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NHL lockout: NHLPA, league finding common ground

It looks like Canada Day will no longer be NHL free agency day.

While the NHLPA spent Tuesday pondering whether to make a fresh offer, details of what has been already been agreed to — and where the NHL has bent — are beginning to emerge.

The Star has learned that the day free agents are declared is on the move from July 1 to mid- to late June. It’s one of 13 NHLPA issues (out of 17) that NHL commissioner Gary Bettman has publicly acknowledged the league has “agreed” to.

“Agreed” may be too strong a word, though.

“Right now, nothing is agreed on because we won’t agree to anything until we get a deal on core economics,” said one insider familiar with the NHL’s positions. “But this is stuff where we said, ‘Okay, we’ll go there.’ ”

There’s no question the key issues — money (including revenue sharing), contract restraints and who pays for damage caused by the lockout — remain outstanding. Just how far the NHLPA moves, if it does indeed make a substantial new offer, will determine where talks are headed. But the sides have already found common ground in some areas and the NHL has moved off some hardline positions. Here’s where things stand heading into Wednesday’s pivotal meeting:

COMMON GROUND

The sides have more or less agreed to:

  • Change the free agent calendar, meaning the market would open on June 15 or 48 hours after the awarding of the Stanley Cup — the players want whichever is later — instead of July 1. Arbitration dates may change as well.

  • Allow cap space to be included in transactions, to encourage trades and get teams out from under heavy contracts.

  • A joint health committee.

  • Eliminate re-entry waivers.

  • A neutral, third-party arbitrator to deal with appeals for on- and off-ice discipline.

  • Minimum roster requirements to avoid situations where teams dress fewer than 18 players to save salary cap room.

GETTING CLOSER

The NHL has moved closer to the NHLPA position on:

  • Entry-level contracts. The league wants a two-year limit. The players want to leave it at three.

  • AHL salaries. The league is offering to count only those that exceed the NHL minimum ($525,000) against a team’s cap. The NHL had wanted the number closer to $95,000. The victory for the PA here is that AHL players won’t have their salaries count against the players’ share of hockey-related revenue. Accounting would be limited to players in the NHL.

  • Unrestricted free agency. The league is offering freedom after eight years of service or age 28, after asking for 10 years. This year, players could become free agents after seven years of service, or age 27.

  • Maintaining salary arbitration, but with eligibility pushed back to a player’s fifth season. The players are asking for arbitration after four years. The NHL initially wanted it abolished.

STICKING POINTS

50/50: Both sides have agreed, on the surface, to a 50-50 split of hockey-related revenue. The players want to get there eventually by guaranteeing certain dollar amounts — starting with the $1.88 billion they earned last season — will be paid over the first few years of a deal. In percentage of expected revenue, the players are closer to 56 per cent. The NHL wants a strict 50-50 split, with some provisions outside the cap to ensure players under contract get paid in full.

Revenue sharing: The players want a bigger pool of money — about $240 million — for the smaller teams. The NHL has increased the amount it would put into the pool to about $200 million.

Contract restraints: The NHL has wanted five-year limits on all deals with no more than a five per cent variation from year to year. The NHLPA seems ready to help teams find a way to discourage back-diving deals, but doesn’t like how strict the NHL’s proposals are.

Lockout damage: Who pays for the financial cost of the lockout? The league sees that as 50-50. The NHLPA wants the league to pay the lion’s share.

THE SKINNY

The NHLPA’s position is that none of the issues are settled — that they are all linked to the restraints the NHL wants. Both sides agree that anything can change, with nothing agreed to in writing.

“This is all minor stuff,” one insider said. “It’s great we have deals on these things, but they’re not changing the world.”

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What does it mean by 'Allow cap space to be included in transactions, to encourage trades and get teams out from under heavy contracts.'? Does that mean if, say, the Islanders have $10 million in unused cap space, they can trade $2 million to us for a player? If so, does it have to be tied to a player transaction, or could two teams trade cap space for draft picks etc?

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What does it mean by 'Allow cap space to be included in transactions, to encourage trades and get teams out from under heavy contracts.'? Does that mean if, say, the Islanders have $10 million in unused cap space, they can trade $2 million to us for a player? If so, does it have to be tied to a player transaction, or could two teams trade cap space for draft picks etc?

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i dont understand the NHL saying they consistantly move and the players have not moved at all? every single proposal from either side is taking away from the players from the last CBA. I understand the entire point of all this to take away from the players, but it sounds pretty stupid from a fans standpoint when the players arent going to win anything in this but just save from what is being taken away from their last cba.

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A closer look at the NHLPA's last offer – and what may be next

(edit - the formatting in the charts seemed to really mess up after copy/pasting, so I recommend clicking through to the original article. I'll leave this here though in case anyone has maxed out their Globe&Mail paywall allowance)

And so we wait.

As the lockout rolls into Month No. 3, the NHL has asked the players to serve up a full proposal, something the NHLPA is working on into the night in order to present it by 10 a.m. Wednesday morning.

Details as to what it may include are relatively thin, but what is available is the economic system the union put on the table about 10 days ago when negotiations broke down into a shouting match between players and owners.

CHY114_HKN_NHL_Labor_20121018.JPG

ANALYSIS

Analysis: Why the NHL players’ 50-50 compromise may not matter

The players' proposal at that point was based on taking the $1.883-billion share they received last season and simply adding 1.75 per cent to it each season.

It was also reliant on the notion of NHL revenues continuing to grow from the $3.303-billion they hit last season. If hockey-related revenues increased by 5 per cent each season (including the current, locked out one), the players' share would shrink from 57 per cent last season to 55.2, 53.5, 51.9, 50.3 and 48.7 over the next five years.

Sounds good, right? A players' share of less than 50 per cent?

Here's the obvious issue: NHL revenues are not going to increase 5 per cent this season. In fact, the league already estimates they'll drop some $400-million to the $2.9-billion range, and that's if the season starts on Dec. 1, which is looking less and less likely by the day.

That makes it virtually impossible to set a guaranteed share like the players have in their proposal, as no one truly knows where revenues will be for not only 2012-13, but every season after that.

Will yet another lockout pull revenues down for years?

Or will this be a temporary one-year blip?

The best way to illustrate all of this is to simply present the financials in chart form. One word of caution, though: I've organized this information as if NHL revenues were going to increase by 5 per cent a season, something that is a virtual impossibility now.

I'll explain why below (note: all dollar figures are in millions):

NHLPA offer

League revenues

Players share

Percentage

2011-12

$3,303.0

$1,883.0

57.0%

2012-13

$3,468.2

$1,916.0

55.2%

2013-14

$3,641.6

$1,949.5

53.5%

2014-15

$3,823.6

$1,983.6

51.9%

2015-16

$4,014.8

$2,018.3

50.3%

2016-17

$4,215.6

$2,053.6

48.7%

Total

$19,163.7

[

As you can see, the differences between these two offers, if revenues grew at this rate, are pretty negligible: Just $128-million over five years, or less than 0.7 per cent of total HRR over this time frame.

That's basically nothing, which is what makes the fact this wasn't on the table back in October, when a full season could be salvaged and revenue gains likely factored in, a little infuriating.

Now, I had attempted to rework the projected revenue figures and present the NHLPA's offer in that light, but it's exceptionally difficult to do so. Even if you simply scale down this year's share to account for the lost games and revenue, what then do you do in Year 2 and beyond?

It's too hard to accurately determine, and we'd be guessing if we came up with a 2013-14 or 2014-15 projection.

(It's important to note here that the NHLPA has said it wanted to lay out an economic system first and then adjust it for the effects of the lockout. My issue with that is how on earth do you project what those effects will be?)

There are positives buried in these figures. For one, the two sides are closer together than they were in October, as the numbers here show a gap of roughly $500-million before the NHL agreed to pay $211-million toward the make whole and the PA put together these new numbers.

No. 2, the PA's ask of a 1.75 per cent increase, under normal circumstances, isn't unreasonable.

Problem is these are hardly normal circumstances.

Where do they go from here?

Looking at the figures above, the players could theoretically put an agreement on the table that started at 55.2 per cent in Year 1 before trailing down to 50 per cent by Year 4.

If NHL revenues fall to $2.9-billion in a shortened season, however, the players' share would dip to $1.6-billion and the notion of the league "making whole" pre-existing deals would be altered significantly.

I'm not sure there's a way around that. Regardless of who either side believes caused this mess, the so-called pain of the lockout is going to have to be shared by both sides here or they'll never get a deal done.

Perhaps the best way to resolve the conflict is ultimately a variation of the make whole provision: Anything above 50 per cent owed to the players in Years 1 and 2 is deferred down the road.

But even if the players decide to deal in percentages instead of guaranteed increases for the first time, don't expect huge movement on the contractual issues in any proposal.

There's a willingness to help the league eliminate the "back-diving" deals like the one Ilya Kovalchuk signed a couple years ago – perhaps even with the adoption of a 5 per cent year-by-year variance limit on contracts – but there's not much room for movement beyond that.

Both sides are entrenched on the other issues, meaning even if there's movement in the right direction on the economics, it likely won't be enough.

In some senses, they've never been closer. But getting through these final series of hoops will be the most difficult part of all.

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NHLPA set to deliver new CBA proposal

League demands formal offer from players to move talks forward

All eyes are on the NHL Players' Association.

With the lockout hitting Day 67 on Wednesday, the chances of a 2012-13 season could hang in the balance as the NHL and the union will head back to the table in New York to try to find common ground for a collective bargaining agreement.

While neither side showed any willingness to budge during a 90-minute session Monday night, NHLPA executive director Donald Fehr spent Tuesday huddled with his closest advisors working a on a new proposal for the league.

The league has demanded a formal proposal -- without a 50-50 split tied to revenue projections -- from Fehr and the NHLPA if the process is going to move forward. The union is now considering its options but NHL deputy Bill Daly said in an email the league is expecting a new offer.

The two sides have agreed to resume negotiations at 10 a.m. Wednesday. Daly said he wasn't sure what to expect in the new proposal.

"(Special counsel) Steve (Fehr) and I spoke late (Monday) night, and he confirmed the union would spend the day working on something to present to us, hopefully as early as (Wednesday)," said Daly Tuesday morning.

Sources say the NHLPA is concerned about too many givebacks to the league at this juncture of the negotiations. Fehr and company don't believe this is the tipping point and the players aren't ready to cave as they prepare to lose their fourth paycheque next week.

Yes, the players want to get back to playing, but they also don't want to wave the white towel by offering up a proposal that the NHL is going to rush to accept. The players are willing to go to a 50-50 revenue split, but they want to make sure all contracts are honoured.

Even if the players do give up more on the core economic issues, including the 'Make Whole' for existing contracts, then the two sides still have to get past the contract issues which the league has maintained are non-negotiable because the two sides are past the point of give and take.

As reported Tuesday, Fehr has been getting pressure from some agents to get a deal done. Sportsnet's Nick Kypreos told his HockeyCentral at Noon audience "there are about a dozen" players -- some of them high profile -- putting pressure on the union to get a deal done.

It's no coincidence the likes of Tampa's Vinny Lecavalier and Martin St. Louis, along with former teammate Brad Richards of the Rangers, showed up at the negotiations this week. They want to see where the process is firsthand because all want to get back playing.

If there isn't a deal this week, or a sign that the two sides are at least making progress in discussions, the league will certainly pull the plug on two more weeks of the season -- all games through Dec. 15 plus the NHL all-star game in Columbus.

The question for the players is simple: Are these negotiations critical?

If they don't move a step closer to the NHL in this meeting, will the league slap a drop-dead date on Fehr and give the union a deadline to get a deal done so there's a meaningful season?

If the two sides can work out a deal in the next couple of weeks, they can still have a 50-to-60 game season. But there's still a huge gap to bridge if there's going to be an agreement and the players don't like the fact the league is demanding they put something on the table.

"It's our position we've made a couple comprehensive proposals in a row," said Daly. "We'd like to know where they are on all issues, and we asked them to put together a comprehensive proposal for us to consider."

The hockey world will wait with bated breath.

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NHLPA expected to make new proposal Wednesday

By Chris Johnston, The Canadian Press November 20, 2012

NEW YORK, N.Y. - The NHL Players' Association expects to take at least one more day before responding to the league's request to see a full proposal in collective bargaining.

The union plans to work internally on Tuesday and could be ready to meet Wednesday, according to a spokesman.

The sides returned to the bargaining table for a 90-minute meeting on Monday night, where the league asked for a comprehensive offer on the split of revenue and player contract rights.

"We've never heard a full proposal from them," deputy commissioner Bill Daly said afterwards. "We've heard their proposal on economics, they're still suggesting that they're moving in our direction on economics. Until we know exactly where they stand on economics ... we think it's all tied together.

"We'd like to hear it all together."

Another issue the sides need to work out is how they pay for the damage caused by the lockout. In the NHLPA's most recent offer, which was tabled Nov. 7, the union asked for the players' share of revenues to jump in fixed increments of 1.75 per cent each season starting from the $1.883-billion they took in last year.

That proposal didn't include the mechanism that would be used to account for the reduced revenue generated during a shortened 2012-13 season.

The league and union must also find agreement on contract rules. The NHL would like to see entry-level contracts reduced to two years, unrestricted free agency pushed back to age 28 or eight years of service and all deals limited to five years maximum.

So far, the union has only shown a willingness to make system changes that would discourage teams from signing players to long-term, back-diving contracts.

Now into its 10th week, the lockout has already forced the cancellation of all regular-season games through Nov. 30 — and the league is expected to wipe more from the schedule in the coming days. The sides considered taking a break from negotiations last week, but the NHLPA urged the league to continue meeting.

"It's hard for me to see how you make an agreement if you aren't talking and so you talk," said NHLPA executive director Donald Fehr. "Sometimes it doesn't lead anywhere, perhaps very often it doesn't lead anywhere, but if you aren't talking it's 100 per cent sure it doesn't lead anywhere."

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The NHLPA has now been ordered by Bettman to put together a deal. See how much power Fehr has?

When faced with this reality, he NOW claims they are putting together a 'new' proposal ? The owners have now completely painted Fehr into a corner where they HAVE to cave in completely.

The players must be SO PLEASED that they hired this guy. He is utterly useless.

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