"I have never experienced anything like it," said Boston Bruins defenceman Andrew Ference, a part of the NHLPA negotiating team. "I'd never been through the nitty-gritty of actual negotiations, being across the table, that kind of pressure cooker. ... The last time [2004-2005 lockout] it was easier to sit back and say, 'It's just a split here, a split there.' When you go through the details you realize the consequences of taking a stance on one issue and how it affects others - like negotiating an entry-level system that's going to affect players that haven't even been drafted yet. Unfortunately, it took both sides a long time for our thresholds to finally cross."
No sooner had the agreement been announced than the debate over which side will eventually prove the winner started. As previous agreements showed, this takes years to discover but a survey of NHL executives and sources connected to the players produced some early opinions.
No one was willing to speak for attribution because the details of the new agreement have not been released. Here are the major issues the players and owners settled to strike the deal:
Splitting hockey-related revenue (HRR)
The agreement: The players and owners will share the revenue 50-50.
What’s changed: Under the previous agreement, the players received 57 per cent of league revenue.
Of last season’s record $3.3-billion (all currency U.S.) in revenues, the players’ 57-per-cent share was $1.88-billion. Under this agreement, the players’ 50-per-cent share would be $1.65-billion, a drop of $230-million in the first year, 2013-14.
One player agent called this a “grand-slam home run” for the owners due to the share of future revenues surrendered by players. If fans come back quickly and stay, there is a chance revenue could more than double in several years to $7-billion.
Salary cap and floor
The agreement: The maximum payroll for this season will be a pro-rated $70-million, which was not based on a 50-50 revenue split in order to give the players a softer landing. In 2013-14, the first full season of a 50-50 split, the cap will be $64.3-million, the lowest the players would go because 300 of them will become free agents this summer. They want as much money as possible available in order to sign before the cap is tied directly to the revenue split.
The floor, or minimum payroll, will be $44-million in both years. The owners resisted this at first to keep the gap between the cap and floor at $16-million, as in the prior agreement. Bettman said a greater disparity in spending would affect competitive balance because rich teams could spend more. but the owners gave in at the end. However, starting in 2014-15 the $16-million gap will be restored.
What’s changed: In 2011-12, the salary cap was $64.3-million and the floor was $48.3-million.
Winner: Neither side. The $64.3-million is closer to the owners’ original demand than the players’ opening number of $70-million. But $64.3-million matches the 2011-12 cap and in that sense, the players did not give up any money.
Length of the collective agreement
The agreement: The deal is for 10 years with both sides getting the right to opt out after eight.
What’s changed: The previous agreement was for seven years.
Winner: Owners, though it was not deemed an important issue by the players.
The agreement: Salary and bonuses in each year of a contract will not differ from another year by more than 35 per cent. Also, compensation in any year cannot be less than 50 per cent of the highest year.
What’s changed: There were no limits on variance in pay from one year to the next in the previous agreement.
Winner: Owners. Outside of the second-year salary cap, their most important goal was to target front-loaded contracts which were being used to circumvent the salary cap. When a player signed for more than 10 years, most of the money was paid in the first few years to soften the cap hit, as the salary charged against the cap is the annual average of the contract.
The owners were also concerned with the affect of these deals on the smaller-revenue teams. For example, when Philadelphia Flyers owner Ed Snider offered restricted free agent Shea Weber a front-loaded $110-million contract, the Nashville Predators had to match it to keep him.
Term limits on contracts
The agreement: A seven-year limit on contracts for a player changing teams; for a player re-signing with his current team, it is eight years.
What’s changed: There were no limits on term in the last agreement.
Winner: Owners, slightly. This was another element of the war on front-loaded contracts. Some players may benefit if league revenues grow quickly, as under the current agreement they could be leaving money on the table by signing for longer than 10 years.
The agreement: The NHL will adopt a defined-benefit plan for the players.
What’s changed: No benefits were guaranteed and payments depended on the performance of the plan’s investments. The plan was infamous for its low payouts even after a group of players successfully sued the league in the 1990s and won improvements.
Winner: Players. In the words of Winnipeg Jets defenceman Ron Hainsey, it “is the centrepiece of this deal for the players.” This might be puzzling considering the average NHL salary is $2.45-million. But the important number here is the median salary – $1.4-million. That means 50 per cent of the NHL’s 740 players made less than $1.4-million.
Research by the web site QuantHockey.com showed that between 2000 and 2010, the average NHL career was 239 games, or 2.9 seasons. More than 1,200 players retired during that period and 624, more than 50 per cent, were less than 30 years old. Those players make up the bulk of the NHL’s workforce, and the union wanted to address their financial security.
The agreement: Each team will have two compliance buyouts prior to the 2013-14 season it can use to get its payroll under the cap. The cost of the buyouts will not count against the cap but they will be counted against the players’ share of NHL revenue.
What’s changed: All buyouts counted against the salary cap.
Winner: Both sides. The players asked for and received two buyouts as they saw it as a way of freeing up more money to spend on other player contracts. It is a good deal for teams because it gives them more flexibility in getting under the cap.
*– player share doesn’t include $300-million in make whole