Blog Post by: Michael Russo
- November 10, 2012 - 2:31 PM
The NHL and NHL Players’ Association have been in touch this morning as the two sides look to keep this scary game of chicken from completely blowing up. The goal is to get back to the bargaining table as quickly as possible.
Afternoon update: Small group from NHLPA and NHL are reportedly having an informal lunch in an effort to likely clear the air and determine next formal bargaining session.
After the contentious end to last night’s meeting, it might be best for these two groups to take a few days apart, regroup and take a deep, deep, deep breath after four long days of staring at each other in meetings.
The four owners on the negotiating committee flew home anyway, although at this juncture, it might be healthier for the Big Four – Gary Bettman, Bill Daly and the Fehr Brothers, Don and Steve – to resume talks without players and owners in the room.
As ESPN.com's Katie Strang reported Friday night and I have since confirmed through multiple avenues, last night’s meeting did end heatedly with an animated exchange between some of the players and owners. Tension is high now. Fans are ticked. Sponsors are ticked. Players and owners are ticked, and both sides are feeling the pressure to end the lockout and get back to the ice.
Yesterday just started on bad footing when the league and union were supposed to meet at 10 a.m. The union kept the league waiting until 4 p.m., something the Fehrs have done a handful of times throughout this lockout.
Then, instead of responding to the NHL’s proposals on revenue sharing and split of revenues, Don Fehr tried to demonstrate on paper how the two sides mathematically were “much closer together” than the league thought. The league disagreed, and things were off to a bad start and almost instantaneously went into private caucuses.
As CBC’s Elliotte Friedman noted in this blog
, Fehr’s assertion of being closer together does seem a bit strange since the night before he told players in that now-infamous memo “there is still a lot of work to be done and bridges to be crossed before an agreement can be made” and there was a “significant gap” in “Make Whole.”
As for “Make Whole,” in the owners mind, they would be honoring the contracts by subsidizing the players $211 million plus 2 percent interest and reimbursing the players in two lumps sums in Year 2 and 3 of the agreement.
This is all based on 5 percent growth, and using the projections of growth by both the NHL and NHLPA, the owners feel the players would be largely “made whole” by Year 3. In other words, at 50/50 players would be “caught up” or “equal” to their current $1.883 billion share if revenues of the league continued to grow at a modest rate from last year’s $3.3 billion.
But the players want a guarantee past Year 3, which is why Fehr still contends the NHL’s “Make Whole” proposal would not guarantee the “full value” of each player’s contract. In addition, while a vast majority of NHL contracts expire before 2013-14, the union says this doesn’t technically “make whole” the contracts that go past that year.
The difficulty in these negotiations is every calculation is based on the assumed growth of the business. And that is becoming more difficult to do as both sides do damage to the business by not playing.
There’s been one other area of confusion. Fehr routinely says the players are conceding at least $948 million to $1.25 billion over five years. He gets that figure off a 57 percent share of revenues + growth, so the $948-$1.25 figure is based off potential future growth from that 57 percent number. That’s not actual dollars being conceded or given back by players. The NHL is no longer seeking an actual salary rollback.
Fehr keeps basing every calculation off 57 percent, but that CBA has expired. It doesn’t exist anymore. And CBA’s exist so businesses can reset the way they do business.
And again, if the rate of growth is what the NHL and NHLPA both project, in three years, even at 50/50, the owners say players will soon again rise above last year’s $1.883 billion share and thus be "equal" after being reimbursed that 12.3 percent cut.
But to repeat, this is only if both sides don’t destroy revenues this season.
Both sides have to figure out a way to compromise here.
The NHLPA is claiming the league has told them that the contractual changes they want to make are non-negotiable. That’s ridiculous and the owners must be flexible.
Here is Fehr from last night in Sportsnet’s Michael Grange’s column here
"At one point the question was asked [of the owners]: If the players were to agree - which they're not prepared to do - to everything in your financial proposal, what you're saying is you still won't make an agreement unless we give up everything in all the player contracting rights in your proposal. The answer was yes, that's what we want.
"Now that's not a direct quote, but one wonders if that's the case how you get there from here."
(By the way, Grange has covered this lockout tremendously from the start, and he is a must-read daily).
I’ve been led to believe that the only change the owners are married to is the 5 percent variances in salary to eliminate the back-diving contracts.
That, of course, is the height of hypocrisy since in the past CBA, it was the teams who used those back-diving contracts to circumvent the salary cap they fought for in the last lockout. So this is one that must be negotiated, and the players would hopefully find common ground because theoretically, the players would still get their money, only spread throughout the contract rather than huge up-front money.
But, ... one can contend the owners/GMs created that mess themselves.
As Grange and many others including myself reported, one area that is a big point of contention is the NHLPA has indicated the players wish to be paid in full in 2012-13, regardless of length of schedule or loss of revenue. Fehr contends that they were trying to put a structure in place before dealing with the effects of the lockout, but that apparently hasn’t been communicated to the NHL. And there’s just no chance the league pays the players in full in a 64-game schedule or something regardless of league revenues.
So as you can see, as the clock ticks, this negotiation gets more and more difficult on so many fronts because there is just no chance revenues will increase this season from last year’s $3.3 billion after a lockout.
That’s why there is so much to lose here – on both sides, and why both sides need to do their best not to be blinded by the anger created with how negotiations ended last night.
For the good of the game, for the good of the fans, for the good of the players’ careers and owner’s businesses, owners and players must get back to the table and grind this thing out.
In other news, the Gophers scored four power-play goals (eight in the last three games now) during a 4-0 victory at Alaska Anchorage last night. They play tonight again at 10 p.m. CT and the game can be streamed on www.goseawolves.com
Adam Wilcox made 14 saves for his second career shutout and improved to 5-1. He’ll obviously start tonight (my guess though). Kyle Rau scored twice. Nick Bjugstad and Ben Marshall also scored.
In Houston Aeros’ news, they lost 5-4 in a shootout to Lake Erie. Justin Fontaine scored a terrific goal that can be seen here.
Jason Zucker forced OT with 1:16 left, and Chad Rau (Kyle’s older bro) and Nick Palmieri also scored.