Blogging the New York CBA talks
By Stu Hackel
With the entire NHL preseason schedule now officially cancelled, the owners and players returned to the bargaining table on Friday in New York City, their first face-to-face negotiations since Sept. 12, which was three days before the CBA expired and the lockout began. They won't be talking about the core economic issues, at least at first. Those sticking points have prevented collective bargaining discussions from proceeding. The agenda for now is to discuss items like travel, pension, player health and safety measures, and supplemental discipline. Those talks have actually been productive. The league had halted them, however, as the gulf between the sides on the economic issues didn't appreciably narrow, but wisely moved earlier this week to restart those "secondary" talks, the hope being that perhaps any momentum generated by them -- and from just getting the parties back together in a room -- could influence movement in the other main area. We'll see.
Informal and back-channel discussions have reportedly been going on during the lull in formal talks and the good news is that what was originally thought to be a one-day formal discussion was expanded so that the sides have reserved negotiating space in New York through Sunday. "I think the fact that they're meeting is a good thing," Canadiens captain Brian Gionta said Thursday at an NHL players charity game in Châteauguay, Quebec. "I'm not quite sure if anything will come of it, but I think it's a good start. At least they're speaking and they're willing to try to get a resolution to this."
We'll be following the events on this blog as they develop all weekend, so check back through the weekend as we update what transpires.
SUN. 5 PM [UPDATED, with video] - After five hours of discussion and some progress reported on health and safety issues, drug testing and some legal matters, the CBA talks were halted and won't pick up on Monday, although they have not broken off. Steve Fehr said the players were willing to meet Monday but Bill Daly told him the league preferred to have internal discussions to review some of the subjects that came up over the past three days. Daly stressed that the hiatus didn't signal anything more than the need to do some homework and prepare documents for further negotiations.
Here are Steve Fehr's remarks after the meeting...
...and here are Bill Daly's:
"We covered a lot of things over the last three days," Daly said. "We both have a lot of homework projects to do and drafts we owe each other on certain things. We think (Monday) would be best used for that purpose."
Listening to Daly's remarks, one gets the impression that much of the "homework" concerns the definitions of Hockey Related Revenue -- an important topic that we detailed in Saturday's update. Steve Fehr referenced "frank" exchanges between the side on Saturday about how they will calculate HRR, and Daly indicated that the PA has a position it needs to articulate in order for that part of the talks to proceed. Daly said discussion of HRR will resume when the PA is ready to make its case.
And there was no movement on the core economics, of course, and none expected with those items not on the agenda.
Neither Gary Bettman nor Don Fehr participated in Sunday's talks at the NHL office in New York. Daly said the discussions were on "micro-issues" and not the kind of things that lead negotiators handle. There was no word on whether the commissioner and the NHLPA director spoke on the phone, which Don Fehr said Saturday might happen.
So that wraps up the weekend's talks, sessions that some people hoped would start the ball rolling more quickly toward an agreement. Daly mentioned that none of what was discussed will get an agreement done but "they are all necessary elements of the deal." As opposed to the 2005 CBA talks, he added, this time the economic and system issues will be discussed after the secondary issues are resolved. As for the economics, Daly re-stated what he and Bettman have said before: "We need some movement on the economic issues, we need some movement on the system issues, we need them to be scheduled as the subject of a meeting and right now, the union's not prepared to do that."
One assumes that by "movement" Daly means the union moving much closer to the league's proposals that reduce player salaries by, according to Don Fehr, 17.5 percent, and accept sharp givebacks on free agency, arbitration, signing bonuses and other individual contracting issues. Unfortunately, the union is not interested in negotiating off of them. The NHLPA has its own ideas about individual player contracts and how to split HRR, and the league isn't interested in negotiating off of those. We'll have to see if the weekend's talks loosen either side's entrenched thinking.
SUN. 11:20 AM - With talks set to reconvene at this hour, the NHLPA delegation, not including Don Fehr, arrived at the league offices. Ian Mendes of Sportsnet tweeted earlier this morning, "NHL and NHLPA are scheduled to meet at 11am this morning here in New York. Stay tuned to my feed for thrilling quotes like: 'No update.'" The impression that no progress is being made is not quite accurate, as we noted yesterday, but when it comes to the swift progress everyone (presumably) would like to see -- specifically, movement toward the season starting on time or shortly after -- that ain't happening.
The discussions today will concern health and safety issues (where progress was made on Friday), and things like grievance procedures and other legal matters. It's possible that talks on the definitions of Hockey Related Revenue, a big and important topic from Saturday (you can read about it below), will also resume on Monday. It's also expected that Gary Bettman and Don Fehr will have more private discussions today (on the phone, if not in person) as they try to find a way to get the economic side of the talks going again.
One of the more thoughtful pieces I've read lately on what is at stake in these talks and why the two sides are at a standstill comes from Yahoo's NHL writer Nicholas Cotsonika, who makes the case that the real fight is not the split of revenues in the initial years of the next CBA, but a bit further down the road. It's recommended reading. His take is that despite the NHL's public protestations to the contrary, the league could be poised for some real growth three or four years. That's what both sides really believe and it is reflected in the proposals they have tabled. "Why?," he asks. "Why would the owners need the players' percentage to drop to 47 by Year 3, and why would the players be so concerned about tying their share back to revenues by Year 4? Because revenues have the potential to pop in three or four years, and both sides want as much of that money as possible."
We'll back later with what transpires in the negotiations today.
SAT. 8:30 PM - The bottom line is there is good news and not-so-good news. The good news is that talks continue and will do so on Sunday. Considering that the sides weren't engaged in formal sessions for a couple of weeks, that's progress. The not-so-good news is that it continues to be a complicated process and no one should expect a quick resolution.
The negotiators for both sides met again for an extended period, most notably going over what constitutes Hockey Related Revenue (HRR), defining what revenue streams will go into it and what will be excluded in the next CBA. The importance of figuring out the framework for the pool of money that will be divided between the players and owners can't be minimized. The owners tried to redefine HRR in their early proposals, but the players resisted, in part because of some confusion about what was being used in the discussions and, in part, because the redefinition made the pool smaller. Judging by the remarks from Don Fehr, Steve Fehr and Bill Daly coming out of the meetings, there are still some sticking points that have yet to be ironed out.
In addition, Don Fehr met privately again with Gary Bettman twice on Saturday and it seems they will meet again tomorrow. The thrust of the Bettman-Don Fehr discussions is to try to figure out how to get some common understandings that will allow the sides to negotiate the core economic issues, stalled because they look at what those discussions should be about in a different way -- the owners limit it to the players' share of HRR, the players want to include player contracting issues and expanded revenue sharing -- and because there is such a disparity in what the sides feel the players' share of HRR should be in real numbers. Or, as Fehr put it, "the kind of things you hope we would be talking about."
Don Fehr exited the meeting prior to the full group and addressed reporters (Bettman did not).
Responding to Daly's allegation Friday that the NHLPA had not moved any closer to the owners' position since Aug. 4, Fehr smiled and replied that "Their position on the big stuff has been that a major move (on the part of ownership) consists of changing the player share from a reduction of 24 percent to 17-and-a-half percent. I think you and everyone else can make a judgement on how significant you think that is. They still have all the proposals on the table related to changing and diminishing player contracting rights." He added the NHLPA proposal "moved in their direction" by which, one assumes, he means it includes measures under which the players agreed to some forms of salary reduction, plus they've discussed a longer agreement (which the owners have sought) than their initial three or four year proposal. "And we're talking about the other stuff."
Fehr said he wasn't sure if the PA would come up with a new proposal, "but if we do, we're not going to keep it quiet."
At the conclusion of the full meetings, both Steve Fehr and Daly addressed the media, Steve Fehr came first, saying the sides had "a frank exchange of views" when it came to HRR, a phrase which usually means things got a bit heated.
Some of that heat may come from the fact that while the owners agreed to revert back to the old HRR definition a couple of weeks ago, Steve Fehr said, "they are seeking some changes or clarifications in what the definitions are."
The rationale for those changes or clarifications was outlined by Daly when he spoke.
"The nature of what we were trying to do today was to create certainty on interpretations that we had over seven years of the CBA operation, so we were really just looking to codify interpretations we already have," he said. It's possible that since the NHLPA leadership and negotiators were not around for those seven years and may lack first-hand familiarly with the way the NHL said things operated could be at the root of the "frank exchange of views." But the sides are working their way through theses matters, which is a good thing-- and these matters are important, even though Daly described the subjects covered in this weekend's talks as the "underbrush."
The sides will reconvene on Sunday morning and go over more "underbrush," which leaves Daly (and probably the entire NHL negotiating team) noticeably frustrated. They want to get to the big issues, but obviously with a pretty wide gulf between the sides in those areas, it seems to make sense to work on things that are more easily agreed upon. As Steve Fehr said, "All issues have to be resolved before you have an agreement; I don't think we have any particular conditions as to what issues have to be resolved in which order."
There have been numerous comments on this blog and elsewhere expressing outrage that the players could command so large a percentage of a business' revenue, especially compared to other businesses. In today's New York Times, Roger L. Martin, Dean of the Rotman School of Management at the University of Toronto, wrote a piece on the NFL referees lockout and made a very cogent case for a new category in the labor force. In the past, he argues, the economy consisted of two major classes, labor and capital. But in recent years, we have to add talent to that; that is talent in sports, business, entertainment, and other sectors of the economy. Labor is replaceable, he says, but talent is not and that's why it commands such a high level of compensation. It's worth reading -- especially if, like Detroit's Jimmy Devellano, you believe the owners are the ranchers and the players are cattle.
In other news, we wrote on Thursday about the problems surrounding negotiations for a new downtown arena in Edmonton, Oilers owner Daryl Katz and his little junket to Seattle, followed by his statement that declared he was leaving his options open when the lease on their current building expires, and the resulting outcry against that, triggering Gary Bettman's pledge that the Oilers won't be moving. Well, on Saturday morning, Katz placed a letter in The Edmonton Journal and The Edmonton Sun apologizing to the fans and re-affirming he'll work with the city council to get things nailed down. If that shows anything, it's that fans (and the media) letting their feelings be known can have an impact, especially when one party is clearly in the wrong.
As long as we're on the subject of arena deals and public funding, the on-again, off-again agreement between the City of Glendale and prospective Coyotes buyer Greg Jamison looks a little closer to being on again after a revised agreement was reached that cuts the city's payments to Jamison for running the team's arena during the first five years of its term. Of course, the deal still has to be approved by the Glendale's city council and it means that Jamison has to raise some additional money to cover his operating costs. There is also concern that, once again, some of Jamison's potential partners may have backed out. (You can read more on these developments in The Phoenix Business Journal and The Globe and Mail). So stay tuned.
Finally, an MRI on Rangers forward Rick Nash's shoulder revealed a bone bruise but no structural damage. Nash was injured playing for Davos in the Swiss NLA on Friday. Pat Leonard in The New York Daily News writes, Nash "is now listed as day-to-day (in better shape than the lockout)."
More updates coming Sunday.
8 PM [Updated, with video]: According to numerous reports by various media members, the sides broke for the evening before 7 PM. They will reconvene on Saturday at 10 AM. In Friday's second session, they continued discussing the non-economic issues in the afternoon session and Steve Fehr, the special counsel to the NHLPA, told the media afterward to expect these issues to be the thrust of the talks all weekend.
Steve Fehr said his brother Don, the executive director, and NHL commissioner Gary Bettman did meet privately at one point during the afternoon. Steve Fehr also said that at this point the NHLPA was not planning to submit a new proposal on the economic issues, characterizing Friday's five hours of talks by saying, "I wouldn't use the adjective 'optimistic,' but it was a productive discussion."
Deputy commissioner Bill Daly spoke afterward and lamented the fact that no discussions occurred on the economic issues (although none were scheduled today), saying that was because the league needs to hear that the players are willing to compromise before they can continue that part of the talks. a stance the league has maintained since their last proposal just prior to the lockout. At that time, they maintained they'd be negotiating against themselves in the absence of something new from the PA. (Steve Fehr said earlier that, "We can discuss the core issues whenever they want to do it. Bargaining is not ping-pong. There are no rules on who has to serve when.").
Here are Daly's remarks:
Daly corrected impressions from the first session that a new drug testing policy was agreed upon, but said that good progress had been made. Then he returned to the stalled areas of the talks, saying the players "have not moved a single dollar in our direction since Aug. 4." He admitted the owners' side was frustrated by the lack of progress, adding, "You can meet all you want but at the end of the day if there's no compromises or no movement or no new proposals, I'm not sure at the end of the day what you're meeting about....(We) can't make 'em talk about what they don't want to talk about."
You can read some background on these discussions further below from earlier today.
Daly described the agenda for Saturday as dealing with matters that will produce a common understanding of the economic rules of the CBA, not the economics itself, but matters like what would constitute circumvention of HRR. He called these the "economic framework."
Asked when the NHL would consider canceling regular season games, Daly declined to say. He did say, however, that "as time goes on, regular season games are at risk."
Jets captain Andrew Ladd spoke to the local media after the informal skate by players in Winnipeg today.
Asked if missing regular season games would alter the way the players are approaching the lockout Ladd replied, "No. I think we have the same mindset all along. I said it before, I think we knew this was going to be their play in the negotiation, to wait until we miss games and, unfortunately, we saw this coming. Now we're just kind of in the wait and see mode and hopefully they step up and actually start negotiating."
One interesting news item from Europe, where a number of NHLers have gone to play for the duration of the lockout: Rangers top line winger Rick Nash, who was traded from Columbus this offseason, apparently injured his shoulder when checked into the boards midway through the first period Friday while playing for Davos in the Swiss NLA. "Rick was taken out of the game for precautionary measures and will be re-evaluated over the next couple of days," said Nash's agent Joe Resnick. That prompted Brian Wilde of CTV Montreal to tweet, "Following the shoulder injury to Rick Nash in Europe, the NHL better find a weapons grade muzzle for NYR management to wear."
2 PM [Updated, with video]: A short break in the session early Friday afternoon produced some news. Mathieu Schneider of the NHLPA said the talks have been good and the sides did reach agreement on some health and safety issues. Here's Schneider speaking after the early session to the media.
From his remarks, it seems as if the league and PA have agreed on a stronger drug testing program that will include testing during the offseason and playoffs. Chris Johnson of Canadian Press tweeted, "Change in NHL's drug policy a long time coming. At 2009 Cup final, Gary Bettman called for year-round testing and more banned substances."
Schneider called the progress on these non-economic issues "baby steps" and added that most of the talks this weekend would concern the non-core issues. So, it does not seem as if they will discuss the split of Hockey Related Revenue (HRR), the pool of money extracted from the teams' total revenues from which the players' share is drawn.
When it comes to the core economic issues, the league insists that the players have to receive far less HRR than the 57 percent they got at the end of the last CBA, a number that rose from 54 percent as prescribed by the old deal, thanks to the extraordinary growth of the business over the seven years of its term. They've proposed, at various times, that the number be reduced to (depending on whose figures are used) 43 percent and then revised to one year of 49 percent but sliding down to 47 in an offer that may no longer be on the table. That would represent around a 19 percent reduction in current salaries. The NHL threatened to withdraw it if the NHLPA didn't accept by Sept. 15.
The players have submitted various proposals. One would initially cut their salaries for a few seasons but snap back to the current levels. They've also said they'd be willing to accept less money over time if their share began closer to the current level. According to their figures, which assume the league will continue to grow revenues about 7 percent annually (which the league disputes as unrealistic and does not think is achievable ) the players would be forfeiting around $900 million in salary under the PA's plan.
The players also oppose the league's position that individual contracts run no more than five years, with more restrictive free agency and no salary arbitration or signing bonuses, and that new players coming into the NHL have a lower cap for the first five years.
The NHLPA has also proposed greater revenue sharing among the owners as a method of addressing the problems faced by franchises that are in difficult financial shape despite the league's record revenues.
"The revenue split is the key issue, but they are tied into a whole lot of other issues, such as the arbitration process, qualification for free agency and others," player agent Tom Laidlaw, a former NHL defenseman, told Kevin Allen of USA Today. "Maybe they won't get to the point where they agree even on these issues, but at least they will know the point where the other side is getting comfortable. This is a complicated deal and the more little things they can agree on, the easier it gets."
The charity game discussed above was the first in what promises to be a series of them by locked out players in Quebec. Played at the Centre Multisports Châteauguay near Montreal on Thursday, it drew -- as Canadian Press reported -- a standing room only crowd of nearly 1,300. Tickets sold for $20 on a first-come, first-served basis at the door allowed fans to see the likes of the Habs' Gionta, Andrei Markov, Lars Eller and Josh Gorges, as well as Patrice Bergeron of the Bruins, Simon Gagne and Jonathan Bernier of the Kings, Châteauguay native Corey Crawford of the Blackhawks, Maxime Talbot of the Flyers, and the Sabres' Jason Pominville divided into two teams and reprising a similar effort by NHLers in 2004. CTV Montreal has a video report on the game here. The Montreal Gazette website posted a number of photos and you can read Pat Hickey's story in The Gazette here. It's worth your time.
Talbot and Pominville each scored twice to lead the red "Montreal" squad to a 7-4 victory over the white "Quebec" team.
"We had a game, so it was good," Markov told Marc Antoine Godin of La Presse. "The pace was pretty good. Even if there were no hits, it had some air of a real game."
Talbot and his Flyers teammate Bruno Gervais organized the tour, which will see more games played next week in the Quebec cities of Saint-Hyacinthe and Sherbrooke. The first game raised funds for the Châteauguay minor hockey association and other children’s charities.
Of course, there are more players going to Europe, including the Jets RFA Evander Kane, the first North American-born player in this lockout to sign a KHL deal, his with Minsk.
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