NHL Lockout: Analyzing the NHLPA's Latest CBA Offer Made to League Owners

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NHL Lockout: Analyzing the NHLPA's Latest CBA Offer Made to League Owners
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The details of the NHLPA's proposal made to the NHL during a CBA meeting on Wednesday have been obtained by TSN.

 

UPDATE: Wednesday, November 21 at 4:19 p.m. ET by Nicholas Goss

NHL commissioner Gary Bettman has spoken to the media following the league's rejection of the NHLPA's latest proposal. Here's what he had to say (via Chris Botta of the Sports Business Journal):

Dan Rosen of NHL.com (via Twitter) also has some more reaction from Bettman:

Quite frankly we have proposed a long-term agreement that we think is fair and balanced. Assuming we can dig our collective way out of the hole that we're digging ourselves into we expect that the players would make under the seven year term that we proposed between $12 and $14 billion. We're having a tough time understanding why what we have proposed and what we have proposed previously hasn't been accepted.

It might not be long before we see more game cancellations, and according to Darren Dreger of TSN, another major NHL event could be wiped from the schedule later this week.

Be sure to check out Bleacher Report's NHL page for lockout updates as they become available.

---End of Update---

 

UPDATE: Wednesday, November 21 at 3:26 p.m. ET by Nicholas Goss

NHLPA executive director Donald Fehr did not have good news to share after hearing what the NHL thought about his union's proposal made on Wednesday (via Ren Lavoie of RDS, Chris Botta of the Sports Business Journal and Chris Johnston of The Canadian Press):

Darren Dreger of TSN has more information:

The NHL's reaction is disappointing, but unfortunately, it's not unexpected. It will be interesting to see how the negotiations continue after this latest setback.

When the NHL speaks to the media, we will update this article again. Stay tuned.

---End of Update---

 

Here are the main parts of the NHLPA's offer, followed by an analysis of the most important information (Full details of proposal can be found at TSN).

  1. Five-year agreement
  2. Revenue sharing: "Pool of $200 Million at $3.303 B of HRR.  Varies year to year with HRR."
  3. 50-50 split of hockey-related revenue (HRR) for entirety of deal
  4. AHL contracts: "Contracts in the minors – Clubs take a cap hit on contracts in the minors over $1M (move in the owners' direction)"
  5. Player discipline includes an "appeal to a neutral arbitrator or to a panel of three arbitrators (one appointed by each side and one neutral). "
  6. "Re-entry waivers are eliminated"
  7. League pays $393 million for their "make whole" provision
  8. Minimum salary cap ceiling of $67.25 million for entirety of CBA
  9. No term limits (player contracts)

 

Significant Changes and Analysis of NHLPA's Proposal

  • This is the first time that the NHLPA has based its HRR figures on percentages, which is what the league wanted. This is a good step in resolving the HRR issue.
  • NHLPA is willing to go to 50-50 HRR split immediately. However, there are certain things included in the proposal that the NHL can argue doesn't represent a "true" 50-50 split.
  • The players are ready to go to a 50-50 split in year one, but the "make whole" provision and other guarantees prevent them from seeing their share of HRR decline, even if revenue drops.
  • In the event that the NHL's revenue decreases over the length of the deal, the players' share of HRR actually grows. This will likely upset the NHL.
  • The union has asked for $393 to be used for the league's "make whole" provision (which helps maintain full value of existing contracts), which means there is still a $182 million gap between the two sides on this issue because the NHL originally offered $211 for this provision. This is not a significant divide, and a smaller one than the two sides had previously.
  • The five-year term isn't something the NHL will likely ever agree to. For the good of the league, and the sport, the new CBA should be at least seven or eight years, with some kind of option to extend or opt out.
  • Revenue sharing being linked to HRR isn't surprising, and something the NHL shouldn't have a real problem with.
  • The NHLPA hasn't done enough to eliminate back-diving contracts, which is something the NHL is determined to do. More work on this issue remains.
  • The union's proposed salary cap ceiling isn't going to please the NHL. The league will likely want a lower ceiling.
  • The NHLPA wants the owners to pay for any damage done to the game during the lockout from a revenue standpoint. Don't expect this to be received well by the league. One stumbling block that remains is figuring out year one of the agreement because it will be a shortened season, and the amount of revenue won't be the same as it would be in a full year.

The NHL won't like everything in this offer from the NHLPA, but the gap between both parties is too small to allow the 2012-13 season to be lost.

After looking over the NHLPA's latest offer, there should be some momentum built from Wednesday's meetings. With some good negotiating and more compromise, a new CBA could be made in the next few weeks if both sides are committed to making progress.

Check back to this article for more reaction from the NHL and NHLPA when the CBA talks on Wednesday conclude.

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