By stuhackel
July 18, 2012

By Stu Hackel

The NHL and NHLPA continue their negotiations today (Wed. July 18) after the team owners' initial proposal was submitted late last Friday. That document, which set out to roll back all manner of player compensation and contractual agreements, caused a wide-ranging reaction in the media, as we discussed on Monday. Most of it was critical of the owners' stance.

Similarly critical were the comments made by a number of players' agents. Of course, they will become highly vulnerable should the players' income decline or if the owners lock out the players in September. "Visceral" is the term rightly used by David Shoalts in The Globe and Mail to characterize the response to ownership's opening offer.

But the players' reaction is the only one that matters, and the first hint was revealed during the weekend by Canucks goalie Corey Schneider, who is on the NHLPA negotiating committee. While he was quoted in part over Sportsnet in Canada, seen in the video above, the full interview was by Elliot Papp of The Vancouver Sun and, in contrast to some of the other reactions, Schneider was measured and calm.

“I think the only thing I can say is it's a first offer,” Schneider told Papp via phone from his offseason home near Boston. “It's a starting point. We're going to consider it and figure out what our counter-proposal is going to be. Yes, it is a little shocking when you first look at it but, again, that's how negotiations work. You aim high and then try to move back from there.

“There is going to have to be a lot of give and take for us to come to an agreement. So we're not too worried and we're not panicking right now. We're just going to take it one meeting at a time.”

Schneider added that it was far too early to assume another lockout was inevitable based on the league's first proposal, with training camps not slated to open for another two months and the regular season almost three months away. “There is still plenty of time,” he remarked. “I mean, we're not thinking in those terms yet. I think we're both trying to get a deal done here, but it takes time and it takes negotiations.”

Schneider's words were the first public player reaction to the owners' initial central economic offer. One current member of the NHL Board of Governors has also spoken to Shoalts. He said, “Where did you expect [the owners] to come in? We’re giving 57 per cent [in revenue], so now we’ll take 56? If a house is up for sale at $299,000 and you want to pay less, you come in at $249,000 and then the other side splits the difference with you. Does that make sense? It does to me.”

But Shoalts believes this "soothing comparison to real-estate haggling is considered the owners’ spin once they saw the negative reaction to their opening offer." He believes, "On the players’ side of the equation, this is not a simple negotiation about sharing a pie equally, but about management still demanding, as it did eight years ago, a fundamental change in the system. There are many on the union side who see this as confirmation the owners are ready once again to shutter their arenas in order not only to get enough concessions from the players to ensure their financially weak teams start raking in more money, but to ensure the rich get richer as well."

The governor added that the NHL's current economic plight is “not nearly as dire as the last time, obviously, because we do have a cap system in place. But it needs to be adjusted.”

And a former NHL governor told Shoalts that the number of franchises that are hurting is six. If that's true, whether that relatively small number constitutes a need to so strongly adjust the current system will be the context in which negotiations move forward.

The owners' opening proposal, contained in a two-page document -- so it is hardly comprehensive -- reportedly called 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.

• The abolition of all signing bonuses.

• Mandating that a player with a multi-year deal be paid the same amount every season, which would mean the end of front-loaded contracts.

Elliotte Friedman of CBC reported on Tuesday that, "Prior to NHL Commissioner Gary Bettman's volley, no formal proposal was offered by either side. According to a couple of sources, the previously 'cordial' discussions featured the NHL explaining why certain franchises were losing money, while the players focused on 'health and safety issues' (benefits, pensions, etc.) important to them.

"So Bettman decided to throw a goalpost onto the playing field and get things started."

What will go on this week at the NHL's New York offices, where negotiations are scheduled for Wednesday, Thursday and Friday? Jeff Z. Klein of The New York Times reports that "Fehr and union negotiators were expected to seek clarifications on each point in the league’s two-page proposal. That process was expected to take at least a day. A union counter proposal may not be made until talks resume in the middle of next week in Toronto."

UPDATE: The two sides met for two and a half hours on Wednesday and, as Klein expected, most of the discussion involved the players getting clarification on the league's proposal. They did not offer a counter-proposal and may seek more information on Thursday. Indications are the two sides remain businesslike and cordial. Chris Botta of Sports Business Daily tweeted that Manny Malhotra of the Canucks remarked afterward, "No one flew off the handle. It's a long process." Botta added that the Rangers Brandon Dubinsky said the PA doesn't see need to respond to NHL proposal "until we get all the information."  NHLPA Executive Director Don Fehr said, “We requested further information. The initial proposal we are looking hard at. We’re not at that stage (to submit a counter) yet. We will make our own proposals — whether it’s a counterproposal to something they said or something of our own — when we’re ready, after we have fully digested what they’ve done, are sure we understand it, have had all the discussions with them we need to have and have had all the internal discussions we need to have.” For more, read Jeff Z. Klein's New York Times story.

Elliotte Friedman thinks it's possible that once the union digests the owners' position, it may not make a counter proposal at all. "According to several players," he wrote, "one of Fehr's major points of emphasis is eliminating the mentality that every time there's a new collective bargaining agreement, you must agree to give back something. He's telling them that the salary lost since 2005 is now in the wealthy teams' coffers and it's up to the owners to fix it, not the players. That's why it wouldn't be incredibly surprising if the NHLPA doesn't even offer a counter and maybe just says, 'We're not considering that. What else do you have?'"

And who knows where that would take things? As both Friedman and Papp point out, there's no pressure points over the summer to move things along. As one source told Friedman, 'Hockey is a sport ruled by deadlines. When do most trades happen? At the trade deadline. How many guys sign free-agent contracts before July 1? Not that many. The CBA doesn't end until Sept. 15. It's going to take time."

The belief among some people is that when players start missing paychecks, the result may be some movement on the NHLPA's side. By the same token, however, if games are not played, the owners' revenue streams also come to a halt. Yes, they have season ticket money already in the bank, but that's not all there is to their income. There are remaining ticket sales, concession (and in some cases, parking) money, broadcasting rights payments, sponsorship and marketing fees, etc. In some cases, teams have debt payments of various sorts due to creditors. So without games, ownership would be similarly pressured.mThat's why some have hypothesized that a deal would be reached sometime before the new year.

The belief is that the combination of missed paychecks and revenue (which would include whatever the NHL gets from its partnership with NBC, whose national schedule begins in November and always does very well with the Winter Classic, not to mention what the league might bring in from HBO for its "24/7" series previewing the Classic) will soften each side's positions and lead to an agreement.

How certain is a work stoppage if an agreement isn't reached by September 15? Don Fehr, the NHLPA's executive director, suggested before negotiations began that the absence of a new CBA does not automatically mean the season couldn't start, and that there's nothing that legally prevents the schedule from being played even if there's no contract. But something that the former NHL governor told Shoalts indicates that fans shouldn't get their hopes up that this scenario will come to pass.

"He brought up the 1994 Major League Baseball season which began without a collective agreement," Shoalts writes. "Then, the players’ union, which Fehr headed at the time, went on strike in August and eventually the World Series was cancelled. The NHL owners, the former Board of Governors member said, will never open the season without a collective agreement in place, which means a bumpy ride lies ahead."

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