Today marks day 58 of the NHL lockout. 326 Games have been canceled and the winter classic has been canceled (rescheduled to a regular game). Some of you may have heard some chatter last week as the NHL and NHLPA met 7 times in 9 days through Sunday (yesterday). I want to summarize what you've seen, what this past week was about, and what the future holds in these negotiations and if you're going to be asking for B's tickets by Christmas or not...
The NHL made an offer this week. An offer that should've been made last month before the Oct. 16th deadline(the deadline to play a full 82-game schedule). The offer they made this week was an offer that would've been accepted (or thought over very very much by the players) had it been made over a month ago...
NHL's New Deal: Based on the principles of a full 82 game schedule (keep in mind this is a 6-10 year CBA so terms must be expressed in the idea of a normal full season) that the revenue will be 50/50 split with a 2yr "Make-Whole" provision paid for by the owners. In year 1 the owners would pay the players 54.3% of HRR (Hockey Related Revenues which last year were at $3.303b), which totals around $149m and factors in a roughly 2% interest factor for the players since they are not getting their entire normal salary. Year 2 would be 51.7% of HRR, totaling $62m above the 50/50 this time, also factoring in 2% interest. By year 3 the split would be 50/50 of HRR.
Three things to take away here... First, if this deal was made in earnest 6 weeks ago, there would probably have been some tweaking here, but ultimately would've been worked out... Second, this deal wasn't made 6 weeks ago, and there is not a full season to negotiate these dollars with anymore, thus if a deal is to be struck with these general ideas, the players would be receiving approximately 20-25% less of the overall value of this year's money simply due to a shortened season... Third, this plan is all centered around the assumption of an annual 5% increase in HRR growth. Everyone is beginning to feel the heat that the league's growth may not carry over without hockey being played, the HBO series canceled (24/7), and the winter classic off the table... All of which will have to have some effect on the growth of the sport not only this year, but for the next 2-4yrs depending on how much hockey we lose here
This proposal also has non-HRR factors as well... The NHL's proposal also includes a limit to 2nd year deals... In short the NHL wants this following in regards to player contracts...
- 2yr Rookie deals (instead of 3)
- Delaying salary arbitration and UFA (Unrestricted Free Agency) by 1yr for each circumstance (whichever occurs), thus basically leaving the rookie stuck for 1yr (after year 2) without the possibility of becoming a free agent, his rights are owned by the team, and the team can chose to trade those rights, or negotiate a new deal (or force one). The problem here is it gives the team all of the control, limiting the money they need to pay, having that player under their control for basically 2-7yrs if they chose to (Jeremy Jacobs would've loved to do this to Segin basically)
- A limit to 5yr deals in the 2nd contract
- In this 2nd contract (or any contract), there is a max of 5% of fluctuation year-to-year in how much the player can be paid (prevents front/back loaded contracts, which the league DOES need, if anything, this is the most reasonable of all the league's concerns)
These non-HRR issues will be 1-2 weeks of negotiations once the HRR negotiations are agreed upon, but are still very important rules for the players (even more so than the 50/50 split). Think of it this way... Both sides know they are going to wind up at 50/50, if its 2yrs or 5yrs, its going to be 50/50. So the players then have to think of their rights beyond that. Players have made their most in the past CBA in their 2nd contract and now that is being removed as well too. Pretty much making a player wait til age 28 or his 3rd contract (6-7yrs into being in the league) to hit a big pay day.
The problem here is that in the war of Billionaires vs Millionaires, the Millionaires have received a lot of negotiating, a lot of give-and-take, and that all came to a stop Friday. (https://twitter.com/RenLavoieRDS/status/267098709597241344) Sides only met for 45mins on Sunday and the give-and-take is over. The owners have given a considerable amount of flex over the past 2-3 months, but does not seem to be moving more than this... The NHLPA will now have to decided whether a better deal is still out there to wait on and try to push for, or if this is the best deal they're going to get... If they're push for more, and they're wrong, the NHL can pull this deal back, both sides will dig in, and these offers based on full seasons will be based on a full-season... Next year...
The NHL will announce more cancellations in 2 weeks if significant strides are not made after Thanksgiving weekend. The 5% annual HRR growth is taking a hit every day, the players are not playing (at least not in the US), and the sport itself is on the decline after 6yrs of rebuilding... The argument is over <$70m when it comes to the HRR, which for Millionaires is a lot, but for Billionaires, well I think its as close to even as the players are going to get
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