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Commissioner Cloutier's "Final Offer" |
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I read one sports news story yesterday that said the NHL and NHLPA were set to being negotiations on December 26th. I read a story from a different source that suggests the NHL and NHLPA have made absolutely no plans to meet. Which is correct? I don't know.
I got to thinking last night about what I'd do if I was Gary Bettman/Bill Daly, and I was told my employers to make a better "final offer". I could do it. In fact, my "final offer" would make more sense (to me at least) than the "final offer" the league gave players a few days ago. If I was running the NHL, I'd go a different direction on a number of matters.
So here's my attempt as the new Commissioner of the NHL acting will the full authority and control over negotiations from ownership, at offering the players a more acceptable "final offer".
CBA Length: 10 years, with an additional 2 year option that needs to be exercised by both the PA and the league in order to take effect. Why? Because an CBA shorter than 10 years will be an insult to the fans who have remained patient through this entire mess.
Salary Cap: The salary cap would eventually be set to a 50/50 share between owners and players. The move to 50/50 would be slow and gradual, done in such a way that no players are asked to take a paycut. There's no "make whole" money required either.
Year 1 (12/13) - 57%/43% revenue split (57% players/43% owners), with league revenues estimated to be $1.91billion for 2012/2013. $1.91bil is $3.3bil minus the amount of revenue lost so far (roughly 42% of estimated revenue for the season). Cap numbers for players would be minus the same 42%, and the players would lose that much income. The cap would still read like teams have $70.2mil of cap space, with full current contracts being counted against it. This way, all teams can fit under the cap from the start of the season with their current rosters.
Just to make sure teams can get under cap, there would be an Amnesty period before the start of the season; roughly three days immediately following the signing of the new CBA, where an Amnesty clause would take effect. This clause would allow teams to buyout player contracts at full remaining value (players to receive 100% of what they are owed) with no penalty against the cap.
Year 2 (13/14) - Revenue split moves to 56%/44%. Escrow would need to be involved here, because it's hard to say how much league revenues in Year 2 of the new CBA would be down. There would also be a second Amnesty buyout period before the start of the 2nd year of the new CBA, once again allowing teams to conduct buyouts at full value without a cap hit penalty. This period needs to occur because we'll only have a clear picture of how much the league has been damaged by October 2013. With a cap to be set at 56% of revenues based on the pro-rated 2012/2013 season's numbers, teams may need to reduce players expenditures by a few million to make it work financially.
I realize the NHL is not crazy about all these buyouts because they would require money from "outside of the system", but allowing buyouts like these in Year 1 and at the start of Year 2 allows for a slow and gradual move to a 50/50 revenue split, which will make players happier than a quick transition.
Year 3 (14/15) - Revenue split (55%/45%).
Year 4 (15/16) - Revenue split (54%/46%).
Year 5 (16/17) - Revenue split (53%/47%).
Year 6 (17/18) - Revenue split (52%/48%).
Year 7 (18/19) - Revenue split (51%/49%).
Year 8 (19/20) and Beyond - Revenues split 50%/50% between players and owners.
If revenues begin to grow again as they did in 2011/2012, you could see the cap go up around $3mil per season in Years 3 thru 8 of this plan. Revenue growth would continue to exceed the annual decline in the revenue share.
Maximum Contract Length: 6 and 8. Six years if signing RFA's or UFA's from other teams. Eight seasons if you're resigning your own players.
Buyouts: Teams could buyout contracts made post-lockout a 50% of value, regardless of a players age or amount of time in the NHL. There would be one buyout period each season, two days after the NHL Entry Draft and lasting 72 hours. This would occur in a way to allow those players time to test the UFA market on July 1st with all the other free agents. The 50% buyout amount would count against a team's cap number the same way buyouts do now.
Increase to Minimum Salary Level: To off-set the buyouts clause (as many in the NHLPA won't like it), the NHL will increase their minimum salary level from the current $525k to $750K. This would apply to all contracts made after the new CBA takes effect.
Arbitration: No changes from current CBA.
Entry-Level Deals: No changes from current CBA.
UFA Age: 28 years old, or 10 years of service in the NHL.
Revenue Sharing: The NHL will commit $200mil per season towards revenue sharing. Of course, there wouldn't be a need for so much revenue sharing if the league moved a few teams from crummy markets (Phoenix, Florida, etc) to good ones (Markham, Quebec City, Seattle).
"Make Whole": As previously explained, there's no need to for make whole money. Under a slow and gradual move to a 50/50 revenue split, teams will have plenty of time to adjust spending and all current contracts would be paid out in full.
Other Items
- The NHL would make a long-term commitment to Olympic involvement, because it's an amazing way to promote the game and league internationally.
- The CBA would set out realignment, and would make way for two more expansion franchises to be added. While some suggest the NHL is already stretching too far with 30 teams (and the size of the league should be closer to 24), expansion a great way to regain some of the league's lost revenue from this lockout. A percentage of expansion and relocation fees could be allocated to the PA for improved player pensions (let's say 25%). Expansion would create more hockey jobs, and set the league up so there could be four conferences of eight teams.
- Realignment would also need to be part of a realignment and expansion plan, and should be completed at the same time (not before).
- There would be no cap floor. Meaning, teams could spend significantly less on talent if they decided to do so. This clause would save several franchises, at least long enough for them to establish a more solid fan base.
Final Thoughts
As much as the Pro-PA camp makes me nuts for how they conduct their business, the NHL made two huge mistakes that likely have everything to do with why this lockout has continued: First, they signed a bad CBA in 2005. Obviously the players want to maintain the rights they gained in that deal; one they considered at the time to be a huge loss and an insult. The owners need to pull back even more money and rights from that 2005 deal, but no one should have expected the players to be happy about it. Everyone outside of the situation can't believe how stupid the NHLPA is acting, but they do have a reason to feel a bit abused in all of this.
The NHL also never should have made such an insulting first offer to the players. It galvanized them behind Donald Fehr. Think of it as prophesy: Before the NHL's first offer, Fehr likely told the players the league was going to do something awful. When the league did what Fehr predicted, it made him look brilliant. As the Disclaimer of Interest vote demonstrated, 95% of the players in the NHL are drunk on the PA's Kool-Aid. Perhaps they'd look at their leadership differently if the NHL didn't put on the black cowboy hat at the start of the movie.
Would the plan I've described here work? I think the PA would be thrilled with it. Not sure what the owners would think. My impression is, the owners feel they need to get to 50/50 within a few seasons. Financial numbers from some of the teams suggest this is correct. There's no way the PA would agree to there being no cap floor, but you can't have everything. Either you can have a slow, gradual move to 50/50, or a system set up to allow teams like Phoenix and Nashville to survive.
Edmonton Oilers Blogger • 
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