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NHL Lockout: 5 Things to Expect from the NHLPA's Counter Proposal

Eric SteitzAnalyst IIIOctober 15, 2016

NHL Lockout: 5 Things to Expect from the NHLPA's Counter Proposal

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    With the new proposal offered by the NHL as a basis for negotiations, the ball is clearly in the players’ court. With a clear-cut starting ground, including the goal of an 82-game season, the players obviously won’t accept this deal straight up.

    The NHL’s proposal is highlighted by a 50-50 split of hockey-related revenue, entry-level contracts moving from three to two years and a maximum contract length of five years on all other contracts. These are just some of the things presented by the league.

    This is significantly different than the initial proposal from the league. The league’s initial proposal called for 46 percent share of HRR for the players. The initial proposal also called for a five-year entry-level contract requirement.

    The NHLPA will make a counter proposal in the coming days. These are some of the things we can expect to see in the new proposed deal.

Three-Year Entry-Level Deals

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    The recently expired CBA had three-year entry-level contracts. The owners initially asked for five-year entry-level contracts in their first proposal. Now, they have dropped that stipulation to two years.

    It may be a bit petty, and certainly won’t make or break the negotiations, but expect the NHLPA to counter with continuing the three-year deals. The owners showing a willingness to move up and down in contract terms give the players the upper-hand.

    The two-year deals give owners an extra year of protection against underperforming young players. It will be interesting to see if this is anything worth arguing about, since the owners haven’t shown a clear stance on the issue in recent proposals.

Salary Variance

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    Some high-paying deals in the NHL offer salaries that are front loaded in order to avoid wasted years at the end of contracts.  For example, Player A signs a six-year, $50 million contract and gets $15 million in each of the first three seasons followed by three years of less than $2 million.

    The recent proposal from the NHL offers a salary variance of no more than five percent over the course of the contract. That will help to eliminate the loaded contracts.

    Ilya Kovalchuk of the New Jersey Devils has such a contract. He earns nearly $12 million from 2012-18, followed by a years with less than $5 million per season from 2019-25.

    Don’t expect the NHLPA to accept this one immediately. This aspect will require some significant negotiation. The counter proposal from the NHLPA should be around 12 percent.

European Players

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    One of the more intriguing portions of the NHL’s proposal is the stipulations on European players. The new proposal from the league says that drafted European players have four years of exclusive negotiating rights with the team that selects them. After that period, they will be allowed to enter the league as a free agent.

    This will put a whole new twist on the draft, especially with the views on the international leagues changing during this lockout. Take Edmonton Oilers pick Nail Yakupov for instance. If he didn’t sign a contract and decided to play in the KHL for four years, he could join any NHL team at that point.

    This could cause some headaches in the draft. Obviously, it doesn’t apply to North American players, but it may be something the European players want to discuss. The players could propose a shorter term, but there's not much wiggle room here, if at all.

Five-Year Contract Limit

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    One of the more glaring parts of this proposal is the five-year limit on contracts. No more lifetime contracts.

    While this is a huge win for the owners, it certainly won’t sit well with the players, especially after this offseason and the contracts that were handed out.

    One of the biggest factors in this one that is rarely considered is the fans. Fans follow their favorite players wherever they go, but they want to see them in a home uniform for as long as possible.

    What if Ryan Callahan bolts from New York? Or, Jamie Benn leaves Dallas? Fan bases would be extremely upset. Five years is not a long period of time. This contract limit benefits owners only.

    Expect a double-digit counter proposal from the NHLPA.

Hockey -Related Revenue Sharing

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    And, of course, the biggest issue is the hockey-related revenue. The recently expired CBA had the players earning 57 percent of HRR. This proposal offers a 50-50 split of a very large $3.3 billion pie.

    The league’s initial proposal offered 49 percent for the first year, followed by a continual decrease down to 47 percent by the end of the agreement. This is a slight, but significant, move for players.

    The NHLPA won’t accept this part as it stands, but it is a good starting point. The players want to guaranty their piece of the revenue, as they should. But, eventually this will all end up to be a 50-50 split.

    Expect a counter in the 52-54 percent range from the NHLPA. They may even add that sliding decrease throughout the length of the agreement to appease the owners. If the players can get the HRR split above 50 percent in the end, it will be a significant win for the association.

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