SBD/September 14, 2012/Leagues and Governing Bodies

NHL Lockout Deadline, Part II: Could Fehr Bring Salary Cap Back In Play?

Will Donald Fehr bring salary cap issue back into CBA negotiations?
Many in the media believe one significant issue brought up by NHLPA Exec Dir Donald Fehr on Thursday was the possibility of the union bringing the salary cap back into negotiations. Fehr said, "What I have said before and the only thing I am prepared to say now is that if we get past that point, then the players are as free to reconsider their positions as the owners. That's all I can say" (Mult., 9/14). In Philadelphia, Frank Seravalli notes Fehr "did not rule out the possibility of attacking the salary-cap system." Bettman responded, "That certainly wouldn't be a positive stop in these negotiations. Not only would it not be constructive, it would defy logic as to why someone would want to take that kind of system off the table" (PHILADELPHIA DAILY NEWS, 9/14). Oilers G Devan Dubnyk said of fighting the salary cap, "To my knowledge, we're not crossing that line" (EDMONTON JOURNAL, 9/14). ESPN.com's Pierre LeBrun noted he asked Fehr "whether a prolonged labor impasse could see his side reconsider the existence of a salary cap in the NHL," and LeBrun wrote the answer "should have sent mini shockwaves into the hearts of NHL owners." There are those "who wonder if Fehr is keeping his ultimate trump card for the right moment way down the road." Fehr will "need to know if his players have the stomach to enter what would be a nuclear war if the NHLPA tries to eliminate the cap." The owners will "never go back to a non-cap system" (ESPN.com, 9/13).

IS THERE A DEAL TO BE MADE? ESPN.com's Scott Burnside asked, "Will the owners budge from their last offer, which starts at the players taking a 49 percent cut of revenues and finishes with what would be a six-year deal with the players at 47 percent?" Burnside: "We’re guessing, yes, there is still wiggle room from the owners’ side." Fehr has to "believe that, too." Burnside: "But how long does Fehr have to exploit that wiggle room and will it be enough for his players? Further, what happens after Saturday?" According to the league’s math, if the players "miss eight games -- less than a month of the 2012-13 schedule -- they will have given up the same amount of money that would have been reflected in the givebacks included in the proposal delivered by the owners Wednesday" (ESPN.com, 9/13). SI.com's Allan Muir noted at Thursday's press conferences, both sides were "chomping down on the pins before lobbing grenades at the other." Muir: "And going by Fehr's surprise announcement that the salary cap could be on the table, a quick resolution is not the smart money bet." The flexibility displayed by the league "with its hastily constructed offer on Wednesday suggests a deal is there to be made." The decision facing the players "is fairly clear: Take a haircut off those salaries now, or hold onto 100 percent of zero" (SI.com, 9/13). The GLOBE & MAIL's James Mirtle gives a thorough examination of both offers and writes, "Despite what has been written in some circles, the players have offered some givebacks here." Even if league revenues "grow at just 5 per cent (which they have exceeded in all but one of the last six years), the players will be offering back about $340-million (or $70-million a season) from where they are now at 57 per cent." If there is "big-time growth (8.5 per cent or more), the PA gives up $250-million or more a year." That is "not nothing." The key difference between the two deals is that the union "is trying to stay at or above that $1.87-billion figure earned last season in order to avoid big-time escrow payments by its players right away." That is "one of the things players have asked Fehr for, and he is listening and trying to deliver." There is "likely some sort of reasonable agreement somewhere in the middle of all this, between the 52.7 per cent the PA has asked for and the 47.5 per cent the league has on the table" (GLOBE & MAIL, 9/14).

NHLPA OFFER
SEASON
REVENUES
PLAYERS SHARE
PERCENTAGE
'12-13
$3.51B
$1.91B
54.3%
'13-14
$3.76B
$1.98B
52.7%
'14-15
$4.03B
$2.10B
52.2%
'15-16
$4.32B
$2.26B
52.3%
'16-17
$4.62B
$2.42B
52.4%
TOTAL
$20.24B
$10.67B
52.7%
NHL OFFER
SEASON
REVENUES
PLAYERS SHARE
PERCENTAGE
'12-13
$3.51B
$1.72B
49%
'13-14
$3.76B
$1.81B
48%
'14-15
$4.03B
$1.89B
47%
'15-16
$4.32B
$2.03B
47%
'16-17
$4.62B
$2.17B
47%
TOTAL
$20.24B
$9.62B
47.5%

In Dallas, Mike Heika writes if the players' strategy is "to offer small givebacks and try to win public favor, then their real strategy is that they can outwait the owners ... because that's what it amounts to." If the players "gamble everything, and then lose," there is a "100 percent lost salary for one season simply because you wouldn't take a 7-10 percent haircut." Players are "fighters and players are followers, so it will go where the union bosses decide it will go." The owners "have already said they are willing to miss some hockey." Heika: "The question is whether the players feel the same way or not" (DALLASNEWS.com, 9/13).

DOES BETTMAN NEED TO WIN? In a special to the GLOBE & MAIL, Hockey HOFer Ken Dryden writes the "fact is, both the owners and players are doing relatively fine." Their fight is "not one of economic necessity." Bettman "needs to win because he won last time, and he’s a winner." The players "need to win because they lost last time and have to prove they’re not losers." There is "no agreement because neither needs an agreement." It is "not a fight they need to have," but they "fight because they can" (GLOBE & MAIL, 9/14). The NATIONAL POST's Bruce Arthur writes, "On and on they went, debating their respective proposals not to each other, but to everybody else." That is "not a good sign." The players "haven't even been pushed yet ... but they already feel like they've been backed into a corner." The players "have done this dance with Mr. Bettman before, and the institutional memory lingers" (NATIONAL POST, 9/14). In N.Y., Larry Brooks writes the NHL's "inexorable march toward its second owners' lockout in the last eight years ... tells the world the owners' priority is not in finding a solution to the particular small-market issues that damage the league's finances but rather in devising a system in which they keep as much cash for themselves as they possibly can." Players who "are not only more fully vested in the game's growth than the league's owners, but also appear to believe in the NHL's capacity to grow more than the suits in the boardrooms." Bettman's league is one "without a vision beyond reaching into the pockets of the players on the other side of the table" (N.Y. POST, 9/14). YAHOO SPORTS' Nicholas Cotsonika wrote under the header: "Players Gird For Battle In A Lockout War They Can't Really Win" (SPORTS.YAHOO.com, 9/13).

POSSIBLE TIMELINE TO A DEAL: In St. Paul, Charley Walters cites sources as saying that the NHLPA “wants a new deal before Thanksgiving.” If that does not occur, it is “willing to sit out the entire season.” Also, if there “isn't a new labor contract by Thanksgiving, don't be surprised if players refuse to participate in the NHL's Winter Classic” (ST. PAUL PIONEER PRESS, 9/14). In DC, John Feinstein notes the NHL wants to play the Winter Classic, and it “doesn’t want to lose the four weeks of HBO’s ‘24/7’ leading up to the Classic, either, because that series brings a lot of attention to the sport among non-hockey fans” (WASHINGTON POST, 9/14). The GLOBE & MAIL’s Bruce Dowbiggin writes under the header, “HBO Series 24/7 Could Be Catalyst For A Deal.” To produce four weeks of documentary footage for “24/7,” training camps “would have to be opened around the end of November.” It is “hard to exaggerate the importance of the HBO series to the league’s profile in the United States” (GLOBE & MAIL, 9/14).

WILL FANS BE BACK? ESPN.com’s Darren Rovell cited a Twitter poll he took which showed 76.5% of “people who called themselves hockey fans said a season off wouldn't affect their interest.” Rovell wrote those results are “why commissioner Gary Bettman had no problem recommending to the owners to lock out the players in 2004 and again this year.” Rovell: “The bottom line is that there will be virtually no consequences from losing a season” (ESPN.com, 9/13).
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