TORONTO – As the NHL’s labour dispute went on display for public viewing, it underscored the importance of the next week in negotiations.
The league’s latest collective bargaining offer to the NHL Players’ Association—surprisingly released in full by the NHL on Wednesday—came with an attached warning about the consequences of failing to reach an agreement by Oct. 25.
In a document that was delivered to the union along with Tuesday’s 10-point proposal, the NHL indicated it couldn’t “responsibly” offer more than the 50-50 split of revenues and other items it was tabling. It also sought to add some urgency to the talks.
“Delay (beyond Oct. 25) will necessarily leave us with an abbreviated season and will require the cancellation of signature NHL events,” it read, making a clear reference to the Jan. 1 Winter Classic game.
“Failure to reach a prompt agreement will also have other significant and detrimental impacts on our fans, the game, our clubs, our business and the communities in which we play. All of this will obviously necessitate changes to this offer in the event we are unsuccessful in saving a full season.”
Donald Fehr, the NHLPA’s executive director, spent Wednesday examining the proposal along with union staff and was expected to deliver a counter-offer when the sides resumed negotiations on Thursday.
They have just one week to reach a deal that would see an 82-game schedule start on Nov. 2—the latest commissioner Gary Bettman said it could get underway with the Stanley Cup still being awarded in June.
The NHL’s offer is a six-year deal, with a mutual option for a seventh, that would see owners and players split hockey-related revenues down the middle. It also included a provision to ensure players receive everything they’ve been promised on existing contracts, although some of that money would come in deferred payments that would count against the players’ overall share in revenue.
“This proposal is our best attempt to save an 82-game 2012/13 season, and is, in fact, the best we can responsibly do,” it read.
While some players continued to express cautious optimism—veteran Winnipeg Jets forward Olli Jokinen labelled it a “starting point”—Fehr didn’t seem quite as enthusiastic. In a letter sent to his membership and player agents, which was leaked to TSN on Wednesday, Fehr wrote that the offer “represents very large, immediate and continuing concessions by players to owners.”
“Simply put, the owners’ new proposal, while not quite as Draconian as their previous proposals, still represents enormous reductions in player salaries and individual contracting rights,” Fehr wrote. “As you will see, at the five per cent industry growth rate the owners predict, the salary reduction over six years exceeds $1.6 billion. What do the owners offer in return?”
Players received 57 per cent of revenue at the end of the expired CBA and would be surrendering $231 million per year, based on last year’s numbers, by moving to a 50-50 split.
The NHL’s latest offer was the third it has delivered to the union since talks began in June and included fewer concessions than it had previously asked for. For example, it said the revenue split would be based on the same definition of hockey-related revenue used in the last agreement, pending “mutual clarification of existing interpretations and settlements.”
Some of the other highlights of the offer include:
—an official salary cap of $59.9 million for the 2012-13 season, with the provision that teams can actually spend up to $70.2 million for one year to ease the transition.
—a new rule that would allow teams to retain a portion of a player’s salary in trades.
—the reduction of entry-level contracts to two years.
—a five-year term limit on every other contract and a stipulation that the average annual value can only vary up to five per cent from the first season. This is a mechanism designed to eliminate the long-term, back-diving deals that became popular during the previous CBA.
—the elimination of re-entry waivers.
—an annual revenue-sharing pool of $200 million, half of which is raised from the 10 richest teams, and the creation of a committee to determine how the money is distributed. The NHLPA would be given representation on the committee.
—the introduction of a “neutral” third-party arbitrator to handle appeals on supplemental discipline with a “clearly erroneous” standard of review.
“There’s a lot of parts of the proposal that we don’t feel are very good from our standpoint and we’re still giving up huge concessions in a lot of different areas,” said Jets captain Andrew Ladd. “We’ll address that in our proposal and go from there.”
It remains to be seen just how far they’ll go.
With a deadline now in place for trying to preserve an 82-game season, the sides have to cover a lot of ground quickly. Thursday’s counter-proposal from the NHLPA, and the league’s reaction to it, should provide a pretty good indication of how realistic it is for them to get there.
“We do not yet know whether this proposal is a serious attempt to negotiate an agreement, or just another step down the road,” Fehr wrote in his letter to players and agents. “The next several days will be, in large part, an effort to discover the answer to that question.”
With files from Judy Owen in Winnipeg.