NHL CBA Talk

Riprock wrote:And yeah I still don't understand the revenue sharing thingy

1. HRR and Player's Share
Owners proposed an 11% reduction and a redefining of what constitutes HRR to lower it.
Players proposed no reduction but modest raises for 3 years with a NHLPA option to jump back to the current 57% in a fourth year. Also rumored to want to redefine HRR to increase it.

Result: In truth the sides are not really close together. The owners want player shares to be significantly reduced, the players offer no reduction at all but on a short-term band-aid before going back to the current system which owners clearly do not want. Also the HRR issue, while not widely reported, will be a major point of negotiation between the sides as adding/removing revenue sources to what is considered HRR can cause huge shifts in the number.

2. Salary Reduction/Rollbacks
Owners propose 24% rollback of current contracts
Players says they will not accept salary reductions but only a 3-year artificial cap on growth of salaries.

Result: The players refuse to give up any of their current money or share, essentially offering a 3-year window for the NHL to somehow turn everything around before going back to the 57% HRR system the league has deemed unacceptable. Short of mass contraction or large-scale relocation of up to 20-25% of the current teams it's likely impossible that the revenue mess many teams currently have could be reversed in 3 years.

3. Contract limits, Free Agency, and ELCs
Owners want limits on the length of contracts, and increase of the age for the start of free agency, and longer ELC lengths.
Players have stated they do not want changes to any of these and didn't include any proposals on them in their CBA offer as starting points for negotation.

Result: One of the major issues owners put on the table to negotiate has been flatly refused by the players, leaving the sides absolutely no starting point for discussions on these issues at this point.

4. Arbitration System
Owners want it gone.
Players not only want to keep it, but expand it to make all arbitration cases binding by eliminating a teams "walk away" rights.

Result: Probably not a major issue for either side, but clearly a message sent by the NHLPA that they do not intend to budge at all from the current arbitration system.

5. Revenue Sharing
Owners proposal included no change to the revenue sharing system.
Players want a massive overhaul of the system whereby the top teams will be asked to pay a very significant amount more into the system, reportedly as much as $25M+ in the first year alone.
The incentive/restrictions in the current CBA on revenue sharing would be removed such as:
Elimination of market size restrictions so teams in large markets can get revenue sharing (NYI, ANA, FLA for example).
Elimination of revenue growth restrictions so that teams who cannot grow their revenues by the same percentage as the league average will still get full revenue sharing (CLB, NSH for example).

Result: The large-revenue teams will now be expected to shoulder the load for the rest of the league until those small markets become viable. However, there will be no restrictions on the the teams who get the money now. In fact, by eliminating the market size and revenue growth caveats to the current revenue sharing system more teams who were not eligible before will be now, partially/fully offsetting the increased revenue sharing dollars the top teams put in so it's possible the per-team revenue gain from revenue sharing will not change significantly.
Note: For all you Jets fans, it's very likely that had those revenue sharing restrictions not existed in the last CBA that the Thrashers would still be in Atlanta since their market size prevented them from being eligible for revenue-sharing dollars. This is also probably a setback to any Quebec fans hoping for a team to relocate there.

6. Salary Cap
Owners propose no change to the current hard-cap system.
Players propose a hard-cap but with exceptions that will allow teams to go +/- 4M over/under the max/min cap. Cap space could be traded or (maybe even) sold to other teams.

Result: Seems like a minor issue, although it seems like it's geared towards allowing "sellers" or low-payroll teams to simply generate more revenue by creating a new "asset" to sell. This would seem to favor the large-market teams who can afford to essentially "buy" an extra 4M in cap space every year.

7. Competitive Balance
Owners proposed no changes to the system
Players propose extra "sellable" draft picks for teams in financial trouble.

Result: Reportedly this is like the MLB model, which in it's first season is already being exposed as flawed. The Detroit Tigers, for instance, have the 5th highest payroll in MLB this season yet were given a free "competitive balance" draft pick. This is a very dangerous system to adopt, especially in a sport where you don't have the massive player pool to draw from like MLB and where later-round picks do not have the same type of success rate as in baseball. The MLB draft is far more of a crapshoot than the NHL draft is. More importantly, if these extra picks are solely tied to revenues then it becomes extremely important to see how revenues/losses are calculated. For example, despite being a big-spending team the Tigers were able to qualify because of their stadium debt. Similarly the Yankees were able to reduce revenue sharing payments by massive amounts (iirc over 20M) because of "stadium debt". The Red Wings could build a new arena and suddenly qualify for extra draft picks. So could the Rangers. Or Leafs. You get the picture. Giving away "free" picks just because a teams business model is failing/not profitable seems unwise. Not to mention a team could spend spend spend to the cap and just incur losses to qualify for this, just like the Tigers in MLB.

8. Non-player Spending Limit
Owners proposed none, simply letting teams spend whatever they want on non-player expenses.
Players can to cap non-player spending.

Result: Pretty audacious demand from the NHLPA, trying to tell owners how much they are allowed to spend. This would obviously impact things like scouting, travel costs, team management and employee payroll, advertising budgets, etc. Considering the inequity in travel expenses is already a sore topic to several teams (Winnipeg, Detroit, Minnesota, Dallas, Vancouver) telling them they not only have to spend MORE than almost every other team in travel while having the same limit to non-player spending would be problematic. If anything, this would force a de facto cap on coach/GM/Scout salaries. It may also lead teams to cancelling events like prospect camps, the Traverse City tournament, etc. as those added costs would eat into the available funds for more important things like scouting for example. I just don't see why the NHLPA would even attempt to do this.

Alot of this seems to be tied into the MLB model. However, that model is very flawed still with tons of loopholes that teams are abusing. I don't think the MLB revenue sharing model or "competitive balance" system is really the best way for the future of the NHL. The sides really are nowhere close at this point on any of the key issues. All the NHLPA has done is propose a system where low-budget/revenue teams will be given "free" assets in the form of picks/cap space to "sell" to the big-revenue teams, while at the same time telling those big-revenue teams to pay a huge chunk more into revenue-sharing. No offers to lower the cap floor as apparently several teams have trouble maintaining a payroll that high. No salary concessions. No reductions of player share from the current level. Guaranteed annual raises with the option for a massive 4th year boost. It's just a big, long-worded document that says to the owners "Let the big-revenue boys maximize the amount of money they give to the little sisters of the poor. That's now he will fix the system. Oh, and we aren't giving you **** in terms of payroll concessions or a reduction from our current levels. In the end we'll still get ours. We win and give up nothing, the small teams win and get a huge cash windfall, and the only loser in this will be the successful teams that get to shoulder all the burden themselves of keeping the league financially viable." Essentially, Fehr proposed a system where the large markets will underwrite the rising player salaries for the smaller markets but didn't really address any of the fundamental problems whatsoever. A wonderful fluff proposal the get the fans and media fawning all over the NHLPA but in reality it's only slightly less rigid and draconian than the NHL's leaked proposal.

tl;dr version: Fehr says we are partners but it's your mess and we aren't gonna help find a solution. Just let the big boys give more money to the little guys to pay for the rising player costs. Why fix the problem when we can just let someone else pay for it?

According to TSN hockey analyst Aaron Ward, the offer also calls for a limit on 'non-player' spending such as costs for head coaching, front office and management payrolls.

In addition, the union's proposal suggests - at the discretion of both the NHL and NHLPA on a case-by-case basis - giving extra draft picks to teams in financial trouble.

The players' offer also allows for franchises in distress under special circumstances to be permitted to trade or sell up to $4 million in cap space to another team - giving the team a way of adding another 'paycheque.'

Big Ev wrote:you're never going to get a deal on first proposals anyway. It won't look anything like the one the NHL proposed first or the one that the NHLPA proposed yesterday.

wprager wrote:

Riprock wrote:And yeah I still don't understand the revenue sharing thingy

Look at it this way, when the Rangers come to play the Panthers, they charge $20 a ticket. When the Panthers come to play the Rangers, the charge $200. Just rough ballpark numbers, not meant for any meaningful calculations -- just to prove a point. If the Panthers were not in the league then the Rangers would have one less home game (well, 3, but who's counting) at which they can charge $200.


So the big market teams *need* the small market teams in order to generate their revenues. But the smaller market teams simply cannot charge as much. You could argue that revenue sharing is simply a cost of doing business -- the rich team is propping the poor team because without those poor teams they could not have as many games to generate their revenue.

Go back to the Original Six. How long was their season? Certainly not 82 games. How long were the playoffs? Probably lasted 2 weeks. And what kind of national TV deal could they get if it was always the same 5 teams paying each other?

Of course trying to explain all that to a team owner may be difficult.

shabbs wrote:The NHL and NHLPA seem to be quite a ways apart. And I'm not talking about issues, I'm talking about how they fundamentally see the state of the game. I'm not feeling as optimistic as I was yesterday...

Riprock wrote:I don't get that, because the NBA has 30, MLB has 30, and NFL has 32.

I think the league for sure can sustain 30 teams, the problem is location. The GTA could easily support a team more than any other bottom 10 team. Quebec City would also be better than Florida, Nashville or Columbus.