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NHLPA counter-proposal: PA willing to take cuts in wages for the sake of league stability

As Paul already noted, the NHLPA’s counter-proposal to the league’s initial CBA offer involves both increased revenue sharing and, by Sportsnet’s Michael Grange’s calculations, a significant drop in the players’ share of league-wide earnings for three years to ensure that the league’s most troubled franchises regain some sort of stability…

And, as the Canadian Press’s Chris Johnston suggests, the NHLPA’s not only turned the league’s draconian CBA proposal on its head, but also turned it inside out by offering a thoughtful proposal of its own that will hopefully kick-start negotiations in a meaningful manner:

Union leader Donald Fehr says players could give up as much as US$465 million in revenue under the proposal if the league continues to grow at an average rate. If the league grows at the rate it has over the past two seasons, he says the amount could reach $800 million.

“We do believe that the proposal the players made today, once implemented, can produce a stable industry ... that can gives us a chance to move beyond the recurring labour strife that has plagued the NHL the last two decades,” said Fehr, flanked by players and union representatives including superstars Sidney Crosby and Alexander Ovechkin.

Fehr also said the union’s proposal does not call for the removal of the hard salary cap the league won in the last round of negotiations. The NHLPA also proposed expanded revenue sharing to help financially struggling clubs, which could reach more that $250 million per year.

“In essence, when you boil it all down, what were suggesting is that the players partner with the financially stronger owners to stabilize the industry and assist the less financially strong ownership groups.”

Fehr didn’t say what percentage of league revenues players were willing to accept. An NHL proposal tabled last month called for a significant decrease for players in revenue share by introducing new contract restrictions, including a five-year cap on deals.

NHL commissioner Gary Bettman said Tuesday he has received the union’s proposal and hopes to continue talks Wednesday.

“It’s clear to me that they didn’t put it together in an hour or two, and as a result we’re going to need to take a little bit of time to evaluate it,” Bettman said.

Bettman gabbed with the media after the talks…

And I’ll try to provide a more thorough examination of the press’s reactions to today’s proposal later this evening. This really is the start of negotiations more than anything else.

Update: Johnston also offered the following…

 

And teh NHLPA just posted a video of Donald Fehr and the 20-some star players (including Alex Ovechkin and Sidney Crosby) who attended the proceedings speaking to the media:

 

 

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Comments

Nathan's avatar

This is where I tell the trolls that said, “ZOMG FEHR WILL RUIN EVERYTHINGZ!!!!11@,” that, you were wrong, and I told you so.

Posted by Nathan from the scoresheet! on 08/14/12 at 06:04 PM ET

WingsFaninCO's avatar

Minimal information at this point.  But, on its surface, this appears to be a master stroke by the PA.  Giving some significant short-term concessions, not asking for anythign ridiculous back, bargaining in good faith after the insult the league originally offered, playing the “good guy” who is willing to help the less-fortunate owners, etc.  All of this while not giving up much in the long-term, trying to head off future lockouts, and earning the support of us insignificant fans.  Well-played Fehr and Co.

Posted by WingsFaninCO on 08/14/12 at 06:05 PM ET

Nathan's avatar

I think I see Kyle Quincey in that shot? Definitely not a star player. :p

Posted by Nathan from the scoresheet! on 08/14/12 at 06:05 PM ET

NIVO's avatar

well im encouraged to know the PA is willing to give some up yet be able to hold heads up high. If the league thumbs their noses at this, then its on them. I’m sure both sides want to fine tune numbers and we are still far from signing off, but its a great step forward.

Posted by NIVO from underpants gnome village on 08/14/12 at 06:06 PM ET

MoreShoot's avatar

never underestimate the ability of the owners to rescue failure from the jaws of promise

Posted by MoreShoot on 08/14/12 at 06:14 PM ET

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This CBA negotiations has officially turn into a war btw big market owners vs small owners and Gary is afraid to pick a side.

Posted by FlyersFan on 08/14/12 at 06:17 PM ET

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Here’s the most important thing to keep in mind: the owners got everything they wanted in the last deal and screwed themselves.  I guarantee you that a CBA written by somebody else is eventually going to screw them much worse, mostly because they’re too shortsighted to see it.

What Fehr is doing is buying off the whole league with an upfront payment that neither the owners nor Bettman can see past.  Watch what happens in years 4+ of the deal, because I will almost guarantee that by that time (at the latest) a whole lot of owners are going to be howling about something or other.

This is what happens when you have someone that’s actually done this before (Fehr) facing off against someone whose never done it right (Bettman).

And I love it!

Posted by HockeyinHD on 08/14/12 at 06:22 PM ET

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Let just admit right now, Fehr owns Bettman and owners now. You don’t think big market teams would fold and jump on this deal in heartbeat? Fehr masterfully included big owners in his statement to put pressure on bettman and small market teams. If there is a lockout it’s on bettman and small market teams that got nhl into this mess. Players dont have do nothing from this point forward.

Posted by FlyersFan on 08/14/12 at 06:29 PM ET

Nathan's avatar

Posted by HockeyinHD on 08/14/12 at 04:22 PM ET

I don’t totally agree with you. Fehr isn’t a boogeyman (I know you aren’t explicitly saying that, so let me finish). Fehr doesn’t want to do something that will set his membership up for another round of, at a minimum, significant labor strike, and at the worse, another lockout.

So I definitely see Fehr as playing a medium-term game here instead of a short-term one, but I think he’s genuinely playing to the health of the non-big-market clubs because if they are happy and have a healthy economic arrangement, there will never be the votes among the owners to break apart a system that works for those clubs. How many big market owners are there? Detroit, Toronto, Montreal, New York, Philadelphia, and Chicago.

If the current framework laid by the PA proposal vaults the league into a 5 - 10 year period of success, and a better economic position for the 24 teams that didn’t make that above list, then that framework will be solid and hard to revoke in the future. And remember, even then, would those six clubs really have much reason to complain? If the other 24 teams are doing well, it will in some part be because revenue sharing is strong, which will only happen if the big guys are strong.

So, I don’t think this is Fehr pulling the wool over anyone’s eyes. I think this is a truly good faith effort to come to an agreement that can lay the groundwork for the kind of long-term labor peace that baseball has seen since its 1994-1995 strike. And that is good for EVERYONE.

Posted by Nathan from the scoresheet! on 08/14/12 at 06:35 PM ET

BrendonR's avatar

Aaaand now we know why they hired Fehr.  This is a very different NHLPA, and good for them.  Split the owners between the haves and the have-nots, and still give them the cap they want (aka need).

I also notice the explicit and recurring theme of the players making concessions.  Even though they did last time as well, this time around there will be no question as to whether that happened.  And that’s a massive future bargaining chip.  With Phoenix and Jersey being so up in the air right now, its interesting to see the potential for hard rules regarding revenue-sharing for weaker teams coming before those situations are resolved.  Oh, and hi Quincey!

Posted by BrendonR on 08/14/12 at 06:35 PM ET

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So, I don’t think this is Fehr pulling the wool over anyone’s eyes.

That’s certainly one perspective, but considering how business (and Fehr) has worked in the past I think it’s HIGHLY unlikely to be the correct one.

Fehr, not being an idiot, knows that in any situation it will be impossible for players to recoup whatever wages they lose due to a lockout in any new deal.  Knowing this, he constructs a framework wherein the players give back some money in the short term (which they would in any situation regardless) while simultaneously creating a system which sunders the Owners from a unified bloc into distinct groups much more than they’ve ever been.

This will, not accidentally, make subsequent CBA negotiations easier for the NHLPA.

So in addition to whatever medium-range ‘fu’ Fehr has worked into his proposal we’re also talking about the introduction and amplification of ownership discord.

He’s playing chess and Bettman is playing checkers.  I agree that he’s not being malicious or devious in any way, he’s just substantially better at his job than Bettman is at his.

Posted by HockeyinHD on 08/14/12 at 06:45 PM ET

Hank1974's avatar

Fehr is a genius.
He’s winning the public relations battle, while attempting to create an even wider rift between the rich owners and poor ones.

Posted by Hank1974 on 08/14/12 at 06:49 PM ET

J.J. from Kansas's avatar

$1.89B split among the franchises is $63M each. This number could essentially mean anything though, since there’s no real expectation that the cap and floor will be set the same way in relation to this number as they always have been.  If they were, the cap would be $71M and the floor would be $65M.

What I think the owners are possibly going to bristle at is that there doesn’t seem to be (although there very well could be) any protection granted by the players’ proposal from a decline in NHL revenues.

$1.89B is 57% of $3.32B, which is fairly close to what revenues were last season, so the number comes from a sane place, but while everybody’s using past results to predict future performance, the owners are looking at a proposal that doesn’t seem to have a safety net.

It’s still a master stroke of telling the NHL that player costs are fine, it’s revenue sharing that’s the problem, but the owners are going to have reservations about this proposal and it’s not all going to be hogwash.

Posted by J.J. from Kansas on 08/14/12 at 06:50 PM ET

J.J. from Kansas's avatar

It’s not even a short-term concession.  It’s a short-term gamble on a concession that they’re asking the league to take.

You say you don’t want to pay 57%, tell you what, we’ll concede that you pay us 57% of what you expect revenues to be and then lock that in. 

It’s only a concession if revenues actually go up.

Posted by J.J. from Kansas on 08/14/12 at 06:55 PM ET

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What I think the owners are possibly going to bristle at is that there doesn’t seem to be (although there very well could be) any protection granted by the players’ proposal from a decline in NHL revenues.

This is another situation where Fehr is likely supremely smart.  A day or so ago the NHL held a presentation for the NHLPA where they described the business arc, among other things.  I’m just guessing here, but I would bet dollars to donuts that as a part of taht presentation the NHL spun the argument out there that ‘since the NHL is going to grow at x%, in reality even if you take a big cut now the growth of the business will bring you back to current levels in y number of years.’

So what Fehr has done is, essentially, throw that right back in the NHL’s face.  They’ve already likely predicted growth… all Fehr had done is returned a proposal based on their own predictions.

Posted by HockeyinHD on 08/14/12 at 07:01 PM ET

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I didn’t get it. Salaries stay what they are, but there’s more revenue being shared?

#ImDumb

Posted by Herm from the office on 08/14/12 at 07:03 PM ET

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Salaries stay where they are, but all the growth goes into the Owners pockets for the next 3 years.  Since the Owners have likely already made a presentation regarding growth, the NHLPA can simply cite that and say ‘That’s how much money we’re giving you’.

IMO, however, Fehr likely suspects the NHL’s growth projections are aggressive, so by doing this he’s ‘forcing’ the NHL to live by it’s own projections while preserving current salary levels for a short interim.

Posted by HockeyinHD on 08/14/12 at 07:08 PM ET

J.J. from Kansas's avatar

So what Fehr has done is, essentially, throw that right back in the NHL’s face.  They’ve already likely predicted growth… all Fehr had done is returned a proposal based on their own predictions.

Posted by HockeyinHD on 08/14/12 at 05:01 PM ET

If that’s the case, then it’s a very clever move what Fehr has done, but the idea that he’s also taken away the insurance against league revenue dropping could get the owners focusing on the wrong thing.

I think it’s a great starting point and I like the idea that the NHLPA is basically telling the league that they can prove it to them that they can have 30 successful teams with the revenue they currently have.  The idea doesn’t necessarily have to be that the players HAVE to have that $1.89B in revenue so much as (like we’ve discussed), the wedge driven between the haves and have-nots among the owners is what’s important.

I think this proposal does that, but I’d also warn against thinking that this proposal is quite as concessionary as it originally looked.

Posted by J.J. from Kansas on 08/14/12 at 07:08 PM ET

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If that’s the case, then it’s a very clever move what Fehr has done, but the idea that he’s also taken away the insurance against league revenue dropping could get the owners focusing on the wrong thing.

But he’s already judo-flipped the NHL on that issue.  Unless Bettman’s going to call himself a liar, there’s very little he can substantively say to rebut the metrics of Fehr’s proposal.

Unless Bettman, in the NHL’s presentation, professed a belief that the NHL’s revenues could drop he really can’t go back to that point now.  Not when, as I suspect, he spun growth as a rationale for accepting a lower percentage now.

I think this proposal does that, but I’d also warn against thinking that this proposal is quite as concessionary as it originally looked.

I don’t think too many people are saying it’s ‘concessionary’, are they?  I know I’m not.  I’m saying it is really, really well crafted and smart with, depending on the details, a deal with tremendous upside for the players.

Posted by HockeyinHD on 08/14/12 at 07:13 PM ET

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This seems like a proposal the league could take, make a close counter and get this signed up, but then we need to remember who the commiss is, he doesn’t want to sign a fair proposal, he wants to lock the players into a deal were he can proclaim that he won, like his buddy Stern.

Posted by Roboshow from Calgary on 08/14/12 at 07:29 PM ET

J.J. from Kansas's avatar

I don’t think too many people are saying it’s ‘concessionary’, are they?

Most of the early talks mentioned that the players were making concessions.  To be fair, I haven’t seen so much of that since the $1.89B figure came out.

Unless Bettman’s going to call himself a liar, there’s very little he can substantively say to rebut the metrics of Fehr’s proposal.

If Bettman, a lawyer, actually promised league growth at the NHL’s presentation, he should have been fired on the spot. Even if he did “show” the players how little time it would take for them to get back to their current earning levels, it’s not hard to dodge the “what if you’re wrong about that” thing being thrown back in his face when it comes time to discuss with the owners, because a 46% players share with escrow already has that piece built-in. Previously the “what if you’re wrong about unlimited NHL growth” question would likely have just been met with “well that would suck for everybody, but under our system, it would mean that we could still have a league at least.”

I’d be interested in seeing how hard the players would fight against including a clause that would create escrow if revenues actually did drop. I feel that’s going to be a very big part of the coming discussion.

Posted by J.J. from Kansas on 08/14/12 at 07:41 PM ET

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If Bettman, a lawyer, actually promised league growth at the NHL’s presentation, he should have been fired on the spot

Why?  It’s the same presentation he’s made to every prospective owner he’s come across in the past two years.  I’m sure he didn’t “promise” it, but nobody’s said he ‘promised’ anything.

The point is, Bettman almost certainly ‘forecast’ continued growth.  All Fehr has done is turn around that ‘forecast’ and beat Bettman about the head and shoulders with it.  Either Bettman has to come clean and admit whatever forecast he made was hooey (which he never would) or he has to eat it, rhetorically speaking.

There’s always the option of the outright lie, but Bettman would just send Daly out to do that part as he has in the past.

Posted by HockeyinHD on 08/14/12 at 08:01 PM ET

John's avatar

Fehr is a master negotiator, and I think Bettman was caught by surprise today.  This is a serious proposal that has a decent shot at putting a crack in the owner’s unity.  But I think it is the smaller market teams that will jump at this, not the bigger market teams.  The bigger market teams just want a stricter cap and no revenue sharing, but the smaller market teams want some bailout money.  Either way, this proposal was designed to put a wedge in owner’s previously united front.

It is going to be hard for Bettman to get a super majority of owners to turn this deal down in its entirety and convince them that jeopardizing a part of the season is a better option than this deal. Not to say he won’t do it, but its going to be a harder job than he thought he would have at this point.

Posted by John from Pittsburgh, PA (Wings fan for life!) on 08/14/12 at 08:02 PM ET

HockeytownOverhaul's avatar

Dont always agree with you HIHD, but I think you nailed the tactics on this one and it really is brilliant.  Also forces Bettman to eat own BS or admit it was BS.  Fehr should’ve been PsyOps.

Check….

Posted by HockeytownOverhaul on 08/14/12 at 08:42 PM ET

J.J. from Kansas's avatar

Either Bettman has to come clean and admit whatever forecast he made was hooey (which he never would) or he has to eat it, rhetorically speaking.

Not really. He just has to say his forecast was promising, but protective of league interests.  There is a huge gap between using a promising forecast and stating the revenues will definitely rise.  That is the difference between having your argument reduced to a lie and having it “expanded to discuss other scenarios.”

For a lawyer, it’s the difference between negotiating and getting fired for making a guarantee.

Posted by J.J. from Kansas on 08/14/12 at 08:59 PM ET

HockeytownOverhaul's avatar

Posted by J.J. from Kansas on 08/14/12 at 06:59 PM ET   But you see the point that’s being made though.. Regardless of how it goes from here, it was a blindside to Bettman to have a well articulated and reasonable counter proposal.  The purpose of the first, as NHLPA has stated, seemed to be meant more to enflame the NHLPA since the requests were so unrealistic and one-sided.  Then all of Bettmans talk about them dragging their feet.

As far as PR goes, it’s brilliant.  When was the last time ou heeard Bettman talk and he didn’t add some condescending little quip?  He’s genuinely take aback by this and realizes he’s going to be the one having to “drag his feet” now while the owners have some serious discussions amoungst themselves.  Regardless if they put in a safety net or not in the event growth decreases doesnt’ change the fact that Fehr just changed the dynamic of the arguement COMPLETELY.

Posted by HockeytownOverhaul on 08/14/12 at 09:34 PM ET

OlderThanChelios's avatar

Minimal information at this point.  But, on its surface, this appears to be a master stroke by the PA. ...

Everything WingsFan said, plus what MoreShoot said…

never underestimate the ability of the owners to rescue failure from the jaws of promise…

And to the latter, I’d simply add “...given the fact that Bettman is their mastermind.” In fact, I wouldn’t be at all surprised if he did everything he could to thwart a compromise simply because he doesn’t want to seem like less than the “total victor” here.

“...what were suggesting is that the players partner with the financially stronger owners to stabilize the industry and assist the less financially strong ownership groups.”

If the public-sector unions in this country would take the same kind of approach, this economy would be a hell of a lot better than it is today. Fehr did exactly what every union leader should do (but none seem to have the courage to do), he took the inflammatory rhetoric out of his proposal.

And, at least on the surface, he seems to be genuinely trying to do what’s best for the game – not just the players or just the owners. Kudos to whoever it was who hired him to lead the NHLPA.

Posted by OlderThanChelios from Grand Rapids, MI on 08/14/12 at 09:56 PM ET

NIVO's avatar

i kinda look at a new CBA like the stock market. The NHL is the market, and people who buy stock(tickets) in this market are fans. A new CBA deal reached for a decent amount of time(term) encourages growth. It brings confidence to the market, which in turn gives confidence to buyers. In other words, there is no reason to believe the growth of revenue should fall flat. If hockey goes uninterrupted (no stoppage), people will buy tickets just like they would have. You have a work stoppage you will DEFINITELY kill any momentum of growth related to revenue as it stands.

Posted by NIVO from underpants gnome village on 08/14/12 at 10:55 PM ET

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Not really. He just has to say his forecast was promising, but protective of league interests. 

... which is tantamount to saying he was lying, and also a quote that’s going to hang around his neck every time a prospective buyer kicks the tires of an NHL franchise, because guys with a few hundred million dollars laying around can afford to have someone do Google searches.

He’d never say that.  Protecting franchise value is his paramount responsibility.

There is a huge gap between using a promising forecast and stating the revenues will definitely rise.  That is the difference between having your argument reduced to a lie and having it “expanded to discuss other scenarios.”

Well, were Bettman to actually be so stupid as to say something like that, were I Fehr I would simply re-apply the judo-flip back in the opposite direction thusly:

“Well then, Gary, since those estimates are a bit off according to you now, why don’t we go back and re-apply more rational figures with regards to the meeting we had concerning the direction of the NHL and how that will impact player take home?”

This would then require Gary to adjust the NHL’s initial offer in the NHLPA’s direction.

Again, all of this rests on the notion that Gary is attempting to negotiate in a rational manner.  If he’s just bargaining on PMS, then things like facts and rationality hardly rate.

Posted by HockeyinHD on 08/14/12 at 11:58 PM ET

J.J. from Kansas's avatar

I think it would be foolish to say that Gary Bettman isn’t negotiating rationally. The rational argument remains stable regardless of the projections for the NHL. “If things go great, then you get paid, if things go badly, then we can survive.” 

Bettman is going to be the bad guy in the public eye regardless of what happens here.

Posted by J.J. from Kansas on 08/15/12 at 12:35 AM ET

OlderThanChelios's avatar

Bettman is going to be the bad guy in the public eye regardless of what happens here.

Given the fact that he continually shows up at events where he knows he’s going to get booed by 80% of the people in attendance, do you really think he gives a rat’s ass about whether or not he comes off as a “bad guy?”

Personally, I think he’s so demented that that kind of negative response actually turns him on. And getting paid $8M a year for being a complete ass is probably what gets him off.

So the idea of him being an “obfuscator” in this process wouldn’t surprise me one little bit. In fact, I think it would be a truly wet dream for him.

Posted by OlderThanChelios from Grand Rapids, MI on 08/15/12 at 01:38 AM ET

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I think it would be foolish to say that Gary Bettman isn’t negotiating rationally.

I agree.  This would be why I said “Again, all of this rests on the notion that Gary is attempting to negotiate in a rational manner”.

The rational argument remains stable regardless of the projections for the NHL. “If things go great, then you get paid, if things go badly, then we can survive.”

That’s not the point, though.  The point is that Fehr has adroitly taken Bettman’s own projections and beaten him with them by changing the parameters of the debate.  The stuff you’re talking about is only relevant in the scenario where Bettman and Fehr are submitting counter-proposals to an arbitrator who would make a final decision.  Since they aren’t, however, it isn’t.

Since they are directly negotiating with each other, Fehr’s ability to utilize Bettman’s own tools as weapons speaks to a level of bargaining sophistication Bettman’s not close to possessing.

Posted by HockeyinHD on 08/15/12 at 09:06 AM ET

Nathan's avatar

That’s certainly one perspective, but considering how business (and Fehr) has worked in the past I think it’s HIGHLY unlikely to be the correct one.

Fehr, not being an idiot, knows that in any situation it will be impossible for players to recoup whatever wages they lose due to a lockout in any new deal.  Knowing this, he constructs a framework wherein the players give back some money in the short term (which they would in any situation regardless) while simultaneously creating a system which sunders the Owners from a unified bloc into distinct groups much more than they’ve ever been.

This will, not accidentally, make subsequent CBA negotiations easier for the NHLPA.

So in addition to whatever medium-range ‘fu’ Fehr has worked into his proposal we’re also talking about the introduction and amplification of ownership discord.

He’s playing chess and Bettman is playing checkers.  I agree that he’s not being malicious or devious in any way, he’s just substantially better at his job than Bettman is at his.

Posted by HockeyinHD on 08/14/12 at 04:45 PM ET

You make a lot of good points here, but I don’t think your view and my view are mutually exclusive. The proposal Fehr and the players have made is one that both A) aims for long-term success of the league as a whole, with its current 30 teams, as this is what is best for both the league and the PA over the long-term, and B) as you have done a great job analyzing in this space, puts the PA in a stronger position for any continued negotiation this year, and in any future years.

So I still don’t think Fehr is trying to dupe the NHL so the PA can come back at the next deal and hit ‘em hard. I think he’s trying to get a deal that really is going to be best for the entire game. The problem is that ownership, as a whole, will be loathe to see it (or maybe more accurately, admit that they can see it).

I don’t think driving a wedge between the big and small-market clubs is a devious tactic. I think it is a tactic that, following the very successful model he helped build in baseball, is intended to make the game healthier for all in long run.

As for the comments from everyone about Bettman having presented growth projections to the PA, and now being unable to go back on them… as long as he has a majority of owners that are willing to lock out, he can really do whatever he wants. The hope is, Fehr’s proposal makes so much sense for all but the biggest 4 - 8 clubs and the worst of the bottom feeders, that there are enough clubs left in a coalition with the players to prevent a lockout.

Posted by Nathan from the scoresheet! on 08/15/12 at 09:55 AM 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.

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