Framework in place?
As CBA negotiations continue between the NHL and the NHLPA, there finally
seems to be a platform in which to work off of, source says.
TORONTO, ON -- The Players aren't frustrated. Not yet, anyway.
Annoyed, maybe. But based on the response from every NHLer I've spoken
to in the last 48 hours, they still believe there is enough time to
get a deal done and start the 2012-13 season on time.
And I agree.
On Tuesday, the NHL presented the NHLPA with a counter proposal that
focused primarily on core economic issues: no salary rollbacks
for players; contracts would stay the same; hockey related revenue (HRR)
would go to 45.9 per cent (up from the 43 per cent that was originally
proposed); HRR is to be adjusted/redefined; the salary cap would
decrease; and the percentage of a player's salary put towards escrow
would increase.
While the Players' are trying to focus on the positives -- in their
eyes -- that came from the offer, such as no rollbacks and
player contracts staying as is, it seems the points on HRR, which
affect the salary cap, and escrow are causing the biggest commotion.
But before we truly toss jabs in the direction of the NHL and its
owners, it should be noted that some of what was proposed, from a
business perspective, is not unreasonable. In fact, it's something
that can be bargained for at the table.
With respect to HRR, yes, the NHL has "redefined" the way it is to be
calculated in their proposal, but it's not unconscionable.
According to a well placed source with knowledge of these discussions,
the NHL has proposed changes to four specific areas related to HRR:
1) caps on revenue generating activities (such as concessions and
parking) are to be removed;
2) costs incurred to generate more revenue (such as suite sales and
signage) are to be included as an expense;
3) capital expenditures made by NHL teams on revenue generating
investments and initiatives will result in an annual credit; and
4) Standard Player Contracts (SPCs) in the minors are to count as an
expense against the Players' Share.
These changes will adjust the current HRR platform, and will have a
direct effect on how the salary cap is calculated.
It should not come as a surprise that the NHL wants various costs,
within reason, to fall under the expenses column. If these costs are
used to generate more revenue, they should, in theory, offset. The
goal is most certainly to maximize revenues, but you've got to spend
money to make money -- that's their point.
While I'm told the NHLPA also understands this, and they aren't
altogether crossing it out, having minor league salaries count as an
expense isn't something I'd expect them to be too fond of. In fact,
they will likely be wiped out in the NHLPA's own counter proposal,
which should come tomorrow.
There are positives out there, and it appears there are bits and
pieces of a foundation being built, but the Players will look to
respond to key elements of the latest proposal.
As mentioned, the four points listed above have a direct connection to
the salary cap -- and that's another major issue. While there aren't
any salary rollbacks, the Players' share is being altered in the NHL's
proposal and based on the numbers they've pitched, the cap "drops" to
$58 million next season.
Aside from the fact that the NHLPA will without a doubt want that
figure (and the ones associated with it) to increase, it should be
noted that the cap figures for next season, 2013-14 ($60 million) and
2014-15 ($62 million) are fixed numbers. Following the first three
years of the proposed CBA, the next three would be determined in a
similar fashion to how they're calculated in the current CBA. Rather
than a "hard dollar" formula in determining the salary cap in years
four, five and six of the NHL's proposal, the NHLPA suggested changing
that to a "percentage-based" formula, and the NHL agreed.
At the end of the day, when a new CBA is implemented, if the salary
cap drops, many teams will be scrambling to get under. However, one
League source told me the NHL is willing to consider "transition
rules" in order to prevent clubs from being forced to trade away or
buy out some of their best players in order to get under.
It's not yet been determined, or discussed, how such transitional
rules will be put into place, but you can be sure that topic of
discussion will arise in the very near future.
So with HRR and its direct association to the salary cap being one
major issue, the other is escrow. And there seems to be a lot of
confusion on how it is to be calculated.
According to a League source, there was no set increase shown in the
NHL's proposal. However, after the NHLPA did the math, they concluded
that the figure would be in and around 15 to 20 per cent, which they
argue puts them around the overall amount of money players would earn
in the NHL's initial offer. But the NHL claims the amount of escrow
will actually decrease over the length of the CBA, which has been the
case in the current CBA.
It's believed the NHL is arguing that the "effective rate of escrow"
only increases in the first few years of the proposal because of how
they've shown changes in the Players' share.
There is still more than enough work that needs to be done between the
two sides to reach a resolution and get the season on track, but the
last two offers exchanged seems to be making, at the very least,
some progress.
If the men in the negotiating room are as brilliant as we all are led
to believe they are, the platform in place should give them something
to work with in achieving their ultimate goal.
