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NHL ‘still far apart’ from NHLPA after new proposal; was progress made?

Greg Wyshynski
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In the last three days, the NHLPA was given a list of "clarifications" that the NHL wanted. It returned to the bargaining table with a new proposal that offered up a significant concession, if not in actual dollars than in philosophy.

Hopes were high … perhaps too high. Perhaps high enough where the owners saw them as eager to cut a deal, in which case the boot on the players' throats was pressed down further by the NHL in dismissing the NHLPA's latest proposal on Wednesday.

From the Star-Ledger:

"We're still far apart," Bettman told reporters in New York, "but hopefully there is some momentum so we can bring this to a conclusion. There was some movement in our direction and it was appreciated."

Bettman said the NHL is losing $18-20 million per day. He estimated the players are losing between $8-10 million each day.

After presenting the owners with the players' proposal, NHLPA executive director Don Fehr said: "We have moved far more than halfway. It's about as good as we can do."

The most significant movement was in the NHLPA's decision to forego a fixed guaranteed amount of revenue from the NHL in favor of the League's preferred option, which is an amount liked to percentage of overall revenue. It marked a significant philosophical shift for the union; and obviously, it was "appreciated."

But did the offer go far enough?

The NHLPA's full offer was published in the media before the two sides resumed negotiations in an afternoon session. That allowed for some quick analysis of the proposal, and it was revealed to be fraught with some pitfalls.

• Mirtle did the charts and graphs thing with the NHLPA proposal, and discovered that the players' percentage of revenue starts at around 56.3 percent and only dips down to 50 percent in Year 5 of the 5-year deal. From Mirtle:

The NHL to this point has offered a straight 50-50 split as well as $211-million as part of the "make whole," putting them that $182-million apart I mentioned above.

Overall, what the players have proposed would likely give them roughly a 52 per cent share over the life of the deal, which is probably a little too high for the league's liking.

Splitting the difference to take them to $300-million in the make whole may ultimately be the final solution.

• Elliotte Friedman of CBC noted that the NHLPA offer's addressing of cap circumventing contracts includes a "cap benefit" provision that breaks down thusly:

So, let's assume you're a GM and sign a player to a 10-year, $55-million deal. The breakdown is easy: $10 million in year one, down to $1 million in year 10. The cap hit is $5.5 million each year. So, in year one, your benefit is $4.5 million, in year two it's $3.5 million, year three is $2.5 million, four is $1.5 million, five is $500,000, six is minus-$500,000, seven is minus-$1.5 million and eight is minus-$2.5 million.

Then your guy retires. Add all of those up and you're plus-$8 million overall when he quits. The team would then have a choice: it can take that $8 million medicine over two years (four million per season) or four years ($2 million per season against the cap).

Problem is, it doesn't address the NHL's desire for term limits, nor does it address contracts that have been previously signed.

• Finally, Tyler Dellow thinks the NHLPA's proposal that "beginning with the second year of the Agreement, players' share, expressed in dollars, may not fall below its value for the prior season" is problematic:

So, basically, although the PA has now moved away from saying "We get $X as our share and if you guys grow the business at Y%, you get what you want", they're now saying "If you guys have a bad year, that's your problem, not ours."

In other words, if revenues ever do shrink, the players will make more than the 50/50 that the NHL is after. The NHLPA has moved away from their initial position here which was a hard number of dollars but only partly — what they're saying is that they'll take a hard number of dollars but rather than expressing that number as $X, it becomes a number that will be defined by whatever the NHL pulls in next year. Their share can then never be less than 50% of that amount.

It is therefore a move away from the linkage that the NHL fought so hard for in 2004.

Linkage that produced a salary cap. A salary cap that Donald Fehr loathes.

Sneaky way of going after linkage, Mr. Fehr.

Again: It's undeniable that progress was made in Wednesday's talks. Renaud Levoie of RDS makes a great point: "The good news, the war of numbers is over. The NHL and the NHLPA agreed that they are 182 million apart." Who didn't expect the NHL would come back with its "own math" after the NHLPA proposal?

For a while this week, it looked like the NHL might have blinked. We went from a 2-week moratorium proposal to resumption of negotiations.

But it was the NHLPA that budged, and now some of their fears might be confirmed: They gave an inch, and now the NHL's going to wait until they're offered a mile.

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