Talks between the NHL and NHLPA have been going on for a few weeks now and yesterday the first shot was fired, but unlike many who see this as an execution style dual in which one side turned around early and shot the other in the back, I see it as a starting gun, like in a race…..a very long race.
As we know, these negotiations are much like the regular season with the added grind of the playoffs - a marathon, not a sprint - and it's foolish to think, as some of you are, the NHLPA will just take their pucks and go home when they have two months to negotiate and sort this all out.
I know you've all seen Pawn Stars because I see you tweeting about it, which means you've all seen owners say, "I'm asking for $5000, but I'd be willing to take $3000" and, after negotiations, they inevitably walk away happy with $2500 in their pocket. How is this any different?
Here are the main points of the reported proposal:
- reduce hockey related revenues to 46% from 57%
- 10 seasons in NHL before becoming UFA
- contracts limited to 5 year terms
- same salary in each season of contract
- no more salary arbitration
- ELCs are 5 years instead of 3
- no signing bonuses
- cap ceiling to be $4M above midpoint, floor $8M under
While this a serious wish list, it's also a way to see what is important to the NHL and the common thread I see is stability.
The first point regarding hockey related revenues is one that I will not attempt to explain and think it will be tops on the list of points to argue when the NHLPA and NHL sit down again on Wednesday, but all the other things on the list are about roster/salary cap stability.
Players used to have to wait much longer either in terms of years of service or age before becoming unrestricted free agents and it doesn't surprise me in the least that owners would like to see that changed considering this means most players developed through their system are able to test the market in the prime of their careers, which from a players' standpoint is by far the best time to do it which is exactly why I don't see that part changing……That said, I think if UFA status was extended we'd see a lot more offer sheets and should the players concede this point, the "penalty" for employing an offer sheet would be amended to be less severe and maybe even contingent upon age/years of service as well as the amount of the contract.
Prior to the last lockout, a long-term deal was generally accepted as 5-7 years in term. It wasn't until a team decided to think outside of the box and sign some monster deals to generate some publicity and fan interest in hopes of selling more tickets that long-term became more synonymous with 10-15 years. At that point, other GMs were inclined to offer the same in order to stay competitive on the free agent market and/or lock up their more promising RFAs.
I'm not sure those long term contracts have really worked out for either the players or the teams although we won't know the true extent of the insanity because only one (Yashin) has expired - technically, it was bought out. Rick DiPietro will never escape the cloud of his contract which has 9 more years left on it. Mike Richards and Jeff Carter felt betrayed after taking a discount (however slight) and signing on to be Flyers-for-Life and traded within a year of doing so. Roberto Luongo has cracked under the pressure of his monster contract and appears on the verge of moving….The point is the shine of these long term contracts on both sides can tarnish rather quickly.
From the owners' standpoint, long-term contracts have become a way to manage the salary cap - which I'll address shortly - and from the players' standpoint it's about job security. That said, I'd hope that these elite athletes would be competitive enough to want to be worthy of those contracts and be willing to earn them over and over again based on their merit and not their legacy. Chris Chelios, Jeremy Roenick, Nick Lidstrom and Teemu Selanne are excellent examples of this.
Not to mention the added pressure from fans of being 40 years old and monopolizing $7 million of the salary cap while their production/performance is not in accordance with that, which brings us to the next talking point - having the same salary in every season of a contract. Along with offering these longer-than-long long-term contracts, the GMs were forced to get creative with these contracts in order to manipulate the salary cap. In my mind, front loaded contracts are only worth it in the first few years and all involved are banking on $5-$6-$7 million being a drop in the salary cap bucket in 10 years, which might not be the best risk to take from a PR standpoint.
I don't see the value in having every year of a contract worth the same, but I do see value in eliminating the term "salary cap hit." Whatever a player is paid in any given year should count against the cap. Players get paid what they want to be paid and teams aren't able to manipulate the rules by adding on an additional year or two or three to make it more manageable. It's a loophole that should be closed.
No more salary arbitration is not even worth discussing because it's ridiculous to even consider. It is the only recourse a player has to make sure he's getting fair market value as a restricted free agent. There is no way the players would concede this point. Ever.
Changing the length of entry level contracts from 3 to 5 years is not the worst idea in the world and besides the principle of it (not allowing a player to negotiate a new contract sooner rather than later), I'm not sure the players would be particularly opposed. If you think about it, the tweener contracts - the ones between ELC and the long term pay days aren't all that spectacular and in most cases are essentially extensions of the ELC. If you loosened the restrictions on the salaries allowed on the ELCs, this might be the most reasonable issue on this list. I think the real battle on this issue will be between the guys with superstar written all over them, who would want shorter ELCs so they can earn more money sooner, and the guys who muck and grind their way to the top, who would prefer an extra two years to solidify their worth to a team. Then again, if the salary limits are lifted, it's a win-win-win. To me, that is even more important than implementing more (and more reasonable) performance bonuses.
On that note, I think the only people who should get signing bonuses are those on ELCs. If you're signing your second, third, fourth contract, do you really need an advance on your paycheck? I know, I know….it's not about need, but it's still a valid point. Signing bonuses should be reserved for the young guys who are making the rather huge transition from college/juniors to the pros and need to secure a place to live, pay for summer training, etc. Beyond that transition phase, hire a financial planner and make smarter decisions on how to use your hundreds of thousands, if not millions of dollars and live within your rather fantastic means.
Finally, the cap floor and ceiling…. I don't have a huge issue with the salary cap as long as it's linked to revenue because it's done its job in creating an outstanding level of parity throughout the league. That said, this will be a huge battle considering the NHL wants to redefine "revenue" to just hockey related revenue. There's a huge difference between hockey related revenue (ticket sales) and everything a team makes from ancillary revenue streams (merchandise, food and beverage, parking and, most significantly, broadcast rights), especially when you consider that they are intrinsically connected.
While there are some serious issues on the table with a lot of debate and discussion ahead, the good news is it's July 14th, not September 14th and I'm not ready, not even close, to pushing the panic button. There's a lot of time left to work out a deal and start the season on time. Keep the faith.
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As you hopefully already know, I produce the College Hockey Spotlight during the season and by popular demand, I'm highlighting the game show segments throughout the summer. Here's how well the boys from Bowling Green know each other....
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I'll be doing another mailbag blog later this weekend (postponed by the latest CBA negotiation news and subsequently, this blog). If you have questions about the NHL, NCAA or international competitions, let me know because I might have answers....
Julie
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