FRIDAY THE 13th: NHL PLAYS LOW-BALL

Multiple media outlets are reporting the NHL has tabled its first CBA proposal to the NHLPA. Based on what’s being reported, it’s a proposal that can only be characterized as a swift kick in the nuts low-ball offer to the NHLPA and the first volley in what stands to be a protracted and likely ugly negotiation.

Simply put, after reading what’s being reported as the initial offer being put forward by Gary Bettman and NHL clubs, there is more than a little work to do for there to be any chance whatsoever the 2012-13 season begins on time.

Even by opening offer standards, this is a low-ball proposal with a capital "L" that will be rejected out-of-hand, as most opening offers are, before another 24 hours ticks by. One of the initial reports by the Canadian Press is here.

There is still no word if the phrases "bend over" or "grab your ankles" appear in the offer that’s being tabled, but I’m guessing Donald Fehr and his rank and file will dismiss it as such.

THE HIGHLIGHTS

According to the CP story and Sportsnet.ca. the proposal put forward by the NHL includes:

–Reducing the player’s share of hockey related revenue (what constitutes hockey related revenue will also be re-defined) by 11 per cent – to 46 per cent from the current 57 per cent.

–NHL player service to UFA status would increase to 10 years. Under the CBA that expires Sept. 15, it’s seven years.

–Standard entry level deals would be for terms of five years. The standard now is three years.

–The NHL is proposing five-year contract limits. That will put an end to long-term deals like the 15-year pact Ilya Kovalchuk signed with New Jersey in in 2010 and the 13-year contracts Zach Parise and Ryan Suter signed last week.

That third item – entry level deals being extended to five years – will be of particular interest to fans of the Edmonton Oilers, who have yet to come to terms with 2012 first overall pick Nail Yakupov.

THIS MIGHT TAKE AWHILE

While neither the NHL or the NHLPA has offered comment on the reports circulating now, there’s been plenty of reaction around the Twitterverse in the hours since the first reports went online.

Jim Matheson@NHLbyMatty First move by NHL owners to tell players they’ll give them 46% of revenues sounds like a ripping elbow to the head to me

Jim Matheson@NHLbyMatty If we have NHL training camps open in mid-Sept, I’ll eat the first three pages of the Official Guide and Record Book.

bruce dowbiggin@dowbboy Nothing in NHL changes till Gary goes and a new commish appears who is not trying to refine 1990s salary cap theory in 2012.

Bryn Griffiths@Fan960Griffiths Wonder if the NHL folks were able to keep a straight face when presenting low-ball first offer to the NHLPA today? #comedynetwork

Bob McKenzie@TSNBobMcKenzie When NFL/NBA deals were settled at (players’ share of) 50 per cent or less, we knew this was destined to be another "takeaway" negotiation.

Settle in, everybody. This has short season written all over it.

Listen to Robin Brownlee Wednesdays and Thursdays from 3 p.m. to 5 p.m. on the Jason Gregor Show on TEAM 1260.

  • O.C.

    I was expecting exactly this. Problem is the new kid Fehr has an ego to protect.

    Start of reg season… Over or Under Dec 1?

    Strange the league didn’t ask for 20% of the player salary to be tied to their playoff run. If no playoffs then paid at end of reg season.

    Why? Makes suspensions in the playoffs hit the pocketbook.

  • Rand

    I’ve read that their also demanding a significant change in how the HRR (Hockey Related Revenue) is calculated that would substantially reduce the amount.

    So even that 46% may be a lot less then it sounds.

    It looks an awful lot like the NHL isn’t at all concerned about risking a season, and wants to get everything here.
    And given that the owners can withstand a lockout far easier then the players, and how rapidly fans returned after the last lockout… that’s probably a justifiable stance.

  • paul wodehouse

    …even though the league has come out with this first volley of lowballedness there is a ray of sunshine to be had on the NHL.com website…they have put up all the good tidings with showing us the “full league schedule” AND they’ve pointed out the list of all the leagues “dates for home openers”

    oh the foolishness ain’t it jus crazy?

  • Serious Gord

    Hardly surprising first step from the NHL.

    The notable thing is that Fehr has already said that the PA is perfectly fine with leaving the current CBA in place indefinitely.

    So essentially the players are admitting that the current deal is too good for them.

    On the revenue share somewhere between the 46 – 57 will be the final number. the real fight here will be who gets bragging rights to being able to say they get the bigger share. Were I the PA I’d let gary get more than 50% for the league in exchange for more things being included in the revenue calculation and better accounting of those revenue streams. In the end fehr could get more gross income even though the sharing percentage is lower.

    For fans and star players the five year contract maximum could have a huge impact on what they can be paid and how many stars any one team can carry. for example, With a five year rule there would be no way that minnesota could have signed both suter and parise. And the oilers would soon be shedding some of the young stars…

    as for the financial health of league goes, i am much more interested in what changes the league wants to make regarding the cap floor and ceiling and whether there may be a luxury tax a la the MLB – something that fehr championed when he worked for that playeres union. This is conspicuous by its abscence from this news release. My guess is that the owners themselves are very much fragmented on what this issue – and a cause for much friction.

    the sphinx that is fehr now has the puck in his end of the ice…

  • Reg Dunlop

    If we lose the season, the O/U on how many teams fold or re-locate should be set at 5. My guess is 4; Phoenix, Columbus,Florida and Carolina.

    If we lose the season the only group that bends over to take it dry is us fans. Hopefully sanity will prevail, but this is pro sports… everybody BOHICA.

  • Chainsawz

    If I were on the player’s side I wouldn’t be overly concerned. It was the NHL board of Goof-enors led by Bettman who signed off on the current CBA. The players came away major winners imo because the 30 teams ownership and management stab each other in the back for their own selfish purposes.

    It’s impossible for me to have sympathy for the now familiar phrase of ‘billion-aires fighting million-aires’ over the fan-generated dollars.

    R.B.
    Regarding the proposed chopping of the arena project budget I’m wondering about the areas they are going after. It appears that apart from the outer finish and upper floor every cut looks like they are going after team revenue streams. Is that accurate and is this another poke in the eye aimed at Katz?

  • Chainsawz

    Another important thing missed in the article is that I believe a proposal was tabled to elimanate Arbitration rights, so no more arbitration hearings. Although this could be cool in theory because if there is no Arb rights, then there could theoreticaly be an increase in Offer sheets. As going to Arb protects an RFA from predatory offer sheets, without it, RFAs could theoretically be able to sign an offer sheet at any time. And without going to Arb to settle a contract disput, I can see RFAs using an offersheet to get what they want. Unless ofcourse they don’t allow guys coming off their 5 year entry deals to sign offer sheets, then the players are getting broom handled.

    Also the Five year ELC sound fine in theory, but for every prospect that is not a top 10 pick a 5 year ELC is a scary proposal. Unless they are going to increase the 50 contract limit, there is a good chance that teams are just gonna end up with a bunch of ECHL fodder on their books for to long, either that or have a TON of buyouts on their books. For every Sydney Crosby that is awesome to have for a 5 year ELC, you have 5+ Ryley Granthams or Logan MacMillans clogging up your 50 contract limit.

  • O.C.

    A few observations. 1) Irezuna is right. It is a 19.5% cut in players’ share of revenue. 2. The various reported proposals fit into 2 catgeories.

    Category 1 – Financial clawbacks by the owners. A. The proposed cut to players share of revenue. B. The proposed increase in UFA eligibility from 7 to 10 years. C. Increasing the entry level contracts from 5 to 7 years. d. End of salary arbitration.

    Category 2 – Closing cap cheating loopholes. A. No signing bonuses. B. Same salary every year of contract. C. 5 year contract limit.

    3. The players were the bad guys in 2004 because they resisted the salary cap, which most fans, including me, felt was necessary for fair competition. The players are going to have give back a bit but unless the owners are planning major pull backs on their initial proposals they will rightly be seen as the bad guys if the season is delayed or eliminated.

    4. What is reasonable? A) players accept 52 to 54% of revenues. B) Owners drop absurd demand for end to salary arbitration. C) Owners drop absurd demand for 5-year entry level contracts. Imagine restricting Gretzky to a five-year entry level deal when he won the Hart trophy all 5 of his first years, smashed the single seain scoring record his second year and got 212 points in year 3, etc. D) Either one or no more years for free agent eligibility.
    E) Everyone agrees on the same salary for every year of contract and no signing bonuses. Instead of maximum 5 year contracts, make it maximum 10 years for players under 25, maximum 7 for players 25-30, maximum 5 for players over 30.

    5. Player safety cuts both ways. Owners don’t want long suspensions, care only when their stars get hurt and believe violence sells tickets. Players don’t like long suspensions either but are worried about long-term concussion effects and should accept longer suspensions for head hits and boarding hits from behind. In fact they should demand it.

    6. No more Bullshit about the Olympics. The Russians came to Vancouver and Salt Lake City, everyone should go to Russia in 2014. The fans, (Remember us?) demand it.

    7. Slight increases to cap max and decreases to cap floor should be acceptable to all, plus more revenue sharing to help the weak.

    8. Fold Phoenix for God’s sake, hold a redistribution draft and charge Quebec City for expansion franchise to start in 2014 in the old building as long as construction of the new building will be complete for 2015-16.

    9. Players and fans should demand no mid-season or playoff changes to the standards of rule enforcement, like last year after the all-star break.

    The owners demands are a very bad sign, so fans should signal their anger and make clear the owners will be responsible this time unless they back off considerably.

  • DieHard

    It just seems to me that one of the 2 sides had to start. We now have one from the owners. It is their turn to make a proposal. They can’t just reject and say try again. The PA must now submit one and then the negotiations will begin.

  • BigE91

    The NHL really wants 50/50 and expects the players to split the difference. Don Fehr is the Czar of negotiations, so this is going to be ugly. No hockey till January, how much are those rush tickets…

  • BigE91

    I now understand why the Oilers are releasing their mini packs 1 month ahead of the usual time. The demand for seats is bound to drop with a looming lockout and if this was the offer on the table on August 1st I’d be even less interested in investing in tickets for what amounts to be the 2013-2014 season.

    Any chance the Barons will move to town for a season to keep hockey around?

  • BigE91

    Does this surprise anyone? The NHL is looking for 50 percent. What did we expect the first offer to be?

    Unless the NHLPA rejects it out of hand or publicly criticizes this as a unreasonable low ball offer then we are no different today then we were 24 hours ago.

  • O.C.

    I don’t know if owners are comparing the other professional league caps to the NHL’s… But its a totally different Tomato when there is a Luxury Tax and not a hard cap… I’m sure the players would be more open to a Luxury Tax? I also think it makes the most sense… if you heavily Tax teams that go over so as to make it completly unpalatable to go very far beyond the cap. AND the tax sifted to the poorer markets “has” to be shown to go directly to player salaries… Fair system in my opinion .

  • JohnQPublic

    A lot of media drama about the first offer of a long negotiation. Who cares?

    The NHL salary cap has grown from $39M to $70M in the seven years since the lockout. That’s a 79% growth or 11.4% per year (for reference the forecast for Canada’s GDP for 2012 is 2% – that means the NHL has been growing 5.7X faster than the Canadian economy currently). That also means the NHL has done a hell of a job increasing its business.

    How would you like to work for a company that gave you 11.4% raises every year for 7 years on average?

    Of course, the owners are going to renegotiate the deal. I would if I were them. It’s a silly deal.

  • O.C.

    First salvo goes the media route , not a good sign for union . Unions always take a bashing in media wars , as many are not union leant to begin with . Bettman preparing to play hardball early and Fehr responds well for now . Looking down road i’ll try and play mediator , as this may end up going to an arbitrator as another step that may not still be a settlement if either side rejects arbitration .

    Union wants no less than status quo on outstanding issues on report , and stand a reasonable chance of getting most of it because of leagues revenues being good overall . Ufa to 10 years , entry level to 5 years , unlikely to change from preset format . Contract to 5 years is only point i see that will be different . 5 years is to little , so i expect that may reach as 5-10 years and shore up some of the loopholes it now has .

    RADIFICATION – To be honest a new CBA agreement should not be so difficult this time . Owners and union still win somewhat by what i perceive is a tentative agreement for all parties . Other issues seem like they are not a problem and should be ratified quickly if they are not basically already . No strike -no lockout .

  • Oil Kings will benefit.Oilers organization still makes money.

    I want 50% I ask for 46%. I don’t ask for 50%. You buy a car you don’t tell the salesman you’ll pay sticker price. There are certain things in life you can negotiate. This is one of them. The first offer as we all know is the one you know they will absolutely refuse. They then posture and counter offer. Its theater and all the players have a role to play. The final act has yet to be played. Till then we are subject to the players and owners blustering and crowing about how unfair the other side is being. Its silly. Let me know when the last act begins.

    • toprightcorner

      This isn’t buying a car, that’s a ridiculous comparison and even the wrong way to buy a car!

      You are better served to get the numbers and requested rou want when you make an Offer to the NHLPA and then you give and take to get the items you want and give up some you don’t. That is what business negotiation is about and then both parties feel like they had somewhat of a victory and fair value for everyone. If one party walks away feeling screwed, it is much harder to work together in the future and respect for each other is lost. The problem is the owners do not respect the NHLPA and that’s why there are always problems.

      BTW, I have never paid more than $500 over corporate invoice on a sale while, there is much more involved in the success of a dealership than the selling price of a car. You help them in some areas and they will help you in other, which is purchase price in this example.

      I would love to sell a car to you, I would eat your lunch without you even knowing it.

      The type of negotiation the league is trying to incorporate wont work and neither side will walk away thinking they won.people with money and power let their egos get in the way and everyone else on the sidelines get hit with the shrapnel and unfortunatly those people are us.

      • Sworkhard

        Do your think you could have got that same $500 over invoice using this technique if there was only one car dealer in all of North America?

        I agree with you that when market forces are working, there is no point in low balling. However, when they are not working, like in the NHL’s case, then I still maintain submitting your respective wish lists is a good starting point.

        The point I’m trying to make is that these negotiations are a lot more complex than trying to buy a car, hire a employee, or make a deal with a supplier.

        • toprightcorner

          That was exactly my point. Buying a car is a ridiculous comparison to CBA negotiations. That’s why you can’t lowball and ask more the moon, stars and sun in an initial offer. The two methods of negotiations are not interchangeable in every situation.

          they should submit a feasible wishlist to start to off not a “screw you and the horse you rode in on” offer that causes even more seperation. Since we only have one dealership in this scenario, you need to be respectful of the to get the best deal or they will hang you out to dry and you will be walking to work for a very long time!

  • Chainsawz

    If I was the PA, I’d counter with a 70% revenue share, immediate free agency, and a 20 year cap on contracts. If one side isn’t going to take this seriously, why should the other?

    • Because then they would forfeit their .5 M$ to 9 M$ salary for a year for sure, and end up getting less in the end. This is their income. They work hard for it, but no more than most people who don’t earn that much in their lifetime. They don’t have the kind of leverage to be able to make a ridiculous counter.

    • O.C.

      Why don’t you think the Owners are serious about dramatic realignment of the percentages and contracts and UFA terms?

      Sustainable Cost Certainty is what any business must achieve in order to remain in the market.

      If the players countered as you suggest, it would be immediate grounds for bargaining in bad faith.

    • toprightcorner

      I agree, the owners are negotiating like it is the 80’s. Why would you want to piss off Fehr, who IMO has been Making an effort th deal respectfully and in good faith. In today’s business world if You piss someone off, you usually lose. Hetman just awoke a sleeping giant because of his ego.

      This offer shows the owners do not care about the fans and if there is a delay to the start of the season. Their requests are ludicrious and show no actual effort in wanting to get a deal done. If that’s what they were planning to do, the could have made that stupid offer months ago and saved months of sitting on their thumbs.

      Another reason to lose respect for the league and their owners. They need to protect the owners from themselves as the always want to reduce what the give players yet they are the ones finding loopholes tha shoot themselves in the ass! Then the complain that they are losing money when they are the ones bending the CBA to spend that money.

      If they had any brains at all, they just need to put internal rules on what they want to spend and the max contract term the want to give and then the limits in the CBA don’t matter. If they want no longer than 5 year contracts than have the owners tell their GMs not to offer more. Than 5 year deals, it’s as easy as that.

      Then again, that would be assuming the owners had a brain, which they have proved that they don’t

        • toprightcorner

          I agree, but he was at least showing respect up until this point. MLB didn’t show Fehr any respect either and look what that got him. In professional sports the owners rarely respect the players union and that’s why these negotiations are always a disaster.

          If the owners sowed respect to Fehr, negotiations would have gone much smoother but too late for that now.

          If Betman respected the players, they would not have needed to hie the meanest dog in the junkyard. His methods of running the league have put more separation between players and owners than ever.

          Little man syndrome will get you every time!

          • Sworkhard

            Agreed that the league is making a mistake if they aren’t internally respecting the PA enough. On the other hand, this offer can also be construed as a sign of respect, but also distrust, for Fehr because he is known as a slick negotiator and union boss. To me, the initial offer isn’t what shows the respect, or disrespect, its how you treat the other side once the negotiations start that show respect.

            If the NHL tries to walk over the PA once negotiation starts, that’s when it’s too late and the rift is created IMO.

  • #27, Also the PA should add some off the deep end crazy talk about
    1. No more drafts – players pick the teams they want to play for
    2. No more RFA. The player becomes a UFA after the ELC expires
    3. Minimum 5 year contract and mandatory 10%+ bonus
    4. Salaries rise yearly as the salary cap rises (sort of like inflation adjustment)