SBJ/October 20 - 26, 2003/Labor Agents

NHL, union talking but not agreeing much

The NHL and NHLPA can't agree on much these days, yielding no progress from talks earlier this month and vehemently at odds over how to interpret financial data supplied by the NHL.

The union made a proposal for a new labor deal that included a 5 percent, across-the-board salary cut, a lower rookie salary cap, and an extensive revenue-sharing and luxury tax system similar to Major League Baseball's.

THE NHLPA'S VIEW OF HOCKEY ECONOMICS
Union’s analysis shows modest disparity between growth rates for revenue, player costs.
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The offer, presented first June 4 and again at a meeting in Toronto on Oct. 1, was designed to address all of the dynamics the NHL says don't work under the current collective-bargaining agreement and which all loosely relate to individual teams driving up the leaguewide pay scale through their own free-spending ways.

The league rejected that proposal because it did not have a "cost-certainty" element that would guarantee salaries being proportionate to revenues. Instead, the league proposed a system that would cut the average payroll to $31 million per team, based on current revenue levels. That would equate to an across-the-board salary cut of approximately 33 percent.

The union calls the league proposal a "non-starter."

NHLPA senior director Ted Saskin said the union is trying to meet the league halfway.

"We've taken the approach of saying, 'What do you think the problems are with the current system?' and putting forth a proposal that responds to what they say their issues are," Saskin said. "All of the things we're putting forth are concessions from our side. We don't want to tax teams on payroll and playoff revenue, but we're prepared to take all those things in an effort to avoid an owners' lockout and ensure that hockey is played next season."

The sides also are butting heads over the financial data the league has shared with the union and the press.

The league says player costs have grown 252 percent and revenue is up by only 163 percent over the course of the current collective-bargaining agreement, which kicked in after a lockout in 1995.

The union says those figures are misleading because the full effects of the new labor deal were not felt until 1995-96, and since then player costs have grown 170 percent while revenue is up 153 percent, a much smaller disparity.

"[The league's] argument is the reason we need cost certainty is the relationship between player-cost growth and revenue growth is out of whack," Saskin said. "If you look at it more closely, I think there's very strong revenue growth and there's been a corresponding spike in player salaries."

Bill Daly, the NHL's executive vice president and chief legal officer, offered a different view.

"Even if player salary growth basically reflected your revenue growth," he said, "they can't take 100 percent of our revenue growth. Then there is no business here, because our other costs are growing, too. They don't dispute that salary growth has outpaced revenue growth. They suggest that it's somewhat smaller than we're suggesting."

Not only do the league and union disagree on how to best interpret the financial data supplied by the NHL, but the union also questions the data's veracity.

"Their information is totally incomplete," Saskin said. "There are clearly problems in how they account for luxury suites, in how they account for cable deals. There are large discrepancies in some instances in arena signage, dasherboards."

He said the league's statements that its data includes revenue from all team-affiliated entities is "just not true." As an example, he says two NHL clubs report no revenue from arena suites whatsoever.

Daly said some clubs have ceded their suite revenue to third parties in exchange for other considerations, such as better arena leases. He said the league is making some adjustments to the financial data, but they amount to "not very much."

"What we told them," he said, "is that to the extent there are any discrepancies in reporting, the discrepancies aren't material."

Both Saskin and Daly accused the other side of being disingenuous in their communication with the media. "I don't believe that they genuinely doubt that our [figures] showed the real picture accurately reflected," Daly said of the union. "If they did, they would have pointed to more specifics."

Saskin said NHL Commissioner Gary Bettman has been grandstanding for the press.

"For the last seven or eight months, he was challenging us to enter negotiations when he knew full well high-level meetings were going on, all at the initiative of the NHLPA," Saskin said.

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