Kukla's Korner Hockey
by George Malik on 08/13/12 at 09:22 PM ET
Updated at 12:55 AM on Tuesday: Tomorrow is one of the few days in mid-August where those who cover the NHL in any way, shape or form have cleared their calendars. The NHLPA will make its CBA counter-proposal to the NHL, and via both Twitter and in an article, the Canadian Press’s Chris Johnston reports that the NHLPA plans on offering something very, very different in comparison to what the owners offered:
“What we expect to do tomorrow is to put forth an alternative view as to what we should do next,” Fehr said Monday. “That’s the best way I can put it.”
It’s a bold move with a Sept. 15 deadline looming for a lockout. The initial offer from the NHL called for a lowering of the players’ share in revenue and introduced new contract restrictions, among other things. There wasn’t one aspect of it that appealed to the union, with one source saying the NHLPA felt it was designed to “anger and provoke” rather than kickstart meaningful discussions.
Despite that, the union thoroughly examined it over the last month before deciding there was no true counter-proposal to be made. Fehr will instead offer up a “different kind of an approach”—one that no doubt includes expanded revenue sharing and more flexibility than is currently allowed under the league’s rigid salary cap system.
“It’s how the players see the world,” said Fehr.
There’s a strong possibility that a) the plan will be more or less released to the public, either in its entirety or via an obviously active corps of Twitter-using players in attendance, and b) that it will attempt to address revenue sharing by introducing a luxury tax:
During Fehr’s time with baseball’s players’ union, he fought vehemently against a salary cap and it’s believed he’s strongly in favour of lessening the impact of the one the NHL instituted after losing the entire 2004-05 season to a lockout. One way to do that is to introduce a luxury tax for teams that spend above a specific threshold.
It’s unclear if the NHLPA might be able to interest owners in that kind of system. Asked specifically about how he felt about a luxury tax on Monday, [NHL commissioner Gary] Bettman declined comment by saying he won’t negotiate publicly.
Negotiations are about to pick up pace. Despite the fact the sides have been talking throughout the summer, they finally seem ready to get down to work.
“All things in this world at this stage of this negotiation are possible,” said Fehr.
The Globe and Mail’s David Shoalts, perhaps keeping the same tone as that, “Blame the players just as much as the owners” editorial the Globe fired off on Sunday night, is worried about what will happen…
If Fehr and the players share any of the details after Tuesday’s presentation, it also means the rest of us get to see just how far apart the two sides are. Do not be surprised if it shows Fehr’s remark last week of a “meaningful gulf” sounds optimistic.
The owners see any solution as coming strictly out of the pockets of the players. They want to reduce not only the players’ share of the hockey-related revenue (HRR) from 57 per cent to 46 per cent but to exclude enough revenue from HRR to further shrink their share to 43 per cent. They also want to increase the eligibility of unrestricted free agency to 10 years, eliminate salary arbitration and limit contract to five years.
Those would be the same owners who were handing out deals last month for 10-plus years and more than $100-million. Minnesota Wild owner Craig Leipold, for example, went from giving 13-year, $98-million contracts to Zach Parise and Ryan Suter one day to sitting at the table a few days later when the owners demanded Parise, Suter and the rest of the players take a 24-per-cent cut to those salaries. This sounds outrageous and hypocritical to be sure but try and look at things from their perspective. They rolled over the NHLPA in the 2004-05 lockout and forced players to accept a hard salary cap and a 24-per-cent cut to those salaries. And it cost NHLPA executive director Bob Goodenow his job, which thrilled more than a few owners.
That is why NHL commissioner Gary Bettman’s salary went from $3.7-million in 2005 to just shy of $8-million today. Sports commissioners are paid big bonuses for three things – a good labour agreement in the eyes of the owners, a good television agreement and expansion fees. The head of a union leader on a pike is pure gravy. So as long as your curve ball is getting the opposition out, you keep throwing it. Even if the opposition signs a star free agent such as Fehr.
The trouble for the fans is that this time around it looks like Fehr has the players educated and committed enough to hang in there long enough to hit that curve and throw a few of their own. That is why Tuesday’s presentation is not a counteroffer in the traditional sense of the word. It will be a series of suggestions on a new way of doing things. When he was asked last month if the players were willing to suggest dropping the salary cap for a new system, such as one based on a luxury tax for big spenders and greater revenue sharing, Fehr did not hesitate to say yes, if the players think it is needed.
A look around the league shows some radical thinking is certainly necessary. The Phoenix Coyotes are headed toward their fourth season as a ward of the state while yet another would-be owner roots around his chesterfield cushions for enough spare change to cover the purchase price. The New Jersey Devils are not facing foreclosure right now only because owner Jeff Vanderbeek’s bankers think it would be more trouble than carrying him until they get a look at a new collective agreement before deciding if he ever has a chance to pay them off.
But with one month from Wednesday left until the collective agreement expires, the only thing the owners are willing to do is make a grab for the players’ piece of the pie.
And while I fully believe that a luxury tax will be involved as a means by which bigger-market and bigger-budget teams can gain a tangible product—a competitive advantage—in exchange for propping up their weaker sisters, it’s hard to say whether that defeats the purpose of a salary cap, or whether that luxury tax will be built into the cap to, say, start with a 50-50 split of revenues and then let a $5-10 million luxury tax, taxed dollar for dollar, increase the players’ share back up to 57% of revenues. Sportsnet’s ever-thoughtful Michael Grange believes that, whatever form the luxury tax proposal takes, it will offer a more meaningful start to negotiations than the owners’ non-starting proposal:
Instead how about an NHL featuring a marketplace that allows rich teams to spend what they want and the best players to earn what they’re worth? Rather than an artificial drag on salaries by way of a hard cap, how about a voluntary tax—a luxury tax—on teams that see fit to invest in talent?
How about an NHL where, rather than weaker markets being propped up squeezing down the cost of labour, franchises that have unique advantages share some of their profits with those that don’t? It’s 180 degrees from what the owners have come to enjoy and the “status quo but better” deal they’re seeking now.
It’s a reflection of what Fehr referred to in a triumph of understatement as “the meaningful gulf” separating the players from the owners. Whether it’s a gulf that can be bridged in a reasonable amount of time or an ocean that will take months to cross is the question that can begin to be answered for the first time in the coming days.
“The game is growing but we want to make it that much better for everyone,” said [Maple leafs forward David Steckel, who described the interest level of the players he’s been responsible for communicating with as ‘sky-high.’ “It’s not just us wanting more money, we want the game to be better for everyone.” If you had a 9-to-5 job and you’re asked to rollback your salaries you’re going to want to know why…that’s what most players saw and are going, ‘how can you ask us to do this again?’” said Steckel. “In seven years you’re asking us to cut our salaries by 48 per cent? We’re not the ones running organizations signing people to deals for $100 million.”
Meanwhile a former NHL governor thinks there is plenty of room for the NHL to move from their initial offer, which called for the players’ share of league revenues to be cut from 57 per cent to 46 per cent or even less depending on a new definition of hockey-related revenue, but the players will have to give up something.
“We’re generating a lot of revenue, but we’re investing to get it,” the former governor said. “The guys at MSG are investing a billion dollars (renovating Madison Square Garden). That’s going to drive up revenue and the players are going to benefit from it but they didn’t put up one penny of that billion.”
Uh, yes, they did. You don’t make a $1 billion investment out of a fart in the wind…
Simply put, the two sides are looking at the sport in fundamentally different ways. If there is a lockout after September 15th it will be hockey’s fourth work stoppage in 20 years. When the players put their vision on the table, it will be the first meaningful moment in a series of meetings that began seven weeks ago and have accomplished little of substance since.
It will be the moment that the negotiations begin for the first time.
That much is certain.
Sportsnet posted a clip of Grange talking about negotiations…
The NHL posted a clip of Chairman Mao—the $8 million man—and Donald Fehr talking about what they’re expecting on Tuesday…
Update: As no one paid attention to what was said on Monday, NHL.com’s Dan Rosen reports that the discussions were ironically pertinent:
The negotiating committees from the National Hockey League and National Hockey League Players’ Association met Monday at the League office for the first of four scheduled days of work toward establishing a new Collective Bargaining Agreement.
The meeting Monday featured NHL Chief Operating Officer John Collins delivering a presentation that detailed how the League has grown the business.
“We just finished a presentation by John Collins, our chief operating officer,” NHL Commissioner Gary Bettman said. “The real purpose of this session was to give the players and the Union a sense of how we’ve been growing the business at the league level over the last few years, the types of initiatives we’ve undertaken to grow the game, and how we see prospects for the future. That was really the full extent of the session.”
NHLPA Executive Director Donald Fehr said the presentation was “informative and it was interesting. I’m certainly glad they did that.”
The NHLPA posted a video of Fehr speaking to the media…
The Fourth Period’s David Pagnotta is in Toronto, and he offered the following update regarding the counter-proposal—if it’s a counter-proposal at all…
Let’s be clear: The Players weren’t insulted by the NHL’s first offer, despite how various media outlets spun the news. They were more surprised the League was willing to kick-start the process in the manner in which they did. As Fehr indicated, negotiations could have started sooner.
“This is a process, which is ongoing,” he said. “It’s taken day-by-day. The process is to work at it every day, until you find a way to come to an understand and to make an agreement. If that day’s tomorrow, that’s fine. If it’s three weeks from now, that’s fine. I just hope it’s sooner, rather than later. But I’m out of the prediction business.”
Tomorrow, the players—as many as 25 of them, which should include the likes of Sidney Crosby and Alex Ovechkin—will meet together before the NHL jumps in the mix. Many fans question why it’s taken the NHLPA one month to retaliate, but the answer is simple.
“First of all, we had to analyze (the NHL’s proposal),” Fehr said. “You don’t turn around proposal for which measure the cost in the billions of dollars over night; not if you’re going to do your due diligence and be appropriately professional in representing your constituents. We have been, and continue to be, in the process of digesting and trying to understand the various pieces of financial information that we have received from the owners. And that takes time.”
Bettman wasn’t willing to tip his hand as to the League’s stance on the PA’s upcoming proposal, but seemed pleased by today’s proceedings.
“Well, there have been a lot of things discussed in the room that will stay in the room, but we thought it was a good idea for the union to understand all of the initiatives and how we operate the business at the League level,” he said. “I’m interested, very interested (to see what the NHLPA brings forward). We’ll have to wait and see. I’m not going to try and speculate as to what they’re going to present tomorrow. I have no idea.”
Bettman seemed uncertain as to what may be put in front of him and the League tomorrow, as Fehr and his members weren’t giving him any clues.
“I’m not sure I understand what an ‘alternative view’ is,” Bettman said. “We’ll wait and see what’s presented, and we’ll respond appropriately.”
And the Toronto Sun’s Terry Koshan offered the following:
While trying to predict which way the negotiations would sway might seem easy—the NHL won’t be thrilled with what the players present on Tuesday, one can assume - Fehr was not concerned about how to narrow what is sure to be a wide gap between the players’ “alternative view” and the owners’ initial proposal.
“You try to figure out how to get from there to there, if there are common elements,” Fehr said. “You try to work with those and you hash them out. If you don’t have that, hopefully you find some. All things at this stage of the negotiation are possible. This is a process which is ongoing. The process is to work at it every day until you find a way to come to an understanding and make an agreement. If that day is tomorrow, that’s fine, if it is three weeks from tomorrow, that’s fine. I just hope is it sooner rather than later.”
With the NHL apparently on its way to a second lockout in eight years, NHLPA executive director Donald Fehr was asked whether collective bargaining agreement talks could not have started earlier. Negotiations with the NHL on a new CBA began at the end of June, with the expiration of the current agreement looming on Sept. 15.
“Could we have?” Fehr said. “In theory you could have started at any time, if the NHL had wanted to, it could have at any time presented us with whatever they wanted to. But I am not concerned with the timing issues at this point.”
The NHLPA had seven players on hand for Monday’s meeting—Chris Phillips, Matt Stajan, Rick DiPietro, Steve Montador, Mathieu Darche, Kyle Quincey and Mike Weaver—but many more are expected on Tuesday when they present what Fehr has called an “alternative view.”
Washington Capitals star Alex Ovechkin tweeted that he will be among those in attendance.
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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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