NHL lockout: The consternation of contract terms in next CBA

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The NHL lockout talks between the owners and players have burnt the midnight oil for the last two nights in New York City; and while Thursday's talks begin with a hugely negative vibe hanging over them … hey, they're talking.

Talking about what? Well, about term. The term of the next CBA. The term of the contracts signed under that CBA. Both of which aren't palatable to the players.

The NHL is willing to bump up its "make whole" money to $300 million if the players agree to a 10-year Collective Bargaining Agreement, with an opt-out after eight years.

Why 10 years? Sponsors. Really, really pissed off sponsors, and those in the business community that want some assurance that we're not going to go through this nonsense every few years; as well as those who'd like to invest in the NHL but want security from a work stoppage.

The players want a shorter term, reportedly five years. Why five years? Because the NHL's 100th anniversary is in 2017, and that's undeniable leverage for the players in the next round of bargaining. Everyone loves a good party — including Gary Bettman, who may serve out his term through the anniversary and then leave — and the players could force its postponement if the next deal isn't done.

Between the two, the NHL probably has majority support from fans on this. Two work stoppages in seven years for this League is a joke — what's the sense of building up hockey's momentum and goodwill if you're just going to drop it down the sewer every few years and have to build it all over again?

The 10-year term would offer stability, or at least the appearance of it. As of now, that's vital for the NHL.

On contract term … things get a little dicier.

There are few issues in this CBA debate that have significant competing philosophies, but contract term is one of them.

The NHL wants a cap on term — five years for teams signing new players and a cap of seven years for retaining their own talent. It's all very NBA-esque.

The NHLPA … well, they're not exactly fans of term limit. They want teams to have the flexibility to sign players to lifetime deals.

From Justin Bourne on contract length:

Does the NHL really want to limit themselves to only being able to lock up their Crosbys for seven yrs? Why not a longer option combined with some resolve to not sign mediocre players to infinite length contracts? Have better GMs. Hold your GMs accountable. You don't have to sign guys for as many years as it's legally allowed. Have personal team rules. If other teams want to sign guys to shitty deals, isn't that a benefit to your club? To hell with parity — what happened to being competitive and cashing in on the failures of other clubs?

But the players are willing to work with the League on trying to prevent cap circumvention in those lifetime deals with something called "cap benefit" that penalizes teams (so to speak) if the player retires [or goes to Russia] before the end of the contract term; i.e. when their salaries would dramatically decrease.

CBC Sports chronicled the specifics of this "cap benefit" gambit last month:

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 cap-hit medicine over two years (four million per season) or four years ($2 million per season).

In other words, you don't rid yourself of the contract's cap implications just because the player is off of your roster.

It's an interesting thought, and it would prevent what we assume was the inspiration for Ilya Bryzgalov's contract — serve a few years, vacate the premises when the contract's annual salary dives.

What it doesn't do sufficiently enough: Prevent big market teams from circumventing the cap early in order to build all-star rosters, concentrating talent among the "haves" in the short term.

But as we've written before, the idea that contract term should be capped is preposterous — let teams protect their investments, and let owners make their mistakes.

Even if those mistakes inevitably lead to lockout hell when they attempt to save themselves from themselves.

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