Monday July 16th, 2012

It doesn't take a genius to figure out what NHLPA director Donald Fehr thinks of the owners' initial CBA demands. (Sitthixay Ditthavong/AP)

By Stu Hackel

Is the NHL's reported first proposal for a new collective bargaining agreement, as some have described it, "a slap in the face" of the NHLPA? Is it "a declaration of war?" How about "cutthroat, ruthless and calculating" or maybe "rapacious"? Is it tantamount to "a home invasion?" Or is it merely the "starting point" from which a labor contract will be hammered out? We could just be in "teasing time," as Adrian Dater called it in his Denver Post blog, "the period when one side makes a 'what if he/they take this outrageous offer? Maybe I’ll get a steal.'"

In some sense, the owners' initial offer is all of these things -- wish list, vision of their perfect world, opening gambit and an insult to their supposed partnership with the players. But in another sense, it's probably none of them because with their proposal -- which is certainly regressive and very severe, if not oppressive -- the owners are, more than anything, posing a first test to the new unity of a union they crushed and dismembered in their previous negotiations, in 2004-05. They want to see how the players react, test their mettle, learn how good a job new executive director Donald Fehr has done preparing his membership. There's still a long time to go before the current CBA expires on September 15, so the owners want to assess their adversary before they proceed further.

What we are seeing is a probe, a sortie, gamesmanship. The owners and Commissioner Gary Bettman have to know better than to expect the players will accept a whopping reduction in their share of revenue. That hefty cut and some of the other demands are so extreme that it's uncertain if the players will even be able to use the league's opening offer as a basis on which to start negotiating. If the players reject it, perhaps it will give the owners a little public image boost, but that isn't the main intent.

To review, the CBA proposal (as first reported over Twitter by RDS's Renaud Lavoie and by Larry Brooks in The New York Post) calls for:

• A reduction in the players’ share of hockey related revenues (HRR) from 57 per cent to 46 percent. The NHL also wants to redefine, and thereby shrink, the HRR pie, cutting players' salaries by 20-to-22 percent depending on whose estimate you use.

• An increase from seven to 10 in the number of seasons a player must put in before he is eligible for unrestricted free agency.

• An increase in the term of entry-level contracts from three years to five.

• Limiting long-term contracts to five years. There is currently no limit.

• The abolition of salary arbitration.

So what was the players' first reaction? We don't know because, after being presented with the proposal, Fehr and the various union members who were at Friday's meeting with him didn't utter a thing about it in public. Fehr only commented, "There's not a lot to say" other than "we had a good and a frank exchange of views." (video). Both he and Bettman remarked that it would be counterproductive to the negotiations to reveal the substance of their discussions. Only leaks later that evening brought details of the proposal to light. But one reporter happened to ask Fehr what he thought of salary rollbacks, and Fehr responded, "I think what most people representing employees would think of salary rollbacks, what I'm sure you would think about salary rollbacks if they were coming to you. You don't have to be a genius to figure out what that is." Fehr has previously stated the players' union opposes a rollback of its share of revenue.

On Friday afternoon, Fehr said he had already begun discussing with NHLPA membership what came up at the bargaining session and that he planned to continue informing membership through the weekend, so we may shortly learn how the players reacted to the league's stance, maybe no later than Wednesday when the next get-together is scheduled in New York. More talks are set for Thursday and Friday. Up until now, little has been said by either side on any matter. As I wrote last week, that quietude might be a good thing because it signaled that some progress was being made on smaller issues. It also indicated that the two sides want to keep things cordial and businesslike. They don't want the talks to degenerate into overheated debates in front of microphones, probably recognizing that such a thing -- especially at this early date in the talks -- would be neither wise nor fruitful.

Compared to Friday's public response by the NHLPA, the reactions among media observers to the league's proposal were sharp and, for the most part, opposed to the owners' position. (If you'd like a sample, you can click on the links in the first paragraph -- and we'll add this one by Jonathan Willis blogging for The Edmonton Journal, which presents an intriguing case for why aspects of the offer aren't in the league's own best interests.) After hearing glowing reports for years about how well the NHL is faring business-wise, many who cover the sport find it hard to reconcile record-breaking revenues with the owners' desire to cut themselves a larger slice of the money pie.

The league's position is that too many teams are losing money. The franchises doing well are doing very well, but the have-not clubs are suffering under the current system. More than a few commentators (Mike Russo of The Minneapolis Star-Tribune among them) made note of the fact that the NHL locked out the players for an entire season to achieve this current salary cap system, one it claimed was necessary to level the playing field between rich and poor clubs and solve the game's economic woes. Obviously, that hasn't happened -- a major point also made by the anonymous "Player," an active NHLer who writes occasional posts for Yahoo's Puck Daddy Blog. In a terrific piece last week, he pointed out that even though the players have done well since the salary cap was installed, under the new system the owners' revenues increased 50 per cent while the players' salaries increased by only 15.

"In real terms," Player wrote, "the amount of money that the owners have 'saved' since 2004 — that is the difference between paying the players three-quarters of revenues vs. 57 percent of revenues — is in excess of $3 billion. If the League asks us to reduce our share to a straight 50/50 split, thus lowering the cap via what amounts to a 12.3-percent rollback, our question will be, 'Why?' One could predict that the NHL will concede that while some teams are doing well, others are barely hanging on. If that is the case, is it the players' responsibility to bail them out? Haven't we been down that road before?

"Bettman got the system he wanted, one that he assured us would give us 30 healthy teams. My opinion is that if we have teams that are 'sick,' as we surely do, then simply re-setting salaries once again will neither be palatable to the players nor will it really fix the problem. Not in the long term. History has shown us that. Clearly the system, as it exists now, does not work for everyone. If we simply roll back salaries again, who's to say we won't find ourselves in the same position five or seven years from now? Once reset, the cap (and the floor) will simply rise again over time as revenues rise. Then we are back to square one."

The Player went on to make the case for more and better revenue sharing among ownership and got into good detail about why and how the current limited system is dicey. His blog post is well worth reading.

If this player's perception of the current state of the league and its finances is widely shared in the union, and if the ranks are unified and strong enough in their convictions to hold their ground, then the first major proposal floated by the NHL isn't going to have much, if any, traction going forward.

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