NHL Lockout: The Owner's New Plan
 

http://sports.espn.go.com/nhl/news/story?id=1981298

Tuesday, February 1, 2005
League's proposal includes $42M salary cap

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ESPN.com news services

The NHL and the players' association plan to meet Wednesday in New York, with league representatives expected to make an offer that will include a salary cap system, ESPN has learned.

With the clock's ticking growing ever louder, the league sent a memo to teams outlining its latest ideas.

This week's proposal, much of which already has been disclosed informally to NHLPA leaders, would include a salary cap with a minimum of $32 million and a max of $42 million but likely would not include an individual cap of $6 million, according to a New York Daily News report.

The plan also is expected to require profit sharing, with a 50-50 split of money over a figure to be determined, although speculation has put it at at least $100 million.

The league also wants to make salary arbitration a two-way street, giving teams as well as players the right to exercise that option.

Opinions differ as to whether a luxury tax -- a league no-go thus far -- could be on the table. The Daily News reports that the formal proposal won't include a luxury tax, but former Canucks president and general manager Brian Burke told the Toronto Star that the two sides "will discuss a luxury tax."

Only Bill Daly, the NHL's chief legal officer, and outside counsel Bob Batterman were expected to represent the league, while NHLPA senior director Ted Saskin and attorney John McCambridge will take part for the players' association.

Trevor Linden, the players' association president, New Jersey Devils president and general manager Lou Lamoriello, and Harley Hotchkiss, the chairman of the NHL board of governors, are not expected to be part of Wednesday's meeting after sitting in last week.

For the fifth time in two weeks, the sides will meet without commissioner Gary Bettman and union chief Bob Goodenow.

Wednesday's meeting will be the first face-to-face talks since last Thursday, when the sides wrapped up a two-day meeting that started in Toronto. The NHL brought up ideas during that session that didn't sit well with the players' association.

Speculation is that a deal must be done this week -- or next week at the latest -- to salvage the current season.

The philosophical differences that existed between the league and the players on Sept. 16 -- the first day of the lockout -- are still there 4½ months later.

Linden, a Vancouver Canucks center, came up with the idea two weeks ago to hold meetings without Bettman and Goodenow. The hope was that it would spur open discussions and lead to a deal that would save the season from completely slipping away.

Through Tuesday, the 139th day of the lockout, 756 of the 1,230 regular-season games and this year's All-Star game had been lost.

Information from The Associated Press was used in this report.

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I'm definitely impressed by this plan. The owners have come through in offering a fair plan. Now its in the player's court. Hopefully they make the right decision.

The chances of the players accepting this:

0%

The chances of players being utter fools:

100%

I would agree.

Haven't been following this very closely, but from what I gather the owners won't agree to anything unless there is a salary cap, and the players won't agree to anything that has one. Someone has to blink.

Fixed it for you.

What's a few billion.

i'm glad the owners are doing business with their balls. it's about time. you think the MLB would stand up to the MLBPA like this? i guess not having a popular sport kinda helps.

When hockey resumes, there WILL be a salary cap. It's to the players' benefit to accept now, get that $32mil min, no individual max, and other amentities they're fighting for.

But they won't, because Goodenow won't give up his job that easily.

To be fair, I don't see much give from the owners side on this so I don't think there's a chance the players will accept this at all. They didn't even go for some minor concessions- they went for the juggular with things like the two way arbitration and an individual player cap (tho if I were a middle class player, I'd be happy about that but every other PA cries at something like that so this'll be no different).

SI

I'd love to see this scenario happen to baseball.

Ditto here, but it'll be quite a while in happening.

SI

Nice.

Apparantly the PA has asked the NHL to have Bettman and Goodenow to re-enter for another meeting tomorrow. Been saying it for weeks now, but it seems like THIS is the last straw - get a deal done now @ $42+mil, or wait til next year (forfeiting this year's salaries in the process), and play at $35mil.

Bob has spent too much time telling the players they don't need a salary cap to step back now. The NHLPA will not come to an agreement until he is fired, IMO.

i don't get it - it's not like he's an agent. where does he stand to profit for digging in his heals holding out for a deal that doesn't include a salary cap? a salary cap only hurts agents who have a limit as to the cut they get off of their clients. in no salary cap they can potentially make oodles of millions. but for a union head? he gets paid either way. isn't it in his best interests to take the best offer on the table? (and i understand about the pride factor as Tekneek was alluding to).

Well, he's in a tough spot.

If he accepted the cap back in August, the players would accuse him of caving. If he accepts it now, he's accused of costing them half a season of salaries for no reason at all.

If he waits until July to accept, he costs them a season worth of salaries AND gets them a worse deal.

He might as well accept now, and spend the next 6 months convincing everyone he played the cards right.

And he's right.

nice to see the deluded masses represented here as well.

A Salary cap for hockey MUST happen, period, without it the sport as a whole will die. The NHL simply can't survive the next decade without one.

The players need to accept this, sign the deal and get their sorry asses back on the ice. I'm with the owners on this one, players and agents alike need to stop being greedy fatbacks and do whats best for the sport. If they want to HAVE jobs in a few years they need to get this deal done, and soon.

So are you, but I get tired of crying in the wilderness of raw jealousy that this subject seems to generate.

i agree....but have a question.

lets say the players amazingly accept this deal (which includes a 24% rollback on ALL current contracts for the life of the contracts).

wont some teams still be above the cap? dont they need some time to adjust to salary cap life?

For all of you who find yourself in agreement with Hell Atlantic, you're insane if you think the owners "doing business with their balls" is going to benefit anybody but the owners in the long run.

I guarantee that you will not see lower ticket prices, except possibly in the very short term to try and get people back into the habit of going to the games. In the long run, they'll be as high as they ever were, and possibly higher. Ditto for parking and concession costs.

And that would be true of any sport. The entertainment cost in pro sports for Joe Average to go see a game is going to be inflationary. If you have "cost certainty," as the owners claim they need, why wouldn't you then, once you have it, do what you can to maximize your revenue, since you know the players can't hold you for ransom anymore?

I could insult you too, but frankly, it's not worth my time.

Holy frigging crap, John and I agreed for perhaps the first time in 4 years.

Actually, it'll benefit me, as a fan - I'll still have my favourite team (the Oilers) around for years to come. Without some form of cost certainty, they're probably toast.

Its too bad you're missing the point.

Without the cap and the things that go with it in about 5 years there would be about a dozen hockey teams in existance and you'd still be paying an arm and a leg to see them.

But of course thats better than giving all the teams enough of a financial footing to stay in business and put competitive units on the ice.

Sure, tix prices will still be high, but at least its a chance to actually have a sport to buy a ticket FOR.
Its not an issue of who's getting the better deal, the issue is continuing to have the NHL to enjoy as fans, wether we can afford to go to the games or not isn't at issue here. There will always be fans who just can't afford to (like myself)

It comes down to this, without a cap the NHL is done, stick a fork in it. With a cap it can at least put more competitive teams on the ice in all its cities and support the fan base with a product.

Hocky, or no hockey, THAT is the question.

Help, I am just curious. Why are the Players not Playing here, in America?

As I was watching the Colorado Eagles play it dawned on me, that NHL players playing here in the minors would bring the NHL owners back to the table immediately. Sure it would be for less money than they are making over in Europe, but in the end the the strike would be over just as soon as those minor league TV rating started to in crease along with merchandise sales.

Nothing would make the NHL sing a different tune knowing that they are easily replaced. Just a shame that the NHLPA did not, or could not, bring this off.

As far as I've seen many players are playing in various minor leagues. Not tons of them, but a number. The money is better over there, so I'm betting most would choose Europe for that reason.

Eh, shit happens, as long as it doesn't become a trend I wouldn't sweat it too much :D

And, since I'm posting already, I'll save a dola & make a simple point about why I so completely agree with the player's rejection of a hard salary cap.

On Dec. 9, the players' association proposed a luxury-tax system with an immediate 24 percent rollback on all existing contracts. The NHL liked the idea, since it would cut average salaries down to $1.3 million, but called that offer a short-term fix.

Umm, that's only a "short-term fix" IF YOU REFUSE TO CONTROL YOURSELVES.
I don't for a moment believe the players can (or do) walk into an owner's office, hold a 9mm to his head & force him to sign a damned thing. Judging from the latest owner's proposal, they don't appear too concerned about min sal levels, just about where the maximum's have gotten to. Guess what? That's their own damned fault & nobody else's. Don't believe a player is worth what they're asking? Then don't pay them that much ... just like most every other business in the world. But don't cry like a little girl if somebody else in the same business decides that Player X is worth the money, that's the same world most of these guy's made their fortunes in, it isn't like this is some brave new world for them. Take the generous rollback offer as a partial reprieve & then act responsibly from that moment forward. Or sell the team. Or fold it. But don't be such a massive pussy that you have to impose some contractual form of self-restraint.

There is a smoking gun to the owner's heads, its called their star players holding ticket sales of the team's fans for ransom, aka huge contracts.

yes they can choose not to pay them, and they can watch them go to another team and watch their arena's sit half-filled for the season.

The players offer IS a short term fix for this reason, both players AND owners would have to control themselves, and since AGENTS do the dealing for the players based on their comissions, the players offer is like slapping a band aid on a 12 inch gaping wound.

Great idea, one inescapable problem. Player's union would scream collusion in a heartbeat if they did that. (Did that being all the owners just deciding to practice fiscal responsibility and not pay exhorbitant contracts anymore.)

This is the point I'm making, RendeR.

If the difference between the arena being half-full and completely-full is having that star player signed to a massive contract, okay. But now you have to ask yourself, Am I making money with the full arena?

If the answer to that is "no," maybe you're better off not signing the star player, fielding a lower payroll, and, yeah, maybe only selling half your seats.

Otherwise what you're doing is yoking those star players and saying "I want your services and the benefits you'll bring me, but I don't want to pay you what the open market would cost." This isn't about the rank-and-file NHL players. This is about controlling costs with the biggest stars, the ones who make 8 figures a year, so that the owners can get the splashy headlines, lure people to the arenas, and make more money off of the talent and effort of those stars while spending less.

You say that the tangible benefit of a salary cap to you is the fact that you'll have a pro hockey team (as opposed to the alternative), but you know what? If the owners would set a budget for their GMs, and hold them accountable to it, they wouldn't be in this fix.

And if that means that your Colorado Avalanche and Detroit Red Wings are more capable of signing top talent than your Anaheim Mighty Ducks and your Phoenix Coyotes, well, the free market sucks, doesn't it? Why should the owners have an inherent right to a profitable product in a market that wouldn't otherwise support it at the expense of the talent which makes that product possible?

Nobody said anything about not paying exorbitant contracts. What it comes down to is tough decisions. Is that star RW making $10m/year going to be more valuable to the team than a 3rd line defenseman, a backup goalie, and a 2nd line center for the same price? If you can afford the player, great, sign him. If not, you fill your holes with the space you have to work with. Some teams are going to have different budgets than others. That's the free market at work.

Collusion would be if the owners said "Okay, don't pay any player at X level more than Y salary." Saying "I make $100 million in pre-tax revenue, I can afford to spend $40 million of that on salary" isn't collusion. That's "Here's my means, I'm going to live within them." Let the union scream. If they don't like what Toronto can afford to pay them, there's always the Rangers.

That's all great if they all have the same budget, otherwise you are letting just a few teams control the league. It's in the best interest of the league and the players to have as many teams as possible competitive.

So far we have not seen the owners move, I would think it's in the players best interests to get this settled as soon as possible.

But the disparity between the different markets is a large reason the game is the way it is today. The Wild were just barely able to sign Gaborik. And if they can't even afford to hold on to their one franchise player who has been there from the beginning, then fuck 'em. They'll just keep on signing less talented players and teaching them the neutral zone trap. Then they'll make the Western Conference Finals every so often and score one or two goals in the whole series. And boy is that good for the league.

Ren, I appreciate your responses. You're saying basically what I would be saying should I have the time and energy to go at it as I have in many other threads.

Jon- I'll take my socialist sports league any day if that's what I'm advocating. I, for one, don't think that just because a team is located in New York or Toronto that they should have an advantage over a team in Edmonton. The alternative really is a 10ish team league. Personally, I think it's in the best interest of the league that there are more teams and a broader audience- maybe not the same number, maybe a few need to fold. But for all who remain- it's in the best interest of the league to give them a fair chance to compete and saying that because you're in a larger market or have a rich ownership group doesn't give you a birthright to win. Communist or nothing, it's good business sense.

Sox Win- second, third... tenth, whatever verse same as the first. Congrats on your stellar contributions of "And he's right." and " I could insult you too, but frankly, it's not worth my time." Is "I know you are but what am I" next?


I italicized what I figured were the particularly damning portions of your argument. In other words, teams with better revenue streams deserve to always be the best teams? That's the logical conclusion of this all. If that's the belief the league is predicated on, then I just won't follow it. I want to see who can do better with the same resources: make the coaches, players, and front office decide who is better.

I draw the line at revenue streams- not all cities are created equal or even remotely equal. There is no way Calgary will ever get the same revenue streams as New York even if they are the most creative business minds out there. The owner can choose who to run the team and which players to sign but they can't magically make a larger population or money spring up in their city.

SI

^
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And he's right.
:D

And that's the other problem. The teams that can't hold onto the talent are the ones playing trapping style defenses, because they'll get slaughtered if they play wide open. Why do you think the trap swept the league in the 90s? The Devils back then did not have the talent of the other top tier teams, but showed an ability to be successful playing a suffocating style... of course them doing so also allowed them to STAY in Jersey, rather than moving to Nashville back in 1995.

I guess, what I don't get it this.

Last season, the average team payroll was around $44 million.

Now, I don't know all the fine details of the proposal, but from what I gather, the league wants a salary cap of approx $32-$42 million. If the NHLPA could get the salary cap around $40 million, and say a payroll floor of $35 million, then what is so bad? They've already offered to take a 24% rollback - that would bring the average team payroll to around $33.5 million.

(I realize there are all sorts of other caps and/or restrictions, but this would just seem to be the big one, I guess)

The key word is "cap".

Just wondering but, doesn't this fly in the face of economics and what it means to be a business? You would ask aggressive businessmen to 'restrain thyself'. Doesn't laissez-faire capitalism rise up if you place NO restrictions on them? Self-restraint in business...that’s novel. You can't expect a businessman to NOT bust his chops to 'win' in a free market, to bend every rule he/she can to win the game! This is what Goodenow 'gambled' on back in the early 90s and he was right. They wouldn't/couldn't restrain themselves then, what’s changed?

I mean, every other business in the world has some rules that govern its activity from OPEC to the ICC or the FCC, rules have been set up to 'balance' the field for the good of the whole. Do you think if no one stepped in to stop Microsoft, they would be the ONLY software company right now? What about Wal*Mart? They're already a bane to a lot of people in the US and Europe/Russia's gonna find out about their special kind of 'love' soon enough. AND if Electronic Arts could, wouldn't they have the ONLY NFL Football game on the market(ok, bad example), but doesn't it make good business sense for them to do it if they could?

Do we want only one or two NHL teams competing season in, season out? This isn't a question about whether or not the league should be ran like any other business, it could be, and you would loose about 3-5 teams a year over the next 5 seasons. We would loose all but one(maybe two) of the Canadian teams. Probably a hand full of US teams would make it and we'll have a dead league with the NY Rangers paying the next stud 180 million a season...and might I remind all you fine readers, this isn't a sport with 100,000 seat arenas...there is just so much income ticket sales can be relied on for. Can we all agree, there is a finite amount of money available from ticket sales...$250 a ticket(oh my!!!) x 30,000 seats(not an arena this size yet that I know of) x 42 home games(less as teams fold)...scarier still is the fact that with an average ticket price of $250 a game, I will wager there won't be many 'butts-in-seats'.

Admittedly, the passion I feel for this issue has swayed me a bit. I want the NHL to be saved, great things await in the next few years and I want to see them evolve. We can't expect the NHL to operate like any other business. The players are NOT going to stop asking for more money. The owners will continue to drive their teams to ruin to 'beat' their fellow GM/Owners and therefore, someone or something has to save the NHL from the monster its created.

This Salary Cap issue, to me, is more than about who has the biggest set of balls, its about saving hockey in ALL its current cities(whether they deserve to have a team or not). If you run this league like a 'real' business, like a Wal*Mart or Microsoft, it will be down to 8 teams real quick...the NHLPA don't want that...and I don't want that.

The attitude of 'the strong(or best) will survive' is only good IF you want to see hockey stripped out of all the small markets who love their teams and a LOT of history will be lost with them and maybe MORE importantly, a lot of FUTURE, yet unwritten history will be lost with them...I’ve rambled long enough...thanks for reading.

If a franchise is not financially capable of competing at the highest level, then it's probably time for them to find another level. And if that's 10 teams or 30 teams or whatever, so be it AFAIC.

Should've bolded them. the Quote feature automatically italicizes, so it makes it tough to see what you were picking apart.


Not necessarily, no. But there's two things to keep in mind here.

1) Success begets success. If you win, people will come to the games, if - and here's the key - you're in a market that will support the sport in the first place. I know the idea behind expansion is to grow the game, but you can't just dump an NHL franchise in a city like Phoenix or Miami and expect them to have an instant appreciation for the sport. You need to build it up from the grass roots. *Those* are the markets I point at when I talk about fiscal responsibility.

Detroit will always be Detroit, New York will always be New York, and so forth. The Canadian teams need help, absolutely, I won't argue that. Because of economic disparities between the United States and Canada, they simply cannot compete in a pure free market with the top American teams.

However, I don't really believe that the NHL needs to be in many of the markets it's currently in, and they certainly don't need a team in Tennessee or two teams in Florida, or hell, even two teams in California. But if they insist on those teams being there, those teams need to understand that they need to live within their means, rather than forcing economic "parity" on the league as a whole simply because 4, 6, 8 teams exist when they really shouldn't.

This is the key: no business has the "right" to exist with guaranteed revenue or profit. You need to be running your business responsibly if you want to make money, and if you're in an entertainment-based business it's not only irresponsible, but unethical, to tell your employees that they need to voluntarily submit to restraints on their earning power in order to increase your own by an indeterminate amount.

The NHL has proposed a cap of $40 million, or $42 million, or whatever, on player salaries on a given team. Tell me, have they countered with a profit restriction on those teams of an equivalent amount, and volunteered to put any excess profit into a fund for, say, the urban revitalization of the markets in which they exist? Or perhaps to use said profits to fund youth hockey in areas that wouldn't otherwise get it, so as to build up a talent and fan base that will enable the league to remain profitable in the long run?

Because that's the key. You can restrain salaries all you want, but if you aren't making solid plans for the expansion of your market, then what are you going to do if the protracted labor dispute reduces attendance as drastically as the '94 baseball strike did? All of a sudden you're committed to $40 million in salaries, but even less revenue is coming in now than did before. Are you going to go back to the union in five years and tell them that you're STILL losing money, and that the cap needs to be more restrictive to save the sport?


They can move their franchise to a city that can sustain them, or put the damn team in a city that will sustain them in the first place. No, they can't change the dynamics of their city overnight, particularly with regard to population, but that doesn't mean they're completely helpless, either.

Agreed. Again, a business does not have an inherent right to exist, nor to be stable and profitable, or else we'd have 0% unemployment. Everybody would start their own business!

The NHL is a business, the same as any other professional sport. That means you don't spend more than you can afford. That doesn't mean you place artificial restraints on what you're required to spend in order to ensure that you don't exceed your revenue. It means you either spend what you *can*, or you look for a way to grow your revenue base. If neither are possible, then you either go out of business, or you find a new place to do business where such IS possible.

Therein lies the crux of the problem. Based on national and local revenue, the league is capable of supporting 25+ teams, provided the money is distributed in the proper fashion.

But you'd rather see 10 really wealthy teams. However, you never address the problem: a 10 team league would have no credibility whatsoever and would wither and die. A fact that no one on the players side is willing to address.

SI

Let it not be forgotten that higher ticket prices, in the newest proposal, equals higher payroll ranges. What will be guaranteed is the percentage, not the range itself, which like in the NFL will change yearly to reflect changes in, you guessed it, the market. Far as I recall, that was never so overtly stated in any previous engagement.

For the 87th or is it 99th or however many-th time, I can't keep up. You can't treat sports leagues like "any other business" because there IS NO OTHER BUSINESS MODEL LIKE THAT. Point to me a business where the following are true: 1) The business as a whole *grows* when there is co-operation among competitors, 2) Destroying your competition can be bad for business

Like Jon above, you can't possibly tell me with a straight face that a league with only teams from the following cities: Toronto, New York, Chicago, Detroit, Denver, Los Angeles, and a couple of others, can operate with more than marginally more credibility than Arena Football or the CBA.

SI

Duly noted- it's been bolded.




This is also a counter to SA's point on the same topic later on in his argument: You know this isn't their final negotiating position. If the NHLPA ever agrees to a cap, it won't be at $42M and 53% of revenue. This is where the wiggle room is in their proposal. They want to be able to back up to a cap of over $50M and low 60% like football and basketball. It's a bargaining ploy, plain and simple.

Two points to counter your points: the first is that yes, the NHL overexpanded. However, it needs to be dealt with. Do you really think that the best solution is to not fix the economic problems, see which franchises get wiped out, and then go from there? How about trying to fix the economic problems, see which franchises get wiped out after the problems are solved, and then get rid of those. You can't tell me that Pittsburgh can't be a good hockey town if they had a chance to field a team that wasn't the NHL equivalent of the Bengals or Clippers.

As for "success begets success"- an expansion franchise won't be able to win for at least 5ish years. If there is nothing in place to allow teams to have some mobility without spending loads of cash, then no expansion will succeed whatsoever. This is part of what happened. Look at Colorado- Denver's not a huge market but because they had a team move there and have great success, they had more cash and a fairly good fan base. Expansion teams don't have that luxury- they need a chance on a level playing field to grow that fan base for the good of the league.

SI

BINGO! Sports leagues aren't "just like every other business". They require a form of collusion in order to merely survive. No other business relies on their competitor's health for its own. No other business gets together with the owners of its competitors to decide the 'rules of the game'. Sports leagues are just an entirely different model and it is about time that people stopped thinking of them as the same as every other business. They aren't.

Is this to be a hard capped Salary cap, or is it gonna be something like the NBA, where the cap is essentially a joke.

Here is the proposal, in full, that was rejected.
http://nhlcbanews.com/news/nhlproposal020205.html

NHL'S PROPOSED FRAMEWORK FOR A NEW AGREEMENT
FEBRUARY 2, 2005

1. TERM

-- Remainder of 2005 season, plus six (6) years (through 2010-11 season).

2. UNION REOPENER

-- Unilateral Union right to reopen Agreement after Year 4 (after the 2008-09 season).

3. ENTRY LEVEL SYSTEM

-- 4-year mandatory two-way contracts.

-- $850,000 maximum compensation (inclusive of NHL salary, bonuses for games played and signing bonus).

-- Signing bonus maximum in each year of an Entry Level contract of $100,000 for Picks 1-5; $75,000 for Picks 6-15; $50,000 for Picks 16-30; and $40,000 for Picks 31 and up.

-- $250,000 maximum aggregate in individual "A" bonuses (as modified) for all Entry Level Players. (See Attachment A)

-- Individual incentive bonuses tied to final voting for League Awards (formerly individual "B" bonuses) will be paid by the League in accordance with the attached schedule. (See Attachment B)

4. RESTRICTED FREE AGENCY

-- 100% Qualifying Offers for Players earning less than $800,000; 75% (or $800,000, whichever is more) Qualifying Offers for Players earning $800,000 or more.

-- Same Right to Match/Draft Choice Compensation Rules as under the expired CBA.

-- Players and Clubs obligated to reach agreement on terms of a new contract by no later than fourteen (14) days after the opening of Training Camp; failure to do so results in player ineligibility (and unavailability to Club) for balance of the season.

5. SALARY ARBITRATION

-- Entirely mutual (Players and Clubs have identical rights to request arbitration).

-- All Group 2 Players are eligible for Salary Arbitration. (Salary Arbitration is available with respect to all Players who have completed four (4) years in the Entry Level System and are not yet eligible for Unrestricted Free Agency.)

-- Non-requesting party has one-time "deferral right" on the following terms: (1) Player can "defer" Club's election of Salary Arbitration by accepting his Qualifying Offer; (2) Club can "defer" Player's election of Salary Arbitration by signing Player to a one-year contract at 105% of the Player's prior year's salary. This "deferral right" would not be exercisable by either a Player or Club with respect to a Player coming out of the Entry Level System.

-- Non-requesting party can elect term of 1, 2 or 3 years.

-- Both parties to Salary Arbitration proceeding have obligation to submit a list of up to five (5) Player comparables (exclusively from among the universe of contracts entered into by Group 2 Restricted Free Agents) prior to briefing, with each side having the ability to strike up to two (2) comparables from the other side's list.

-- Mutual "Walk-Away Rights" for Clubs and Players as follows: (1) Clubs can walk-away from Salary Arbitration Awards in return for which Players attain immediate free agency subject only to a Right to Match in favor of the Player's Old Club for contracts entered into for 90% or less than the value of the Award; (2) Players can walk-away from Salary Arbitration Awards and elect instead to accept a contract for 90% of their Qualifying Offer. "Walk-Away Rights" exercisable only by non-requesting party.

-- League has option to eliminate Salary Arbitration mechanism in its entirety at any time during the term of the Agreement by converting age of eligibility for Group 3 Free Agency to 28.

6. UNRESTRICTED FREE AGENCY

-- Age for Group 3 Free Agency reduced to age 30 for the 2006-07 season (with corresponding reduction in years of service requirement).

-- Groups 5 and 6 Free Agency eliminated.

7. PLAYER CONTRACTS

-- NHL Minimum Salary increased to $300,000 per year.

-- We believe that in order to ensure that Players are compensated in the fairest possible manner, the parties may have a mutual interest in negotiating over the establishment of an NHL Maximum Salary for individual players. No specific amount is being proposed in this regard.

-- Guarantee terms (1/3 or 2/3 for skill; 100% for injury) remain unchanged.

-- Maximum term of 3 years (with term of all existing contracts "grandfathered").

8. LEAGUE-WIDE PLAYER COMPENSATION "RANGE"

-- The parties agree that the new Player Compensation System shall ensure that total League-wide Player Compensation in any year of the new CBA will not: (1) be below 53% of the League's revenues, or (2) exceed 55% of the League's revenues.

-- 15% of each Club's Player Payroll will automatically be escrowed every season to ensure compliance with the 55% high-end of the Player Compensation Range.

-- Accounting will be performed at the end of each League Year, and the escrowed funds will be distributed either to the Players; or to the Clubs; or to both Players and Clubs in order to ensure that Clubs have paid no more than the agreed upon 55% of League Revenues.

-- If NHL Clubs as a group spend less than 53% of the League's Revenues, the Clubs will be required to contribute additional dollars to a pool to be distributed to the Players to ensure that they receive the agreed upon 53% of League Revenues.

9. FLOATING TEAM PAYROLL "RANGE"

-- The parties agree that the applicable Payroll Range for each team in any given year should be representative of the League as a whole, and should not necessarily be engineered either toward the lower payroll teams as a group, or to the higher payroll teams as a group.

-- To effectuate this philosophy, the following Floating Team Payroll "Range" is being proposed.

-- For purposes of establishing the starting Team Payroll Range, each of the top five and bottom five Clubs (ranked in terms of Total Team Payroll for the 2003-04 season) will be entirely excluded from the analysis (Teams 1-5 and Teams 26-30).

-- The low-end of the Floating Team Payroll Range will be established by averaging the Total Team Payrolls (as adjusted to reflect the 24% Salary Rollback) of the ten (10) Clubs ranked immediately below the League mid-point (Teams 16-25). Using that calculation in Year 1, each Club will be obligated to spend no less than $29.8 million on Team Payroll (or $32 million in total Team Player Compensation).

-- The high-end of the Floating Team Payroll Range will be established by averaging the Total Team Payrolls (as adjusted to reflect the 24% Salary Rollback) of the ten (10) Clubs ranked immediately above the League mid-point (Teams 6-15). Using that calculation in Year 1, no Club will be permitted to spend more than $40 million on Team Payroll (or $42.2 million in total Team Player Compensation).

-- The mid-point of the Floating Team Payroll Range will be adjusted on an annual basis to reflect changes in League-wide revenue, with corresponding changes to both the low-end and the high-end of the Floating Team Payroll Range.

-- Enhanced and meaningful revenue sharing pursuant to which all 30 Clubs (assuming an appropriate level of business performance within their respective markets) would be provided the ability to afford a League-representative Team Payroll, which would be established at a point within the prescribed Floating Team Payroll Range.

10. PAYROLL TAX FEATURE

-- The NHL is not in favor of a Payroll Tax, and believes it is neither an essential nor useful element of the type of system we are proposing. Nonetheless, to the extent the Union feels otherwise as they have suggested to us, we are prepared to consider the inclusion of a Payroll Tax element in the context of a Floating Team Payroll Range. Specifically, we propose that, at the option of the Union, a single-tier or dual-tier Payroll Tax structure may be incorporated within (and not exceeding) the Floating Team Payroll Range at thresholds and rates to be negotiated.

11. PROFIT SHARING

-- The parties agree that the objective of the new CBA is to make the National Hockey League, as a whole, healthy and profitable through the establishment of an economic partnership with its Players.

-- Profit Sharing with the Players on a 50 (Players)/50 (Clubs) basis over and above a League-wide profit threshold to be negotiated.

12. JOINT AUDIT CONTROLS FOR CALCULATION OF CLUB REVENUES

-- Each year's accounting will be performed by an independent accounting firm jointly selected by the NHL and the NHLPA.

-- Mandatory $2 million fine and loss of 1st Round Draft Pick for first Club offense for failure to disclose required financial information.

-- Mandatory $5 million fine and loss of three (3) 1st Round Draft Picks for second Club offense for failure to disclosed required financial information.

13. ESTABLISHMENT OF JOINT OWNER-PLAYER COUNCIL

-- Establishment of a joint Owner-Player Council (with League and Union representation as well) to meet on a regular basis to discuss issues of mutual interest relating both to business and game-related matters.

14. 2005 STANLEY CUP PLAYOFFS REVENUE PARTICIPATION

-- To compensate the Players for a shortened 2004-05 regular season with a full Playoffs, we understand that there will have to be a distribution out of revenues generated from the 2005 Stanley Cup Playoffs to ensure that the Players receive the agreed upon 53% of League Revenues.

15. SALARY ROLLBACK

-- Union's offer of 24% across-the-board Salary Rollback for all remaining years of all existing contracts is accepted.

I can't believe this is actually in there. This was just a proposal put out there to try and fish for public opinion that didn't work.

Then again, I guess this is the owners' way of saying "ha, we called your bluff".

SI

I thought the owners had said that the salary cap would be tied to revenue?

If I were a player, I would jump at this. The NBA and MLB would hate this deal. It gives the PA access to accounting data, profit-sharing, and more. It could set a new benchmark for sports CBAs. Unless I am mistaken about the agreements with the other major sports, no other players' association would have the kind of access and involvement that the NHLPA would have going forward under this.

I'm really torn on the revenue-sharing, "socialist" argument. I root for a team that's big market, maybe the big market in all the league. I realize that gives them a huge advatnage over teams like the Oilers and Flames.

On the one hand, I look at the Leafs fan base all across North America. I see sold-out games, I see stands filled with blue and white jerseys during every road game, I see high TV ratings every time they play, and there's a part of me that says "They deserve to have more resources than the other teams, because they have a massive fan base that's incredibly loyal and throws money at the team. Why shouldn't they be able to spend more than some team playing in an empty arena that nobdy cares about?"

I hate the idea that one of the most successful teams (off the field) in all of North American sports should have to give up millions of dollars to support teams like Nashville and Atlanta that have no interest in a team. That's not millions of dollars of the owners money, it's my money, and the rest of the fans. I'm not so naive as to think that ticket prices will come down, so where does that leave us? I spend $200 on a new Leafs jersey, and the money goes straight to Phoenix so they can make another "How Icing Works" commercial for the scoreboard?

On the other hand, I want the Oilers and Flames and Wild to succeed because I can see the passion those fans have. I don't want to have a ten-team league. I think the NFL parity model is far better than the MLB model, with its guaranteed Yankees/Sox ALCS. And I realize that while the Leafs' popularity is largely based on their inherent greatness (cough), there's at least some measure of a self-fulfilling prophecy. They're on TV all the time because they get high ratings, so people grow up watching them, so the ratings stay high, so they're on TV all the time, etc. I get that.

In the end, I think it's inevitable that the league needs some sort of revenue sharing to survive. I accept that. I'd just feel a lot better about it if the league would first take a good hard look at its current franchises and decide to pull the plug on a few of them. I'd like to see the league divided into three tiers: the big markets, the small markets, and the no markets. First get rid of the no markets, and then I'll grin and bear it when you give my money to the small markets.

You think the NHLPA would consider that proposal? "Ok. You guys rejected the salary cap with 30 teams. Our new proposal involves eliminating roughly 100 NHL jobs amongst your ranks, along with the minor league organizations that go with them." And so goes their chance to prove in court that they are negotiating in 'good faith.'

Actually, everything you read indicates that the NHL is fine with fewer teams. It's completely counter-intuitive for the reasons you mention, but people I've talked to (who are not insiders but who do get to talk to insiders) have said the PA wouldn't object to losing teams. Remember, the 100 jobs lost would just be the lowest paid players anyways, the fourth liners. Does the NHLPA seem like it really cares about those guys?

A valid point. If they cared about those guys, they would be playing hockey right now. The low-end players stand to make more money under most of the league's proposals. Over half of the players in the league make less than the average salary too, with the median salary $300k - $400k below the average. I'm not sure, yet, why they are letting the high-rollers lead them into ruin.

The owners aren't ready to consider contraction. Quite frankly, I think there is sufficient evidence that all current teams could make money in their locations, especially with a cap in place.

BTW.. read the fine print of the owner's plan.. There's enough poison pills in this to make it nothing more then a cheap PR stunt at BEST.

For example.. "Oh look.. we hate arbitration, but we're going to make it so both players and teams can go to arbitration. See how much we're willing to bend?"

And OOPS.. there's language in the contracts that states that at ANY time, the owners can pull arbitration off the table and replace it with guaranteed free agency at 28, where the players run into the artificial barriers of salary.

Lemme get this straight ... a league of 10-20 teams "isn't credible", and yet I've heard repeatedly how "credible" a league of scabs would be? Bwahahahahaha.

(this is an espn.com article :))

Want a clear understanding of just how bleak are the prospects of a resolution to the NHL lockout? It's now up to Gary Bettman and Bob Goodenow to save the day.

For most of the last month the respective leaders of the two sides in the longest labor dispute in NHL history were frozen out of the process because it was believed things might go more smoothly with the two acerbic personalities safely tucked away in their offices. Now, after the NHLPA quickly rejected the latest, perhaps last, league proposal presented Wednesday, NHLPA executive director Goodenow and NHL commissioner Bettman aren't just back in the loop but they must work together to defuse the labor time bomb they helped create before the season blows up in their collective faces.

"Obviously if we're going to break the current logjam we're going to have to brainstorm on some new directions," NHLPA senior director Ted Saskin said during a conference call hours after the union's rejection of the offer which was pretty much the same offer the union flat-out rejected last Thursday in New York.

"We need to discuss where we are in the process and how we might move it forward," Saskin said.
The one element of certainty about Thursday's meeting is that it marks the beginning of the end of this dispute. Whatever the outcome of Thursday's meeting will set the course.

Imagine every bad odd-couple, cop/partner movie ever made without any of the laughs and you'll have a sense of Thursday's meeting dynamics. Oil and water have a better chance of getting together than these two men do given their history and the shaky framework provided by this latest proposal.

Saskin had perhaps the best analogy of the situation. It's like someone tries to sell you a house in a swamp but offers to put in some nice curtains to obscure the view, he said.

"The salary cap is the swamp."

To be sure, there are some curtain-like elements to the NHL's proposal that might actually provide the framework for meaningful movement in this dispute.

There's a profit-sharing initiative that the NHL's top negotiator Bill Daly describes as the "cornerstone" of a long-term partnership between the players and owners. But the concept is so vague no one could say just how lucrative it might be or when there might actually be profits to share.

There's an option for a joint audit of team financial records with heavy penalties in the form of fines and forfeited draft books for non-compliance and a player/owner council to oversee improvements to the game and business matters.

There's the return of salary arbitration which the owners wanted to eliminate altogether although there is a clause in the new proposal that allows the owners to eliminate it whenever they want and replace it with unrestricted free agency at age 28. That's not a particularly attractive option for players given that the market would be flooded with players trying to sign on with teams who'll have less money to spend.

"Oh, let me sign up for that," one team player rep told ESPN.com sarcastically.

There's a payroll tax component which the players can invoke at their discretion. Of course given that it's a payroll tax within the salary restraints demanded by the league makes it of little use to players.

Which brings us to the salary cap, which is actually a cap within a cap -- or given Saskin's analogy, a swamp within a swamp?

Including player benefits, there is a minimum salary requirement of $32 million per team and a ceiling of $42.2 million. But team salaries cannot exceed 55 percent of league revenues, which means that given last year's $2.1 billion in revenue the maximum per team payroll would be $38.5 million. If revenue drops to, let's say $1.75 billion, the maximum per team salary would drop to $32 million. If revenues jumped to $3 billion, salaries would be capped at $42.2 million even though 55 percent of those revenues would mean a $55 million payroll.

The proposal also called for a three-year maximum on any contract length.

As for the 24 percent across the board rollback on existing contracts offered by the players in December, the owners did make a concession there. They agreed to keep the rollback but left it as an across the board rollback instead of restructuring it as they did in their Dec. 14 proposal.

"Why did the NHL even make this offer? The whole thing doesn't make any sense," another team rep told ESPN.com.

"I think almost every player in the association would turn this down. It's not something to make players look long and hard at," he added.

It's almost as though this offer is designed to ensure that players don't actually give it serious consideration, the player rep said.

"Just when it looks like we might possibly take a step forward they give us something that's three steps backward," he said. "They make it easy for us."

What remains confounding is what exactly might be discussed Thursday in New York and how it could possible end any other way than abruptly.

"I don't know what there is to talk about. It gets a little stranger every day," one of the player reps confided.

The one element of certainty about Thursday's meeting is that it marks the beginning of the end of this dispute. Whatever the outcome of Thursday's meeting will set the course.

If Goodenow and Bettman are able to find in the wreckage of rejected proposals and entrenched positions some kernel of common ground, the talks will move forward without a break.

"I would hope that as an outcome of tomorrow we will continue talks on a continual basis," Daly said. "I am concerned in any prolonged gap in the negotiations at this point. It's time that the parties need to be working on this and mutually problem-solve on a daily basis to try to get this resolved."

If, as logic and history suggest, the two men glare at each other and quickly depart, then the formal cancellation of the season won't be far behind.

At this stage, a resolution of any kind will be considered mercifully welcome.

After four seasons of it, complete with annual accounting done by a firm that the NHL and NHLPA select, the union can open it up again. If the league was lying, surely they would have the evidence by then, right? In the meantime, they can keep making lucrative salaries (even $300k a year is in a high tax bracket)... I think the knowledge gained from the unprecedented level of involvement the NHLPA would have under this proposal makes it worth more consideration than their snide remarks give it. I think they are afraid the league is right about the finances and once annual accounting is done the NHLPA will be forever locked into that system as the media revenue dwindles away. The NHLPA isn't happy with 53% - 55% of league revenues. They want 75% of the revenue pie that is getting smaller and smaller.

Maybe the players want to handle the off-ice jobs too, since they want the off-ice staff to be paid with 25% of the money. There are a lot more people involved off the playing roster than there is on it. Spending over half of the revenue on the playing roster is a pretty fair offer, because the players by themselves don't generate the revenue. If all the off-ice stuff is a mess, the fans won't be knocking down the doors to get into the arena.

This was setup to be the point of negotiation. Any 'poison pills' are put in there to be negotiated out by the PA during the process. Seems very normal to me.

The difference being, one is permanent and one is temporary...


Hell yeah, what he said!!!

Sports leagues are unique all around...a model for the NHL might be only found in another league, the NFL. Are they 'doing it right'...at least partially I think and it works for them. Their field is leveled enough now that every team can go into training camp with a real belief that they can make it to the playoffs...and more than a few can be optimistic that a deep playoff run is possible. This translates to a good time for the fans and it makes it fun for everyone!

A slight nitpick, but I believe Atlanta is one of the few teams that is profitable.


I think you are right. If they can't use the "NHL is lying about their finances" canard then they lose a lot. The public opinion will definetly shift full swing over to the owners, who the public can see is losing money hand over fist.

Please, like the NHL still won't cook the books.

Not an honest team amongst the bunch. There's too many ways to hide legitimate revene for it to ever be truly counted.

Try a little harder. Name the number of leagues who have actually went on with scabs? Again, it's a pure negotiating ploy.

SI

No doubt there are shady characters. However, Flames management opened up all the books with the players a couple years ago. The President is very reputable, actively involved with the fans and I take him at his word when he says the team was riding $35 million of debt but made $15 million last year because of the playoff run. Ownership consists of legitimate hockey fans, who have put up with losses more than they should have but have kept the team here rather than leaving for Houston or somewhere else. Alumni are still living here and actively involved in the community and with local charities. All in all, it's a pretty classy organization.

Montreal also has the reputation of being a first class organization but I can't comment specifically.

Ok, I take back my comment.

that's two.

I wouldn't trust the other owners to tell me the weather with the help of an open window and a thermometer/

You don't have to trust the NHL with the accounting. The accounting firm would be selected by both the NHL AND the NHLPA. Get it?

Also, there are some pretty stiff penalties for not turning over the proper goods.

Well, it's 9:32 p.m. EST and they're still meeting in New York... 8 hours and counting... a small statement from the NHL which says no updates will be given tonight...

The six heavy hitters are working... I think (hope?) they realize the damage no season will cause to *both* sides...

if any concessions are made, its gotta come from the players. they wont give up the money AND the prime of their careers.

i just hope something is resolved...

Whichever side you're on, one thing's for sure... the longer this goes, the better the chance of a deal.

Didn't the AFL-NFL merger back in the day go on forever over how to realign the league between all the owners?

Meeting again tomorrow...

So.. how do you book revenue from concessions. From Merchandising. From parking, arena advertising...

This is all hidden stuff that earns sports teams owners a ton of moeny. But if you take a look at sports teams.. you don't see any of that shit. Why? Because it suits the team's need to book the revenue as an arena owner while crying about huge (fake) losses as a team owner.

You see, you have two ways to look at this. The players aren't important in this thing. They're just the paid help.

Either...

A) The owners are incompetent fools who can't spend within a budget and be innovative in attempting to keep the fans interested in the public without spending beyond their means who, for their own sake, should have their teams yanked from them for their own good to prevent them from losing tens of millions of dollars to their own incompetence.

or...

B) The owners are like many other corporate suits.. looking for every last despicable trick and loophole to break any opposition. Crying poor all the way to the bank while raking in tens of millions of dollars behind the scene. They don't want cost certainty, or actually, they don't just WANT cost certainty, they want to take a step towardsthe old days where owners were rich and players were basically indentured servants.


You know, for a society that abhorred Communism in all its forms in the 80s so deeply, we sure want it for a major part of our sports lives.

I think I start to understand some folks's opinion when they say.. "You can't legislate fairness"

If my employer said they were committed to spending at least 53% of revenues on non-management wages, I think I could be happy with that. You combine profit-sharing with that and I am entirely on board. I would want to sign that committment immediately before they changed their mind.

Shit, I'll join this camp. A Salary Cap is essentialy people (owners) asking to be saved from their own stupidity - and having someone else bear the burden for it.

Dood, you're ignoring basic economic principles in favor of half hearted crap motivated primarily because people can't deal with atheletes making a lot of money. There is no damn motivation to lower ticket prices whatsover. if the NFL paid its players 1/10th of what it did, do you think Super Bowl tickets would be any cheaper ?

Umm - no. You think Microsoft isnt reliant on its competitors making software for its systems ? You think Adobe isnt reliant on other companies using its standards as the way to distribute documents ? Sports teams are complimentary products to one another.

If the players want a "free market" they can go to a different hockey league. They don't have to play in the NHL. As you can see from this season, they don't have a problem suiting up overseas. Heck, they don't even seem to have a problem playing for a few hundred bucks a week (demonstrated by NHL regulars signing with the lowest levels of pro hockey in North America). They say one thing when talking about the NHL, but then go off and do the opposite.

If you want there to be no cap, then we should drop guaranteed contracts as a requirement as well. That's not 'free market.' No minimum salary, other than the minimum wage for the location of the team. If the owners are not allowed to be collective in the CBA, then neither can the players. No more union. We're going entirely with the free market approach. Each player negotiates his own arrangements in his contract and that's where it stops.

actually it's not. it's essentially one group of people having more resources due to their location and market size to spend on FA's than people in smaller markets and with smaller resources. the playing field needs to be equal so that smaller resource teams can compete with teams with infinite resources. stupidity only deals with the big market teams who keep raising the value of top FA's and price them out of the market.

the point is to compete and win because you have a superior gameplan and are savvy when it comes to assembling your team. the point isn't to have unfair advantages and to use your endless stream of revenue to buy a championship. we know that always isn't the case for baseball where teams like the Marlins and Angels win, but those are the exceptions to the rule.

No, not really. Microsoft would be fine if its competitors didn't exist. More than fine. Adobe doesn't compete with OS makers like Microsoft and Apple who use its standards. Adobe would also be fine if competitors didn't exist. More than fine.

Sports teams could not exist if it did not have its competitors.

Microsoft can sell OS's and computers because of their need in business and because people love the software they can run on their computers on MSN systems - their is an intrinsic link there. Take Apple for instance- it was kept afloat by a Microsoft investment in the pre JOB era (although it is a bad example).

Was there ever a pre-Steve Jobs era for Apple?

Steven Paul Jobs (born February 24, 1955) is best known as the co-founder (with Steve Wozniak) and CEO of Apple Computer, and somewhat less so for his leadership of Pixar.

Perhaps you are referring to his 11 year absence from 1985-1996?

That is what Im referring to when- Microsoft put a $150 million in cash into the company - a fact many a Mac-phile likes to forget (different story) .. :D

What link is there to one of its competitors? Apple was only kept afloat to try to stave off anti-trust decisions (they could point to them and say see... there is another one!). Without anti-trust, they'd love to squash them like a bug. Then again, Apple does more than make OS and productivity software.

Given that I work for the only major company to compete directly with both Microsoft and Adobe, I feel uniquely quailfied to tell you that your anology fails miserably.

(Which is not to say your argument fails, just that this particular analogy was a poor choice.)

Why would that be the case ? Its not a great analogy by any means, but I'd prefer an explanation rather than a "rank dismissal". Essentialy, my point is that in any market, competitors are very often a neccessary evil. in the MP3 player market, Rio has benefited from Apple's presence, because people want MP3 players, but many can't afford Ipods and go with a cheaper option.

Microsoft especially, and Adobe to a somewhat lesser extent, have often done everything in their power to destroy competitors. Not to compete with them, but to put them out of existence. There have been several high-profile examples, but even the boring day-to-day stuff would have you shaking your head.

Now you could make a very good argument that that's just business, and the competitors should quit crying and just compete harder, survival of the fittest and all that. And yes, there are a handful of examples of competitors helping each other (usually only due to unusual circumstances, like anti-trust lawsuits). But to say that the software industry heavyweights are accepting of competition is just not generally supported by history.