The Complete Idiot’s Guide to the NHL CBA negotiationsSeptember 14, 2012, by
By now you are probably aware that the chance of the season starting on time remains pretty low. You’ve heard the rhetoric and you may have come across some attempts at number crunching. However, the fact of the matter is the media and the respective parties involved haven’t done a great job at communicating what both sides need in order for the sport to continue to grow and prosper. All you are getting are calculated opinions, half truths and secondary issues that are only meant to distract you from the core issue. How do we grow and split the pie?
What a fair CBA should look like
In my humble opinion, the pie (also known has hockey related revenue) should be split 50/50. This past year the split was 57/43 in favor of the players. Obviously a split of this nature is not sustainable. The way the business world operates in 2012 is far different than it did in 2005. Whether it is wages, travel costs, healthcare costs, lack of access to credit, etc., the price of doing business in this country has increased dramatically over the last several years and I think most people understand that.
It sounds like I am over simplifying this, but at the end of the day the NHL is still the 4th most popular sport in this country. It doesn’t make much sense to me that players collect 57% of their sport’s revenues, while players in more popular sports such as football and basketball all receive 48-50%.
Of course getting to a fair 50/50 split is easier said than done.
The NHL’s proposal
Forget the league’s earlier proposals with all of the contract restrictions, eviscerating arbitration and their attempts to redefine HRR (e.g., deducting expenses used for upgrading their buildings). Those are secondary issues that can be left to debate over another day and I’m not sure how important those issues truly are to the league anyway.
The meat of the NHL’s latest proposal is a six-year deal in which players would get 49 per cent of hockey-related revenues off the bat, then in year 2 it would be 48 per cent. The remaining four years would be 47 per cent.
The league is certainly moving closer to 50% from their original offer of 43%, but the way they go about getting there is unrealistic. You can’t rollback players salaries that much that quickly and continue to decrease their share. If anything the league should slowly decrease the player’s share to around 50% and keep it there.
The NHLPA’s proposal
The NHLPA’s original proposals have been less straight forward as they’ve been trying to re-write the entire way the league functions with ideas of selling cap space, soft caps and increased revenue sharing (yes, the league already has revenue sharing, which has curiously been under-reported for some reason).
Still, the NHLPA is right in their assertion to prevent salary rollback and receive the contracts this coming season they were guaranteed. Their latest offer was a five-year deal. They backed off their original request for 57% of revenues (in the final year) and are instead proposing they take 54 percent of new revenues in the fourth and fifth years of any agreement. Of course, 54% is still too high and their cut doesn’t move closer to 50/50 over time either.
While some of the numbers are still being debated, I have seen reports that the NHLPA stands to lose anywhere from $200 million to $300 million per season under any of the proposed deals. This obviously sounds like a lot, but if you divide those figures by the 690 players in this league it only averages out to a loss of around $300-500K per player. Considering the average NHLer makes somewhere between $2.4 and $2.5 million, I don’t really see the big deal.
The Final Word
Overall the purpose of this post isn’t to strictly blame or point fingers at one side or the other. Both parties are at fault for this impending lockout. The NHL may be the ones forcing a stoppage, but you can’t play on without an agreement, as the NHLPA certainly would have no incentive to get anything accomplished.
You can blame the NHL for giving ultimatums and –generally speaking– being terrible at communicating with the fans/media, and I wouldn’t argue with you. But then again, having players take to Twitter to mouth off or to concoct some weird idea of persuading labor boards in Alberta & Quebec to forbid a lockout is a complete waste of time. The NHLPA should be focusing their efforts on coming to an agreement.
Hopefully both sides will come to their senses soon.