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With news last night from TSN Leakcentre via Darren Dreger- you can read about it
HERE from HB's own Travis Yost- always a good read and follow.
It comes down to the concept and language no one seems understand let alone like. In particular 'make it whole' is the terminology that causes head's to scratch but it shouldn't.
First, in total revenue discussions in contract talks whether it be individually or group targets are often used with hard numbers and percentages. For instance the NHL argues that it cannot sustain business across league with only 47% of HRR. The counter by the NHLPA is that to change that percentage split to the proposed 50/50 how do existing signed contracts continue to be honored as they were intended and agreed upon? This is where 'make it whole' comes in.
As I have explained in past months, my professional life has brought me through this process and it took 18 months from beginning to end. The basic principle was how to make my representative group (players) receive fair compensation for our work. While each of our businesses do not negotiate individual contracts we negotiate to earn a minimum amount of money paid to us annually. How each 'player' earned that money was based on how well you operated your business- performance, an issue not related to current NHL contracts.
If the total amount of revenue paid was less than the agreed upon minimum there was a provision to 'make us whole'. This is what the NHLPA wants and it's fair and entirely possible to honor contracts as they were signed.
While the NHL and PA have agreed that there is 3.3 billion dollars of HRR on current definitions what if salaries were not tied to HRR and escrow was gone?
Impossible? I'm not so sure.
At a cap of 70 mill there is 2.1 billion to be spent but the players only earned 1.87 because of HRR, but their contracts were whole aside from escrow.
The solution, at least for the owners is to allow players to earn contracts in whole a they were signed enforce a cap that equals 50% of HRR at 3.3 billion. It would be 55 million and there's no way the players would take it. So herein lies the crux of where I see the battles lines to finalize a deal between the two sides.
If the owners want to guarantee a 50/50 split on HRR and keep up-front costs down, ie player salaries, and players want to earn their current and future contracts in whole a concession has to be made.
The reason why the NHLPA will not take a 50/50 immediate roll back tied to a cap is that to earn the 1.65 billion all teams have to spend to the cap of 55 million. Right now the floor is 54 so in theory it’s not that hard but going further the owners will not want a floor. Look at the next season and say that all contracts are honoured but after that teams have to get to a hard cap of 55 million and under. Right now 22 teams are above the cap and the NHL is offering to honour those contracts in full or ‘whole’ and should, going forward. So what happens in a 2013-14 season?
Take the Canucks, in that 13-14 season their opening payroll is 55,403,333 so very close but they would have some holes in the roster thus moves are going to be made. But all contracts are paid in full no escrow. To even offer an olive branch the NHL says we won’t drop below the 3.3 billion in HRR and the split minimum is now 1.65 as a floor and it can only go up. If the revenue drops below 1.65 billion it does not affect the cap or salaries. If revenue goes up the players are paid out the difference upon determination based on a scaled formula of their existing contracts.
If each team received an extra 10 million (600 million league wide split increase) a player’s share could be their percentage of the existing cap their contract takes up. Take Vancouver again, each Sedin would receive an 11% top up or ‘bonus’. What’s different now is the players are earning their contracts in whole and they are very interested in more league revenue as it is like a bonus based on profit sharing.
This outline is rudimentary at best and I won’t bore you with getting into some minute details of how this scenario works in it’s entirety but I think this is one way the owners may go forward with the ‘make it whole’ proposal. The challenge for the NHLPA is that their counterpart wants to change the way the players earn their money either in full or through escrow manipulation. The fans and public can support 50/50 but they also don’t think the players should have to take a hair cut on the deals they signed in good faith.
In this proposal the players get some gurantees they never sink below the current high water mark of HRR at 3.3 Billion and they earn the contract in full. However there is less money to be spent going forward and that means the guys at the top end of the salary scale will probably make less than they do now. It’s a savvy tactic should it materialize because it makes each player look at their counterpart and say ‘are you so valuable that I should make less to afford you?’
This situation was always going to end by pressure from within either camp and it’s possible that Gary Bettman just started the civil war in the NHLPA. Do you want to be made whole or do you want it to be Fehr?
Winnipeg Jets Blogger •Winnipeg Jets Writer • 
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