Peace in our time: the give and take of the new CBA

Folks, I’m in my mid-30s. I’ve covered the Calgary Flames for 10 years and watched them for pretty much my entire life. We’re living in crazy times, once in a lifetime times, and this may be the first time in my recollection that the National Hockey League gets a new collective bargaining agreement without a work stoppage.

How? Seemingly through a cooperative relationship between the owners and the players, and the players playing their hand quite well.

In 2004, the players said they wouldn’t take a salary cap. Guess what? They lost a season and had a salary cap imposed on them. In 2012, they said they wouldn’t let the owners carve their hockey-related revenue share from 57% down to 50%. Guess what? They lost half a season and got their shared squeezed down to 50%.

But with the league wanting some certainty amidst economic challenges – losing the end of the season and the playoffs would cost them around $1.1 billion in revenues, plus an unclear revenue picture for 2020-21 – the players finally had the upper hand with hefty leverage in negotiations.

The NHLPA membership is risking a lot by playing the post-season – their immediate health potentially, but also unclear future health impacts from potential COVID-19 exposure – as well as simply losing time with their families. They also agreed to a 10% deferral of salary for 2020-21 to help with cashflow for the owners, but they’re getting all the funds paid back with payments in 2023-24, 2024-25 and 2025-26.

So what did they get?

In terms of this year’s playoffs, two things:

Beyond this season, there are a lot of favourable changes.

As we discussed, the salary cap formula is changing. The cap will be flat until league revenues return to their anticipated $4.8 billion level, and the new formula will be based on past revenue growth rather than hopeful future growth. Adding in a cap on escrow will alleviate the major player concern – not getting what they signed for in their contracts – and the clause that the CBA will extend if accumulated escrow debt grows to more than $125 million helps the owners. These changes spread the short-term economic pain around, but in a way that is palatable to the players.

Other changes are also pretty player-centric:

Well played, players. Well played.

The expectation is the CBA and Return to Play package will be ratified by the Board of Governors and the players by Friday.