McKenzie: Matter of Time
Time. It's all a matter of time now.
Is there enough time left to save the season? More importantly, is
there any inclination on the part of the NHL or the NHL Players'
Association to save the season?
Certainly, time is running out, which is why there is an expectation
the labour dispute between the NHL and NHLPA will finally come to a
head this week. There are a myriad of reports out there about a
formal NHL proposal to the NHLPA. Some say it could come as early as
today or tomorrow. There are also reports that the NHL and NHLPA,
specifically league commissioner Gary Bettman and NHLPA executive
director Bob Goodenow, will meet face to face this week, possibly on
What's really needed at this point is a deadline. There are some on
the management side of the fence who are pushing Bettman to do
something he's avoided from the time this labour dance began. That
is, set a firm deadline for the cancellation of the season. One
league source said it's time for Bettman to deliver a proposal, meet
with Goodenow, set a date and either negotiate off the proposal or
cancel the season if the NHLPA rejects the proposal.
Now, what might be in the proposal?
The best guide to that can be found in the memo the NHL has sent to
each club on the weekend, effectively outlining the league's position
on all critical issues. These were the concepts the league put
forward to the NHLPA at last Thursday's bargaining session in New
It's worth noting the NHLPA dismissed those concepts, saying they
were not the basis for negotiations. It's possible that whatever is
contained in the new proposal will differ slightly from the league's
positions of last week, but sources suggested there's not likely to
be a lot of movement one way or the other.
In order to prevent the internal memo from being leaked, the NHL
apparently only sent it to one governor for each club, but it is now
in wider circulation as governors for each club have been circulating
the document to their respective general managers and club personnel.
While the actual document has yet to end up in any media outlet's
hands, the contents of the memo are no longer a closely guarded
secret. Here's a rundown of some of the major concepts the league
offered the players on Thursday:
Term: A six-year deal, not including the balance of this season (if
there is to be one), with a provision that would allow the NHLPA to
unilaterally terminate the CBA after four full seasons.
Salaries: The league is proposing cost certainty or a team-by-team
salary cap, linked to 55 per cent of league revenues. The salary
range would have a floor of $32 million and a cap of $42 million,
although those figures are slightly misleading as the cost for player
benefits (health care, insurance etc.) are also to be included in the
salary range. Since the average costs per team for player benefits is
in excess of $2 million per year, the actual range for player
salaries would be between $30 million and $40 million. But if overall
league spending on payroll and benefits exceeds 55 per cent of league
revenues, the NHLPA would be obliged to pay back the league the
overage from an escrow account. Likewise, if the league spent less
than 55 per cent on player compensation, the league would be obliged
to make a top-up payment to the NHLPA from the NHL's escrow account.
Luxury tax: The NHL is not proposing a luxury tax but said it would
negotiate one if the players really wanted it, but there is
apparently no implication that that the league would abandon cost
certainty in favour of a tax proposal. Obviously, the players have no
interest in a tax system if cost certainty remains in effect. That
would change, of course, if the tax system replaced cost certainty,
but there's no indication from the league that is about to happen.
Profit sharing: This is a new concept. The league apparently proposed
that the NHL and NHLPA appoint a joint auditor to determine mutually
agreeable league revenues and profits and that the owners and players
would share all profits equally (50-50) in excess of $115 million.
The NHL also proposed a heavy fine (using dollars and draft picks)
system for teams found guilty of under-reporting revenues and profits.
Revenue sharing: The NHL did not outline a specific revenue sharing
plan, but said it would commit whatever dollars are necessary to
ensure that small-market teams are able to spend the required dollars
to meet the $32 million floor of the payroll range. The expectation
is that any NHL revenue sharing plan would be based on a
redistribution of playoff monies, not regular season revenue to any
Salary arbitration: Not only would players be able to file for
arbitration, teams would have the option of taking a player to
arbitration. This two-way or mirror-image arbitration would have no
limits on the size of the awards, but there would be a choice of
having one or two or three year arbitration awards. Teams would have
the right to walk away from one arbitration award in a specified
period, which would make the player an unrestricted free agent.
Players would have the right to walk away from one arbitration award
in a specified time period, but the player would be obliged to take
the team's qualifying offer of 75 per cent of last year's salary.
Qualifying offers: Teams would be obliged to offer 75 per cent of a
player's salary from the previous season in order to keep that
player's restricted free agent's rights. In the expired CBA,
qualifying offers were either 100 or 110 per cent, depending on
whether the player was making more or less than the league average
Entry-level restrictions: The NHL proposed a four-year entry level
system (up one year from the old ELS of three years) with a salary
and signing bonus cap totaling no more than $850,000 per year. There
is a provision for a maximum of $100,000 in A level bonuses and
$250,000 in B level bonuses. Which is to suggest the absolute maximum
any entry-level player could make would be $1.2 million per year.
Guaranteed contracts: Buyout provisions (at two thirds of remaining
salary) would remain the same as the last CBA.
Unrestricted free agency: The age for unrestricted free agency would
drop from 31 to 30.
Now, it should only be a matter of time until the actual proposal is
made and then it's all a matter of time, something that is now going
to be in short supply in terms of saving a season.