The state of CBA negotiations
There was never any chance that a new collective bargaining agreement was going to materialize over the summer.
No one should be surprised at where things stand -- talks at a standstill, with the expiry of the CBA looming next week and the subsequent lockout. That was always going to be the way this played out. Neither side was going to show its true hand until it was really on the clock.
At least the summer negotiating sessions weren't a total waste. That was a stark difference from the summer of 2004, when in the face of obvious Armageddon -- the owners willing to scrap a whole season to get their salary cap -- the summer sessions were a pure charade.
Not this time around.
"I think it's been different in a lot of respects," NHL deputy commissioner Bill Daly said Wednesday. "At least with respect to a lot of the issues that need to be discussed and worked out, we ploughed a lot of ground in that area and made some progress. I think we have some tentative agreement to some things, we have teed up issues in other areas -- so from that perspective we had a good summer of negotiation.
"Each side was also able to express where they are on the economics of the deal. Some of the system issues, those still need to be resolved. There hasn't been a lot of movement on those issues. And they are the critical issues to setting off all the dominos. We're focused on those issues exclusively right now."
While they remain far apart on the key economic issue -- the percentage the players will get in the new CBA -- both sides used the summer sessions to get ahead in other areas.
I'm disappointed by the response we got last Friday. It would suggest that they're, at this point, pretty entrenched in their position. It may also suggest that Sept. 15 really isn't a meaningful date for them.” -- NHL deputy commissioner Bill Daly
"My approach is really very simple. You get up every day; you try to find a way to work through the issues; you organize the group of things you want to talk about so that they have some nexus with one another to the extent that's possible," NHLPA executive director Don Fehr said Wednesday. "If you can have things discussed in smaller groups without everybody being involved in every meeting, sometimes that can be helpful. And you follow through 'em, you have your discussions, and sometimes they go well, sometimes not. Sometimes they get heated, but so what. You got to do that. You get it done. To the extent that you can get through that kind of stuff, that's helpful."
Half a season could still be scrapped by the time both sides break through on the big issue, but the work on the secondary issues should provide an expedited process to ratification once they agree on the big one.
"I would say we certainly are farther advanced in terms of thoroughly discussing the other issues that need to be discussed than we were in 2005," Daly said. "I don't think that's insignificant."
Still, the big one remains: how to fairly divide a business that generated $3.3 billion in revenues last season.
NHL commissioner Gary Bettman has made it clear the players' current share of 57 percent from hockey-related revenue is too high, backed by the NBA and NFL scaling their players back in recent labor deals.
Finding that magic number is the entire ballgame.
"We have a lot of things there that we would like to continue discussing. At this point obviously we're not given Gary's position on last Friday, but hopefully we'll get back to those fairly soon," said Fehr. "Obviously, I'd like to find a way -- we've been trying -- to bridge the gap on the core economic issues, but so far that's proven to be elusive."
On Friday, as Fehr cited, talks broke down after a fairly steady summer schedule of sessions, 24 meetings from June 29 through Aug. 31 in New York and Toronto.
But under the shine of the summer sun, the pressure wasn't on. Now it begins. Bettman will get his mandate from the owners next Thursday in New York at the Board of Governors meeting to commence the lockout Saturday night at midnight once the CBA expires.
Then it's game on. Who blinks first?
The players' first paycheck will go by the wayside in mid-October. That's always worth monitoring. How many missed paychecks can the players stomach?
"I've been involved in a lot of disputes before 1996, none since then until now," said Fehr, the former baseball union head. "But there was a constant underestimation of the players' resolve. I don't know what to do about that, but I just wish it wouldn't happen. It would make things easier."
CBA Talks Timeline
June 29 The NHL and NHLPA meet for the first time to kick off CBA negotiations. The league spends most of the meeting delivering a financial presentation and identifying issues it wanted to discuss in the CBA.
July 5-6 Both sides' negotiating teams meet again in New York. The NHLPA on Day 1 responds to the league's initial presentation with its views. On Day 2, there is discussion of noneconomic issues such as player health, supplemental discipline and retirement benefits.
July 10 Talks continue in Toronto. The NHLPA brings up noneconomic issues such as training camp, player travel, hotels, etc.
July 13 The NHL makes its first proposal to the NHLPA at the union's offices in Toronto. The key element is the players' share of hockey-related revenue downgraded from 57 percent to 43 percent, plus new definitions for HRR.
July 18-20 Three days of talks in New York, including more discussion about the league's initial proposal plus philosophical discussion about where the system should be headed.
July 24-26 Talks resume for three days in Toronto with mostly small-group sessions tackling secondary issues. On July 25, the league presented additional elements of its proposal.
July 31-Aug. 1 Both days follow the same script: a full-group committee negotiation session in New York followed by smaller group sessions with widespread focus, including the league rolling out the final elements of its proposal.
Aug. 7-10 Four days of talks in New York. On Day 1, two breakout sessions -- the first on player health and safety, the second involving miscellaneous CBA legal issues. On Day 4, the subcommittee session centers on hockey-related issues, including supplementary discipline, training camp and ice conditions.
Aug. 13 The first of four days in Toronto. NHL COO John Collins (mastermind of the Winter Classic) delivers a business presentation.
Aug. 14 The NHLPA delivers its first proposal. The players are willing to give up a portion of future revenue growth for a period of three years, then Year 4 of the CBA would go back to 57 percent for the players. The salary cap under the NHLPA's proposal would start at $69 million for the 2012-13 season.
Aug. 15 The NHL and NHLPA dissect the union's proposal. The league makes it clear to the NHLPA that this proposal won't cut it.
Aug. 16 A subcommittee meeting in Toronto discusses noneconomic issues.
Aug. 22 The big four meet in Toronto instead of the larger group that had existed for most of the talks up to this point: commissioner Gary Bettman, deputy commissioner Bill Daly, NHLPA executive director Donald Fehr and NHLPA special counsel Steve Fehr.
Aug. 23 Full negotiating committee meeting in Toronto. The NHLPA delivers more of its proposal.
Aug. 28 The NHL makes a counterproposal. Under the current HRR parameters, the proposal scales the players' share of revenue from 57 percent to 46 percent.
Aug. 31 The NHLPA focuses on its proposal, specifically willing to budge on Year 4 of their deal. Talks break down with no plans to hold more talks in the foreseable future.
You can never tell for sure how players will react in this situation, but their resolve appears strong. Between 150 and 200 players are expected in New York next Wednesday and Thursday for player meetings. The NHL's last proposal, which would see the players' share reduced from 57 percent to 46 percent, is a total no-go for them.
Eight years after giving in and handing the owners a salary cap for the first time in the history of the sport, there isn't a big appetite among players to give the farm again.
What the players want to know is why is it, exactly, that 57 percent won't cut it?
"Our experience has shown that 57 percent to the players is too much," Daly said, "particularly in an economic environment that's changed significantly, in a situation where Canadian currency and the value of Canadian currency has changed dramatically, in an environment where generating revenues and the cost of generating revenues has become more significant. And the bottom line is 54 percent, where we started, with going to 57 percent, where we currently are, is just too much."
The players responded with a counterproposal last month, which showed some willingness to address the issues but was nowhere close to where the league wants to be. The NHLPA's initial proposal promised to limit player increases for the three years of the deal and go back to a 57 percent share of HRR in the fourth year -- all of which would commence under a $69 million salary cap for next season.
"In their initial proposal, I think there were elements about it that were encouraging," Daly said. "I think there was some recognition that there are financial issues that need to be addressed and some indication of the willingness by the players to address them, just not in the magnitude that we believe we need to be successful and stable and to continue to grow the business, to invest in the business for the benefit for both the clubs and, quite frankly, the players as well."
The key to the NHLPA's proposal is enhanced revenue sharing, a staple of Fehr's legacy in baseball.
"The players' position is that, while they are willing to address the disparity in revenue between franchises and to assist teams that need assistance, we are willing to fix what needs fixing but not fix what doesn't," said Fehr.
Reading between the lines, what he's saying is that the NHLPA isn't interested in increasing Toronto's profits, for example, but rather trying to stabilize franchises in need. That's why the union is willing to bend a little on future earnings if, and only if, its team revenue-sharing plan is accepted.
"So what we proposed was to significantly limit player salaries provided the owners do their jobs and raise revenues," said Fehr. "And all we are asking for is a revenue-sharing plan, which tries to fix the problems and [gets] help from the big-market teams in doing so.
"And that's where we are. That's the road map to a deal that we put forward. So far the owners haven't agreed to it."
The league -- which feels its proposed revenue-sharing plan isn't that far off from what the union would want -- counters by saying it already has moved significantly by changing its initial proposal. The initial offer from July 13 saw the players' share decrease to 43 percent while also changing the definition of HRR in the owners' favor. On Aug. 28, the league made a proposal that raised the players' share to 46 percent.
"We moved significant dollars in the players' direction," Daly said. "We tried to embrace elements of their proposal that we thought were important to them, and we really tried to structure our proposal in a way that was very similar to the core structure of their proposal. So we thought it was a very significant proposal and very significant movement. We would have hoped that at a minimum we would have got movement from the other side as a response to it, and we were sorely disappointed that we didn't."
The NHLPA doesn't consider the league's second proposal as any kind of concession.
"We don't view a concession as something when you change what you're asking for," said Fehr. "A concession is giving up something you have. The players' proposal took less salaries based on what they now get in the existing contract."
The fundamental issue, the one that has stopped talks, is that the owners want money from the players off the top and the players are only willing to give back in time, not from what they've already earned.
"That's the major point of differentiation right now," Daly said.
The league's last proposal would result in 15 to 20 percent of escrow on player salaries next season, according to the NHLPA's estimation; the league estimates 12 to 13 percent. While there's no salary rollback being proposed like eight years ago, that acts as almost the same thing in the players' view.
That will remain the biggest issue moving forward in these talks, but the future structure of individual player contracts is a close No. 2.
"Why don't we say 1A," said Daly, stressing the importance of the issue. "It's not even the long-term contracts necessarily, although that in itself is an issue. I think it's the contracts that cheat the system."
Among the ideas from the league's initial proposal were changes to give clubs the option to lengthen the entry-level contracts to five years, eliminate salary arbitration for restricted free agents and extend the eligibility period for unrestricted free agents by stating that a player can't be UFA until he has played 10 NHL seasons; currently it's seven years pro or 27 years old.
These ideas don't appeal to the NHLPA.
"Individual players and clubs are a lot more likely to be able to figure out what an appropriate contract is than somebody sitting at a CBA table," said Fehr. "We believe in markets. We believe they work. Secondly, we believe in flexibility. We believe that the players and clubs should be allowed to try and construct an agreement that they think is in their respective best interests and try to come to terms with it."
The union has told the league it espouses making the system more flexible by allowing teams to trade cap space, an idea similar in spirit to Toronto GM Brian Burke's long-standing idea of retaining salary in trades. The union even threw out the idea of a team being able to go under the payroll floor minimum by trading away that cap space to a team that wants to go over the cap.
That's not the direction the league wants to go in. It would rather focus on player contracts, which will continue to be a thorny issue, one that is far from settled.
"It's fair for you to conclude that that is a critical issue that we have communicated to the players' association," Daly said. "This doesn't get settled if we don't address that issue. ... There are a number of different ways to address that issue. If there's a willingness to address the issue on the other side of the table, I think that it can get resolved."
We don't view a concession as something when you change what you're asking for. A concession is giving up something you have.” -- NHLPA executive director Donald Fehr on the league's second proposal
Even the length of the new CBA is a point of contention.
"There's no agreement on that," Daly said. "They did express last Friday that short term was important to them. I think it was the first time that we heard that in the terms that they used. I think they're really proposing three years with an option.
"If you ask me my view on that, I think it needs to be longer."
Another potential contentious issue, first reported by Larry Brooks in the New York Post on Wednesday, is the league's proposal to clarify "management rights" in the new CBA to give owners more power in the areas of realignment, schedule-making, playoff format, etc. This comes as a result of the NHLPA blocking the league's attempt to realign the divisions for the 2012-13 season.
"Part of our proposal is to clarify current management rights' language," Daly said. "I would suggest that our current management rights' language would give us the ability to make decisions in those areas with a pretty high standard -- which is Players' Association consent not be unreasonably withheld. That in legal terminology is a pretty high standard. But they decided to assert an objection to what we tried to do with realignment. Instead of grieving that and going through a multimonth litigation process to try to establish that we were right and they were wrong, we decided to try and address it more directly in collective bargaining."
The league wants the hammer next time it tries to realign.
"What we made clear both in terms of delivering the proposal and then talking about last Friday is we welcome the input, we want to work cooperatively with them and do things jointly to the extent we can, but at the end of the day, somebody has to be able to make decisions," said Daly. "We can't paralyze the business on the basis of no one party having the ability to make a decision. It's our clubs who are the ones opening the buildings and paying for the cost of putting on the games and producing the product to the fans. They should be making those decisions, ultimately."
Another issue added to the mix.
There's a lot of work to be done. It seems hard to believe there's any chance a full season will be played at this point.
Fehr offered a "no comment" when asked where he felt things would go from here.
"I'm disappointed by the response we got last Friday," responded Daly to the same question. "It would suggest that they're, at this point, pretty entrenched in their position. It may also suggest that Sept. 15 really isn't a meaningful date for them. Hopefully at some point there is a meaningful date for them and we can move this thing forward. Right now it appears as though we're stalled, at least temporarily."