Tuesday, August 14, 2012

NHLPA CBA Proposal

Today the NHL Player's Association boss Donald Fehr gave the league a proposal for a new collective bargaining agreement. He said that it was not a "counter-offer" but rather an "alternative view". The initial offer made by the NHL received general condemnation by the media for being absurd and excessively greedy. The player's first proposed CBA is far more reasonable than what Commissioner Gary Bettman tried to shove down our throats. Considering the league has been setting revenue records consistently since the lockout (where we lost a season so the owners could get "cost certainty" which they now have), it's hard to swallow when Gary tries to sell a story of financial hardship. Things have never been better.

The NHLPA is seeking to break the linkage between league revenue and the salary cap, settling instead for small incremental increases in the salary cap. The cap would no longer be free floating, which would eliminate the need for escrow. When Donald Fehr says the deal will save the NHL $465 million, that number is just a little bit misleading. That refers to the amount of cap space the players would be giving up (over 3 years combined) if the NHL revenue continues to grow at 7% (its average growth rate since the last lockout). Under the NHLPA proposal, if revenues stay the same, the salary cap goes up. If revenues fall, the salary cap goes up. This proposal takes away all the downside risk and guarantees the players cap increases for the next 3 seasons.

The next major highlight of the NHLPA offer was increased revenue sharing, which is no surprise. By helping provide lower income teams with the means to spend more money on player salaries, the players will make more money. There would certainly be a number of owners eager for a more lucrative revenue sharing system, depending on where they draw the line. The question is whether it will get enough support from owners to pass into NHL law, which is dicey at best. It would benefit the players and low income teams, but will receive strong opposition from the league's richest and most powerful teams who will be on the hook to prop up weak franchises more than they already do.

The existing CBA is set to expire in one month and both sides have now made their initial offers. Where things go from here is anyone's guess, but if Bettman categorically rejects the offer, he's going to find that public opinion is not on his side this time around. The worst possible thing he could do is walk away from negotiations rather than making a reasonable counter offer. The NHLPA offer was completely fair, the same can't be said about the crap produced by the NHL.

1 comment:

  1. Completely agree. For all of Bettman's distractions about having no dance partner, well, the dance has started. Public sentiment will not be on the owners side. They got their cap and they crow about their TV deals and profitability.

    What will a reasonable CBA look like? I think something that eliminates escrow and allows the owners to minimize the bleeding of taking over defunct franchises. I personally think that's revenue sharing or an incremental luxury tax with a soft cap.