FOXSports.com's A.J. Perez breaks down the NHL's labor talks and answers big questions.
By A.J. PerezFoxSports
National Hockey League commissioner Gary Bettman sounded nearly dismissive a little more than a year ago when it came to possible labor strife, citing the fact that the nation’s three other major professional sports leagues had their respective collective bargaining agreements expiring before the NHL’s did.
In the ensuing months, all those leagues came to terms on new deals with their players. There were two lockouts in the bunch: The NBA lost nearly half its regular season, and the NFL saw a truncated training camp. Major League Baseball and its players came to a deal without much hint of acrimony.
The NHL is on deck, and there seems to be little cause for optimism at this point.
FOXSports.com breaks down what obstacles remain before the Sept. 15 deadline for a new CBA and what has to happen to avoid the third work stoppage over the last 20 years — the last of which cost the NHL the entire 2004-05 season.
With record revenues, why are the owners threatening another lockout?
It’s partially because of those record revenues that the owners aren’t happy with their cut. Bettman said in May that the league’s revenues are $3.3 billion, a figure that far outpaces even the highest estimates in the current CBA. It’s because revenues are so high — about 50 percent better than before the last work stoppage — that the players get the top end of the revenue prescribed under the current agreement: 57 percent of revenues.
In the NHL’s initial proposal, the owners want to see the players’ cut fall to 46 percent.
“We had a 24 percent reduction (in salaries) last time. Let’s have another one,” said Donald Fehr, the former head of the baseball union who serves as the executive director of the NHL Players’ Association. “That’s their proposal. That’s what creates the gulf.”
What it means: The owners erred when they allowed the players to get to 57 percent of league revenue, even if the union takes issue on how that’s computed. Look for it to come down to a 50 percent split, which would bring the NHL more in line the other sports with a salary cap like the NFL (about 47 percent of total revenues) and the NBA (51.5 percent).
If the owners are asking too much, what is it that they are really after?
Basically, the owners want to do everything they can to lower costs and avoid (gasp!) more revenue sharing. Fehr told reporters on a conference call Friday that the league wants to eliminate what meager revenue sharing it already has.
The NHL, arguably more than any other pro league, is one of haves and have-nots. For every team like the New York Rangers, there are the New York Islanders. The union’s proposal this week attempts to solve that by allocating as much as $250 million from the more successful clubs to help the likes of the Islanders, Phoenix Coyotes and a handful of other money-losing franchises.
Contraction, while bandied about by the media and fans, isn’t likely to be an option. It would take serious concessions (the NHLPA would at least demand expanded rosters on the remaining teams), and the cost to break leases and compensate ownership of the shuttered teams would be steep.
What it means: The CBA can be just as much protecting the owners from themselves as it is in reining in player compensation. Unlike the last labor battle, Fehr could have the players more in line than the disparate views of some of the 30 owners. Maybe. Bettman will no doubt have the owners speaking off the same talking points — or rather avoiding the media altogether — but behind closed doors, it could be another story.
What are the players willing to give up?
When Fehr was first tapped to head the players union, fears abounded that he would demand the elimination of the salary cap. (Fehr had long been against a cap during his long tenure at the MLB Players Association, and the sport still doesn’t have one.) That’s not the case, however, and the NHLPA in its proposal said the hard cap can stay and the players are willing to forgo up to $800 million (if the current CBA were extended) over the first three years of a new deal.
Don’t expect the players to be too kind to several other economic rollbacks the league seeks in its current proposal, including making players wait 10 years for free agency (three more than the current CBA), the elimination of salary arbitration and limiting contracts to five years.
What it means: Credit to the NHLPA, which is winning the public relations battle already. Its initial proposal offered some concessions, rather than flatly arguing for the status quo — one that the union was all but forced to accept after the lost season. Temporary rollbacks in pay will certainly be easier for the players to stomach than long-term hits, like free agency and contract length limits.
What’s the realistic possibility of losing games? The season?
Bettman said earlier this week that the owners and players were “not on the same page,” and Fehr said “a pretty substantial gulf” existed between the two sides. Hockey could continue after the Sept. 15 deadline under the current terms, but Bettman has already ruled that out.
Still, the tenor isn’t quite what it was in the summer of 2004.
The union back then was steadfast against a salary cap and offered up only a one-time five percent salary rollback. Plus, the league was in a much worse financial shape overall.
Eight years ago this week, Bill Daly, the NHL's vice president and chief legal counsel, told The National Post: "Right now, economically, we're not a healthy league and we're not as competitive as we should be and that indicates to me that we need a change in our current economic system."
Unlike 2004, the league has a lucrative, long-term national TV partner in NBC Universal. The 10-year deal, signed last April, is worth $2 billion over the length of the deal. It also has the Winter Classic, the annual outdoor game on (or around) New Year’s Day that has boosted the league’s image (and its coffers).
What it means: The hard part (getting the players to agree to the salary cap) is in place. That doesn’t mean there aren’t some serious financial hurdles yet to overcome. The cancellation of some, if not all of the exhibition season/training camp along with some regular-season games appears to be a real possibility. It’s hard to imagine that the NHL would risk cancelling this year’s Winter Classic (scheduled for Michigan Stadium on Jan. 1), but the owners didn’t seem to blink at ruining an entire season.