NHL Labour Negotiations Dying A Slow Death

Thursday, the NHLPA forwarded three separate proposals to the NHL and it’s owners in response to the NHL’s proposal earlier this week. While fans would have been foolish to expect a deal to be hammered out on Thursday, there was hope that the two sides would find some common ground and enter into a meaningful dialogue that would at least get the negotiations headed in the right direction.

Instead, the NHL reviewed the NHLPA’s latest proposal and dismissed all three (at least one of which is said to have included a 50-50 split) in a matter of minutes, leaving the two sides at a loggerhead, and further jeopardizing the 2012-13 NHL season.

In a nutshell, the NHL’s most recent proposal called for a six-year agreement that would see the NHL and NHLPA agree to a 50-50 split of Hockey Related Revenues (although what constitutes HRR has never been agreed upon) and a five year limit on player contracts.

The Proposal would also see entry level contracts being reduced from three to two years, while group three UFA eligibility would apply to those serving eight years or at the age of 26. There would also be limitations on year-to-year salary variability on multi-year player contracts of a maximum increase or decrease (salary and bonuses) limited to 5 percent of the value of the first year of the contract and the elimination of re-entry waivers.

All of this was contingent on the NHL playing a full 82-game season with an Oct. 25th deadline to allow for the season to start on Nov. 2nd.

When you get right down to it, what the owners were proposing is to take back most of the concessions the players gained during the last lockout, which did not sit well with the players or NHLPA executive director Donald Fehr.

At the conclusion of today’s one hour meeting Bettman emerged to face the media where he vehemently stood by the NHL’s latest proposal.

“We gave it our best shot,” Bettman said. “It is our best offer. We gave them (players) what we had to give. We indicated we’re prepared to have discussions. We’re willing to make tweaks or adjustments.”

Bettman went on to call today’s meeting “concerning”, “discouraging”, “a step backwards” and also lamented that the two sides were “not speaking the same language.”

For his part Fehr was equally miffed, questioning both the legitimacy and timing of the NHL’s latest offer and continually pointing out that the players have nothing to gain by going along with said offer.

“The magnitude of the concessions the players made then, 24% in salaries, we estimate around $3.3 billion (US),” Fehr said. “In that same time, the NHL had record revenues every year. So what proposal against that backdrop did the owners make? Let’s have another 24% less, later it was 17.5% and the most current offer, if one can call it that, which came in the last few days, was to reduce salaries ‘only’ 12.3%.”

“If you assume that’s their (NHL’s) best offer, why in the world did we (NHLPA) see it four weeks into a lockout, and not on Sept. 14 or whenever they made the proposal for a 24% rollback?”

While there is some truth to Fehr’s venom, there will come a point where the NHLPA will have to give something back to the NHL and it’s owners if they truly want to play hockey again. Clearly, the NHLPA is not looking to make “tweaks” or “adjustments” as Bettman said the NHL was willing to do, we are looking at two sides very much at odds with little to no reason to believe the other will budge off of their demands.

Don’t forget, the players gave back 24 percent in salary in the last lockout, and while I think we’d all agree that the players will have to give something back to the owners in order to make the current NHL stronger, they are clearly not prepared to have that burden put squarely on their shoulders.

In their original proposal the players asked that the most successful franchises give monies to those that are struggling in the form of revenue sharing. The NHL rejected this idea and now seem hell bent on making the players pay in order to strengthen the struggling teams.

One thing is for certain, both sides seem determined to crack the others armor. Bettman has been talking a tough game, and while you have to respect the job he is doing for the owners, my money is on Fehr to out-wait, out-wit and out-class Bettman in the end.

When it comes to labor negotiations Fehr, a veteran of three labor disputes from his days with Major League Baseball, is a demon. That is why the NHLPA is paying him an absolute fortune to represent them and why Major League Baseball is glad Fehr is gone. Make no mistake about it, Fehr will not give into Bettman and the owners, not on their terms, and certainly not without limiting the concessions the players will have to make in order to get a deal done.

You want a 50-50 split Mr. Bettman? No problem, but we (NHLPA) will dictate the pie from which revenue is drawn. You want to cancel more of the season? No problem, we are willing to sit out all season long. Fehr is playing Russian roulette and his gun has six shots loaded ready to point at Bettman’s head. Go ahead Mr. Bettman…make Fehr’s day!

This is poker at its best, hockey fans. And with the two sides currently bluffing with their “take it or leave it/all-in” proposals I cannot see this game ending without significant bloodshed!

Despite record revenues being reported since the last lockout there is widespread belief that as many as 20 NHL teams are struggling financially, which is why the owners are fighting so hard to get away from the last agreement which called for the players to take a healthy 57 percent share of HRR.

From a players perspective the NHL’s recent proposal feels disingenuous and the fact that the NHL suddenly wants a quick resolution had NHL super-star Sidney Crosby questioning the NHL’s tact.

“The timing of this (proposal) is pretty ironic, thinking that the only way of getting 82 games in is figuring something out in the next week. I think that’s by design. You come with three proposals (Thursday) and it’s shut down in 10 minutes, not even a day to think about them. That doesn’t seem like a group willing to negotiate.”

Crosby is right. Why now, with the NHL clearly looking to save face with the fans, is the NHL seemingly willing to negotiate? And why should the NHL dictate when the season should start and how the revenue is split?

While the players want to get back to the NHL as quickly as possible they are not so desperate as to sell their souls in order to do it.

If you ask me the players are in control here. Nobody goes to a hockey game to see the owners, and in the end the fans do not care what the players are making as long as there is NHL hockey to watch. Sure, the players need the owners, but many players have found alternative leagues with which to play in and without the players the owners really have nothing but empty buildings, buildings that are costing many owners huge amounts of money while they sit empty.

At the end of the day a 50-50 split seems inevitable. What the two sides are squabbling over more than anything is how to get to that 50-50 split and how to determine what constitutes HRR.

In fact, the NHLPA’s latest proposals are said to have included at least one that would call for a 50-50 split. With the NHL dismissing the NHLPA’s latest proposals one can presume that the biggest sticking point now is not the percentages, rather the pot from which the split is made, or the amount of HRR that is involved.

Phoenix Coyotes forward all but confirmed this with his comments today.

“We did come to 50-50 as they proposed,” said Doan. “When people ask for money, they usually say ‘give me your money or I’m going to hurt you. They don’t say ‘give me your money and I’m going to hurt you.’

So, if the owners were asking for a 50-50 split and the players offered up a proposal which included this concession, then it must be the size of the pie (amount of HRR) that is being split and some of the other factors such as player contracts, rollback penalties, etc. that are holding things up— none of which are small issues.

Of course, there is still time for the two sides to come to an agreement, but as the clock continues to tick the more likely the NHL will lose momentum with it’s fans, especially the fringe fans— the same fans that were responsible for much of the growth the game has enjoyed over the past seven years.

If the game stops growing that bottomless pot of HRR the two sides are fighting over will dry up, and then what have you got?

If the lockout continues much longer the NHL will have to consider canceling the Winter Classic, which brings in millions of dollars in revenue and unmeasurable public relations and marketing/awareness for the league. The NHL invests millions of dollars in advertising and other costs for the Winter Classic, monies the league will not want to part with if there is no inkling of a deal getting signed.

While only a small portion of the 2012-13 season has been put on hold thus far, there is reason to believe that if a deal is not signed by Oct. 25th further cancellations of regular season games may have to be made, which will not sit well with the fans, or players for that matter.

In the end the players, owners and fans all want to play hockey, but with the sides so far apart in their negotiations there is a real danger that there will be no hockey this season.

If that should happen the loyalty from fans and sponsors will be tested and any momentum the league was having in terms of growing the game and revenues could also be in jeopardy.

Why, with the game doing so well, either side would want to test the patience of the fans is beyond me? Then again, when you consider the huge growth the NHL experienced since the last lockout maybe they are confident that the fans will come back?

With both sides dismissing the others proposals the fans are now left to sit idly by while billionaire owners fight it out with millionaire players.

So, here we sit, weeks into the lockout and little (if any) progress has been made. In fact, as Bettman pointed out today, the two sides may be further apart than they ever were and that is not cause for optimism.