CBA Negotiations Continue; A Modest Proposal

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By: Tyler J. Altemose (@TJamesAltemose)

Chris Campoli, representing the NHLPA, met with the media Thursday as CBA negotiations continued. He explained that the sides discussed “hockey issues” within separate sub-committees, all of which he considered “equally important” to the process.

Although Campoli and the NHLPA expect to continue working day to day in an effort to hammer out a new collective bargaining agreement before the September 15 deadline, he did express some frustration.

“Frankly, it was a little disappointing to see the response [to the NHLPA proposal] yesterday and the view they have on it,” Campoli told reporters. He said that the Players’ Association has made “considerable concessions” during negotiations, something the owners have yet to do.

NHLPA Director Don Fehr and NHL Commissioner Gary Bettman are not set to meet again until Wednesday, although Fehr did say that they will remain in contact via phone in the meantime.

With both sides firmly standing their ground and with a lockout looming, I decided to take a closer look at the situation and come up with a proposal of my own. I focused on the three big issues–revenue, the salary cap, and contract structure–in an effort to find a middle ground between the players’ and owners’ positions.

Revenue

Revenue–specifically how it is shared between the NHL and NHLPA–is likely the most contentious issue of these collective bargaining negotiations. I have thoroughly explained the relative positions on the issue, so I will spare the details this time. My proposal is as follows:

I praised NHLPA boss Don Fehr for his proposal when it came to revenue. I think removing the link between HRR and player salaries is a reasonable concession, and for that reason I include it in my proposal. I also like the idea of an option year putting the parties’ positions back at the status quo once negotiations on the next CBA are to begin.

In the players’ proposal, they are to receive 54.4 percent of HRR. The owners stand to make anywhere between $450 million and $800 million, depending on whether NHL revenues continue at a 7 percent pace or if they increase to a 9 percent pace. With the recent television deals made with the league, I expect that figure to reach the upper limits of that scale.

In order to appease owners, my proposal eliminates the clause that would give the players 57 percent of HRR if the league’s revenue in any year exceeds 10 percent. Furthermore, I believe the NHL should be allowed to redefine HRR so as to eliminate some of the sources of income. This could mean another three percent of revenue in favor of the owners. Although a small concession by the players, I do feel that it is important.

Salary Cap

The salary cap issue is perhaps the most important issue in this CBA, mostly because this system is the machine through which revenue flows and is directly responsible for the competitive balance of the league.

Author “DragLikePull” of the SB Nation blog Pension Plan Puppets wrote a very informative story yesterday where he explains two solutions to the woes of the small market teams. First, small market teams could be given additional funds in the form of revenue sharing to help them reach the salary cap floor. Another solution is to lower the salary cap floor so as to make their current revenue sufficient. ["DragLikePull" further goes on to explain that the issue is more about control for the league and less about revenue. I highly recommend you read the entire article.]

The one positive to take out of this issue is that both sides have agreed to a hard cap. Although the players have proposed some exceptions, my proposal eliminates that clause. I do, however, believe that the cap should be calculated by the NHLPA’s methodology. According to a recent TSN article, this would set the cap in 2012-13 at $69M.

In a slight alteration to the players’ proposal, however, my proposal eliminates the cap floor altogether. I discussed the revenue sharing issue above and how I believe that can help the league regain a more competitive balance.

To clarify, removing the link between HRR and salaries prevents the salary floor from rising higher each season. This puts an ease on the smaller markets’ books. Those markets are given further assistance by the larger market teams (in the amount of $250 million) to be distributed as agreed upon by the NHL and NHLPA.

I do not believe that after this assistance has been given smaller markets should be required to spend a minimum amount of money. As far as I am concerned, spending money and maintaining a competitive balance are not always mutually exclusive.

Player Contracts

If nothing else this has been a dishearteningly frustrating issue for the players. As Larry Brooks of The New York Post explained in a story which followed the original NHL proposal on July 13, the owners are essentially trying to turn back the clock on player’s rights when it comes to contract negotiations.

Among the items included in the NHL proposal is a ten year mandated playing career before qualifying for unrestricted free agency, a five-year entry-level term (followed, as stated, by a five year term on a standard SPC as a restricted free agent), the abolition of arbitration, elimination of signing bonuses, and flat salary figures.

What do the players want? Well, frankly, they don’t want to change a single thing.

So where do they meet in the middle? I have been thinking about it and came up with the following points.

The first point that should be made is that the arbitration system should be kept in place as it stands. This is one of the only negotiating tools restricted free agents have.

Speaking of restricted free agents, I propose the following system regarding entry-level contacts: Any player age 18 signing his first SPC must sign onto a mandatory five-year term. That term is four years for a 19-year-old signing his first SPC. Any player 20 or older will be forced to sign onto a minimum three-year contract.

What this does (for the most part) is ensure that any player 18-20 finishes their ELC at the age of 23. Afterwards, they will remain a restricted free agent for another three years until they turn 26, at which point (with a minimum six-year playing term) they will qualify as a restricted free agent.

As far as UFAs are concerned, I feel that even they should have some limitations as far as term and compensation is concerned. The current CBA allows for a yearly salary maximum (salary and bonuses) of up to 20 percent of the upper limit. I propose limiting that figure to 15 percent. Furthermore, I feel that SPCs for unrestricted free agents should be a maximum of eleven years.

I did some searching to calculate the average of player retirement. It appears as if for the decade 2000-2010 there was a significant drop in retirement once players reached age 38. Since my proposal allows for players to qualify for unrestricted free agency at age 26 and the latest average retirement age appears to be 37, I propose that contract term be maximized at eleven years.

As Sportsnet’s Michael Grange explains, the number one cost for owners has been player salaries. Limiting spending on player salaries, although a short-term loss for the players, will compensate as long-term gains when it comes to negotiating the next CBA.

Admittedly, this is just a rough sketch of what meeting in the middle between the players and owners might look like. I tried searching for other proposals but was unfortunately at a loss. What this process did do, however, was give me a greater appreciation for both sides, inasmuch as I better understand the difficulties inherent with this process.

This is a developing story. Stay tuned to The Hockey Guys for further developments.