Searching for hope in NHL CBA talks
By Stu Hackel
The Labor Day weekend has come and gone and there's still no labor agreement between the NHL and the NHLPA. About a week and a half remains before the expiration of the current collective bargaining agreement on Sept. 15 and most observers, like my SI.com cohort Al Muir, are downcast, and not without good reason. They look at the calendar, they've heard what the lead negotiators -- Gary Bettman for the owners and Don Fehr for the players -- had to say last week after deciding to not talk for a while (Bettman says it was a mutual decision, Fehr said it was at the owners' behest; they can't even agree on that) and believe that the chances of reaching a deal are negligible.
Yet, strangely, both Bettman and Fehr insisted that a deal was still possible. Are they posturing? Just putting up a brave front? Delusional?
Actually there are some reasons to hope that the two sides can find a way to an agreement. But it is based on a couple of assumptions. A lot of whatever optimism remains has to do with what we don't know. That is, first, whether both sides are actually trying to make an agreement and not force a work stoppage -- and we'll assume they are. Secondly, what are the real positions of the two sides? What they will settle for when the clock ticks down toward zero and the prospect of playing under a deal that's not ideal becomes preferable to not playing at all?
If one of the sides really wants a work stoppage, there is no hope. And if what one side insists on is something fundamental that the other side cannot live with, an agreement won't be forthcoming. But we can't know either of those possibilities for sure right now. And we may not know even if we slip past the 15th, there's still no agreement, and the slight edginess we've heard in the voices of Bettman and Fehr last week turns into full-blown recriminations.
But let's look at where these negotiations have gone so far, because they do offer some hope that progress can still be made. First on the core economic issues, the players' "alternate" proposal to the owners' first, very harsh one contained a formula for slowing salary growth over the first three years. That was some good movement in the owners' direction. Well, in the league's most recent offer a week ago, the formula for those three years was incorporated into what Bettman called the NHL's "meaningful and significant" six-year counter-proposal. Also, the owners reportedly would honor existing contracts rather than cut them back 24 percent, as they had initially proposed. That represented movement in the players' direction. So there has been some agreement, especially on those first three years.
It's where things go from there that caused a problem. The players' proposal included a "snap back" in Year Four to the 57 percent of Hockey Related Revenue (HRR) contained in the current CBA. On the other hand, the owners want after the first three years to move the players' share down to 50 percent of HRR, and redefine HRR to narrow that pool of money a bit. It represented, according to Bettman (in this video of his remarks last Friday), a $460 million movement on the part of ownership, and he projected that if the business keeps growing, the players' salaries would start to rise in Year Four. But the players didn't see the merit in that if it meant that their share of HRR (a redefined HRR at that) was taken down to 50 percent and more of their money was put into escrow, so they felt the proposal lacked basis for discussion.
The players did, however, come back later in the week and say that they were willing to move off their 57 percent in Year Four. They proposed a few ways in which that might be accomplished and Fehr took the unusual step (unusual for him because he can be reluctant to discuss details in his press briefings) of explaining the different techniques they might try.
Considering the belief that the NHLPA would not budge off the 57 percent or concede anything beyond what the players currently have, that was a little movement by the NHLPA in the direction of the owners. But it wasn't the sort of movement that Bettman had hoped to achieve. He wanted big movement. He wanted the players to negotiate off what he'd presented in his latest proposal, not revise their own earlier proposal or begin negotiating off it.
At that point, the standstill we speculated about on this blog a few days prior kicked in and that's where we are now. The league continues to maintain that the percentage of HRR it puts toward player salaries must be reduced. That's the owners' major goal in the negotiations. The players believe they've already made concessions by agreeing to work under a salary cap and take a lower percentage of revenues, and they aren't interested in permanently reducing their slice of the pie.
So the picture may seem bleak today. But if you're looking for some burning coals in this pile of ashes, the fact is that these sides have modified their positions as the talks have gone on, endeavoring to come up with creative ways to bridge the gap. The trying has been in spasms, to be sure, but the effort has been there. One assumes that even though the sides are not meeting face-to-face, they are continuing to massage their current positions internally, hoping to craft something additional that the other party will find to its liking.
"Someone needs to be in position to offer or say something new," Bettman said last Friday, while expressing disappointment that the NHLPA didn't engage in substantive negotiations on the league's latest proposal.
"You get to times in collective bargaining in which one side or another is not prepared to have further discussions for whatever set of reasons and you have to get through them," Fehr remarked the same day after re-stating that the owners already have a system that limits player salary growth. "Hopefully it won't take very long. We'll see."
Sadly, the discussions on non-economic issues -- things like travel, ice conditions, scheduling, health and safety issues -- have stopped as well during this hiatus. This decision apparently came at the behest of ownership and that's unfortunate. Bettman said he was concerned about the "atmospherics" of continuing those discussions when the core economic talks seem stalled. "The players are looking for lots of things which I think -- with the right economics -- we'd be more than prepared to do to make day-to-day life as good, even better, than it is now," he said. "But we're not in a position -- until we know the economics and certainly in light of the fact that we, in effect, got stonewalled today -- to be moving forward on other things."
Fehr countered, "My experience is, if you can put some of those to bed even if it's doing that with some limitations or saying we can do this if -- and you leave the if out there -- that's a good thing to do." It's hard to argue with that. Ceasing the non-economic part of the negotiations can be seen as either a snitty, petty retaliation or a pressure tactic, but, regardless, when time is tight, it's not helping matters for the owners to be obsessed with "atmospherics" if they truly want to get a deal done.
It's also not helping matters when agents spread the word (as they do here in Tim Panaccio's story for CSN Philadelphia) that the real deadline for an agreement is not Sept. 15 but Oct. 11 when the NHL season is scheduled to begin. First, the damage to the NHL would begin if training camps don't open on time. There are preseason games that won't be played in NHL and non-NHL arenas, there are important sales and marketing activities that commence when the players report and, worst of all, it creates an impression, probably erroneous, that the NHLPA isn't concerned about the CBA's expiration date. That feeds into ownership's suspicion that the union has been dragging its feet, an image the PA certainly doesn't want attached to its negotiating efforts. Bettman remarked last Friday that once the CBA expires, "I think the dynamic changes. The damage to the business changes the dynamic of the negotiation....I think it gets more difficult, not easier, to make a deal." His words should be taken seriously.
We're not at Sept. 15 yet, so new understandings are still possible, maybe even enough to allow the season to proceed. But it certainly won't happen if the sides aren't talking.
After going their separate ways prior to Labor Day, both Bettman and Fehr assured the media that they would not stand on ceremony if they had things to discuss. So while the owners and players figure out their next moves, the rest of us wait for one of them to pick up the telephone.
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