Michael Russo has covered the National Hockey League since 1995. He has covered the Minnesota Wild for the Star Tribune since 2005, after 10 years of covering the Florida Panthers for the Sun-Sentinel. He uses “Russo’s Rants” to feed a wide-ranging hockey-centric discussion with readers, and can be heard weekly on KFAN (100.3 FM) radio and seen weekly on Fox Sports North.

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Former North Stars co-owner George Gund III dies

Posted by: Michael Russo Updated: January 15, 2013 - 6:01 PM

Former North Stars co-owner George Gund III died Tuesday in Palm Springs, Calif., at age 75.

Gund and his brother, Gordon, owned the Cleveland Barons in 1978 when they merged with the North Stars.

The North Stars were successful through part of the 1980s, but they started to have financial difficulties later in the decade and the Gunds considered moving the team to the Bay Area.

The NHL cut a deal with the Gunds, awarding them the expansion San Jose Sharks, and the North Stars were sold in 1990 to a group that eventually was headed by Norm Green.

The Gunds also owned the NBA's Cleveland Cavaliers from 1983-2005.

The North Stars/Sharks situation was best described in this 2006 column by Patrick Reusse -- through the quotes of Lou Nanne --  for the Star Tribune:

George Gund owned the San Jose Sharks for the first 10 seasons of their existence. He sold the team to a group of local investors in the spring of 2001. Gund still holds 5 percent and sits on the Board of Directors.

The San Jose franchise came into existence through perhaps the oddest distribution of talent in the history of big-time sports. Not surprisingly, it was the result of a plot conceived by Lou Nanne to save the NHL for Minnesota. Nanne and the Gunds - George and brother Gordon - had been involved in a similarly creative maneuver in 1978.

That time, they received permission to fold the Gunds’ Cleveland Barons into the North Stars, with the Gunds taking over ownership from the original Walter Bush group.

“There wasn’t much opposition within the league when we did the merger,” Nanne said. “[Montreal’s] Sam Pollock said at the league meeting, `If you put one pile of garbage together with another pile of garbage, all you have is a larger pile of garbage.”’

Of course, Nanne had been busy for weeks before the merger was approved to improve the smell of that roster. He took over as the coach late in the 1977-78 season, determined to have the North Stars finish last in order to land Bobby Smith in the draft.

The North Stars wound up with Smith, and three years later they reached the Stanley Cup finals.

Nanne served in the roles of team president and/or general manager over the next 12 years. The Stars had gone downhill, the crowds had dwindled at Met Center, and George Gund decided in 1990 that he was going to move his team to San Jose.

Official records refer to the Sharks as a 1991-92 expansion team.

Nanne said this was the actuality: “We were the expansion team. The North Stars were going to play the ‘90-’91 season in Minnesota, then George was going to move the whole operation to the Bay Area. We had to make that deal on player distribution or we would’ve been left with nothing.”

Nanne ran his plan to save the North Stars past Chicago’s Bill Wirz, an influential NHL owner, and received a blessing to try to convince Gund.

“I flew to Palm Springs to see George,” Nanne said. “I said, `The league doesn’t want you to move. The other owners might try to stop it. Why don’t you make a deal. Take 20, 25 players out of the North Stars’ organization. You will have what you want, a team in the Bay Arena, and we’ll still have a team in Minnesota.’ “

Gund went for the deal. “It was a pretty good one for George,” Nanne said. “He paid the league $50 million for a Bay Area franchise, and sold the Stars for $38 million. So, he would up getting a big, new market, with a new arena, for $12 million.”

Gund first sold to Howard Baldwin and Morris Belzberg. When the deal fell through, Norm Green came in as the owner. The player dispersal was not going to occur until after the 1991 season. Miraculously, Green’s upset Stars reached the Stanley Cup finals, losing in six games to Pittsburgh.

A couple of days later, San Jose plucked 24 players and two future draft choices from the North Stars’ organization. And a couple of years later, with Nanne out of hockey and in the investment business, Green moved the Stars to Dallas.
“The deals we made with the Gunds and got through the league had to be two of the craziest of all-time,” Nanne said.

NHL sweetens offer to players

Posted by: Michael Russo Updated: December 28, 2012 - 1:53 PM

UPDATED

The NHL has tendered a new proposal to the NHLPA that moves closer to the players in certain areas.

NHL Deputy Commissioner Bill Daly e-mailed the Board of Governors with an update on an offer that includes six-year max contract lengths (up from five, still seven on re-signing your own free agents), max 10% variances in salaries per year (up from 5%) and the willingness to put the $300 million "Make Whole" back onto the table.

Here's a statement from Daly: “In light of media reports this morning, I can confirm that we delivered to the Union a new, comprehensive proposal for a successor CBA late yesterday afternoon. We are not prepared to discuss the details of our proposal at this time. We are hopeful that once the Union's staff and negotiating committee have had an opportunity to thoroughly review and consider our new proposal, they will share it with the players. We want to be back on the ice as soon as possible.”

As part of the 300-page proposal, the NHL says a deal must be struck by Jan. 11 to start camp Jan. 12 and begin a 48-game season Jan. 19, sources say.

The players are looking for compliance buyouts. The league offer would allow one but would come out of the player share.

As per player requests, arbitration, entry-level contracts and free agency remain largely the same.

It is a 10-year CBA term with an opt-out after eight years.

ESPN.com obtained many of the bullet points here, much of which has been reported before. The lone new nugget is the fact that the league is looking to change the draft lottery to give all non-playoff teams the chance to win the No. 1 pick, not just the five worst teams

The NHLPA has not responded to this very detailed proposal yet, one that is described to me as basically a full CBA tendered.

Right now, no meetings are scheduled, but that is bound to change as both sides look to save the season and begin a 48-game schedule.

As you know, it's been a rollercoaster of emotions all lockout, so don't get your hopes up yet. But are players and owners really willing to risk the future of their careers and this league for the minor details separating the sides now?

Again though, we'll see how the NHLPA reacts to the fine print. I'd suspect a counteroffer, so no doubt there will continue to be ups and downs as we hit crunch time, so don't expect an imminent conclusion.

NHL seeking to void contracts if players go 'disclaimer of interest' route

Posted by: Michael Russo Updated: December 15, 2012 - 11:30 AM

We're at the point of the NHL lockout where we've gone from mediation to potentially the court system.

On Friday, it was first reported by TSN's Aaron Ward that the NHLPA Executive Board decided on Thursday that it's time to seek a vote from the 700-plus player membership whether or not to authorize the Board to file a disclaimer of interest if it so chooses. So, to be clear: Not to necessarily go that route; just to vote to give the Board that authorization if it wants to go that route.

A disclaimer of interest is essentially where Executive Director Don Fehr and the NHLPA effectively walk away from the players and say the Union no longer represents its membership. That gives players the right to file lawsuits against the NHL for locking them out and to go after all the things agreed upon in that collective bargaining agreement, things like the draft, free agency, etc., etc.

The Union has been discussing this possibility publicly for some time. But in a preemptive strike once that threat became public knowledge, the NHL filed a class action complaint in federal court in New York seeking a declaration that the lockout is legal AND the NHL filed an unfair labor practice charge with the National Labor Relations Board (NLRB), alleging that by threatening to "disclaim interest," the NHLPA has engaged in an unlawful subversion of the collective bargaining process and conduct that constitutes bad faith bargaining under the National Labor Relations Act.

The NHLPA says this is "completely without merit."

The 43-page complaint to federal court can be read here, courtesy of Sportsnet in Canada. Named as defendants are the NHLPA, the 31 players on the negotiating committee, including Minnesotans David Backes, Jamie Langenbrunner and Alex Goligoski and also five others that have different types of contract statuses (restricted free agent, unrestricted, unsigned draft pick, etc., and an NHLer playing overseas -- Minnesotan Ryan McDonagh).

In the complaint are several players quoted either in articles or on Twitter where they talked publicly decertification (where the players disavow themselves from the union rather than vice versa) or disclaimer of interest. In addition, the NHL has taken quotes of players also demonstrating complete faith in the Fehr Bros., so the league is trying to demonstrate that this would just be a negotiating ploy and not the fact that the union cannot adequately represent the players.

(This is clearly one reason why Commissioner Gary Bettman doesn't allow owners to speak publicly. May this be a learning lesson to us all; words can be used against you at a later date).

So while the NHLPA's main objective might be to try to make the NHL budge and negotiate a CBA (owners don't want to 1) pay excessive damages to the players potentially in lawsuits and 2) operate a league where there's no rules), the NHL is now trying to dissuade the players from going this route.

Regardless, according to RDS in Canada, starting Sunday, the NHLPA will have a five-day vote to see if the board is authorized to go the disclaimer of interest route if it so chooses by Jan. 2. Two-thirds of the players would have to vote yes for the NHLPA to then decide whether it should go this way.

As part of the NHL complaint, the most interesting section is No. 14: "In the event that the court does not grant the declarations described in paragraphs 9 through 13, the NHL requests a declaration that, if the NHLPA's decertification or disclaimer were not deemed invalid by the NLRB, and the collective bargaining relationship between the parties were not otherwise to continue, all existing contracts between NHL players and NHL teams (known as Standard Player's Contracts or "SPCs") would be void and unenforceable."

Basically, what the league is saying is that if the collective bargaining agreement ceases to exist, contracts negotiating under it should not exist either.

Via email, I was in touch today with TSN legal analyst and Partner at Gowlings in Ottawa Eric Macramalla (must follow on Twitter at @EricOnSportsLaw) to ask essentially what this means. His reply:

"The NBA argued the same thing – that player contracts would be void because the CBA no longer applies once the Union decertifies or disclaims interest. The league is arguing that the player contract is governed by, and is in, the CBA. By extension if the collective bargaining relationship between the players and the owners is over by way of the disclaimer or decertification, then player contracts should also cease thereby becoming void.

"That is an ambitious argument. It would meet with resistance from the players. It may also be a tough argument to make successfully in court. A judge may not want to strike down the contracts unless the player contracts actually says the contract is void under these circumstances. So may be a tough one for the NHL to prevail on but there is nothing wrong with advancing the argument. We do that kind of stuff all the time at law."

A few people have asked me if the NHL somehow won this argument if the NHLPA disclaims interest, does that mean "we lose Parise and Suter."

I kinda chuckled. It means ALL contracts in the NHL would be void.

I have trouble buying that we'll ever get to that juncture.

Basically right now, there's a whole lot of uncertainty about where this goes from here.

The hope is like the NBA, all these type of threats suddenly cause both sides to compromise and strike a deal and say, "is this all worth it?"

That happened in the NBA when 12 days after the players filed a disclaimer of interest last year, the lockout was over.

So, some feel this could actually spur a deal relatively soon.

I just don't know. First, I have covered the NHL since 1995. I have learned that sanity rarely prevails in this league.

The anger between these two sides right now is venomous.

The owners have dug in, clearly incensed by Don Fehr.  The players are downright offended by the way they've been treated. And as we all know by now, you pick a fight with a bunch of hockey players, and they'll rally together and fight back.

My fear is go the disclaimer of interest route, I don't know if we have 30 teams on the back end of that thorny process. That may sound like a good thing for those who want the NHL to lose all the unhealthy markets to begin with, BUT, I hope the players understand that lost teams mean scores of lost jobs as well. So, be careful what you're voting for if you're a fringe player.

On the other hand, maybe this is the type of thing that causes the owners to cave. What would a disclaimer of interest do to franchise values? Who the heck is buying an NHL team if there's no collective bargaining agreement to essentially restrict player rights and keep this from being the Wild, Wild West?

(By the way, imagine what the heck new St. Louis owner Tom Stillman is thinking right now. "I just bought into this!" I'm shocked Greg Jamison is still going through with his purchase of Phoenix during this whole mess).

Anyway, I'm rambling.

To me, this is all scary and as I've said throughout this lockout, as somebody who loves the game and has spent his entire adulthood covering this great game at the NHL level, it bothers me what these sides are doing to the future of this league. The damage right now is vast.

I'd also like to get back to covering hockey games and not pretending I'm some economic expert crunching numbers in CBA proposals and now some legal expert trying to figure out the nuances of decertification, disclaimers of interest and class action complaints!

I'll be on KFAN today in studio at 1:35 p.m. CT, probably with my blood pressure rising throughout. I should also have an article with an update to this chaos in Tuesday's paper.

NHL releases CBA proposal details; Fehr's initial assessment not positive

Posted by: Michael Russo Updated: October 17, 2012 - 9:54 AM

In an interesting move, the league released details of its proposal today.

The pressure is on the NHLPA right now because if it counters today or tomorrow off its previous proposal and not the one the NHL offered yesterday, we're back to Square One. But as you can see in Donald Fehr's initial assessment of the NHL offer to the players in these excerpts obtained by TSN, Fehr is not very positive regarding the offer.

There's still a big gulf.

This is not take it or leave it, though. The NHL is willing to negotiate as long a deal is struck by Oct. 25 and the season can begin Nov. 2. There's a good amount of stuff in this proposal that should justly concern the players and they should address (and have the right to) with the league.

But that's why this is a negotiation.

It is time for Fehr (part of six work stoppages in baseball), for the first time in this process, to actually negotiate. The league keeps making proposals off their own proposals. It's time for Fehr to start playing ball here -- for the good of the game, for the good of the fans, for the good of his constituency.

So stay tuned. But see below (letter and proposal):

 

NHL'S PROPOSAL TO NHLPA
TO SAVE THE 82-GAME 2012/13 SEASON
 
            We have reached a critical point in our collective bargaining negotiations. In an attempt to save an 82-game 2012/13 season (including the usual schedule of Playoff Games), the NHL is making a substantially revised proposal to the NHLPA regarding the critical issues on which the parties have been separated and which are essential to an agreement with the NHLPA on a new CBA moving forward. We believe that the proposal set forth below is fair to the Players and the teams, and good for the game and our fans. 
 
This proposal is based on what we believe is a fair sharing of revenues as between the Players and the Clubs. 
 
This proposal does not require any roll-back in the salaries of Players, and attempts to recognize and protect prior contractual commitments. 
 
This proposal provides for increased revenue sharing, targeted to those teams that are most in need. 
 
This proposal is our best attempt to save an 82-game 2012/13 season, and is, in fact, the best we can responsibly do.
 
            Our negotiations with the NHLPA have failed to progress on the most critical economic and system-related issues. After considerable deliberation, we have decided to make this proposal because time is of the essence. Specifically, in order to save the full 82-game season, the Regular Season schedule will have to commence no later than November 2, with 7-day Club Training Camps that must open by October 26.  As a practical matter, this means we must conclude a new written CBA by October 25. We believe the parties can achieve this and that by working together, we can jointly preserve an 82-game season for our Players, our Clubs, and most importantly, for our fans. 
 
Delay (beyond October 25) will necessarily leave us with an abbreviated season and will require the cancellation of signature NHL events. Failure to reach a prompt agreement will also have other significant and detrimental impacts on our fans, the game, our Clubs, our business and the communities in which we play. All of this will obviously necessitate changes to this offer in the event we are unsuccessful in saving a full season.
 
            Here are the elements of our proposal and a brief explanation:
 
            Term
The term of the CBA proposed by the League -- 6 years, plus a mutual option for a 7th year -- is consistent with the term of the expired CBA. It will allow for our fans, the Players and the Clubs to enjoy a reasonable and extended period of labor peace thereby enhancing the short to medium term business planning of the parties. During this time, the League and the Players can work together to continue to build on the momentum the NHL has experienced over the course of the past 7 years, both on and off the ice. 
 
            HRR Accounting
We agree to retain the CBA’s current HRR definitions. Further, we propose to formalize the various agreements the NHLPA and the NHL have reached, and lived under, during the course of the expired CBA, and to clarify mutually identified ambiguities in the CBA. Importantly, we do not believe any of our proposed clarifications should have any impact either on the amount of the Players’ Share or the amount that any individual Player is entitled to receive. None of these clarifications for instance, would have had a material impact on the 2011/12 Actual HRR number. This proposal is all about certainty, clarity and speeding up our complex, end-of-year accounting process.
             
Applicable Players’ Share
We believe a 50-50 sharing of Actual HRR is a fair allocation and a reasonable compromise as between Players and Clubs.  The simple fact of the matter is that it costs Clubs more money now to operate and to generate revenues than it used to. These increased costs include amounts dedicated to the health, safety and enhanced comfort of NHL Players, the increased costs associated with generating ticket and gameday revenues, and the significant capital investments that are regularly being made around the League to enhance the fan experience and to create new revenue streams. The proposed 50-50 sharing arrangement, comparable to the sharing arrangements in the NFL and the NBA, will enable the NHL to protect and promote the long-term future of the game, the financial health and stability of the Clubs and the long-term earning capacity of the Players. 
 
Payroll Range
We propose to set the 2012/13 Payroll Range on the basis of last season's Actual HRR, using the same methodology as used in the recently expired CBA. While this will result in a reduced Upper Limit for 2012/13, we have also proposed to permit the Clubs to exceed the Payroll Range this year, to a maximum of $70.2 million – which was the Cap established prior to this past summer. This will allow a Club  that chooses to do so to maintain or enhance its current roster during a full-year transition period. 
 
Cap Accounting
We are proposing that a Club’s Lower Limit obligation be satisfied without reference to (or inclusion of) performance bonuses. This will effectively increase the minimum commitment of actual compensation paid by the “Lower Limit Clubs” to Players. The proposal acknowledges the League’s agreement to a request made by the NHLPA earlier in our negotiations.
 
We are proposing that all years of existing long-term contracts in excess of five (5) years be counted against a Club’s Cap regardless of whether or where a Player is playing. While such contracts (and Cap charges) can be traded during their terms, in the event a Player subsequently retires or ceases to play, the effective Cap charge would revert to the Club that originally entered into the contract. This proposal is consistent with our other proposals intended to address the harmful effects of long-term, front-loaded, “back-diving” contracts.
 
We are proposing that the salaries of minor league Players on NHL contracts (above a threshold of $105,000) be counted against a Club’s Cap. This provision is intended to prevent Clubs from “stashing” or assigning players to the minors (or any other professional league) for “Cap management” purposes. We are not proposing that any salary paid to minor league Players on NHL contracts be counted against the Players’ Share.
 
Finally, we propose that to facilitate more trades and create increased flexibility in managing Cap Room, Clubs be allowed to allocate portions of a contract’s Cap charge (and related salary obligations) in the context of a Player Trade. This will facilitate additional Player movement and trades between teams as they manage their respective Caps and Payroll Range obligations.
 
System Changes
We also propose making certain modest modifications to existing elements of the current system, none of which will affect the total dollars to which the Players are entitled; they will address instead the allocation of those dollars as among various categories of Players, and we believe should ensure and improve the competitive balance and quality of play around the League as a result.
 
In our opinion, and as we have expressed in prior bargaining sessions, certain elements of the current system have produced a dynamic that has led to a misallocation of Players’ Share dollars in favor of those Players coming out of the Entry Level System at the expense of other, more proven and established Players. We are therefore proposing the following to hopefully address this dynamic:
 
(1) We have withdrawn our initial proposal that would have provided Clubs with an option to extend the terms of Entry Level contracts, and instead are proposing to reduce the duration of the Entry Level System from three years to two years, thereby allowing entering NHL Players an earlier opportunity to become Restricted Free Agents. This will free up more money currently committed to Entry Level Players in their third years who are no longer legitimate NHL prospects and will also allow talented NHL prospects an opportunity to negotiate non-ELS contracts earlier in their careers.
 
(2) We have withdrawn our initial proposal to eliminate Salary Arbitration. We are instead proposing to maintain the Salary Arbitration mechanism, and are further proposing that the rights of Players and Clubs to elect Salary Arbitration be made mutual. Moreover, we are proposing to revise the eligibility criteria for Salary Arbitration to five years of professional experience (instead of the current four years), the same criteria as existed under the 1994-2004 CBA.
 
            (3) We have withdrawn our initial proposal to revise the eligibility requirements for Unrestricted Free Agency to 10 Accrued Seasons, and are instead proposing a modest single year adjustment to 28 years of age or 8 Accrued Seasons. This proposal still allows for the possibility of early UFA status for Players -- as early as age 26.
 
            All three of these system proposals are designed to shift the current allocation of Players’ Share dollars away from “second contracts” and toward “third and subsequent contracts” to ensure what we believe to be a more equitable and effective allocation of Players’ Share dollars to more proven, established Players who are playing in the prime of their NHL careers. 
 
            We are also proposing two additional system modifications that are intended to address the recent phenomenon of long-term, front-loaded, “back-diving“ Player contracts that we believe has proven harmful to the interests of our Clubs and has clearly had the purpose and effect of circumventing the letter and spirit of our existing system.  In addition, these contracts have increased the Escrow obligation and reduced the effective salaries of Players playing under “normal” contracts. In order to mitigate the consequences of these contracts, we have proposed 5-year term limits for SPCs and tighter restrictions on the year-over-year salary variability of contracts.
 
            Due to our proposed change in the Cap treatment of minor league Players on NHL SPCs, we are proposing the elimination of the Re-Entry Waivers provision. The elimination of this provision, coupled with the ability to allocate Cap charges and salary in trades, should lend themselves to fewer NHL-caliber Players being relegated to minor league service for prolonged periods of time.
 
Finally, in order to help preserve the vibrancy and stability of European professional leagues as a continued source of NHL talent, we are proposing to convert the typical four-year period of exclusive negotiating rights that attach to European Players from the current “two-plus-two” model (with each Player being subject to having to re-enter the Draft) to a straight “four-year” model (with no obligation to re-enter the Draft).
             
Revenue Sharing
The NHL has proposed to increase the Revenue Sharing pool for 2012/13 to $200 million (assuming League-wide revenues of $3.303 Billion), representing an approximately 33% increase over the amount that will be distributed on account of 2011/12. This enhanced amount is at least comparable to the levels of revenue sharing in the NBA and MLB, and will be adjusted proportionately upward or downward based on Actual HRR results in future seasons. 
 
At least 50% of the Revenue Sharing pool will be funded by the Top 10 Revenue Grossing teams. The remainder of the Revenue Sharing pool will be funded from League- and Playoff-generated revenues. 
 
The Revenue Sharing pool will be redistributed to those Clubs who are in the most need in order to enable those teams to have sufficient resources on hand to compete for and compensate Players within the Payroll Range, and otherwise to provide a basis for their continued financial stability. In this regard, we are proposing to commit for the next two years revenue sharing payments to recipient Clubs that are equivalent to or greater than what those Clubs will receive on account of the 2011/12 season. The effect should be to continue -- and even improve -- the historic and unprecedented quality of play and level of competitive balance we have jointly been able to achieve during the period of the recently expired CBA. 
 
All Clubs in the NHL except the top 10 Revenue Grossing Clubs will now be eligible for Revenue Sharing, including Clubs in large media markets who were previously ineligible (such as Anaheim, New Jersey and the New York Islanders, among others). Further, our proposal eliminates some of the current “business performance” thresholds that had the effect of materially reducing the amounts a Club might otherwise qualify to receive in revenue sharing. Instead, under-performing Clubs will be expected to enhance their business planning capabilities, will be provided on-site assistance to meet enhanced business objectives and will be provided with much greater counseling as to “best practices” in business operations. 
 
In addition, we have proposed  the formation of a functioning and active Revenue Sharing Committee, on which the NHLPA will have representation and will have an opportunity to provide input, to determine the best and most effective distribution of revenue sharing funds.
 
Supplemental and Commissioner Discipline
We are proposing to amend current Player discipline provisions to introduce additional procedural safeguards to protect Player interests, including an ultimate appeal right to a “neutral” third-party arbitrator with a “clearly erroneous” standard of review.
 
No Rollback; Players’ Share “Make Whole” Provision
The NHL is not proposing that current SPCs be reduced, re-written or rolled back. Instead, the NHL’s proposal retains all current Players’ SPCs at their current face value for the duration of their terms, subject to the operation of the escrow mechanism in the same manner as it has worked under the expired CBA. (In other words, under the expired CBA, the compensation a Player received each year was either higher or lower than the face value of his contract depending upon Club-Player contracting levels and the level and growth rate of HRR.) Under the expired CBA, in two of the seven years Players were paid in excess of the face values of their SPCs and in five of those years they received less than their face values. That process would remain intact under the new CBA.
 
Under our “make whole” proposal, which is premised upon a 5% anticipated growth of HRR both this year and in future years, every Player will be paid compensation based on the full value of the Players’ Share under which his current SPC was signed.
 
In order to effectively transition from a Players’ Share of 57 percent to 50 percent, including importantly to protect Players’ current SPCs against an absolute reduction in Players’ Share dollars, the new Agreement contemplates, in its initial years, a “make whole” mechanism that will effectively pay each Player currently under contract the difference between 50% of Actual HRR in 2012/13 and 57% of HRR in 2011/12 -- which was $1.883 Billion.
 
Again, premised upon an assumed 5% growth rate between 2011/12 and 2012/13, the “make whole” amount is calculated to be a maximum of $149 million for the 2012/13 season ($1.883 Billion minus $1.734 Billion (57% multiplied by $3.303 Billion minus 50% multiplied by $3.468 Billion). Similarly, utilizing that formula and our 5% growth projections, the “make whole” amount is calculated to be a maximum of $62 million for the 2013/14 season.
 
To accomplish the “make whole,” each Players’ pro-rata “make whole” will be determined for the first two years of the Agreement and will be paid to each Player as a Deferred Compensation benefit over the life of the Player’s existing SPC. For those Players whose contracts expire after the 2012/13 season, the benefit will be paid when final HRR is determined for this season (in October/November 2013). Player “make whole” payments will be accrued and paid for by the League, and will be chargeable against Players’ Share amounts in future years as Preliminary Benefits.
 
The “make whole” obligation will be operational only through the 2013/14 season  because, beginning in Year 3, the projected growth in League-wide revenues should have resulted in an increase in absolute Players’ Share dollars (in excess of the Players’ Share of $1.883 Billion in 2011/12). This will effectively restore “full value” to all existing SPCs without any continuing need for a “make whole.”
 
We note in regard to this proposal, that while the NHLPA’s August 14 proposal was premised upon a 7% annual growth rate in HRR, we instead used the more conservative growth rate of 5%, consistent with our prior proposals. If the NHLPA’s estimate of revenue growth is more accurate, then the amount of money needed to effectuate a “make whole” would actually be less.
*                             *                                   *
 
 
The parties have already reached agreement on many of the non-critical but necessary items needed to complete a new CBA. We hope the NHLPA and the Players will view this proposal in the manner in which it is intended -- an invitation to complete an Agreement in the necessary timeframe so that a full 82-game 2012/13 season can be saved.

 

FOR IMMEDIATE RELEASE / OCTOBER 17, 2012


NATIONAL HOCKEY LEAGUE’S OCTOBER 16 PROPOSAL
FOR NEW COLLECTIVE BARGAINING AGREEMENT

NEW YORK/TORONTO (October 17, 2012) – Following is the full text of
the NHL’s offer for a new Collective Bargaining Agreement in order to
preserve a full, 82-game season that the National Hockey League presented
Tuesday to the NHL Players’ Association (along with the accompanying
commentary and descriptions also provided to the NHLPA). While the original
intention was not to release the details of the offer publicly, not
surprisingly there have been widespread reports attempting to describe and
characterize the terms of the offer that understandably are incomplete. As
a result, we believe that full public disclosure at this stage is both
necessary and appropriate.


NHL PROPOSAL TO SAVE 82-GAME SEASON

1. Term:

· Six-year Agreement with mutual option for a seventh year.

2. HRR Accounting:

· Current HRR Accounting subject to mutual clarification of
existing interpretations and settlements.

3. Applicable Players’ Share:

· For each of the six (6) years of the CBA (and any additional
one-year option) the Players’ Share shall be Fifty (50)
percent of Actual HRR.

4. Payroll Range:

· Payroll Range will be computed using existing methodology. For
the 2012/13 season, the Payroll Range will be computed
assuming HRR will remain flat year-over-year (2011/12 to
2012/13) at $3.303 Billion (assuming Preliminary Benefits of
$95 Million).

· 2012/13 Payroll Range……………………
Lower Limit = $43.9 Million

Midpoint = $51.9 Million

Upper Limit = $59.9 Million

· Appropriate “Transition Rules” to allow Clubs to exceed Upper
Limit for the 2012/13 season only (but in no event will Club’s
Averaged Club Salary be permitted to exceed the pre-CBA Upper
Limit of $70.2 Million).

5. Cap Accounting:

· Payroll Lower Limit must be satisfied without performance
bonuses.

· All years of existing SPCs with terms in excess of five (5)
years will be accounted for and charged against a team’s Cap
(at full AAV) regardless of whether or where the Player is
playing. In the event any such contract is traded during its
term, the related Cap charge will travel with the Player, but
only for the year(s) in which the Player remains active and is
being paid under his NHL SPC. If, at some subsequent point in
time the Player retires or ceases to play and/or receive pay
under his NHL SPC, the Cap charge will automatically revert
(at full AAV) to the Club that initially entered into the
contract for the balance of its term.

· Money paid to Players on NHL SPCs (one-ways and two-ways) in
another professional league will not be counted against the
Players’ Share, but all dollars paid in excess of $105,000
will be counted against the NHL Club’s Averaged Club Salary
for the period during which such Player is being paid under
his SPC while playing in another professional league.

· In the context of Player Trades, participating Clubs will be
permitted to allocate Cap charges and related salary payment
obligations between them, subject to specified parameters.
Specifically, Clubs may agree to retain, for each of the
remaining years of the Player’s SPC, no more than the lesser
of: (i) $3 million of a particular SPC’s Cap charge or (ii) 50
percent of the SPC’s AAV (“Retained Salary Transaction”). In
any Retained Salary Transaction, salary obligations as between
Clubs would be allocated on the same percentage basis as Cap
charges are being allocated. So, for instance, if an assigning
Club agrees to retain 30% of an SPC’s Cap charge over the
balance of its term, it will also retain an obligation to
reimburse the acquiring Club 30% of the Player’s contractual
compensation in each of the remaining years of the contract. A
Club may not have more than two (2) contracts as to which Cap
charges have been allocated between Clubs in a Player Trade,
and no more than $5 million in allocated Cap charges in the
aggregate in any one season.

6. System Changes:

· Entry Level System commitment will be limited to two (2) years
(covering two full seasons) for all Players who sign their
first SPC between the ages of 18 and 24 (i.e., where the first
year of the SPC only covers a partial season, SPC must be for
three (3) years).

· Maintenance of existing Salary Arbitration System subject to:
(i) total mutuality of rights with regard to election as
between Player and Club, and (ii) eligibility for election
moved to five years of professional experience (from the
current four years).

· Group 3 UFA eligibility for Players who are 28 or who have
eight (8) Accrued Seasons (continues to allow for early UFA
eligibility -- age 26).

· Maximum contract length of five (5) years.

· Limit on year-to-year salary variability on multi-year SPCs --
i.e., maximum increase or decrease in total compensation
(salary and bonuses) year-over-year limited to 5% of the value
of the first year of the contract. (For example, if a Player
earns $10 million in total compensation in Year 1 of his SPC,
his compensation (salary and bonuses) cannot increase or
decrease by more than $500,000 in any subsequent year of his
SPC.)

· Re-Entry waivers will be eliminated, consistent with the Cap
Accounting proposal relating to the treatment of Players on
NHL SPCs playing in another professional league.

· NHL Clubs who draft European Players obtain four (4) years of
exclusive negotiating rights following selection in the Draft.
If the four-year period expires, Player will be eligible to
enter the League as a Free Agent and will not be subject to
re-entering the Draft.

7. Revenue Sharing:

· NHL commits to Revenue Sharing Pool of $200 million for
2012/13 season (based on assumption of $3.303 Billion in
actual HRR). Amount will be adjusted upward or downward in
proportion to Actual HRR results for 2012/13. Revenue Sharing
Pools in future years will be calculated proportionately.

· At least one-half of the total Revenue Sharing Pool (50%) will
be raised from the Top 10 Revenue Grossing Clubs in a manner
to be determined by the NHL.

· The distribution of the Revenue Sharing Pool will be
determined on an annual basis by a Revenue Sharing Committee
on which the NHLPA will have representation and input.

· For each of the first two years of the CBA, no Club will
receive less in total Revenue Sharing than it received in
2011/12.

· Current “Disqualification” criteria in CBA (for Clubs in Top
Half of League revenues and Clubs in large media markets) will
be removed.

· Existing performance and “reduction” standards and provisions
relating to “non-performers” (i.e., CBA 49.3(d)(i) and 49.3
(d)(ii)) will be eliminated and will be adjusted as per the
NHL’s 7/31 Proposal.


8. Supplemental and Commissioner Discipline:

· Introduction of additional procedural safeguards, including
ultimate appeal right to a “neutral” third-party arbitrator
with a “clearly erroneous” standard of review.

9. No “Rollback”:

· The NHL is not proposing that current SPCs be reduced,
re-written or rolled back. Instead, the NHL’s proposal retains
all current Players’ SPCs at their current face value for the
duration of their terms, subject to the operation of the
escrow mechanism in the same manner as it worked under the
expired CBA.

10. Players’ Share “Make Whole” Provision:

· The League proposes to make Players “whole” for the absolute
reduction in Players’ Share dollars (when compared to 2011/12)
that is attributable to the economic terms of the new CBA (the
“Share Reduction”). Using an assumed year-over-year growth
rate of 5% for League-wide revenues, the new CBA could result
in shortfalls from the current level of Players’ Share dollars
($1.883 Billion in 2011/12) of up to $149 million in Year 1
and up to $62 million in Year 2, for which Players will be
“made whole.” (By Year 3 of the new CBA, Players’ Share
dollars should exceed the current level ($1.883 Billion for
2011/12) and no “make whole” will be required.) Any such
“shortfalls” in Years 1 and 2 of the new CBA will be computed
as a percentage reduction off of the Player’s stated
contractual compensation, and will be repaid to the Player as
a Deferred Compensation benefit spread over the remaining
future years of the Player’s SPC (or if he has no remaining
years, in the year following the expiration of his SPC).
Player reimbursement for the Share Reduction will be accrued
and paid for by the League, and will be chargeable against
Players’ Share amounts in future years as Preliminary
Benefits. The objective would be to honor all existing SPCs by
restoring their “value” on the basis of the now existing level
of Players’ Share dollars.
 

Russo's Rants: It's official: NHL players are locked out

Posted by: Michael Russo Updated: September 15, 2012 - 10:59 PM

10, 9, 8, ... 3, 2, 1, and KABOOM!

It's official.

It was feared for weeks and became oh-so apparent the past several days when the NHL and the Players' Association got nowhere in negotiations, but it's now for real: NHL players have been locked out and a $3.3 billion business has closed shop and halted seven years of momentum and good will.

It occurred at 11:01 p.m. CT tonight. When it ends is anybody's guess because these two sides are in alternate universes, speaking different languages.

NHL Deputy Commissioner Bill Daly said earlier Saturday that the two sides will next meet when either side is willing to make a new proposal, say something new. But that actually hasn't happened yet.

Neither has made an official counter proposal stemming from the other's proposal. They've basically been tinkering with their original ones, negotiating off their own proposals.

Read the coverage in Sunday's paper, but just a few answers to questions I have received from Wild fans:

1. The Wild can have no contact with its players and Wild players are forbidden from team facilities except for Pierre-Marc Bouchard. He has not yet been cleared to play from last winter's season-ending concussion, meaning he has access to Wild doctors, treatment from trainers and the gym. If not cleared by Oct. 11, he is entitled to his $4.3 million 2012-13 salary.

2. Wild season-ticket holders will find out Monday what happens with their tickets. I've been led to believe they can either get refunds as games are cancelled OR keep their money in their accounts in return for interest, which I hear is the second-most generous rate in the NHL.

3. Wild employees have an all-company meeting Monday. Owner Craig Leipold will announce a transition plan, which I'll report Monday afternoon. But I have been told there will be no imminent layoffs. But a game-night staff of 500 arena workers sadly won't be getting paychecks and places like Eagle Street Grill and Tom Reid's Hockey City Pub will be less crowded on what would have been game nights.

4. Yes, whether there's a season or not this year, every player will lose a year on his contract. Bouchard, Niklas Backstrom, Matt Cullen and Stephane Veilleux are in the last year of their deals and could become free agents next summer. Cal Clutterbuck, Marco Scandella, Jared Spurgeon and Justin Falk are the NHL guys in the last year of their deals that could become restricted free agents.

5. If the season is lost, I've gotten a lot of questions about the draft order. That obviously will be announced at a later date. In 2005, there was a lottery and if I remember, teams got assigned balls based on playoff appearances and recent first-round picks. Pittsburgh won the Sidney Crosby lottery. The Wild got No. 4, lucking into, ahem, Benoit Pouliot.

6. If games are cancelled but the lockout ends with enough time to have a shortened season, yes, the schedule would be altered. In 2005, the season wasn't actually cancelled until Feb. 16, if I remember correctly. In 1995, there was a 48-game, all-conference schedule, if I remember correctly.

7. Players don't miss paychecks until Oct. 15, but they also get 8 percent of last season's salary back then, too.

8. I noted last week how teams must cease player promotion. For instance, "Becoming Wild" will take a hiatus and Twitter contests asking the names of Kyle Brodziak's dogs will end. But teams are still allowed to sell jerseys and don't need to remove "most" content from their web sites.

9. The way it usually works in lockouts: You cancel two weeks out. So beginning in a matter of days, preseason games will start to be wiped off the slate.

10. Have any more questions? Read Sunday's paper AND please join me for a live lockout chat on startribune.com Tuesday at 2 p.m.

Fun stuff, eh?

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