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Pittsburgh Penguins Sidney Crosby (left) watches as NHLPA Executive Director Donald Fehr refers to his notes on the NHL's proposal during a news conference following collective bargaining talks in Toronto on Thursday October 18, 2012. (Chris Young/THE CANADIAN PRESS)
Pittsburgh Penguins Sidney Crosby (left) watches as NHLPA Executive Director Donald Fehr refers to his notes on the NHL's proposal during a news conference following collective bargaining talks in Toronto on Thursday October 18, 2012. (Chris Young/THE CANADIAN PRESS)

Analysis

Analysis: Why the NHL players’ 50-50 compromise may not matter Add to ...

Who’s ready for more numbers from yet another two failed CBA proposals? Yay.

Sadly, this is what we have left to occupy our time with given the NHL lockout now is all but guaranteed of going at least another few weeks and shortening (or killing) the 2012-13 season.

The NHLPA came up with not one, but three different proposals for the league to have a look at on Thursday, and commissioner Gary Bettman and friends spent roughly the time it takes me to touch my toes looking it over before tossing them all in the dustbin.

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Here’s the thing to remember, however. For all the histrionics coming out of the meetings on Thursday, this much is undeniable: The players have tabled an offer that eventually takes them to a 50-50 share under reasonable circumstances, matching what the owners offered in at least one year of the agreement.

It ain’t much, but given how far apart they had been previously, it’s something. Certainly more than what was there before.

Of the NHLPA’s three offers, the one I’m going to punt out without even discussing is Proposal 3, which I believe was something in response to the league’s “make whole” concept and not a credible offer.

Below is what Proposals 1 and 2 look like in a scenario where there is 5 per cent revenue growth each season (below the historical norm of 7.1 per cent).

WHAT THE HECK IS PROPOSAL 1?

The basics: “Players would receive a set revenue figure for a small raise in Years 1, 2 and 3 but would then have their salary frozen at the Year 3 number until their share hit 50 per cent.”

NHLPA offer No. 1

  
 

League revenues

Players share

percentage

2011-12

$3,303.0

$1,883.0

57.0 per cent

2012-13

$3,468.2

$1,920.0

55.4 per cent

2013-14

$3,641.6

$1,980.0

54.4 per cent

2014-15

$3,823.6

$2,060.0

53.9 per cent

2015-16

$4,014.8

$2,060.0

51.3 per cent

2016-17

$4,215.6

$2,107.8

50.0 per cent

    

Total (2012-17)

$19,163.7

$10,127.8

52.8 per cent

NHL offer

   
 

Players share

percentage

 

Difference

2011-12

$1,883.0

57.0 per cent

 

2012-13

$1,734.1

50.0 per cent

 

$185.93

2013-14

$1,820.8

50.0 per cent

 

$159.22

2014-15

$1,911.8

50.0 per cent

 

$148.18

2015-16

$2,007.4

50.0 per cent

 

$52.59

2016-17

$2,107.8

50.0 per cent

 

$0.00

     

Total (2012-17)

$9,581.9

50.0 per cent

 

$545.9

 

As you can see, with 5 per cent revenue growth each season, the deal does in fact take the players to 50 per cent at the end of the five-year term the NHLPA is proposing. It’s clearly designed to do exactly that.

If revenues increase at a rate faster than that, the players’ share shrinks quicker, although there are some caveats in there (which aren’t well defined) should growth exceed 5 per cent a season.

The league likely doesn’t like this as it guarantees the players small raises and their share drops relatively slowly. But it does wind up at 50 per cent, which is ultimately a little more than a 12 per cent cut from the previous agreement.

WHAT THE HECK IS PROPOSAL 2?

The basics: “Players would receive just 24.7 per cent of new revenues each season as their share of league revenues shrunk over time to 50 per cent.”

NHLPA offer No. 2

  
 

League revenues

Players share

percentage

2011-12

$3,303.0

$1,883.0

57.0 per cent

2012-13

$3,468.2

$1,923.8

55.5 per cent

2013-14

$3,641.6

$1,966.6

54.0 per cent

2014-15

$3,823.6

$2,011.6

52.6 per cent

2015-16

$4,014.8

$2,058.8

51.3 per cent

2016-17

$4,215.6

$2,108.4

50.0 per cent

    

Total (2012-17)

$19,163.7

$10,069.2

52.5 per cent

NHL offer

  
 

Players share

percentage

Difference

2011-12

$1,883.0

57.0 per cent

2012-13

$1,734.1

50.0 per cent

$189.72

2013-14

$1,820.8

50.0 per cent

$145.84

2014-15

$1,911.8

50.0 per cent

$99.78

2015-16

$2,007.4

50.0 per cent

$51.41

2016-17

$2,107.8

50.0 per cent

$0.62

    

Total (2012-17)

$9,581.9

50.0 per cent

$487.4

 

This one is even more straightforward and only gets complicated if the league’s revenues grow at more than 5 per cent a season. (I’ll leave these provisions out for simplicity sake.)

The league again probably doesn’t like this one because the players are guaranteed raises (albeit small ones) as long as revenues go up and their share shrinks to 50 per cent fairly slowly.

But, again, look at the bottom line in the “difference” column: They end up in basically the same place as the owners’ offer that’s currently on the table.

WHAT’S THE TAKEAWAY FROM ALL THIS?

Well for one, in my opinion, the PA has done a poor job of accurately explaining how their proposals function and how close they are to what the league has proposed on the financial side of things.

All we often hear from Donald Fehr is “the players are giving up x billions of dollars in concessions” with a figure that is based on a 57 per cent share which they have zero chance of maintaining.

That probably sounds harsh to anyone on the players’ side, but it’s 100 per cent true.

Meanwhile, the vast majority of the media at the press conferences on Thursday had no clue what the PA had proposed when Fehr finished speaking – and that confusion carried over to the fans shortly thereafter.

As far as many were concerned (and especially after Bettman’s reaction), it was more gibberish that was directly opposed to the owners.

If that many “neutral” people can’t grasp the concepts involved, what are the chances these proposals are going to find any champions on the other side of the table?

Zip.

Getting to 50-50 at the tail end of the PA’s agreement is great – it’s a sign that finally there’s some real commonality (!) between the two sides here. And the total “difference” we’re talking about is now in the realm of $100-million a season or less in several scenarios.

That’s roughly 3 per cent of hockey-related revenues. And losing a season over that would be absurd.

But here we go.

The players’ side was getting demonized coming out of Thursday’s meetings, and a lot of that is understandable given how badly fans wanted this nonsense to be over with. But those two proposals were not unreasonable in the context of what’s been on the table previously, as the PA never previously contemplated going below 52.5 per cent even in a high revenue growth scenario.

Now they’re working with the NHL’s growth figure (5 per cent) and ending up where the owners did in their proposal.

It’s slow movement, but it’s movement – and there remains a deal there in the middle.

What should really frustrate fans more than the actual offers in place there is the lack of negotiations taking place between the two sides. If they can turn that $500-million or so difference over five years into $150– or $200-million, they’re basically there.

And it’ll be a 54-53-52-50-50-50 type slide that guarantees players their current contracts and gets it done.

THE BIGGER PROBLEM

Here’s the thing though: That revenue split isn’t the only issue. My information is the league attempted to broach the subject of other trouble spots (like contract term limits, free agency, etc.) in negotiations on Thursday and were told the PA wasn’t interested in discussing them at this time.

Fehr has said repeatedly the players should not have to budge an inch on these issues as these gains are what they fought for from the 2004-05 lockout.

It’s an admirable stance from the perspective of the players like Jonathan Toews, who talked about the sacrifice players made eight years ago, but it’s also the type of hard line take the PA has accused the owners of in talks to date.

There seems to be a belief on the players’ side that once ownership gets a revenue split it can live with, these other issues will fall by the wayside, but I doubt that’s the case at all.

Gary Bettman intends to get a term limit and a couple other concessions beyond the money – and a complete refusal to negotiate on those issues could kill the season on their own.

Follow on Twitter: @mirtle

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