CBA Proposal Breakdown
By Jake Breunig
September 12, 2012; New York, NY, USA; NHLPA executive director Don Fehr speaks during a press conference at the 2012 NHLPA summer player meetings at the Marriott Marquis. Mandatory Credit: Brad Penner-US PRESSWIRE
Well, the NHL did just what I asked of them yesterday in my article asking them to provide a little more detail about the ongoings in their corporate meetings. I didn’t expect this however. As many may know by now, the NHL has fully released the details of their most recent CBA Proposal. While most fans will probably look at the short-hand version of the proposal, I have decided to read the detailed version and translate it here to you, the fans.
First, the “new CBA” will have a shelf life of six years with an optional seventh year. But what pisses me off about this, aside from wanting a longer term, is that, as stated, the contract length “is consistent with the term of the expired CBA.” The fact that they are keeping it consistent with the previous CBA which was formed after the loss of an entire season baffles me. And they claim that this will give “the fans” and the clubs and players an “extended period of labor peace…” I call bullshit on that. The fans want extended labor peace beyond 2018. I want what the NFL got, 10 years with a no-opt-out clause. The NBA also signed a ten year extension. The last time they signed a 7 year CBA, half the season was lost last year.
The first this mentioned on the proposal is the HRR accounting. The NHL will retain its definition of HRR.
Finally we get to the meat of the sandwich, players’ share. “We believe a 50-50 sharing of Actual HRR is a fair allocation and reasonable compromise as between Players and Clubs.” The proposal mentions the NBA and NFL when talking about the revenue split, saying it wants the split to be similar to their CBA’s. Well the NBA players get around 52% and the NFL players get 47%, so you could say the NHL is right in the middle.
Next on the books is the Payroll Range. Payroll Range will be computed using existing methodology. For the 2012/13 season, the Payroll Range will be computed assuming HRR will remain flat year-over-year at $3.303 Billion. Appropriate “Transition Rules” to allow Clubs to exceed Upper Limit for the 2012/13 season only.
• 2012/13 Payroll Range
Lower Limit = $43.9 Million
Midpoint = $51.9 Million
Upper Limit = $59.9 Million
In regards to the Cap, the NHL will no longer allow teams to use performance bonuses to count towards the cap when trying to reach the floor, the Islanders did just this last season. They will also look to more of less add a penalty for front-loaded, back-diving, and long term contracts by having the contracts in excess of 5 years be counted against the clubs cap regardless of whether or where the player is playing. Money paid to Players on NHL SPCs (one-ways and two-ways) in another professional league will not be counted against the Players’ Share, but all dollars paid in excess of $105,000 will be counted against the NHL Club’s Averaged Club Salary for the period during which such Player is being paid under his SPC while playing in another professional league.
The league also wishes to increase player movement and trading. “Clubs will be allowed to allocate portions of a contract’s cap charge in the context of a player trade. This will facilitate additional player movement and trades between teams…”
Next came the system changes to the league. These changes are to entry level contracts, arbitration, and UFA eligibility.
1.) The NHL has withdrawn its proposal to extend Entry Level contracts and instead proposes shortening them from three years to two years. The NHL believes this will free up money that will be allocated to a third year entry level player who is no longer considered a legitimate NHL prospect. This will also allow talented NHL prospects to negotiate non-ELS contracts early in their careers.
2.) The NHL is withdrawing their proposal to remove salary arbitration and rather would like to keep it but make the option of arbitration mutual between players and teams. Also, they would like to extend the eligibility from four years to five years.
3.) The NHL has withdrawn their proposal to extend UFA eligibility to ten years of professional experience and would rather like to change it to 8 seasons or 28 years old. This would still allow for underaged players to hit UFA at 26 years old.
Two more changes will be made under this proposal as well. The NHL believes that the rapid increase of front-loaed, back-diving, and long-term contracts have proven detrimental to the teams, although it was the teams who wanted to offer these contracts, not the players. Also, they would like to remove Re-Entry Waivers for AHL players. These changes should, as believed, decrease the amount of time that legitimate NHL players and prospects have to spend in the minors. Finally, NHL Clubs who draft European Players obtain four (4) years of exclusive negotiating rights following selection in the Draft. If the four-year period expires, Player will be eligible to enter the League as a Free Agent and will not be subject to re-entering the Draft.
Final thing on the new proposal is Revenue Sharing. I won’t go crazy on this because its a lot of math and big words. The NHL commits to a Revenue Sharing Pool of $200 million for 2012/13 season (based on assumption of $3.303 Billion in actual HRR). The amount will be adjusted upward or downward in proportion to Actual HRR results for 2012/13. Revenue Sharing Pools in future years will be calculated proportionately. At least one-half of the total Revenue Sharing Pool (50%) will be raised from the Top 10 Revenue Grossing Clubs in a manner to be determined by the NHL and the distribution of the Revenue Sharing Pool will be determined on an annual basis by a Revenue Sharing Committee on which the NHLPA will have representation and input.
Other benefits to the players include no rollbacks, meaning the players will not take a pay-cut. The players can also seek a “third party” for a ruling on disciplinary action. Players can make an appeal to a “neutral” third-party arbitrator with a “clearly erroneous” standard of review. Finally, the league will make a “make whole” share provision. “Under our “make whole” proposal, which is premised upon a 5% anticipated growth of HRR both this year and in future years, every player will be paid compensation based on the full value of the players’ share under which his SPC was signed.
There is a lot to process in this agreement. To me, the biggest thing that stands out is that much of the proposal is the same as the previous CBA with only minor tweaks. What do you think of the proposal?