NHL, NHLPA need spirit of compromise and common sense to start making CBA progress
NEW YORK – He said it once. Then he said it again, just to be clear. NHL commissioner Gary Bettman said if the sides don't reach a deal before the collective bargaining agreement expires Saturday night, the offer the owners made Wednesday will come off the table.
You can call it an ultimatum, an intimidation tactic, and it is. This is a league that locked out the players for an entire season in 2004-05, forcing them to accept a salary cap and a 24-percent pay cut, and now it is threatening another lockout and asking for another pay cut – despite seven years of record revenues.
But understand a few things:
– This is the leverage the owners have and are willing to use, a reality the players must acknowledge – like it or not – as they consider whether going without a paycheck altogether will be worth it.
– Though the sides have inched closer, they remain entrenched in their core economic positions – the owners demanding the players accept that pay cut immediately and shrink their share of hockey-related revenue from 57 percent to less than 50; the players offering to limit their raises and keep their share of HRR above 50 percent.
[Related: NHL saves face with offer, but start of 2012-13 season in jeopardy]
– There needs to be much more of a sense of urgency to get a deal done before a lockout hurts the projected revenue growth on which both sides have based their proposals.
– And know this: Bettman's message came with a clear signal to NHL Players' Association executive director Don Fehr that the league still has wiggle room. He all but begged him to make another counterproposal.
"It was an attempt to engage the union, finally, in trying to make a deal at least on the economic main issue," Bettman said.
Bettman was asked if this was the owners' best offer. He was asked if this was the owners' final offer. Both times he deflected the question, presumably because it isn't necessarily the owners' best offer or the owners' final offer.
"We're in a negotiation," he said. "We're trying to move the negotiation along."
He was pressed.
"It is what it is," he said.
He was told he was obfuscating.
[Also: Don Fehr's biggest challenge? Maintaining NHLPA unity]
"Don knows what it is, and I'm not obfuscating to him," Bettman said. "It's more important that he knows than anybody else. Hopefully he'll have a good session with the players, and they'll react favorably to what we did. That's what I'm hoping for."
Well, he can hope.
Fehr sounded unimpressed with the owners' proposal before meeting with more than 250 players at a Times Square hotel. He reiterated that the players were unwilling to take an immediate pay cut, and he retraced the history of these negotiations with a sarcastic edge.
He mocked the idea that the owners' latest proposal included "meaningful movement," as Bettman had put it, because the owners originally asked the players to take 43 percent of HRR, then moved to 46 percent, and now had moved to 47 percent – cuts of 24 percent, 19.3 percent and 17.5 percent.
The money quote: "While it is accurate in a sense that the owners' proposal does not take quite as much money from the players," Fehr said, "somebody might say they've moved from an extraordinarily large amount to a really very big amount."
[More: Company wanted to buy NHL in all-in package deal in 2005]
What this is to Fehr is a pure power play. He said the owners' position in bargaining is that a lockout "worked so well last time, we get to do it all over again." He pointed out the parallels to the recent labor negotiations in the NBA and NFL.
"It doesn't matter what the sport is, and it doesn't matter what the claimed economics are," Fehr said. "The proposal is always the same. It is always, 'The players will take a lot less money, and if not, we'll lock you out.' That's what the proposal always is. It's regrettable, but that's the world we seem to live in."
But that is the world we live in. As regrettable as it was for the players involved, the 2004-05 lockout worked for the NHL, and the recent lockouts worked for the NBA and NFL. The NBA got its players to accept a revenue split of about 50-50. The NFL got its players to accept 47 percent.
Fehr often reminds everyone that a lockout is the owners' choice, and he's right. It is. But it's their choice to make, and the owners have been up front for a long time that this is the choice they would make.
[Also: Owners risk union backlash with CBA demands]
They have been frustrated by what they consider the union's foot-dragging (not to mention its forays into Alberta and Quebec labor law). The owners wanted to open negotiations a year ago; the union needed more time. They made an opening proposal in July, and yeah, it was draconian, but it was an opening proposal. The players took a month to counter, and though it was a much more reasonable offer, the players haven't budged much since. As much as Fehr insists the union respects the Sept. 15 deadline, his actions don't indicate he does, and neither do his words.
Why would the owners lock out the players Sunday when training camps aren't even scheduled to open until Sept. 21? "There's no work that's supposed to be performed on Sunday or Monday or Tuesday or Wednesday or those days," Fehr pointed out. Well, maybe that's because the CBA expires on Saturday night, and deals are driven by deadlines. Why wait to create a pressure point?
The players walked into the league office Wednesday armed with what they called a new proposal. It included ways the deal could stretch to five years, and it tied the players' share of HRR in the later years to revenue growth. Fehr said based on a growth rate of 7.1 percent – the average under the current seven-year agreement – the players' share would fall from 57 percent to 54.3, to 52.5, to 52.0, and then end up at 52.3. The total salary savings would be just under $900 million.
"Today the players made a new proposal which we hope addressed a number of concerns that the clubs have raised," Fehr said.
[More: NHL player agent suggests 18-month lockout possible]
Problem is, the players ignored the owners' biggest demand – that the players take an immediate pay cut. The players didn't change their offer to limit their raises to 2 percent, 4 percent and 6 percent in the first three years. So Bettman dismissed their proposal as "really not much different other than a couple of things around the edges."
Bettman was obviously ready to pounce. After the players made their proposal, he caucused with a couple of owners and returned with a counterproposal – just like that. He agreed to keep the current definition of hockey-related revenue, pacifying the players on that issue and helping everyone speak the same language. He proposed that the players take 49 percent of HRR in Year 1 and phase down to 47 percent by Year 6.
The players made $1.88 billion in salary last year. Bettman said using the league's estimates for future growth, that would go down by 9.7 percent in Year 1, lower percentages the next two years, then start to grow again. He said using the union's estimates, that would go down only about 7 percent in Year 1, 3 or 4 percent in Year 2 and start growing again by Year 3.
"When you factor all of that in," Bettman said, "it seems to me that having a work stoppage and damaging HRR long-term really doesn't make a whole lot of sense."
Bettman could have taken the players' cut down to zero to really take a step toward a deal. Asked why he didn't, he said: "Because we're not prepared to have another year under our current economics."
But again, he sent a clear signal that there is room to negotiate, and he's right: When you factor all of this in, it doesn't make a whole lot of sense to have a lockout and damage the business long-term.
What if the players come back and say they don't need an immediate raise? Maybe the owners will say they don't need to take an immediate cut. What if the players come back and say they'd take 53 percent of revenues and scale down to 51? Maybe the owners would give them 51 and scale down to 49.
"If there's a real intent on the other side to make a deal," Bettman said, "then we'll get into a room and make a deal and address the issues in a meaningful way."
We'll see, and we'll see soon.
"If the players don't accept an offer satisfactory to them and [the owners] pull it off the table and lock out the players, then that's what they will do," Fehr said. "It will be their choice, and what happens after that will happen after that."
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