Blog Post by: Michael Russo
- November 9, 2012 - 10:49 PM
After hoping for a few days that no news is good news and "at least they're not storming off in a huff and a puff," and "at least they keep meeting" despite slow progress, it became abundantly clear tonight: this lockout's far from being over.
Despite four days of talks after the NHL and NHLPA's No. 2's met for several hours last Saturday, the NHL and NHLPA still remain a good distance apart on a new collective bargaining agreement.
I've been saying on the radio all week that I suspected we'd still have a couple more blow ups and soap operas and emotional roller coasters during this process, so let's hope this is just one minor blip before the two sides eventually reconvene for the good of the game. After all, there's just too much to lose. As I wrote last Sunday, it's a math equation now.
But today? Today did not go well. Other than league lawyers meeting in pension subcommittee's with union lawyers, the actual NHL and NHLPA meeting didn't begin until close to 4 p.m. ET. It was over in about 90 minutes, and little of that was face to face. Much was caucusing.
According to ESPN's Katie Strang on a tweet, "the meeting ended with some tense exchanges between the two sides."
After the meeting, NHLPA Executive Director Don Fehr held a conference call with the negotiating committee and executive board to provide an update. Other players are invited on those calls, too, and reportedly, players are getting very frustrated with the league.
Afterward, Fehr told reporters during a subsequent press scrum that the union will meet internally Saturday morning and determine the next step. He did say he assumed the union would be in touch with the league, but he never said if that would be to schedule the next session. The league says it's willing to get back at the table at any time.
“We’ll come to grips with where we are and try and figure out what to do next,” Fehr told reporters in New York (thanks to Canadian Press' Chris Johnston for sending me audio of Fehr's gathering). “I don’t know what will happen next.”
Friday’s breakup came after the NHL proposed a 50/50 split in revenues with the players this week, multiple sources say. In addition, the league spelled out its "Make Whole" provision, which many feel would be the type of breakthrough that could lead toward the eventual end of the lockout.
But the union still feels it comes well short than making the contracts "whole," although Fehr did say tonight that the union told the league they felt "were much closer together on a structure of a deal than suggestions were."
The NHL's definition of its "make whole" provision is to insure that players will continue to make at least 57 percent of $3.3 billion, or $1.883 billion. To do that, players would have their 12.3 percent salary reductions deferred for a maximum of three years, sources say.
The league would subsidize the players $150 million the first year and $61 million the second year, plus 2 percent interest. By Year 3, the players would be “made whole” as long as revenues grow 5 percent, said sources.
The league says it will guarantee this $211 million if revenues don't rise back up.
Still, players want to be paid in full every cent agreed to in good faith with owners and Fehr said Friday night they aren't "receiving the full value of their contracts.” That's still more than $350 million, player sources say.
Until this issue is reconciled, this thing's in trouble, and the longer they're not playing, the more revenues drop and the harder the math becomes. Also, players feel owners are standing firm on all their contractual changes like free agency to 28, five-year max contracts, contract variances of 5 percent, etc.
Word of the NHL proposal trickled out because the NHL didn’t feel Fehr portrayed its 50/50 proposal fully in a Thursday night memo sent to 725 players. That memo was leaked to the media Friday and thus got back to the league and its owners.
In the memo, Fehr didn’t provide details of the league’s “Make Whole” 50/50 offer, said a “significant gap remains,” said revenue sharing “needs considerable work,” and that the NHL’s proposed contractual changes “must be agreed to.”
Fehr said Friday night that in memos, you “necessarily have to summarize,” and that he’s routinely transparent with his constituents. All players are invited to any bargaining session on the union’s dime, and dozens have sat in on these meetings with the league, including this week.
Players have raved throughout the lockout that Fehr keeps them constantly informed and jumped to his defense tonight.
My blog below just stated that the memo didn't portray their proposal fully, so word was getting out about what their proposal was.
It was also reported on Twitter by the New York Post that the union was seeking full 2012-13 salaries even in a shortened season and regardless of league revenues. I was led to believe this, too, and remember again, revenues will surely fall due to the lockout.
The Post also added that in addition, they wanted 5 percent growth or more than $1.9 billion, and this would eat 65-67 percent of league revenue during a shortened season.
However, Fehr said tonight that the union was trying to put a structure in place with the NHL before “dealing with the effects of the lockout.”
Games have been canceled through Nov. 30, meaning there is still time to reach a deal and start by Dec. 1. But the clock is ticking, damage to revenues and the league’s reputation is being done, and as both Commissioner Gary Bettman and Fehr said, “There’s still a lot of work to do.”