Thursday, December 9, 2004
If owners insist on cap, season will be lost
By Scott Burnside
Special to ESPN.com
TORONTO -- The spotlight now shines on Gary Bettman.
In the wake of a stunning proposal by the National Hockey League Players' Association that included a massive 24 percent cut to existing salaries and changes to other elements of the previous collective bargaining agreement that the union claims represent $1 billion in savings, it falls to the commissioner of the National Hockey League to take the next step and forge an agreement that will save the NHL season.
But be forewarned, there is every possibility the commissioner and the owners he represents will disregard the innovative elements of the proposal presented by the players Thursday and insist on a salary cap -- and the season will be lost.
"If that's what they come back with then we can all put our heads on the pillow and know we've done the most we could and the season's over. That was expressed on the call today from a number of players and that's our view as an executive committee," said Colorado Avalanche defenseman and NHLPA executive committee member Bob Boughner.
"We don't negotiate a salary cap or cost certainty. This is a guarantee. This is guaranteed hard money back in their pockets. The numbers don't lie," Boughner said.
Bettman and his negotiating team will pore over the details of the six-point, six-year offer and will meet again Tuesday, likely in Toronto, at which point it's expected the owners will present a counterproposal.
Bettman, while praising the salary rollback, has already suggested it is not enough, claiming the salary rollback is a one-time concession that doesn't address the owners' desire to link salaries and revenue -- which he feels will guarantee the long-term financial health of the league.
"I was very candid with the union and the players that we're there in expressing and acknowledging the one-time element as an important step but reiterating our need to get the systemic issues right," Bettman said.
The commissioner said the salary cut was an acknowledgement of the league's dire financial situation. But the fact remains the 24-percent cut to all existing salaries is not just a one-trick pony. The NHLPA claims the rollback will save owners $528 million over the next three years.
That's more than the $497 million in losses the league claims to have incurred in the last two seasons.
Furthermore, the salary slashing will have a ripple effect throughout the length of the six-year deal proposed by the players because it will affect the starting point for players when their next contracts will be negotiated and it will affect comparables for salary arbitration.
"The whole market has been reset 24 percent," said Ottawa Senators captain Daniel Alfredsson, another member of the NHLPA's executive committee.
"It is significant, it is substantial, it is not something that is ephemeral, it does not disappear," NHLPA executive director Bob Goodenow told reporters during a detailed, point-by-point analysis of the proposal.
The salary rollback is the centerpiece of a package that touches on all of the elements of the collective bargaining agreement that dictate salary.
Entry-level contracts will be capped at $850,000 -- down from $1,295,000 -- and bonuses cut by a third, a concession the union claimed would save owners $400 million over the life of the deal.
Changes to the amount owners would pay players in qualifying offers would save another $285 million over the next three years.
Owners would also have the opportunity to take players to salary arbitration, albeit on a limited basis, thus providing further savings over time.
The players also upped the ante in the payroll tax element of their proposal from their last offering in September, a proposal that came exactly three months ago and was the last time the two sides met before the start of the lockout on Sept. 15.
The payroll tax would kick in at $45 million with tax rates between 20 and 60 cents on the dollar with more punitive taxes for repeat payers.
The entire package represents a brand new economic landscape for the NHL, according to the union.
"I think we came in with a stronger proposal than they probably thought we were going to come in with," Boughner said. "This is a proposal we believe will save the season and should save the season."
It should. But will it?
A former top executive with one of North America's four pro leagues told ESPN.com this week that the two sides have gone beyond the point of having a settlement in which both sides can emerge a winner. The only option left is for both sides to take some losses and move on, he said.
Lose-lose is suddenly the most attractive option for a league with very few options given the lack of interest shown in the sport since the lockout started.
Certainly no one can accuse the players of not understanding that concept.
Many players reacted angrily when told of the proposal.
"Yeah, some players have said, 'Holy cow!' and maybe in stronger words than that," Goodenow acknowledged.
Is there room for more movement from the players? Sure. The tax threshold on the luxury tax did not have the bite many had expected and one assumes if there is wiggle room for a counter-counter proposal from the players it would be there.
The question now remains whether Bettman and the owners are prepared to take their dose of medicine too. If Bettman's comments are to be taken at face value, the answer is no.
It is said the only certainties in life are death and taxes. In Bettman's world a hard cap is part of that etched-in-stone list.
"Yes, we still believe the right way to go is a partnership between the league and the players where there's a definite relationship between revenues and expenses and that's something we're going to have to look at and how it might apply in the context of what has been proposed," Bettman said.
"I don't believe in a luxury tax. I don't think it is predictable and I don't think it works in terms of getting rid of disparities or letting teams retain their playing talent," Bettman said.
If that is indeed the league's final position then the season is doomed, as many believe it has been doomed from the outset.
If not, if the owners can take at least a partial step toward the middle in light of the major step taken Thursday by the players, then the framework is there for an agreement and beyond that a new future for the league.
All of this now rests on Bettman's shoulders.
It is not an insignificant weight. This is now the moment that will define his reign as commissioner of the National Hockey League.
Scott Burnside is a freelance writer based in Atlanta and is a frequent contributor to ESPN.com.