If you are a hockey nut be sure to be seated when you read this. Also keep in mind this is a first proposal from the owners in what should be a long and ugly negotiating process. Talk had been that things were somewhat smooth in the initial conversations between the owners and NHLPA, but it looks like the ugliness is about to begin and lockout appears to be coming.
Here are the major sticking points of what the owners offered the NHLPA:
1) They want to reduce the player share of hockey related revenues (HRR for short) from 57% to 46%.
They also want to redefine what revenues are part of HRR in order to reduce the amount and the percentage share. The owners are literally shooting for the moon on this point as it is clearly their starting point for the negotiations.
2) Player must play 10 seasons in the NHL before being eligible for unrestricted free agency.
This is another way they can control salaries. The owners hate the bidding wars that go on during free agency. This year with Suter and Parise being no exception. Had either landed with the Blackhawks they would have been the highest paid players at their respective positions despite not being the best players at those positions. That only results in the best players wanting more. It's an endless cycle
3) Player contracts can be no longer than 5 years.
This or something close to it was going to happen anyways. So this is actually a point the players may concede on to be able to gain ground in other areas like the HRR share and the way that is computed. So basically say goodbye to the lifetime deals like Hossa, Suter, Parise, Luongo, Pronger etc...
4) Eliminate salary arbitration
The owners rarely in salary arbitration so they may as well try to get rid of it. Arbitration is an ugly process anyway because the organization basically has to sit there with the player and arbitrator and tell them why that player does not deserve more money. Basically it is a "you stink because...."
5) Entry contracts for rookies are 5 years instead of 3
This is designed to slow down young players from getting bigger pay days earlier. It won't really effect high 1st round picks as much because they are already getting a decent salary. However guys like Andrew Shaw who came out of nowhere would have to wait 5 years to be fairly compensated. I would bet this ends up in the middle at 4 years.
6) Salaries are to be paid evenly every year of a contract
This basically wipes out signing bonuses in the first year or two of a contract. A ploy that large market teams would use to go after free agents.
You can see that a lot of the offer is designed around trying to keep teams together longer, and have longer control over players through the first 10 years of their career. That's great if you draft well, especially in the lower rounds.
The biggest concern to me is the redefining of what is part of HRR. The owners will get a few percentage points of the revenue to swing in their favor. However, if they are allowed to redefine HRR it will end up being well more than a couple percent. They will drastically reduce the amount of revenue shown to the players.
These are just random numbers for example, but if the NHL made $2 billion last year at 57% the players share was $1.14 billion. If they got the 46% of $2 billion is would be $920 million. However let's say the owners are allowed to redefine the revenue and get it down to $1.5 billion. At 46% that just $690 millions. Even at 57% that is only $855 million, which is less than the 46% of what currently would define HRR.
Hockey fans are going to hear a lot about HRR in the coming months. Like I said though, this is just a starting point. Hopefully the NHL and NHLPA come to a resolution without a lockout and don't miss any games. It would be a shame to stunt the growth hockey has seen the past couple of years.
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