Published September 12, 2012
NEW YORK – While the NHL and its players now agree on what qualifies as hockey-related revenue, the two sides still haven't figured out how to split up the money the sport generates.
With only three days remaining to work out a new deal before NHL Commissioner Gary Bettman follows through on a vow to lock out the players for the second time in eight years, league executives returned to the bargaining table with the union on Wednesday and traded new proposals.
The owners weren't particularly pleased with the new offer they received — with Bettman saying it wasn't much different from earlier proposals — and they ended up countering with one the commissioner said was drafted on the fly Wednesday.
NHLPA executive director Donald Fehr, speaking for the second time Wednesday before a meeting with several hundred players, wasn't overly impressed with what he was given, either.
"We did not make a proposal which mirrored the owners' proposal," Fehr said. "We did not say let's go back to when we didn't have a salary cap. We said, 'Look, there is a meaningful disparity in revenue between the teams, and in recognition of that, there is a way we think we can fix the system so we don't end up in the same problem all over again.
"If you look at what happened in all the cap sports ... it doesn't matter what the sport is, and it doesn't matter what the claimed economics are, the proposal is always the same: it is always players will take a lot less money, and if not we will lock you out. It's regrettable, but that is the world we seem to live in."
After the players made their offer Wednesday morning, Bettman met with Boston Bruins owner Jeremy Jacobs, and Murray Edwards of the Calgary Flames to craft a new NHL offer that was handed back to the players' association with a shelf life on it.
"We made clear in presenting the proposal that this proposal was intended to lead to a deal before the weekend," Bettman said after the nearly three-hour meeting, "and that if in fact a deal was not achievable, what we had proposed would be off the table. We were quite clear on that."
After not meeting face to face since last Friday, the sides gathered at the league office before the NHLPA held player meetings later at a New York hotel. The NHL board of governors will convene Thursday with Bettman, while the union holds a second day of discussions with more than 250 players.
This was the first formal session since Aug. 31. No new meetings were immediately scheduled, but both sides expected to talk again no later than Thursday after both sides' internal meetings conclude.
Fehr said the union's new proposal was "consistent" with the last one it submitted. The league responded with a time-sensitive counter, and Fehr, despite the developments, admitted he does not "know whether this will lead to anything."
"Our proposal was made with the same principles that we have always had in mind and those are that we didn't see any reason — given the seven years of record revenue growth and enormous concessions the players made the last time — to have an absolute reduction in player salaries," Fehr said. "They are prepared to have their share fall over time as revenues grow, and that we hope to partner with the large revenue teams in terms of providing whatever assistance to franchises may be called for generally under revenue sharing."
The NHL again came up from their original offer of 43 percent of hockey-related revenues going to the players. In an earlier proposal before Wednesday, the NHL pushed it up to 46 percent, and Bettman said the new offer was even higher without giving a specific number.
"We concluded that their proposal wasn't going to get us anywhere," Bettman said. "With time running short, we actually crafted a new proposal that is different than the other proposals because it is much simplified."
In the expiring CBA, the players were given 57 percent of the total. The definition of hockey-related revenues wasn't changed from the current deal.
"If the players had made proposals which mirrored the owners, what we would've said is we want to increase to 71 percent, then we'll only take 68 percent — that is the equivalent of their 46 percent proposal," Fehr said. "The equivalent of today's proposal would be to say is all we want is 67 percent."
The NHL has backed off on its previous demand of a 24 percent cut on all existing contracts — a key component of the deal that ended the season-long lockout in 2005 — but the league is seeking cuts in other ways to make up for that.
"We're not asking for a rollback," Bettman said. "We have said that our proposal — the one that is time-sensitive — would have a phase-in, and while it contemplates the possible reduction in player share, if you use our estimates it would be under 10 percent. If you use the players' association's estimate on revenue growth, it would actually be seven percent.
"When you factor all of that in, it seems to me that having a work stoppage and damaging (hockey-related revenue) long term really doesn't make a whole lot of sense."
Fehr conceded that the phase-in does slow the rate the players would absorb cuts, but not in a significant manner.
"The phase-in in the first year would hit the players a little bit less than the full phase-in, it would reduce the share from 57 to 49 rather than from 57 to 47," he said. "While it is accurate in a sense that the owners' proposal does not take quite as much money from the players, somebody might say that they've moved from an extraordinary large amount to a really very big amount."
As he has all along, Bettman insisted that the league will not operate the upcoming season under the current economic plan, and cited damage that will result from an impending lockout as the reason why the current offer won't be viable after this weekend.
"What we would be prepared to do now to make a deal before there is extensive damage is not the same that we will be prepared to do in the event we get to a point where we have suffered the damage," Bettman said. "We looked at their proposal. It was clear that there wasn't very much movement at all.
"We said we have to try something different which is why we tried to simplify the approach and focus on the percentage."
Elsewhere, the union filed an application with Quebec's labor relations board, along with at least 16 Montreal Canadiens, asking it to declare a lockout illegal in the province. A hearing on the application is scheduled for Friday.
"The players don't want to see hockey interrupted," Fehr said. "We believe under Quebec law, a lockout would not be appropriate and would not be legal, so we are asserting that position. We would like to think that is consistent with the interests of the fans and eventually consistent with the interests of the owners.
"We'll let the legal proceedings take care of themselves."
What makes this week unique — in addition to the deadline looming over all of it, of course — is the amount of players on hand. It will indeed be the offseason's biggest show of force. Pittsburgh captain Sidney Crosby, one of the league's biggest stars, is one of them. He skated on Tuesday with some of his Penguins teammates in suburban Pittsburgh before traveling to New York.
Industry revenue has grown from $2.1 billion to $3.3 billion annually under the expiring deal. Owners asked players to cut their share of hockey related revenue during a six-year proposal. Players are concerned management hasn't addressed its problems by re-examining the teams' revenue-sharing format.
"We're not in position to make a judgment as to whether this is going to be productive. We have to wait and see," Fehr said. "Every day is in some sense more important than the last one. The commissioner has indicated that a lockout will begin if no agreement is reached. We take him at his word as we have for the better part of a year.
"On the other hand, you can only make a deal when people are ready to make a deal."
If one isn't struck by midnight on Saturday night, the start of the regular season will be in immediate jeopardy. The season is scheduled to open on Oct. 11. Players would begin missing paychecks four days later.