Silver Nuggets: Examining the NHL's latest CBA proposal

Bruce Bennett - Getty Images

At first glance, the NHL's latest CBA proposal looks very reasonable - but an in-depth examination reveals a few possibly contentious sections.

As many of you are likely aware, the NHL made a proposal yesterday to which the NHLPA is expected to respond shortly. Donald Fehr's initial reaction was that the proposal still has huge reductions in player salaries and rights, but that it is a step in the right direction.

Player's share

The most contentious item is the share of revenue that the players will receive. Currently they receive 57%, the latest league proposal is 50 per cent. In essence, it is a 12% rollback by another name. The league would, naturally, receive the other 50%--and they may make the overall revenue pie smaller once they "clarify" certain details of hockey-related revenue. The league has managed to spin a 12% cash grab as a concession on their part.

It is worth noting that prior to the 2004-05 lockout, the players' share of hockey-related revenue has been estimated at roughly 74 per cent.

Salary cap

The salary cap would have a ceiling of $59.9 million and a floor of $43.9 million. The first season, 2012-2013, would be a transition year in which teams are allowed to go up to the $70.2 million ceiling had the old CBA been in place. The Senators will be fine in this regard, with a current cap of $52 million per cap geek. They assume the Senators carry their 12 one-way forwards plus Mika Zibanejad.

All existing contracts will count against the cap for the duration of the deals. This means players like Ilya Kovalchuk, Marian Hossa, Roberto Luongo will have their contracts count against the cap even if they retire. If the player is traded and then chooses to retire, the cap hit will count against the team that originally signed the deal. This could lead to hilarious outcomes for the Flyers with Mike Richards and Jeff Carter.

Players sent to the AHL will also have their cap hit count. Moving big salary contracts will become a little easier, with the team allowed to retain up to $3 million or 50% (whichever is lower) of the player's cap hit and salary.

Contracting rights

The unrestricted free agency age will be changed to 28 years (from 27) or eight seasons (from seven). The entry level contracts will now be changed to two years (from three years). The maximum length of the contract will be five years. The annual salary paid cannot deviate more than 5% from the average cap hit. Teams would also have four years to sign a European draft pick (instead of the current two). However, the player would become a UFA instead of re-entering the draft.

With an ELC of two years, and a maximum contract of five years, players will always be restricted free agents after their second contract. The implication seems to be that this will lower the cost of second contracts, but I feel it might be the opposite. With teams unable to buy out any UFA years, the annual cap hit might be higher on second contracts. The risk to the team is much lower and unrestricted free agents should see their annual compensation increase. Would a player like Evgeni Malkin be signing for 5-years $60 million or $70 million as a UFA?

What this would end up doing is have the star players eat up a larger share of the cap with the third and fourth liners receiving less. This is a positive outcome in my opinion as star players are grossly underpaid relative to their peers.

Revenue sharing

The revenue sharing pool will be $200 million and a minimum of 50% of that will be funded by the top 10 revenue generating teams. All clubs will now be eligible to receive revenue sharing. Previously the top 15 clubs by revenue were disqualified.

No "rollback"

This one is a bit misleading. The league says existing contracts won't be rolled back as players will be compensated over the course of their deals. However, the compensation will be funded by reducing the players' share in future years. Donald Fehr labels this as players paying players.

*****

So there you have it, while the proposal could be a starting point, the initial reaction from the players hasn't been too enthusiastic. The league is a proposing a double digit decrease in player salaries and in return they will...reduce players' contracting rights. So you can see why the players wouldn't exactly be jumping at this.

Here are some links:

  • Nicholas Cotsonika feels the onus is on the players now to negotiate in good faith. (Yahoo!)
  • Elliotte Friedman wasn't impressed with the league's decision to publish the full proposal publicly. He also had a tweet with a profanity (later deleted) saying as much. (Elliotte Friedman)
  • The two sides will meet again tomorrow. (TSN)
  • The Binghamton Senators improved to 2-0 in the new season with a 3-1 win. (Silver Seven)
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