Kukla's Korner Hockey
by Paul on 11/27/12 at 12:14 PM ET
from Craig Custance of ESPN,
Assuming risk moving forward
There's been a lot of talk about how close the two sides are financially but there's a major hurdle that needs to be addressed in the NHLPA's last offer. The line that says this: "There are no guarantees or fixed targets, other than a requirement that, beginning with the second year of the Agreement, players' share, expressed in dollars, may not fall below its value for the prior season." In English? In Years 2-5 of the players' offer, the number they make in the second year is the bottom line. Their cut of the revenue won't go below it.
"What they're saying is, 'We're not willing to absorb any risk," said one NHL source.
During the last CBA, revenues grew at record rates, so a clause like this wouldn't have mattered. But there's a growing belief that it may take a few years to recover from the damage of this lockout and the locked out players don't believe they should pay the price. The sooner a deal is reached, the less of an issue this becomes.
"If this thing settles in the next two weeks, they've put a lid on it," said an agent.
But if the lockout drags on beyond that, it's perfectly reasonable to predict that revenues dip in the coming years. If that's the case, and the players negotiate a floor in which their cut of the revenue can't go any lower, it's no longer a 50/50 deal. They'd get more than 50 percent of the revenue.
"My own personal belief is that it's going to take two or three years to dig out of this," said another prominent agent on Monday. "The fans are totally fed up with this. If it takes them two or three years to dig out of this, I'm not sure why the players should pay the price."
A reasonable mediator suggestion: This is a tough one. The players didn't have this kind of protection during the last CBA and it worked out just fine for them. If the two sides are going to return to a partnership, one side can't assume all the risk. Perhaps limiting a potential loss in revenue for the players to a certain percentage each year, early on in this CBA would be fair. But after three seasons, when the game has recovered, lift all restrictions.
Ther other issues Custance discusses are Make Whole and Contracting Rights, read on (paid subscription)...
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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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