NHLPA Counter Proposal: What People Are Saying

On Tuesday, the NHLPA presented the owners with their counter-proposal for a new collective bargaining agreement.

Some of the details of the players’ proposal include:

  • The deal would be a three-year commitment with an option for a fourth year.
  • No changes to the standard player contract. The owners had wanted contract limits and changes to restricted and unrestricted free agency.
  • No changes to existing contracts, written under the previous CBA.
  • The hard cap would remain, but there would be a luxury tax included to allow teams some level of flexibility.
  • The players would agree to take a lower percentage of hockey related revenue (HRR) during the deal, cutting back from their current 57% to 54% for the first three years of the deal. This would be done to encourage revenue sharing of up to $250M per season.
  • In the fourth year of the CBA, the players would have the option of jumping back to their current 57% of HRR.
  • According to Fehr, the players could surrender as much as $465 million in revenue under the NHLPA’s proposal assuming continued growth at an average rate. Fehr added that number could be as large as $800 million if the growth seen during the last two seasons continues .

Here’s what the experts are saying:

Dave Pagnotta at The Fourth Period

Michael Grange at SportsNet.

Adam Proteau of The Hockey News

Harrison Mooney of Yahoo!s Puck Daddy

Brian Stubits at CBS Sports.

Jesse Spector at The Sporting News.

The NHL is expected to respond to the proposal soon (as early as Wednesday). The Chicago Tribune’s Chris Kuc reports the NHLPA will hold regional meetings to discuss the proposal on Thursday and Friday in Chicago.

My response is intrigue.

With this deal, the players have effectively won the PR battle (perhaps even the war). As Edzo likes to say, the Players Association “takes a hit to make a play” with this proposal.

By accepting lower HRR, the players are now forcing Bettman to do his job: serve all of the owners. The focus of Fehr’s comments, and this proposal, is squarely on leveling the playing field across the league so every team can compete financially.

As I pointed out on Monday, more than half of the NHL’s teams lost money in 2010-11. If Bettman is serving the 18-20 owners that lost money as well as the 10 that survived/profited, there should theoretically be a 2-1 vote in favor of spreading the wealth around the league to help struggling franchises.

This was a savvy move by Fehr and a unified NHLPA. After a ridiculous initial offer by the owners, this is a strong move by the players to get the 2012-13 season started on time.

Now we wait for the league’s response…

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12 Responses to NHLPA Counter Proposal: What People Are Saying

  1. wall says:

    Tab, please educate me on where the HRR actually go when “they” say the Players share…

    Do the Players actually get the Xtra cut as a bonus to their pay or do the teams/franchise (which would in theory give them more money to throw at player’s contracts)???

  2. Cord says:

    and are all profits by teams pooled and divided equally? That doesn’t seem very American. Well…on second thought…

  3. Tab Bamford says:

    Read this update from Michael Grange at SportsNet (it’s excellent, from Wed late morning ET): http://www.sportsnet.ca/hockey/2012/08/15/grange_nhl_nhlpa_cba_talks_fehr_proposal/

  4. aaron says:

    Yes, how genuinely mature it was of the players

    To deny the salary rollback the owners demanded
    To ensure that they can hit unrestricted free agency as soon as possible.
    And to exchange some winks and nudges while demanding to retain the cap-bending long term contracts that the owners claim “got them into this mess” in the first place.

    Your Mickey Mouse understanding of all things Hockey actually missed the most important piece of the puzzle here, the one suggests we are nowhere closer to avoiding a long standoff than we were before the offer was tendered:

    Fehr didn’t even touch the issue that will be the single greatest hurdle to a new CBA, the redefinition of Hockey Related Revenue.

    Currently, almost everything, from ticket sales to merchandise and TV Deals falls under the umbrella of HRR. Yet the owners do not only want to limit the percentage of HRR that the players retain, they want to limit the size of the pie that is going to be sliced up and dolled out, they want to change the definition of what hockey related revenue is to exclude such things as luxury and corporate boxes and expand the size of the cash flow that goes directly into the ownership’s pockets. Fehr hasn’t even touched that Bruhaha yet, though it is an ugly fight that will have to be meted out in the end, and it is the reason why we could be waiting until December or January 1 for hockey, if the season gets underway at all.

    In your own ridiculously incompetent way, you actually did stumble upon the spirit of Fehr’s counter proposal (hey, even blind squirrels find the occasional nut), its all about public relations, and its all about having the players look as good as possible in the public eye before you have it out with the owners in an ugly fight over the definition of HRR where both sides will look greedy and bad. Since, honestly, who could make a fight over whether or not popcorn sales should go into the calculation for figuring the salary cap (and thus determine the player’s share of revenue) look palatable for the public?

    Like I said, the only reasonable explanation of this counteroffer is that this is still just the postering that happens before the real ugly fighting gets underway. When the players and owners start exchanging very public blows then I will no that something is actually underway.

    P.S. @ Cord

    HRR is not pooled, total Hockey Related Revenue from all 30 teams is used to calculate the midpoint of the salary cap. The midpoint is calculated by dividing the total annual HRR by 30, then the cap ceilings and floors are set at a fixed point $8mil below and above and below the median.

  5. Tab Bamford says:

    So my Mickey Mouse understanding of Hockey missed the most important piece of the puzzle but did identify the spirit of Fehr’s proposal? OK

  6. aaron says:

    Yes.

    You missed the very important fact that Fehr’s counter proposal failed to propose a definition of what Hockey Related Revenue will be under the CBA. Rather, it was delivered more or less with the implication that HRR had better be just as broadly and all-inclusively defined as it was in 2005, or else.

    And you stumbled upon the spirit of this proposal, PR, but have completely misunderstood its meaning. In everything that has been released about the proposal, I see no olive branch here (and if there was an olive branch, I doubt the players would have failed to leak it), no piece that entices the ownership to hurry up and get a deal done. You’re not alone here; many in the blogosphere and the media have also taken the NHLPA’s bait hook, line, and sinker. Latching on to the silver-lining that the players agreed to take a lesser share of the same revenue pool (whether or not the revenue pool will remain the same is the big fight that is still yet to be had), and that they seem cooperative compared to the owners. All the while missing the major point that this counter proposal is essentially a thinly veiled acceptance of the labor war that the owners declared.

    Rather than seeing the agreed upon reduction in player’s share as a genuine gesture, look at it tactically. So the players ceded ground in an argument where it was a foregone conclusion they were going to lose. Big whoop. You could have asked anyone six months ago whether or not they thought the players were going to lose part of their current share of HRR and they would have told you, unequivocally, “Yes.”

    Yet, knowing full well they were going to have to give something back to the owners, the players demanded that it happens on their terms (and impacts them in much less immediate sense). Furthermore, the players have not ceded an inch on the issues where they believe they have any chance whatsoever of winning. Keeping the same ELCs, no contract term limits, same UFA status, etc. There is no budging there whatsoever. And then the revenue sharing is simply an added barb, something to try and dig into the natural fissures that already exist in the owners, seeing if it can get them to crack. Does that look like a proposal from a group that wants to hurry up and get a deal done to you?

    It’s only a savvy proposal in the sense that since the media has been dooped into thinking the “players are playing nice.” So when the owners and players are still fighting over whether or not corporate box sales will be included in the definition of hockey related revenue in November, Fehr can point fingers and say, “Look, we tried to play nice back in August, but the greedy money grubbing owners kept the fight going to get everything they could out of us!”

  7. Ryan says:

    Aaron. Fehr did address the issue by not addressing it. It is laughable that the owners want to redefine HRR. Any income directly related to the product on the ice either team or individual players is HRR. No I repeat no sane individual would think that the Luxury Boxes etc are not directly related to the product. Therefore Fehr won’t address nor should he; because if the talks went to litigation no judge would agree with the redefinition that owners are proposing. Exhibit A your honor the way every other pro sports organization defines ____ Related Income.

  8. Ryan says:

    Like I said before. Fehr won’t cave. Tab is absolutely right the PA is winning PR War especially when Bettman and his Deputy Commish and COO are getting raises, yet attempting to cry poor.

    What I can’t understand is Why are some of you so caught up in the length of the contracts? If a team can fit contracts and contract lengths under an AGREED UPON SALARY CAP, what is the issue?

  9. wall says:

    Tab, thanks for the link— really helps understand things a little better.

    Aaron, agree w/ most of your comments… the only thing I can disagree with is your use and wording in your reply to Cord-

    Just like Dickie- you are confusing the words “midpoint” and “median” in your explanation to the point it does not make literal sense… BUT I get it your point and agree…

    Furthermore, the players don’t want to give up LTC’s and UFA terms… that is a sign that the last REAL athlete is GONE!!! They are just like the other sport’s athletes- overpaid,whining, brats– (see Patrick Kane)– Hey they should get paid… but these bullshit 12 year contracts to “get under cap” are a joke…

  10. Ryan says:

    Am I the only one that laughs at the Owners? They agree to a Salary Cap. They are the ones that come up with these long term contracts to get creative and fit players under the Cap. Now they claim there needs to be language to eliminate the long term deal. My Response is, Hey Owner/ GM don’t offer long term deals.

    These owners are like Crack Heads scrathing their necks saying, You gotta put language in the CBA to keep me from offering long term deals…. WTF it isn’t the NHLPA’s responsibility.

  11. aaron says:

    @ Ryan

    You talk baselessly, without knowledge.

    HRR is an arbitrary distinction agreed upon in the last CBA, so yes, what will or will not be included in the definition of HRR will have to be negotiated. As I said Fehr skirted the issue but implied that the definition had better remain the same, which he knows full well is a sticking issue for the ownership. Which is why this PA counter offer was as much a declaration of war as the owner’s was. He also skirted the issue, because if you want to win the PR war, its probably not best to say, “BTW, we demand that we get a share of all box seat and t-shirt sales.”

    As I said, that is a fight that will get hashed out behind closed doors, in like November or December. It will happen, and It will be ugly.

    I agree the players are winning the PR war, I’ve simply scoffed at how significant (or, rather, insignificant) that is. In the end PR is the only leverage the players have (and it isn’t much) when the owners can lockout as long as they need to get the things they really want (a more narrowly defined pool of HRR and contract limits, and they’ll get that, however long it takes). I’m also scoffing at the notion that this offer was a good faith effort by the players to move toward a middle ground or a done deal, because it so clearly was not.

  12. aaron says:

    @wall

    Yeah, was sloppy with my language

    But the current calculation of the cap ceiling is:

    (HRR * 0.57)/30 + $8mil

    The floor is (HRR * 0.57)/30 – $8mil

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