Thoughts on the CBA Negotiations

Someone is cheering for the players.

The NHL put forward their initial offer to the NHLPA over the weekend, and it was generally regarded as ridiculous. The major points I've seen reported consistently are as follows:

  • The players will receive 46% of revenues, down from 57%.
  • 10 seasons of NHL service before unrestricted free agency, up from 7 seasons.
  • Entry-level contracts of five seasons, up from three seasons.
  • A new limit on contract length of five years.
  • Elimination of salary arbitration.
  • Elimination of signing bonuses.
  • A narrower salary range.
Now, maybe I'm crazy, but I don't think this is ridiculous at all. If these are the only major points that the NHL is going after, this is a very good start for the players because the owners aren't going after guaranteed contracts, aren't going after no-movement clauses, and aren't going after the definition of hockey-related revenue. If true, that's great news for the NHLPA. That last point is particularly important because I'd have to think that the most important thing to both sides is money. Most of these other issues talk about the distribution of money amongst the players (i.e. which players get paid) rather than how much the players get paid as a whole. After the jump, I'll take a brief look at each point, and how I think the players might respond.

The players will receive 46% of revenues, down from 57%. When I last wrote about the CBA, I expected this to be one of the two most important issues (the other being the definition of hockey-related revenue). 46% sounds like a lot, but it's not far off what players in other leagues are earning.

My suggestion here would be to take a point cut for every five points of revenue sharing (without restrictions) the owners are willing to agree to. Thirty stable franchises is good for the players because it means more stable jobs. In exchange for agreeing to the percentage cut, the players could ask for HRR to be changed to include relocation fees and expansion fees.

This would really put the screws to the wealthy teams and be a big boost to the poor ones. It would be great to hear the NHLPA come out and say that they'd accept 46% of revenues so long as revenues were redefined to include something that is clearly hockey-related, and so long as the teams agreed to put 55% of their share of HRR into a common pot.

I think that would come off well to the public ("We want stability and parity long term, and our proposal achieves that much better than what the NHL has offered. They're just kicking the can down the road; we're trying to solve the problem."), and it would be a tremendous boost for the majority of owners earning less than the league average.

10 seasons of NHL service before unrestricted free agency, up from 7 seasons. Should the owners agree to the first point, you can probably justify conceding on this point, though I'm sure players like choosing where they get to play. Of all the issues that are mostly a matter of distribution rather than total money, this one is probably the one most worth fighting for to the players, but conceding it helps to build that alliance with the poor teams because they'll get to hang on to their stars for a longer period of time. If this were up to me, I'd go along with this for that reason.

Entry-level contracts of five seasons, up from three seasons. Another one that's easy to agree on for current players and poor teams. Do you know how many players on the negotiating committee are new draftees? None! Players on entry-level contracts? Still none! Thus, they'll get thrown under the bus, much like last time. I expected that something like this might happen, which is why I suggested that the Oilers shouldn't be signing any 2011 draftees back in October. It may also help to explain why Nail Yakupov doesn't have a contract.

A new limit on contract length of five years. This results in less security for individual players but no less security for players as a whole. It really only impacts the top 10% of players in the league, and a large number of those players already have mega-deals. The players could make it contentious, but again, if the first point is agreed upon, this one is easy to concede.

Elimination of salary arbitration. This is brutal for young players. If I were the players, I'd agree to this so long as the compensation for signing an offer sheet was greatly reduced. Then you're stuck hoping that teams give them a whirl, much like teams do in the NBA (Jeremy Lin is off to Houston!).

Elimination of signing bonuses. This one is a double whammy. Not only does it make life tough on stars who get more money sooner by putting bonuses into their contract, it also serves to take money out of the system by screwing young players. Take Teemu Hartikainen as an example. His AHL salary over the last three years has been just $65,000, but he has also received a signing bonus of $87,500 in each season, which is money that doesn't count against the cap. Because it actually serves to take money out of the system, this one is probably worth fighting over. The NHLPA can even emphasize that they're standing up for young guys here, which might make some of the other concessions they've made more palatable.

A narrower salary range. I don't really understand why the owners want this. This really hurts the poor franchises, and the NHLPA should hammer that point. "A narrower salary range only makes sense with increased revenue sharing" is a drum that they should be beating hard.

Should the NHL decide that they don't like this deal (as I assume they would), the next offer from the NHLPA should be vastly in favor of the rich teams. Call for a wider salary range, no limits on signing bonuses, unrestricted free agency after the five-year entry-level contract, and a smaller cut in their percentage of revenues. The goal in this negotiation needs to be to play the owners against one another.

I know that some very smart people see decertification as the end-game here, and that may end up being true, but hockey players are lucky in that they don't really need to go in that direction quickly. The KHL is rising and by the time the next negotiation comes around (if I'm the players, I'd try to make this deal a long one), they may well be more viable than they are now. The NHLPA can afford to let one of the other leagues blow up the sports landscape and see how it works before they try it themselves.

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