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CBA negotiations: trying to make sense of the cents

CBA negotiations: trying to make sense of the cents

So while the NHL and NHLPA are working on potentially depriving us of what we truly love most (sorry, ladies, and gents, you don’t come first), we’re all left to try to understand just what the hell these CBA negotiations are about. Before blindly blasting one side or the other for being a greedy SOB (yes, reader, I’m looking at you and your Joker Bettman photo that was so funny you reposted it on Facebook), it’s only fair that we take the time to understand all the stipulations. Let’s take a look at each of the NHL’s proposed clauses, and try to figure out some of the logic behind them:

 

Donald Fehr, executive director of the NHL Players Association, speaks to reporters about on going labor talks with the league outside the NHL headquarters in New York, Tuesday, July 31, 2012. The current collective bargaining agreement ends on Sept. 15, and the NHL season is scheduled to open on Oct. 11. Detroit Red Wings Dan Cleary listens, right.
(AP Photo/Kathy Willens)

Proposal: Player revenue is to be reduced from 57 percent to 46 percent.

Why the owners like it: First, I’ll clarify what this means: player revenue is what determines both the salary cap and the salary floor (minimum a team must spend on players), and a lower portion for player revenue reduces both those numbers. Besides the obvious of retaining more money for their organizations, a smaller salary cap would reduce disparity between the big market teams and the small market teams. While big-city teams such as New York, Boston, and Toronto have no problem finding the cash to build a team, the smaller markets, such as Phoenix and Florida, don’t have the resources. A lower floor means these smaller teams will be able to afford a team without being forced to lose piles of money and avoid bankruptcy (*cough Phoenix cough*), and a lower cap means they will be on more even ground with the big dogs. Smaller teams would be more competitive, which increases interest and therefore revenue in those markets, keeping them afloat, which adds to the income of every team from both revenue sharing and general interest in the league. So they say.

Why the players hate it: Forty-six is less than 57.

 

Proposal: Players must be in the league for 10 seasons before qualifying for unrestricted free agent status (as opposed to restricted free agent status), up from 7 seasons.

Why the owners like it: Having a stronger capability to retain players allows for smaller market teams to remain competitive, and allows all teams to have more control over their players. Also, owners can (and do) make the claim that since they invest so much time and resources into developing their guys, they should be able to retain them longer.

Why the players hate it: I’m not going to get into all the details of free agency (because honestly, I don’t understand everything), but a player’s ability to negotiate a large contract is incredibly inhibited by restricted free agency. There’s a reason Zach Parise signed a one-year deal with the Devils in 2011 to get to unrestricted free agency as soon as possible. I think we can say it worked out for him: he’s making $98 million, he gets to play on a solid young team with an all-star defenseman, and he doesn’t have to live in Jersey.

 

Proposal: Player contracts may not exceed five years (currently unlimited).

Why the owners like it: I should probably have rephrased the topic to “why the small-market owners like it.” Hopefully, you understand how the big market teams with excess cash have been signing players to frontloaded, long term deals to get around the cap (i.e. Brad Richards). Yeah, the small market teams don’t think that’s fair, because they don’t have the ability to do that. Limiting contracts to a max of five years will effectively put an end to the Kovalchuck-type deals, leveling the playing field. Additionally, more years means more money for the player, and you better believe the Glen Sathers of the world are willing to set the market high. A limit on years shortens the bidding war.

Why the players hate it: Unlike the NFL, all the money in a player’s contract is guaranteed, if the player doesn’t terminate the deal. If a player’s performance warrants a big contract spanned over several years, then a player signing such a contract is financially secure. Take, for example – sorry to bring it up Bruins fans – Marc Savard. In 2009, Savard signed a $28.05 million, seven-year extension with the Bruins, but, coincidentally, was concussed by some douchebag in the same 2009-10 season. He’s been able to play in only a few games since, and his playing career is over. However, he still gets paid the full contract. Now, had he been unable to sign such a long-term deal, he would have been forced to sign a deal for at least two fewer years, and, assuming the per-year value remained the same($4 million), he would have made/be making around $8 million less. And it’s possible, if not very likely, for many of these players that, once their NHL career is over, they really won’t have the opportunity to earn a steady and significant source of income, so they need to make every penny they can as a player.

 

Proposal: Entry-level contracts to be extended from three years to five years.

Why the owners like it: This one’s easy. Entry-level deals are always under $1 million per year (bonuses notwithstanding) by rule. Being able to keep a player signed for that cheap, especially the better ones, allows the smaller market teams to avoid going above their spending limit for a couple of years, and allows the bigger market teams to make a better free agent splash.

Why the players hate it: Similarly to their previous argument, the players need to make all the money they can, while they can. Not every player is talented enough to demand a huge contract after his entry deal expires, like Rick DiPietro. The point is that nothing is guaranteed. The two extra years take away from potential millions of dollars a player may earn, and it also removes his ability to secure a long-term deal (even if it’s only three or four years) after his third year of service. In those first five years (fourth and fifth specifically here), a player may get injured or give the impression to GMs that he’s reached his potential, thus negating any leverage he had to lock up that lucrative five- or six-year deal he would have had if he’d been able to negotiate a new contract after the third season.

Now, as you may noticed (I was definitely trying to make you notice), there’s a very interesting, and often overlooked, narrative that’s taking place among the discussions; instead of the negotiations simply being owners vs. players, it’s more like – and get ready for some math symbols here – [small market owners vs. big market owners] vs. players. The smaller market teams want a low, hard cap so they can stay competitive with the rest of the league, and the bigger markets, not really giving a crap about the little guy and disregarding their arguments that it will make a more profitable league, want to be able to spend as much as they want.

Also, revenue sharing. Big market teams hate it. Small market teams need it. “Why should we have to give you a portion of the jersey, TV, radio, etc. sales we earn?” the big markets will say. “If you can’t survive on your own, maybe you shouldn’t have a team, ATLANTA.” And the small markets will respond with “Hey, screw you, with your fancy canes and monocles and such. You need us! We generate hockey fans that wouldn’t exist without us, and with revenue sharing, some of that extra money goes to you!” And then there would probably be a lot of back and forth arguing, Wade Redden would probably be brought up, chairs would be thrown…How can the players reach an acceptable agreement if the owners, as a unit, doesn’t know what it wants?

 

The NHLPA submitted its counterproposal today (which was really less of a counter offer and more of a “Hey NHL, your proposal was stupid, here’s something totally different and more reasonable”). While all the details aren’t out, their CBA would essentially cut player revenue by an estimated $465 million, but also increase revenue sharing. Score one for the little guy. The contract would last three years with an option for a fourth (if not, the CBA would revert to its current format). And should the NHLPA’s offer be accepted by the NHL, and should we have hockey when we’re supposed to (I mean starting in October, not “all the time”), I think it’s only appropriate to credit all the success to one of the players in attendance at the meeting, Mr. Sidney Crosby himself.

 

So it’s up to you to determine who’s wrong and who’s right here. Not that it really matters, we all just want hockey. And sure, it’s easy to hate on Bettman or the rich owners, some of whom may or may not have either signed Scott Gomez, accepted a trade for Scott Gomez, or screwed your small-market team by offering a player $110 million, but it’s not that simple; killing the Bettman won’t work here.

Scott Finger

Scott Finger

Managing editor at Hooked on Hockey Magazine
Scott is the managing editor for Hooked on Hockey Magazine and loves hockey, writing, and writing about hockey. He graduated from Roger Williams University in 2011 with a useless degree in Media Communications (concentrating in Journalism). Being a New York Rangers fan (and NY Giants and Mets fan) living in Boston is very uncomfortable for him, and it'll be awkward trying to celebrate a Rangers Cup win in the streets when they inevitably win sometime in the next 100 years. He also likes long walks on the beach.
Scott Finger
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