About nine months ago, NHL commissioner Gary Bettman put together a wish list for the coming labour negotiations with the players.
Like anything to do with collective bargaining, it was mainly about money: Lowering the players’ share of revenue from its current 57 per cent to less than 50, cutting players’ rights to salary arbitration, not allowing wealthy teams to get bad contracts off their books by sending the player to the minor leagues, clamping down on front-loaded contracts and limiting the lengths of any player contract.
There is also a push from some of the small-revenue teams to lower the minimum payrolls, or salary-cap floor, to ease their financial woes.
“We don’t want to give up too much and they want to get as much as they can. That’s the whole thing,” Phoenix Coyotes captain Shane Doan said Monday in Chicago as the first of three days of NHL Players’ Association meetings ended. Details may or may not be revealed this week but for the players it essentially means saying no to the owners when the negotiations begin, in the words of NHLPA executive director Donald Fehr, “very quickly,” after the meetings finish on Wednesday.
The way the players see it, they gave the owners a 24-per-cent rollback in all of their salaries in 2005 when the current agreement was reached, in addition to finally agreeing to a salary cap based on revenue, at a cost of losing the entire 2004-05 season to a lockout. Even though both the players’ unions in the wealthier NFL and NBA agreed to reduce their share of league revenue to narrow bands of 47 to 48.5 per cent (NFL) or 49 to a little more than 51 per cent (NBA) in recent settlements, the NHL players feel they gave up a lot seven years ago and don’t need to be as generous this time when the agreement expires Sept. 15.
Other issues for the players are the escrow system that came with the salary cap, in which money is withheld from their pay cheques to ensure they receive the proper share of league revenue, developing a concussion protocol, travel and scheduling and participation in the Olympics.
The trouble is the NHL still has the same over-riding problem it did seven years ago – the 10 or so teams at the top of the revenue chart make all kinds of money while teams in the middle struggle to break even and the 10 teams at the bottom lose millions of dollars a year.
Introducing a salary cap based on revenue only exacerbated the problem in the case of the poorest teams. As the Toronto Maple Leafs and the other Canadian teams, aided by something else no one saw coming seven years ago, the Canadian dollar at par, piled up the revenue, the small-revenue teams found it harder and harder to hit the minimum salary limit each year. In the first year of the current agreement, 2005-06, the cap ceiling was $39-million (all currency U.S.). In the season just ended, with the NHL announcing record revenue of $3.3-billion, the cap floor was $49-million.
The owners’ solution is to cut down the players’ share of the revenue. Now that the NFL and NBA players agreed to take 50 per cent or less, the NHL owners are confident they can do the same.
The players, though, see the solution through more revenue sharing. It was introduced in the current agreement, albeit in limited fashion, but the Coyotes and Panthers et al are still swimming in red ink.
“The players had their salaries rolled back by 24 per cent but somehow none of that [money] got into the hands of the small-revenue owners,” said player agent Anton Thun of Toronto. “The reason for that is the revenue redistribution model didn’t work.”
Since many small-revenue teams feel the current revenue-sharing system is too restrictive because they need to hit certain growth targets or they lose part of their share, any labour disruption could be as much about squabbles among the owners as it is between them and the players.