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NHL and NHLPA argue over the fundamentals of surrendering players’ salary to owners

Greg Wyshynski
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The NHL and the NHLPA met on Thursday, with Donald Fehr and the players presenting what Commissioner Gary Bettman (pictured here with sunglasses, LL Cool J and some sort of were-lion) called "the balance of their proposal."

To the surprise of no one, Bettman added: "We are far apart on that system." Which is something one usually hears before a work stoppage that seems more inevitable with each negotiating session.

More Bettman sound bytes, via Renaud P Lavoie of RDS:

"We are focus on making a deal … NHLPA wants to keep things the way they are, and that is slowing the process."

"We believe that we are paying the players more that we should be."

"It's difficult to make progress when you don't know what are the fundamentals."

So what's fundamentally preventing a deal?

The NHL's basic premise: Along with salary cap loopholes, wage inflation and revenue sharing, the NHL's owners royally screwed the pooch in the last CBA on the percentage of revenue they allowed the players to earn. (Keep in mind this was collective bargaining that the NHL allegedly "won.")

Emboldened by ownership wins in the NBA and NFL, the NHL's owners want to dramatically reduce that 57-percent of revenues down to, at best for the players, a 50/50 split. This would be accomplished via a rollback on existing contracts.

Why? Because the NHL feels that despite pulling in $3.3 billion in revenue last season, it still has a large number of teams that lose money. (Which, again, speaks to flaws in a system that the NHL succeeded in implementing.)

The $3.3 billion is oft-quoted, but the NHL feels it's misleading: How much are teams actually making once you account for expenses and debt? So the CBA debate is about stopping that bleeding before it gushes, in the League's eyes.

The players are pretty cool with the current system, to the point where they volunteered to slash their share of the revenue down to around 54 percent in their "alternate" proposal — with the caveat that they'll work with the NHL's biggest revenue-generating teams on the redistribution of that wealth. A partnership, if you will. What a concept.

The players are willing to do this because they're not fighting the current salary cap system — salaries would go down, but the mechanisms currently in place to re-inflate them like salary arbitration and free agency would be maintained.

Remember how Bettman was talking about "the fundamentals" today? Herein lies the "gulf" between the sides: The players might even consider dipping down to the expected 50/50 split with the owners … if the rest of the financial system was in fact the status quo. But the NHL wants a reduction in salaries and revisions to the current system that will, again, protect the owners from themselves.

That means getting rid of arbitration, shackling rookies to 5-year contracts, making UFA status achievable only after 10 years of NHL service and other tweaks. So while the players might swallow a 24-percent salary rollback again under the current system, they certainly won't if the rest of the NHL's plans are enacted, because it would deaden wage growth in this League for years.

There are other fundamentals too, on the players' side. Via Mirtle:

Fundamental issue for players is they want dollar value on their contracts to reflect what they'll get paid. After all, escrow would be huge w/ big HRR share dip. Players don't want the $4-mil deal signed two months ago to suddenly pay them $3-mil.

So, in summary: The NHL thinks it gave the players too much of the League's revenue seven years ago, it wants to take it back and it wants to make sure that its 30 franchise owners can't completely [expletive] themselves again with loophole-laden monster contracts and spend-to-the-cap salaries by installing yet more fail-safes into the system.

(Which, one imagines, the owners will simply circumvent again if it means gaining a competitive advantage over each other.)

Meanwhile, the players are left wondering how mismanagement (on and off the ice) in places like Phoenix, New Jersey, Long Island and Columbus can be remedied by their giving up 24 percent of their salary under the NHL's proposal.

They'll keep wondering through a lockout. Only the NHL knows for how long. They have the leverage, and they have the confidence that fans and media will return when the League does because we've already done it once.

Meanwhile, arena and front office workers in Calgary are preparing for their own salary rollbacks, casualties to this labor war. And there will be more.

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