Breaking Down Potential Changes in New NHL CBA

The current NHL collective-bargaining agreement is set to expire on Sept. 15, 2012. Once this current CBA expires, everything in the NHL could come to a halt and a lockout could ensue.

The NHL and the NHLPA have been meeting over the past few weeks and they have been trying to iron out a new agreement, so what potential changes can you expect from a new CBA?

There has not been a lot of definitive details on what changes could come, but here are some topics that have been mentioned and some things you can expect.

Luxury Tax

This topic was discussed on the July 9 episode of the Marek vs. Wyshynski podcast and it makes a lot of sense. Currently, the NHL operates with a salary cap, but there are tons of loopholes and shady ways to circumvent the salary cap without actually circumventing the salary cap.

For example, Ilya Kovalchuk, Brad Richards and Roberto Luongo signed notable front-loaded multi-year contracts laden with bonuses. Each player's cap hit is under $7.0 million per season.

The majority of money made by each player is in the first few years and it declines significantly but legally in the ending years.

Although the cap hit remains the same, a team struggling to hit the cap floor would take on one of these cap hits to reach the floor because they would not be paying the player the full value of their cap hit.

These front-loaded deals violate the "spirit of the salary cap."

To discourage these types of contracts, why not add a luxury tax to the salary cap? The cap would still be a set number, but for each dollar a team spends over the cap, they would be significantly taxed.

Some teams with deep-pocketed owners would probably spend over the cap, but this tax money could go into the revenue-sharing pool.

Amnesty Clause

If you took a look at every team in the NHL, you can find at least one cap-killing contract that has an impact on how the team does business. In some cases, there are two, three or even four contracts that general managers would love to get rid of for good.

What if, under the new CBA, teams were allowed to extinguish one contract? What if teams could have a do-over on one deal that would come without the penalty that a buyout currently does? If an amnesty clause was integrated into a new CBA, teams would become a lot smarter on how they hand out contracts.

The players would obviously still receive the money they were signed to, but it would no longer count against the salary cap.

This has potential positives and negatives because teams could be more aggressive in spending, only to then buy out one of their players. However under the current CBA, teams still perform expensive buyouts but they are assessed a cap penalty.

Despite the negatives, there are a few positives. The positives of a potential amnesty would be that teams could unload contracts legally instead of trying to shop to lower-end teams desperate to get to the salary floor.

There would also be a level playing field, because each team could use this amnesty buyout once during the length of the CBA and teams would be less likely to sign players to lengthy multi-year contracts.

For more on this subject, check this out.

Increased Revenue Sharing

The NHL has made significant profits as a whole over the past few seasons, including record-setting revenues for the 2011-12 season.

Under the current collective-bargaining agreement, every time that revenue increases, the salary cap ceiling increases.

A potential way to add more parity and competition to the league could occur by increasing revenue sharing. By increasing revenue sharing, the playing field would be level for all teams because lower-end markets would reap the benefits from money contributed from bigger-market teams.

This would make it easier for markets like Florida, Nashville, Phoenix, Winnipeg, etc. to pay for big-name free agents like Los Angeles, New York, Pittsburgh and other big teams already do.

This issue would likely cause tons of debate because the big-market teams do not want other teams to have a huge benefit off their dime.

Term Limits

A new collective-bargaining agreement could also include the NHL and NHLPA determining a set limit for contract length. It is possible that this new clause could limit deals to five or seven years per contract.

This would eliminate the potential to add "dead years" at the end of a contract and it would eliminate the ability to bump down the cap hit.

This is another issue that will be met with criticism, because teams should be able to lock up their players for as long as they want.

Restructuring of Free Agency

Under the current collective-bargaining agreement, a player is a restricted free agent until they have served seven years in the league or when they reach age 27. Unrestricted free agency follows this process, but what if the entire system was changed?

Right now the Nashville Predators are in a predicament with Shea Weber. He either has to sign long-term with the Predators or they will seek to trade him so they don't lose him for nothing.

They also would likely not match a one-year offer sheet because they would be unable to trade him after doing this. 

Nashville would forgo future draft pick compensation if they matched the offer sheet. If the system was amended to help this process, free-agent negotiations for all UFA and RFA players could be easier.

If teams could trade for Weber and have an easier time negotiating a good contract, teams would be willing to take more risks on RFA's, and the home team would not lose young stars for nothing.

Contraction

This may be the most "out of left field" possibility, but Greg Wyshynski of Yahoo! Sports' Puck Daddy blog had a solid breakdown on a piece that originally appeared in The Globe and Mail. Globe and Mail text will be italicized. 

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Globe and Mail:

In some NHL circles, a more drastic solution is envisioned. The Coyotes could simply be folded, its 23 players sent to other NHL teams through a dispersal draft and the league would operate with 29 teams next season.
This would allow the NHL to collect expansion fees of $200-million or more each from Seattle and Quebec City, the top candidates for NHL teams, rather than a single relocation fee of $60-million or so for the Coyotes. That is a gain of at least $200-million if a total loss of $200-million is assumed on the NHL's investment in the Coyotes.
(Suddenly, Columbus Blue Jackets fans have visions of Mike Smith or Oliver Ekman-Larsson dancing through their heads.)

Puck Daddy:

Shoalts is right with Quebec City. I don't believe the NHL wants to relocate to Quebec. I believe they want to expand there, and collect the type of expansion fees they did not when they had to hastily move the Atlanta Thrashers to Winnipeg.

I also feel that the Quebec's very public lobbying for a team—from construction of an arena to target an NHL franchise to the city by city tour of Nordiques fans for public pressure—is counter to what the League wants from its prospective owners. Who was the darling of the Board of Governors: Jim Balsillie or Mark Chipman?

To that end, there's a factor here that Shoalts didn't mention: The Markham arena, which will seat 20,000 and costs $325 million and is, of course, just for spiffy concerts and certainly not for a second NHL team in Toronto, no siree.

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If an increase in revenue sharing is not the way to go, contraction for struggling financial teams could work. By contracting teams, the NHL can cut its losses and can gain upwards of $200 million in expansion fees.

This would bring hockey to more devoted and supported markets. The NHL would increase revenue and then money could be distributed accordingly under the current system. It is a radical option and it is something that the NHL would like to avoid.