The NHL lockout is finally over.
The league confirmed on its website Sunday morning that an "agreement in principle" has been made.
The National Hockey League and the National Hockey League Players' Association reached agreement on the framework of a new Collective Bargaining Agreement early Sunday morning.
After a marathon 16-plus hour negotiating session at the Sofitel Hotel that began Saturday afternoon, the sides announced an agreement in principle shortly after 6 a.m. Sunday.
The League did not announce the start date of the season or the number of games each team will play. Those details will be announced soon.
Both sides exchanged multiple proposals over the last few weeks in a showing of actual negotiations, and the presence of mediator Scot Beckenbaugh in the CBA talks seems to have made a huge difference (via Michael Grange of Sportsnet):
We asked Scot Beckenbaugh for comment on his status as the NHL's off-season Hart winner he declined: "I'm as famous as I want to be."— Michael Grange (@michaelgrange) January 6, 2013
With the deadline to save the season just days away, the league and its players had plenty of reasons to negotiate until the deal was done.
It would have been nice if the negotiating that took place this week was done many months ago, but at least hockey fans won't have to go through another lost season.
Let's break down the details of the new CBA and examine how the major issues that were negotiated since September were resolved.
CBA term was a very important issue for the league because establishing an extended period of labor peace between the NHL and NHLPA needed to be an outcome of this lockout.
By agreeing to a 10-year CBA term (via Katie Strang of ESPN), both sides have ensured that another lockout won't occur anytime in the near future. This is great news for hockey fans everywhere.
#CBA Can confirm following terms: 10-yr deal with opt-out after 8 yrs, 7-yr contract term limits (8 to re-sign) and '13-14 cap of $64.3 m— Katie Strang (@KatieStrangESPN) January 6, 2013
The players could have made a stronger effort to fight for a seven- or eight-year CBA term, but they understood that for the game to grow and their share of hockey-related revenue to increase, the league needs a prolonged period of labor peace.
In the end, everyone wins with a 10-year CBA term because the NHL needs to avoid lockouts as much as possible after having three of them in the last 20 years.
Player Contract Term Limits
When the NHLPA first agreed to player contract term limits by proposing an eight-year term, it was only a matter of time before this issue was solved.
The union had to do everything it could to persuade the league to move as far toward their eight-year limit as possible.
The players actually did well to convince the owners to move to seven years on all new contracts, as LeBrun reports:
Player contract term limit at 7 years (8 years for your own player).— Pierre LeBrun (@Real_ESPNLeBrun) January 6, 2013
The owners were originally looking for a five-year limit, and deputy commissioner Bill Daly labelled the issue as "the hill we will die on." Then the league moved to a six-year limit, and now finally seven.
This was a huge issue for both sides, but it's encouraging to see the owners budge from their initial demands. This is one issue that the players didn't seem willing to soften on.
According to TSN's Darren Dreger, revenue sharing will be $200 million:
Confirming revenue sharing will spread $200 million. Additionally, $60 mil PA initiated growth fund also included.— Darren Dreger (@DarrenDreger) January 6, 2013
The union hoped for $250 million in August, but it was going to be hard to convince the rich owners from profitable teams in large markets to share a much larger portion of their revenue with small-market teams, many of which are in non-traditional hockey markets.
As long as teams in need of extra revenue get the help they need to pay expenses and make moves to improve their roster, revenue sharing will be helpful.
Salary Variance, Salary Cap, Buyouts
The owners wanted a $60 million salary-cap ceiling for the 2013-14 season (via Darren Dreger of TSN), which meant that the two sides were $5 million apart. The final number agreed on was closer to the NHLPA's proposed ceiling, according to LeBrun:
Further to @aaronward_nhl reporting Year 2 cap at $64.3 M, I can add that Year 2 floor will be $44 M— Pierre LeBrun (@Real_ESPNLeBrun) January 6, 2013
Having the ceiling at $64.3 million benefits all teams because more than half of the league already has over $60 million in salary committed to players for 2013-14. A $60 million ceiling would have caused many teams to make moves that would shed salary, ultimately weakening their rosters.
The cap ceiling will continue to increase as revenue grows. In the meantime, the $64.3 million ceiling in the second year of the deal is a win for the players because it could have been lower.
According to Chris Johnston of the Canadian Press, every team will have two buyouts to use after this year is over, but they also must be used before the 2013-14 season:
As part of new CBA, each team can use up to two compliance buyouts prior to 2013-14 season. Will count against players' share.— Chris Johnston (@reporterchris) January 6, 2013
These buyouts will help teams get rid of cap hits that are ruining their cap flexibility. Some teams may also use a buyout or two to get under the new 2013-14 cap ceiling of $64.3 million.
Pension funds base on what MLB players have.— Renaud Lavoie (@RenLavoieRDS) January 6, 2013
Pension fond is the only gain by players vs what they had in the CBA that ended in september 2012.— Renaud Lavoie (@RenLavoieRDS) January 6, 2013
Pensions were a critical issue that both sides took a lot of time to figure out, and one reason for that is because pensions work differently in the United States and Canada.
Another major issue dealing with salary was yearly variance, and Neil Greenberg of the Washington Post has the details on this topic:
With new variance clause (35% r to yr, max 50% of highest year) means a $10mil deal goes $10, 6.5, 5, 5, 5.... goodbye #clownyears bro.— Neil Greenberg (@ngreenberg) January 6, 2013
What does this mean? There will be a year-to-year salary variance limit of 35 percent on multi-year contracts. Also, the lowest salary in the contract cannot be less than 50 percent of the highest salary.
This will help prevent general managers from finding ways around the salary cap by signing players to very long contracts which include a small salary in the final years of the deal.
Although, it's certainly possible that teams will find other loopholes in the new CBA that will help them get around the cap after the deal is studied in-depth.
Dreger is reporting that player discipline and the appeal process for suspensions will change under the new CBA. That was fully expected to happen.
Sup discipline: Shanahan 1st, appeal with Bettman 2nd. For 6 or more games neutral third party will decide if necessary.— Darren Dreger (@DarrenDreger) January 6, 2013
This appeal process is a bit more fair to the players, and it should give them a slightly better chance of winning an appeal.
One interesting change to the new CBA is an NBA-style draft lottery where every team that misses the playoffs has a chance to win the top pick. It's not just the five worst teams anymore.
Draft lottery will change. All 14 teams fully eligible for 1st pick overall. Weighting system may remain, but 4-move restriction out.— Darren Dreger (@DarrenDreger) January 6, 2013
This change has its good and bad parts. The good news is that teams will no longer have any incentive to "tank" late in the season to ensure they make the lottery, where they were guaranteed a top-five pick under the old system.
The new draft lottery opens up the possibility that the team with the 11th- or 12th-worst record in the league, who just missed the playoffs, could win the No. 1 pick.
Since the NBA draft lottery began in 1985, the team with the worst record and best chance to win the first selection has won just four times.
In 1993, the Orlando Magic shocked the basketball world when they were lucky to win the lottery after just missing the playoffs with a 41-41 record. There were 10 teams that season with a worse record than Orlando.
The Nightmare Is Over
The final step in this process will be for the owners and players to vote on the agreement that has been reached.
The NHL's new CBA will ultimately need to be ratified by both a majority of the 30 league owners and approximately 740 players.— Chris Johnston (@reporterchris) January 6, 2013
The players were expected to lose these negotiations, and they did, but at least the CBA reached on Sunday is much more favorable than the deal that the players' union signed in 2005.
Now that the league and its players have a new CBA to take the game into what promises to be a very bright future, hockey fans can now look forward to actual games and no more boring lockout updates.
The last few months have been incredibly difficult for fans everywhere, but the upcoming 2013 season should be one of the most exciting ever.