie is smaller" (NEWSDAY, 8/30).

CHECK THE FINE PRINT: The NHL’s offer has been characterized as a 50-50 split with players, but sources said that the players do not see it that way. One source said, “Their proposal goes to 50 percent of HRR, based on the way they define HRR. The way we look at it, they didn’t go to 50-50, they went to 46 (percent).” The reason for that is the NHL is redefining and reducing what revenues are included in HRR. Under the original proposal made by the league in July, HRR going to players would be reduced from 57% to 43%, using the old definition of HRR. The owners moved from 43% to 46%. The source said that overall reduction to players' share under the NHL’s new proposal would be about 19%. The NHL in the expiring CBA negotiated an escrow, where a percentage of players’ salaries are taken out of their paychecks during the season and held until the revenues for the season are calculated after the end of the season. The players then receive back the amount of money escrowed that is over their percentage of revenues as defined by the CBA. The escrow mechanism allows for players to get an exact percentage of defined revenues, which is why the NHL system has been called a hard cap. The source said that individual contract issues -- including the owners' proposal to increase the years a player would have to wait to reach free agency from seven to 10 years, and a new entry level system -- were not discussed at the meeting yesterday (Liz Mullen, SportsBusiness Journal).

PUBLIC APPEAL: In N.Y., Jeff Klein noted Fehr characterized the league’s latest proposal "as a 19.3 percent pay cut rather than the initial proposal’s 24 percent pay cut." Fehr said, "There was some movement there, and what we’re going to endeavor to do is come up with a response, which we would like to believe will allow us to make a deal, and if it doesn’t quite do that, push the process along." He said that the union "would be ready to make a counteroffer on Thursday or Friday." NHL Commissioner Gary Bettman said, "Our proposal is more significant than the players' initial proposal" (NYTIMES.com, 8/29). The CP's Chris Johnston noted Bettman and Fehr were "surprisingly candid with reporters Wednesday and each discussed specific aspects of the NHL's latest proposal, some of which had already been leaked out to the media." They both "showed a desire to try and shape the larger public discussion around the talks." But Johnston wrote, "Nothing is coming easy in these negotiations" (CP, 8/29). In DC, Katie Carrera noted the two sides still "disagree over the sources and uses of revenue-sharing funds as well as other elements like the term of the agreement, player contract constraints and arbitration -- to name a few" (WASHINGTONPOST.com, 8/29).

BE PREPARED: CSNPHILLY.com's John Boruk wrote, "If I’m an NHL general manager of a large-market, free-spending team, then I’d better start pinching a few pennies along the way." The revised proposal "calls for a reduction in salary cap from $70.2 million to $58 million, or an estimated 17.5 percent cutback." According to capgeek.com, if that number "holds when a new CBA is eventually reached, 16 teams (more than half the league) would currently be spending over the limit" (CSNPHILLY.com, 8/29). In Buffalo, Bucky Gleason writes Bettman "was dreaming if he believed the NHL players' association would accept a proposal that amounted to a roundabout route through a pretty neighborhood toward the same destination." What he "viewed as a significant step actually looked like him sidestepping the same issues" (BUFFALO NEWS, 8/30). In Philadelphia, Frank Seravalli writes for hockey fans "hoping training camps will open in 3 weeks, it's starting to get scary" (PHILADELPHIA DAILY NEWS, 8/30).

PLANNING AHEAD: Penguins RW and NHLPA rep Craig Adams said that Penguins C Evgeni Malkin, the reigning NHL MVP, "will not be the only player to sign with a European-based team in the event of a lockout." Adams said, "It’s something I’ve heard discussed among players." In Pittsburgh, Rob Rossi notes Malkin and Penguins D Sergei Gonchar "started skating with Moscow's Kontinental Hockey League team Aug. 20." Both said that they "will play for the KHL club in Malkin's hometown, Magnitogorsk, if an NHL lockout stretched into the scheduled regular season." Malkin and Gonchar "would play on weekly contracts that would allow them to return to their NHL clubs when a new CBA is reached" (PITTSBURGH TRIBUNE-REVIEW, 8/30).
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