NHL Olympic nonsense aside, will the players extend CBA?

NHL players don’t trust the NHL.

For all the talk of partnerships and unity and striving to create the best product they can to grow the game, players side-eye every decision and proclamation Gary Bettman makes about the state of the game and about potential labor strife.

It’s a natural, understandable reaction given the negotiating history between the two sides over the last decade, which has left the players with battle scars, humbling losses and paychecks that don’t actually reflect their salaries.

But’s there’s also a Pavlovian response to the things Bettman says that are … well, to put it politely would be to say “lawyerly.”

Like feigning shock recently at players building lockout protection into their contracts. (“Why are they thinking that? We haven’t had any discussions.” C’mon, man.) And like this whole steaming pile of Olympics B.S. shoveled onto the NHLPA on Wednesday.

In case you missed it, the NHL has signaled to the NHLPA that Olympic participation in 2018 would get a green light if the players extend the current collective bargaining agreement for around three more years.

This is what drives you absolutely mental about the way the NHL goes about negotiating with its players: For the last year, we’ve heard about how it’s all about the money the IOC and IIHF have to scare up for player insurance and travel costs, as well as better accommodations and the like. We’ve heard about how the NHL could give a toss about Pyeongchang as a hockey market, so it would consider skipping the 2018 Winter Games for Beijing in 2022. We’ve heard about how the owners are sick and tired of shutting down the season for no financial gain, even if events like the World Cup are supposed to ease those concerns.

[ Join a Yahoo Daily Fantasy Hockey contest now]

What we haven’t heard? That Olympic participation is somehow linked to labor peace roughly five years from now. Because it’s utterly, completely not, and the minute you hear “Olympics as CBA negotiating chip,” all of that other stuff just becomes bluster. None of it is remedied if the players extend the CBA.

(Oh, and if the NHL attempts to put an Olympic pullout on the players … yeah, good luck with that spin.)

Now, in calling around after this story broke on Wednesday, we’ve gleaned a few things.

1 – The Players, Uniformly, Want Olympic Participation.

This isn’t exactly breaking news, but within the context of “CBA extension for Olympic participation” we wondered how many players would be down for it.

Like, Zac Rinaldo isn’t exactly headed to Pyeongchang, right? Is there a divide between elite players who want to play in the Olympics and others that don’t?

Ah, but Zac Rinaldo and all the other players that aren’t on Olympic rosters really, really dig having that prolonged midseason vacation every four years. Don’t ever underestimate that.

2 – The Players Really, Really Hate Escrow

Again, not exactly breaking news, but escrow – and in a broader sense, linkage – is the main battleground for the players’ next CBA war, which could happen as early as 2020 if either side opts out of it.

Escrow, the short form: The NHL and the NHLPA have a 50-50 split of revenues. Players are forced to put a percentage of their salary aside every season in case they make more than 50 percent of all revenue. That money is filtered to the owners until the shortfall is erased and we’re back at 50-50.

Escrow last season was 17 percent of player salaries, and the calculations are ongoing about how much they’re getting back. It’s currently set at 15 percent of salaries for the 2016-17 season.

(Now, the players do have a modicum of control over their escrow withholdings. Each year, they vote whether to “escalate” the salary cap, i.e. increase it by up to five percent. This typically results in higher escrow withholding – more money spent on player salaries, more out of whack the balance is for the 50-50 split. But while the votes have been close, the agents and NHLPA leadership have gotten it through.)

How does escrow work in other leagues? Glad you asked. Here’s Artie Novikov of Midlevel Exceptional on the NBA system:

Players will never lose more than the 10% of their salary that is withheld in the escrow account. If the overage is greater than the 10% then teams may dip into the benefits pool to cover the shortfall in BRI, which amounts to 1% of BRI. If at this point the shortfall is still not covered, then tough luck for the owners. No more money will be taken from the players’ paychecks, and the players will have earned more than their fair share that season.

The league is smart, though. If such an overage happens the league has the flexibility to reduce the cap and tax levels for the following season to prevent another overage. If there is ever a situation where the players end up earning more than their guaranteed share due to a substantial drop in league revenues, then the hope is that both sides will negotiate in good faith to revise the CBA to address the issue.

With all that said, an overage greater than the 10% escrow account is rare and should be very avoidable if league revenues continue growing.

So it’s a fixed escrow number in the NBA vs. the linked escrow number the NHL has.

Now, there’s danger in comparing the NHL’s economic realities to any other sport. First, their revenue pie is of a significantly smaller size – billions less, actually. Then the whole thing gets thrown into chaos when you consider how much revenue is generated by Canadian teams and how much a drop in the Canadian dollar influences the NHL’s margins.

That said …

3 – The NBA’s Pending CBA Is The Key To The Next NHL CBA

The NBA is inching closer to labor peace, and that’s huge news for the NHL’s players. Granted, NBA commissioner Adam Silver and NBPA executive director Michele Roberts have a sunnier relationship than Bettman and Don Fehr; and, frankly, the NBA pie is so large that there’s no reason for either side to cravenly grab more slices now.

But the real intrigue here for the NHL players is how the NBA’s new CBA is going to redefine Basketball-Related Revenue. From The Ringer:

It was previously reported that the percentage of Basketball Related Income will stay the same, which a source confirmed: 49–51 percent of BRI will go to the players, with the remaining share going to the owners. The two sides haven’t fought over economics, but there were still some significant matters to work through. The players association hired more outside experts than in past years to comb through every inch of the nearly 400-page CBA and team financial records/audits to find areas that needed to be addressed.

They “went through the couch cushions,” said a source, “and found a number of areas where owners in the past were able to keep some parts of revenue out of BRI.” Nothing nefarious happened, but there were instances, for example, when an owner could sell a luxury suite to a company year-round. Access to the luxury suite covered events like concerts, ice-skating, and wrestling, but also happened to include NBA games.

In the past, the revenue from that luxury suite on nights NBA basketball was being played wasn’t always accounted for in the BRI. That won’t be the case anymore. “The union has effectively argued those things belong in BRI. They’ve expanded the definition,” said the source. “So in addition to the game just growing overall, they’ve increased the pie themselves.”

So the NHL players will have a keen eye on the size of their own pie after the NBA settles its CBA. Which is why the NHL is keen in getting their extended ASAP.

Again, NBA labor peace doesn’t guarantee NHL labor peace. Hell, it could be just the opposite, even with how the NBA deal will put wind in the players’ sails. But maybe the two sides don’t decide to do the “cancel all the games until January, stare into the abyss of a lockout season, sign deal” dance this time.

4 – Will The NHL Players Extend The CBA By Three Years?

The short answer is “probably not,” but it has little to do with the Olympic Deal that Bettman put on the table. The players know, or should know, that’s just a raw carrot being left on their plate with a string attached to a rabbit trap. The ultimate decision on the Olympics remains out of their hands. The offer made by the NHL is simply the first salvo in CBA talks, four years out.

Right now, the dynamic between players and owners isn’t typical for the NHL’s labor situation: One could argue that the owners are fairly happy with the current economic system, in the sense that they aren’t crying about “cost certainty” at the moment; and one could argue it’s the players, especially with escrow, that want to change it.

Dynamics can change quickly when the economy changes. If a recession hits the U.S., for example, who knows what that does for owners that are at the moment content with the economic system? And who knows how that reinforces the players’ loathing of escrow, if they need to surrender an even greater percentage of their salaries?

Look, the NHL wants a three-year extension. Prolonged labor peace is a good thing for them. Getting Donald Fehr off the negotiating table – one assumes he wouldn’t still be there by the middle of next decade – is a good thing for them. The current system with linkage works for them.

Should the players want an extension? One agent told me there’s an appetite from NHLPA leadership to extend the CBA that isn’t currently shared by the players themselves, but the important thing to remember is that by the time the CBA is reopened, a high percent of today’s most influential veteran players are going to be out of the league. So that dynamic could change. Maybe new leadership makes for a radicalized union. Or maybe they’re fat and happy with the current system. Who knows?

The sense we get is that the anger over escrow is so volatile that it could, on its own, compel the players to forego an extension and reopen the CBA. But when it comes to negotiating with Gary Bettman, the devil’s in the details, and they know this.

Open up the CBA to get capped escrow, and lord knows the concessions to get there are going to make Olympic participation seem like a pittance. The NHL could go after any number of contractual items and free agency standards. (Two words: Salary rollback.)

Such is life when your “partner” has all the leverage, you like your paycheck and you harbor a burning desire to get back on the ice.

And such is life when everyone involved knows the fans will be there whenever it’s settled. Eventually.

—

Greg Wyshynski is a writer for Yahoo Sports. Contact him at puckdaddyblog@yahoo.com or find him on Twitter. His book, TAKE YOUR EYE OFF THE PUCK, is available on Amazon and wherever books are sold.

MORE FROM YAHOO SPORTS