NHL CBA: NHL's First Offer Is Understandably Laughable, but It's a Start
With the current collective bargaining agreement between the NHL and the National Hockey League’s Player Association set to expire on September 15, the clock is ticking on getting a new deal in place before the 2013 season begins on October 11.
Earlier this week, we learned that the dance between the two sides had begun. Reports have filtered out that the NHL has presented the NHLPA with their first offer, and as first offers go, it’s about as laughable as one would expect.
The NHL is looking to reduce the player’s share of the revenue pie from 57 percent to 46 percent. In addition, the league is looking for players to serve ten years in the league before hitting unrestricted free agency, limit contract length to five years, get rid of the salary arbitration process and make entry-level contracts five years instead of three.
If you’ve never been involved in a contract negotiation, these requests seem ridiculous and they are. The reality is that they’re expected to be kind of crazy. The first offer is usually nothing more than a starting point, it puts some cards on the table and gets conversation started. When the final contract is hammered out, it’s usually miles away from where the first offer began.
The NHL’s first offer will easily be dismissed and shot down by the players as almost every request can and will be torn apart.
The big issue is to reduce the share of revenue. The NHL is going to have a very, very hard time getting the players to agree on a cut here and there is one simple reason for that: the league is bringing in money at a record pace, setting revenue records in each of the last seven years.
According to a press release from the NHL, the projected revenue for the 2012 season was going to be $3.2 billion, an increase of 18 percent over the 2011 season. That’s a nice chunk of change and a great increase in revenue, especially during tough financial times.
Where the request to cut the players' share becomes really laughable is when you see that since the 2003-04 season, revenue has grown 195 percent. With money coming in at that rate, the NHL has very little hope of getting the players to budge from the current rate.
The ten years for unrestricted free agency is also going to be a tough pill for the players to swallow. Currently, a player needs to play seven years before he can become an unrestricted free agent. I can possibly see the players agreeing to move this back up to eight years as it was in 2006, but more than that may be wishful thinking on the league’s part.
The limiting of the contract length request is also going to be a very, very rough sell. Why? The teams are the ones offering these contracts to the players; no one is forcing them to offer a 12-year deal to anyone.
If they don’t like the length of the contracts being thrown out there, they don’t need to offer them. Yes, that will cut some teams out of the running for certain players, but if that is what the market bears for a player, then so be it. I can see contracts getting capped at possibly ten years, but five? No way, not even close.
The salary arbitration process is an interesting one. Neither side can enjoy the process, as arbitration hearings can be rough on the players and can cause irreparable damage to relationships. There’s a slim chance this could be abolished, but to do so both sides will need to find something to replace it. Finding something to supplant arbitration that both sides see as fair will be a tough haul.
The one thing that may stand from the original offer is the length of rookie contracts. Contract negotiations are always give and take, and it's always easier to sell the rank and file on giving something up for the younger union members than it is for the veterans who have “served their time." For that reason alone, I would expect entry level contracts to increase by at least one year if not two.
It’s going to be an interesting summer and I expect things to get heated before they are resolved, there’s a great deal of money involved here, so don’t look for the players to give up their piece of the pie.
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