Catching Up on the NHL 2012 CBA Negotiations

Let’s talk Collective Bargaining Agreement. Sounds exciting doesn’t it?  If you haven’t been following it too closely, it’s looking more and more like there will be some kind of lockout for the NHL this year.  Does that mean there will be missed regular season games?  Not necessarily…but the longer this drags out the more and more pessimistic everyone is.  The current Collective Bargaining Agreement is due to expire Sept. 15, 2012.  Theoretically it would be possible to play the 2012-2013 season, while they continue to discuss a new CBA, under the current CBA contract if the NHL Owners and NHL players association (NHLPA) agree to do so but the NHL Owners and their pawn, Commissioner Gary Bettman shut down that idea early in the process.

Nov 21, 2011; Dallas, TX, USA; NHL commissioner Gary Bettman answers questions during a press conference to introduce the new owner of the Dallas Stars at the American Airlines Center. Mandatory Credit: Jerome Miron-US PRESSWIRE

If there is not an agreement by the Sept. 15 deadline there will officially be a lockout.  Both sides will continue to talk until an agreement is made and only then will the NHL start its season.  Whether that is the 2012-2013 season in its entirety, the 2012-2013 season shortened, or 2013-2014 season is yet to be determined.    Right now there is currently a second offer on the table from the Owners to the NHLPA that will not be accepted.  We now wait for the NHLPA, lead by Executive Director Donald Fehr, to submit a counter proposal and so goes the merry-go-round.

Let’s take a look at the timeline to date before we examine where we are headed as Sept. 15 begins to loom large.  These are the dates and the information that leaked from each proposal  (For purposes of brevity from now on NHL will embody NHL Owners and NHL Commissioner Gary Bettman and NHLPA will represent executive Director Donald Fehr and all players)

• June 11:  Stanley Cup is Presented to the Los Angeles Kings
• June 29:  The first formal meeting between  NHL and  the NHLPA
• July 13:  NHL makes first official offer to the NHLPA  with the following changes from the current CBA:
• • Player’s current share of Hockey Related Revenue(HRR) reduced from 57% to 43%
  • Rookie entry level contracts extended from 3 years to 5 years
  • Time before a player can become an unrestricted free agent extended from 7 years of service or age 27 at the end of June to 10 years regardless of age
  • Contract terms limited to 5 years from previously no limit.
• July 26:  NHLPA refuses to counter the NHL’s first offer, instead they present an offer to the Owners with the following changes from the current CBA:
  • The NHLPA proposed a three year deal with a NHLPA option before the agreement would revert back to the existing CBA.
  • NHLPA said that they realized some teams/Owners were having trouble and would reduce their share in order to help the league.
  • The NHLPA’s proposal was based on the growth of HRR per the last 7 years.  The NHLPA under the current proposal get 57% of HRR which is XX dollars.  They proposed they would not take more than XX dollars for the next three years.  XX dollars considering the growth of the league would then be approximately 55% next year, %53 percent the year after and 51% in the third year.
  • The NHLPA approximated the delta from the 57% to the 51% over the three years would be between 450-800 million dollars.
• Aug 9:  Bettman reiterates the leagues willingness to lock out the players if deal is not reached by Sept. 15.
• Aug. 15:  Bettman states there is still ‘a wide gap’ between sides after the NHLPA’s proposal.
• Aug. 28:  NHL submits a new offer, asking the players to reduce their share from 57% to 46% of HRR.  Moving up from the 43% first proposal.  They also proposed the salary cap to drop to 58m from the scheduled 72m. (Note: If this happens, Shero may pull of the genius thing again, getting the penguins 10m under the salary cap for the first time since the last CBA) NHL did not ask players to reduce their salary.  Bettman states that the NHLPA and NHL are close to agreement on the subject of Revenue sharing.
• Aug. 31:  NHLPA believing NHL’s concern is the 4^th year of their first proposal, they discuss changes to the 4^th year.  Ignoring NHL’s second offer.  Talks break down and Recess.

As it stands right now, there are no formal talks scheduled, although there have been reports of “informal” talks.  We are now one week away from an official Lockout.  It’s hard to believe there won’t be a lock out now.  It’s an outright shame that it’s come to a lockout a mere 7 years after a complete season was canceled due to a CBA impasse.    That being said, if you expected there to have been a deal before Sept. 15 you were probably expecting to win the Powerball too.    So there is time, but a short amount before the scheduled start of the regular season.

The Owners won last CBA by so much that the Owners basically wrote it.  They got everything they wanted including a hard salary cap.  Most, including myself, were on the owner’s side last time around,  with the thought that there needed to be a hard salary cap for more parity, so smaller market teams like the Penguins could compete year in and year out.  Now it’s seemingly the flip-flopping opinion of the Owners that the CBA, the very CBA that the Owners wrote, favors the players.  The public perception of righteousness is on the player’s side this time around because of the contradictory nature of the Owners.  There were 4 contracts given out over $98 million dollars this summer alone and the NHL Owners are crying poor saying some of the Owners would lose less money with a locked out season than they would if they played the season under the current CBA.

The players believe that if they are going to lower their share of HRR then HRR shall be restructured to include all non-hockey related revenues.   The players believe when they include the non-related hockey revenues to the existing HRR the split is already 50-50. Yet the NHL is standing tall on this issue refusing to redefine HRR, much like the salary cap last go around. Although it seems that this difference isn’t as big of an issue as the salary cap, it is about money,  a lot of money

The NHL is forever in charge of these situations because the Owners are wealthy vs. the players who are rich.  The NHL will get paid 200 million dollars from NBC whether they play the season or not.  Owners don’t lose their livelihood when they don’t play a season the players do.  Adding to the natural advantage, it seems the Owners have become even more emboldened since the ‘05 lockout came and went with little loss in fans and attendance the following season, before the industry eventually ballooned from a 2 to 3 billion dollar a year corporation.

It seems the NHL will inevitably win this, but by how much?  The Players are united this year more than last time.  But even if fans are on the player’s side, is this a good thing?  Will it make this standoff equal to last even if the issue seems smaller in general?  It’s hard to wrap your head around as a fan because all we really want is hockey. The fans have become the real losers in the equation, and we all wait helplessly.  We’re not going to stop watching or following the sport we love because of greed so we all wait with baited breath as Sept.  15 quickly approaches and most likely passes without an agreement.  We wait, hoping they get a deal done, waiting to the last minute to show their cards.  What if they show their hand and they are playing two totally different games?

It seems insane for a league that has grown over a billion dollars in profits (per year!) just 7 seasons after it last locked its players out to be on the verge of doing it again, yet that’s exactly where we sit waiting….