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Key Issues Leading Up To The New CBA

from Tony Gallagher of the Vancouver Province,

It is less than a year before the NHL’s Collective Bargaining Agreement runs out with the Player’s Association and already some of the issues are beginning to come into view as the present deal continues to evolve or contort, depending upon your point of view.

In speaking to a number of informed people around the league on both sides of the respective fence, it’s clear that one of the league’s biggest problems within the present agreement is the obligation to enforce a floor on the genuinely pathetic franchises around the league.

The teams that have been losing money and crying wolf for the past 10 years are now being forced to pay out in the $45 million neighborhood which is forcing them into a position of losing money in some cases and the league will be looking towards either lowering the floor or eliminating it altogether. That is something the players will likely vigorously defend.

“That provision is just kicking their ass right now,” said one agent who has been observing the economic realities of the game for a number of years now.

In a perfect world the NHL would love to see guaranteed contracts right out the window, or perhaps marginally more attainable, a formula somewhat like the NFL has whereby some of the money in a contract would be guaranteed with the remainder having to be earned

continued

Filed in: NHL Talk, NHLPA, | KK Hockey | Permalink
 

Comments

J.J. from Kansas's avatar

Great article.

Actually outlines the pressing issues without seeming to take sides one way or another.

Also does a fantastic job of trying to neither drum up controversy or pageviews with a sky-is-falling attitude.

Posted by J.J. from Kansas on 09/04/11 at 12:47 AM ET

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Excellent article: it’s as evenhanded as J.J. says above, but not at the expense of interesting ideas and language—“the commissioner’s never-ending quest to make the CBA idiot proof for GMs around the league,” HAH

Posted by Ken on 09/04/11 at 01:31 AM ET

Lindas1st's avatar

It was okay.

Posted by Lindas1st from New England on 09/04/11 at 01:49 AM ET

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Any complaints about the cap floor must include the context of the entire cap system that was agreed upon. The cap floor exists only because the players agreed to limit their earnings as a percentage of league wide revenue. If the league as a whole is profitable, it is an issue only among owners if certain markets cannot operate at the cap floor. They should subsidize those markets (or relocate) using the cost savings (in big markets) that the players conceded.

Eliminating the cap floor would be unfair to the players (who in agreeing to a cap reduce payroll) unless the league guaranteed a percentage of revenues to the players by making a leaguewide payment into escrow to reach that percentage.

This is in effect the same as subsidizing weak markets through revenue sharing—instead of sharing revenue, they would be sharing costs. One legitimate point of contention is the fact that the ceiling and floor are set at $8m from the midpoint, rather than a percentage from the midpoint. Burying players in the minors or overseas, and sham multi-year contracts also can distort the market by making additional cap room available to big market teams.

In the end though, the issue is the percentage of revenue (and how to define hockey related revenue) that goes to the players; disparity between markets is a battle to be fought among the 30 owners. Guaranteeing profit for all 30 teams is NOT the players’ obligation.

Posted by Dave on 09/04/11 at 01:31 PM ET

J.J. from Kansas's avatar

Posted by Dave on 09/04/11 at 11:31 AM ET

Well-said Dave.

Personally, I’d be ok with lowering the floor (and I think the players would too) as long as the percentage stays the same.  That way the players get bonus payments when the end-of-year number crunching is done rather than have to pay back into Escrow.

The going thought that I agree with is that the next CBA is going to be more of a battle between the large teams and the small teams than it’s going to be a battle between all owners and players.

Posted by J.J. from Kansas on 09/04/11 at 01:57 PM ET

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The going thought that I agree with is that the next CBA is going to be more of a battle between the large teams and the small teams than it’s going to be a battle between all owners and players.

Posted by J.J. from Kansas on 09/04/11 at 11:57 AM ET

Right. All Fehr has to do is offer some proposal that gives on a few things, gains on a few things (say, trading term limits or the way cap hit is calculated for the elimination of escrow) but tacks on greater revenue sharing and he’ll have the owners fighting his battle for him. He can walk right into the middle of the rift between the Carolinas and Torontos.

Posted by steviesteve on 09/04/11 at 05:40 PM ET

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Paul Kukla founded Kukla’s Korner in 2005 and the site has since become the must-read site on the ‘net for all the latest happenings around the NHL.

From breaking news to in-depth stories around the league, KK Hockey is updated with fresh stories all day long and will bring you the latest news as quickly as possible.

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