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NHL Lockout: Detailing Biggest Remaining Hangups from Latest CBA Offer

PITTSBURGH, PA - JUNE 22:  NHL Commissioner Gary Bettman speaks during Round One of the 2012 NHL Entry Draft at Consol Energy Center on June 22, 2012 in Pittsburgh, Pennsylvania.  (Photo by Justin K. Aller/Getty Images)
Justin K. Aller/Getty Images
Nicholas GossCorrespondent IOctober 16, 2012

The NHL brought a reasonable proposal to the bargaining table on Tuesday in an attempt to create some meaningful labor discussions with the NHLPA over the next week, but there are still some important issues that will need to be negotiated further before a new collective bargaining agreement is made.

NHLPA leader Donald Fehr didn't offer too much of a reaction to the league's offer when speaking to the media on Tuesday (via Steve Zipay of Newsday).

Donald Fehr: ''Would like to believe after we are done [reviewing], that it's an excellent starting point and there's a deal to be made.''

— Steve Zipay (@stevezipay) October 16, 2012

It's unrealistic to think that the players will accept the owners' most recent offer without making some changes in the form of a counter offer.

Let's examine the biggest remaining hangups in the current labor negotiations.

For a complete breakdown of the league's proposal from Tuesday, click here.

 

Hockey-Related Revenue (HRR)

You may be surprised that the owners have moved to a 50-50 share of hockey-related revenues this early in October, but going from 57 percent of hockey related revenues down to 50 percent in just one year isn't something that the NHLPA will be quick to accept.

In an ideal situation, the players would like to gradually decrease from their previous share of 57 percent of HRR, but the lack of a salary rollback in this offer could impact the players' willingness to accept a 50-50 deal.

Since revenues are expected to keep growing in the years to come, a 50-50 split of HRR is a deal that the players should give strong consideration to accepting. The expiration of the NHL's broadcasting rights in Canada in 2014, among other things, will help boost revenues over the course of the next CBA, which will benefit the players.

It will be interesting to see how Fehr looks at a 50-50 split. Does he tell the players that this is the best HRR split they will get, or will he advise them to wait longer and hope to get an even better percentage later on?

In its first proposal made in July, the league offered the players 46 percent of HRR, and now they are offering 50 percent, so does Fehr try to get even more from the owners now that he's seen them give back 4 percent in just a month's time?

Hockey fans are hoping that he doesn't try to be greedy, because if Fehr and the players don't end their battle with the owners over HRR soon, the chances of the season starting next month will continue to decrease.

 

Revenue Sharing

UPDATE: Wednesday, October 17 at 9:50 a.m. ET

Pierre LeBrun of ESPN has some more info on revenue sharing from the league's proposal.

According to NHL offer, at least 50 percent of revenue sharing pot will be raised by top 10 revenue grossing clubs...

— Pierre LeBrun (@Real_ESPNLeBrun) October 17, 2012

---End of Update---

Revenue sharing is one issue that the NHL and its players still have a gap to close on.

In August, the players made a proposal that included the total amount of revenue sharing per year climbing from $140 million under the previous CBA to about $250 million (via Chris Johnston of the Canadian Press).

Fehr says revenue-sharing could reach $250 million per year.

— Chris Johnston (@reporterchris) August 14, 2012

On Tuesday, the NHL's offer included around $200 million in revenue sharing per season, according to John Shannon of Sportsnet.

Revenue sharing would be at or near 200 million dollars

— John Shannon (@JSportsnet) October 16, 2012

Revenue sharing is important, but there are other ways for the league to bring in revenues that it can share among its teams, including expansion fees.

There's strong speculation the NHL could announce two expansion teams for Canada once CBA deal struck: Quebec & Toronto. More in Oct. 29 THN

— Jason Kay (@JKTHN) October 11, 2012

The NHL's willingness to offer a revenue sharing figure close to $200 million is a good sign, but more work needs to be done to close the gap that remains between the players and the league on this issue.

 

Term Limits

The players don't want term limits because it prevents them from being able to earn a high salary for a long period of time.

In the NHL's new proposal, five years is the maximum length of all contracts, which means that the players would no longer be able to sign the large deals that Zach Parise and Ryan Suter signed this past summer with the Minnesota Wild (13 years, $98 million each).

Teams want term limits to help avoid bad contracts hurting their salary-cap flexibility, which would actually be a positive change for the league.

The NHLPA will have to make concessions during negotiations, and if they want to keep arbitration and entry-level contracts similar to what they were under previous CBA (Tuesday's offer from the league included arbitration and ELCs going from three years to two), then they will have to give the owners something in return.

Term limits is an issue that the two sides can negotiate over in the next week or so, but it's important that the league gets arbitration in this deal, and the fact that it's even back on the table is a major win for the players.

 

AHL Salaries

Shannon was also able to give us some information that will spark a lot of discussion over the next few days.

Another interesting tidbit from NHL offer... Players' Salaries for those NHLers playing in the AHL would be part of the cap.

— John Shannon (@JSportsnet) October 16, 2012

Tom Gulitti of The Record also reported some more details on this AHL clause.

Also, on 1-way deals in AHL counting against NHL cap, it wont be all of them. It will only be salaries above a certain threshold.

— Tom Gulitti (@TGfireandice) October 16, 2012

This new rule would make teams more accountable for the contracts they sign with players (like Wade Redden and the New York Rangers, for example).

Here is some reaction to Shannon's report from other members of the hockey media.

The AHL contract rule is interesting. It’s there to keep teams honest. Also, think of the (bad) trade action it would cause.

— Joe Yerdon (@JoeYerdonPHT) October 16, 2012

NHLPA will never allow AHL salaries to count toward NHL club's cap. Will they?

— Sam Carchidi (@BroadStBull) October 16, 2012

If guys in AHL count against cap, I can see the NHLPA having a big issue with that #NHLPA #NHL #Lcokout

— Kevin McGran (@kevin_mcgran) October 16, 2012

This is one part of the league's offer that the players will not easily give up on. If players like Redden have their cap hits included in their team's total salary cap number, that means there will be less money for general managers to spend on players who will actually contribute at the NHL level.

Since the players are going to have to accept a smaller share of HRR than they got in the previous CBA, which will result in the salary cap being lowered, they won't want another clause in the agreement that's going to create even less room under the cap for teams.

Players in Redden's situation want to be able to make the full amount of money in their huge contracts, but if their cap hits are part of their team's salary total, then teams will probably be more willing to buy out these types of players.

Being bought out allows a player to have a fresh start with a new team, but if these players signed huge contracts, they will want to earn the full value they signed for.

This clause could also prevent teams from spending a lot of money on veterans during free agency because general managers may fear that if they overpay for a player in his mid-30s, he could end up being like Redden and hurt the team with his poor performance and large cap hit.

The players won't want anything in the new CBA that could make teams less likely to spend large amounts of money in free agency.

 

Nicholas Goss is an NHL Lead Writer at Bleacher Report. He was also the organization's on-site reporter for the 2011 Stanley Cup Final in Boston. Follow him on Twitter.

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