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The View From Both Sides

from Eric Macramalla at Forbes,

Requesting amendments to a ratified agreement is a big deal and the NHL knows that. So to approach the Union for further concessions means the league is seeing something new and material that requires urgent attention. Indeed, the NHL believes that its financial assumptions have so dramatically changed such that this coming season is no longer financially viable within the four corners of the existing framework.

So what has changed for the league? It’s fans - or more precisely no fans. The NHL didn’t anticipate that it wouldn’t have fans in arenas this season. Most were expecting some return to normalcy in Fall of 2020. That has now been pushed to at least the Fall of 2021. So there was a belief fans would be back; they will not.

That substantially alters the financial outlook for the league. Under the existing framework, players will take home $1.6 billion in salaries. With league revenue hovering around $1.8 to $2 billion without fans in attendance, players would account for 80% of league revenue. That’s a far cry from the typical arrangement of a 50/50 split of league revenue.

The NHLPA, however, is banking on an additional $1 billion injection of revenue by way of some fans attending some of the games. If that is indeed the case, then the players would take home closer to 53% of league revenue, which presumably would be far more palatable for both sides.

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Comments

utahgentile's avatar

“the NHL believes that its financial assumptions have so dramatically changed such that this coming season is no longer financially viable ...”


When the current agreement was ratified in July:
- Covid was a raging worldwide pandemic with no end in sight.
- Experts were warning of a second, more severe wave in the coming fall and winter.
- The prospect of developing, approving and distributing an effective vaccine wasn’t predicted to be completed until summer of 2021.
- The league was in the middle of working out its no-fans bubble scenario just to award the Stanley Cup and salvage some much-needed TV revenue.

It seems someone wasn’t thinking this through …

Posted by utahgentile from the land of white and delightsome people on 11/28/20 at 03:44 PM ET

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A 48-game season with realigned, in-division-only play, starting in 2021 in empty arenas is not what anyone on either side of the negotiation had in mind when they signed the new CBA.

Posted by PresidentJoeByzerman on 11/29/20 at 04:34 PM ET

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Escrow is used to get 50/50 split at the end of the season. Since the newest CBA defined maximum escrow percentage, it follows that 50/50 split is not automatic.
Also, it’s hard to claim that today’s situation is worse than last season concerning playing NHL games. Also, it’s hard to claim that NHL can’t play when all other leagues are playing. Force of God could have been claimed last season, but how can you claim that between the CBA signing and now new, totally unforeseen circumstances happened?

Posted by Davor on 12/04/20 at 02:58 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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