The NHL became the first major professional sports league in North America to lose an entire season to a labor dispute when it didn’t play the 2004-05 campaign, with that impasse centering on the owners’ desire for a salary cap.
This round of discussions has a different backdrop. League revenues reached an all-time high of $3.3 billion last season, which is believed to be an increase of more than $1 billion annually since the lockout, but there are still some financially unstable teams, notably Phoenix and New Jersey.
On Friday, the owners submitted an initial proposal that according to multiple reports asked for significant concessions from the players in several key areas. While this is only the first proposed plan and negotiations are sure to follow, the offer increased speculation that the league is prepared for a stoppage.
On the flip side, the players certainly don’t want another lockout, and throughout the offseason they’ve expressed cautious optimism that a deal can be struck quickly.
“We’re very hopeful and we have no reason right now to believe the season will not start on time,” Capitals forward Troy Brouwer said in a phone interview last week. Brouwer attended NHLPA meetings last month and said he hopes to attend one of the negotiation sessions. “We don’t want the sport to lose any popularity that it’s gained and I think we all agree if we’re not able to reach an agreement quickly it would not be good for hockey — on either side.”
Talks are ongoing between the owners and players association, and the two sides have met five times since June 29, with three more days of discussion scheduled for this week. Leading the owners is NHL Commissioner Gary Bettman, who has locked the players out twice during his tenure, and on the other side is NHLPA Executive Director Donald Fehr. The former head of the Major League Baseball Players Association, Fehr helped create 16 years of labor peace in that sport but also led that union through a strike in 1994-95 before he was brought in by the NHLPA.
“We’ve got a lot to do in a relatively short period of time and both sides are working very hard at it,” Bettman told reporters Friday in Toronto following the latest meeting. “I’m not going to speculate as to what we may or may not do. Our goal is to get a deal as quickly as possible.”
Bettman and Fehr have declined to discus specifics publicly, but there are several main issues that are expected to take priority. It’s important to keep in mind that these factors are intertwined and discussion of one won’t occur in a vacuum.
Player revenues: Under the current CBA, players receive 57 percent of hockey-related revenue and the owners want to decrease that number. In their first proposal, the owners wanted to reduce it to 46 percent, according to Renaud Lavoie of French-language television network RDS. The New York Post’s Larry Brooks reported that the owners seek to redefine what is included as hockey-related revenue.
By comparison, during labor disputes in the past year, players in the NFL and NBA agreed to revenue shares of roughly 47 percent and 50 percent, respectively.
Salary floor and revenue sharing: As the salary cap rose these past seven years, so did the floor — from $21.5 million in 2005 to $48.3 million last season. It has helped inflate contracts for players on some low-revenue teams, but it’s also a financial strain on those teams.
Players will fight rolling back salaries as they did during previous negotiations to artificially lower the floor and cap, arguing that they will only rise over time and create the same problem. The NHLPA likely will propose altering the league’s revenue-sharing program, which currently restricts teams that qualify for the funds by revenue generated, average attendance and television market size, to better level the field between the haves and have-nots.
Free agency: The age to become a free agent went from 31 to 27 or seven years played in the NHL, creating lengthy, lucrative contracts for players in their prime. Owners would like to push it back up. Their initial proposal would require 10 years in the NHL before players are eligible for unrestricted free agency.
Contract lengths and structure, buyouts, etc: One only needs to look at the deals signed by Zach Parise and Ryan Suter in Minnesota, who agreed to matching 13-year, $98 million contracts that depreciate to $1 million in salary each of the final two years, to see that often the way teams lock up players for long terms is by front-loading the deal.
The league’s first offer would limit contracts to five years in length, abolish the option for salary arbitration and extend entry-level contracts to five years from the current three. Alteration of buyout rules, so that a buyout wouldn’t count against the salary cap, and the creation of an amnesty clause that would permit teams to drop a bad contract are also expected to come up in talks.
Miscellaneous: Other debates likely will include equipment size, the way in which supplementary discipline is doled out, a new realignment plan and more.
For at least the next two months, much of the hockey world will be relegated to watching and waiting to see if either or both sides are willing to lose games. Fehr has stated that the season could start on time without an agreement as negotiations continue, if the two sides agree to it. But whether that is a realistic possibility remains to be seen.
“I have always viewed a strike as a last resort,” Fehr told reporters in Toronto Friday. “What a last resort means is you bargain in good faith, you do everything you can, you listen carefully to what the other side says, you make counterproposals when you can, and you keep at it until you get an agreement. Hopefully the other side shares that.”
As is the case around the league, Capitals players have voiced their hope that there won’t be a stoppage. They’re ramping up their offseason workouts as they usually would in preparation for training camp and a season that may or may not start.
“I want to play hockey come September. I hope they can get a deal done; it’s something I’m watching closely,” said Jay Beagle, who recently signed a three-year contract extension and said he plans on returning to Washington the same time he usually would.
“I’ve talked to a couple of the guys, and either way I’m going to be heading down to Washington like I would on a normal schedule and proceed as normal, like there’s going to be a season,” he added. “I’ve never been a guy who knows much about what’s going on. I’m just a guy who loves to play hockey.”