NEW YORK – The NHL (search) made a take-it-or-leave-it pitch of a $42.5 million cap to the players' association Tuesday night, the night before hockey was set to be wiped out altogether. The union responded with a counteroffer of a $49 million salary cap that the league dismissed out-of-hand, saying all teams couldn't afford that much.
"If every team spent to the $49 million ... total player compensation would exceed what we spent last season," NHL commissioner Gary Bettman (search) said in his second letter of the day to NHLPA executive director Bob Goodenow. "We cannot afford your proposal."
Goodenow disputed Bettman's claim in a letter, taking a hard-line stance and replying, "You will receive nothing further from us."
"Clubs are spending significantly less than your team payroll limit number of $42.5 million," Goodenow said in his second letter. "I am at a loss to understand how you suggest your offer earlier today represents a $75 million dollar increase when it only impacts the spending of nine teams!"
The exchange began with the first real positive news of the lockout early Tuesday, when the players' association accepted, for the first time, the concept of a salary cap. That concession came after the NHL dropped its demand that league revenues be linked to player costs.
So the players offered a $52 million dollar cap; the league countered with its final offer of $42.5 million.
"We wish that the NHL had offered a 'no linkage' proposal before yesterday so that negotiations in that arena could have commenced sooner," Goodenow said in his first letter to Bettman. "However, we recognize that they did not and we agree that time is short."
The league had bumped its salary-cap offer up from $40 million and gave the union until 11 a.m. Wednesday to accept. Bettman said if the offer was rejected, the season would be canceled two hours later, according to a letter he sent to Goodenow.
In his first letter, Bettman said there was no time or flexibility for bargaining.
"This offer is not an invitation to begin negotiations — it's too late for that," Bettman said. "This is our last effort to make a deal that's fair to the players and one that the clubs (hopefully) can afford. We have no more flexibility and there is no time for further negotiation."
In the union's counteroffer, teams would still be allowed to spend up to 10 percent above the threshold, but they would only be able to do it twice during the six years of the deal and would be subject to an escalating luxury tax on anything above $40 million.
The players' original soft-cap proposal on Monday permitted teams to go over the threshold three times.
The union's offer would also require the 30 teams to have a minimum payroll of $25 million, but clubs would be allowed to drop no more than 10 percent below the total twice during the deal.
Bettman scheduled a Wednesday news conference with the intention of announcing that there wouldn't be any hockey until at least next fall.
"Hopefully, the press conference will not be necessary," Bettman said in his letter.
That shifted the pressure to the players, some of whom stated Tuesday they were surprised that the union accepted a salary cap this late in the game.
"We probably could've gotten this thing done in the summertime," Chicago forward Matthew Barnaby said. "I'm just a little disappointed that it went this far to play poker and to have someone call your bluff."
NHL chief legal officer Bill Daly met one-on-one with players' association senior director Ted Saskin in Niagara Falls, N.Y., on Monday and presented an offer that removed the owners' desired link between league revenues and player costs.
The union refused to agree to that kind of tie-in because it doesn't trust what the league claims as its revenue total. Once the NHL dropped that requirement, the players came off their refusal of a salary cap.
The NHL's proposal on Monday was for a hard cap at $40 million with a 50 percent tax penalty for teams that spend between $34 million and $40 million.
Now the sides are faced with a hard deadline to make a deal and salvage a season that was already going to be cut from 82 games per team to 28.
A central component to all offers is a 24 percent rollback on existing contracts that was first presented by the players' association in its Dec. 9 framework. On the adjusted scale, only eight of the 30 teams would have finished last season above $40 million. The average team payroll was $33.95 million, with the rollback factored in.
Without the rollback, the Detroit Red Wings had the highest payroll at the end of last season with $82.9 million; Pittsburgh was the lowest at $21.65 million.
If a deal is not reached, the NHL would become the first major professional league in North America to lose an entire season because of a labor dispute. The Stanley Cup has been awarded every year since 1919, when a flu epidemic canceled the finals.
As of Tuesday, the 153rd day of the lockout, 834 of the 1,230 regular-season games and the All-Star game already have been lost to a lockout that started Sept. 16.
Bettman said the sides needed to start putting a deal on paper by last weekend if the NHL was going to hold a 28-game, intra-conference schedule and a full 16-team playoff.
"I know, as do you, that the `deal' we can make will only get worse for the players if we cancel the season," Bettman said in the first letter. "Whatever damage we have suffered to date will pale in comparison to the damage from a canceled season and we will certainly not be able to afford what is presently on the table.
"Accordingly, I am making one final effort to reach out to make a deal that will let us play this season."
Bettman said teams needed to have cost certainty to survive and the only way he could guarantee that was with a salary cap that linked league revenues to player costs. Now that position has changed for the first time since the NHL started gearing up for the lockout in 1998.
The league has said teams lost $273 million in 2002-03 and $224 million last season, and an economic study commissioned by the NHL found that players get 75 percent of league revenues. The union has challenged those figures.