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August 30, 2012 | 1:46pm ET
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.

David Pagnotta is the Editor-in-Chief of The Fourth Period Magazine. Follow him on Twitter.


 

 

ARCHIVES 
Aug. 28, 2012 Not so fast, NHL
Aug. 21, 2012 Negotiations set to intensify
Aug. 14, 2012 Positive signs stem from PA proposal
Aug. 13, 2012 NHLPA to present "alternative view"
May 29, 2012 Much to be done in Toronto
Apr. 10, 2012 Habs need proven winner
Feb. 14, 2012 Plenty to consider around deadline
Jan. 06, 2012 Players' wanted say in realignment process

 

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