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Volume 21 No. 2
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Agents don’t expect big changes in contracts

While many executives were still sorting through the terms of the new collective-bargaining agreement last week, NHL player agents don’t expect dramatic changes to player contracts under the deal.

“The system is really the same,” said Neil Sheehy, president of ICE Hockey Agency and agent to a number of NHL star players, including defenseman Ryan Suter, who signed a 13-year, $98 million deal with the Minnesota Wild last July. “How does it change my life? It really doesn’t that much. It means I can’t do a 13-year deal. I can do a seven-year deal or an eight-year deal.”

Early reports in the hockey media focused on the large amount of givebacks from players in overall hockey-related revenue, but many agents declined to comment to SportsBusiness Journal to offer a full assessment of the new deal because they had yet to study it in detail. The NHL Players’ Association sent a one-page summary of some of the new terms in the CBA to agents early last week, but a full memorandum of understanding was not distributed as of press time.

Clearly the biggest change for agents negotiating contracts under the new deal is that term lengths are now capped, multiple agents said. Under the new CBA, contract lengths will be capped at seven years for most players and eight years for players re-signing with their existing clubs. Under the old deal there were no limits.

There also were changes in how teams can structure contracts as far as the “variability” of payments to players over the term of multiyear contracts. Ownership sought more flat contract payments, where players would receive the same payment every year on a multiyear deal, preventing deals from being front-loaded with big payments. Under the new deal, the payments in certain multiyear deals cannot vary more than 35 percent year over year, and the lowest year of a contract cannot be less than 50 percent of the highest year of the contract, sources said.

“Dealing with long-term contracts, you have to be much more cognizant of their structure year to year and the allocation of dollars,” said Kurt Overhardt, founder and CEO of KO Sports Inc., which represents about 30 NHL players, including Vancouver Canucks center Ryan Kesler.

But agents stressed that many elements in the new CBA are the same as the previous deal, including salary arbitration eligibility and the entry-level system term limits.

“The only real change to player contracts and structure of contracts is they are not going to be able to front-load contracts and stretch them out over 12, 13, 14 years,” said Allan Walsh, an NHL agent at Octagon Hockey, who has been a vocal critic of the NHL. “There is no question there are some givebacks in this deal, particularly for the first time ever a term limit on player contracts.

“However, when you look at what the NHL’s goals were going into this lockout in attacking every aspect of the system that allowed players to create a market for their services, [NHLPA Executive Director] Don Fehr and the players association staff did a masterful job in getting the best deal possible without losing the entire season.”