Monday, November 05, 2012

NHL Armageddon 2012 -- inching forward

The National Hockey League as expected canceled the Winter Classic Friday, a decision that endured the wrath of hockey fans on Twitter and on social media. As angry as fans of the frozen sport were Friday, hockey fans welcomed the news that NHL deputy commissioner Bill Daly and NHL players' association special counsel Steve Fehr met for most of Saturday.

"We had a series of meetings yesterday and exchanged views on the most important issues separating us," Daly said Sunday. "We plan to meet again sometime early this week."

"I agree with what Bill said," Fehr said. "Hopefully we can continue the dialogue, expand the group, and make steady progress."

Late Friday media outlets reported NHL owners are ready to “make-whole” all current NHL contracts, the offer had been extended to the players earlier in the week.

More than 60% of the current 800 NHL players have long-term contracts, agreements that were constructed under the collective bargaining agreement (CBA) that expired on September 15, 2012, the day the current NHL lockout began. Under that CBA the players received 57% of Hockey Related Revenue (HRR), the owners 43%. Included in the last proposal the owners made to the players on October 16 a 50/50 split in HRR. That offer was withdrawn by the owners on October 25.

NHLPA executive director Don Fehr sent NHL players an email/memo concerning the owners “make-whole” offer late Friday: “You may have seen media reports this evening of a supposed league "offer" regarding the "make-whole" aspect of the negotiations. There have been no proposals from either side since the last talks took place on October 18th. As was discussed in detail by Steve Fehr on the Executive Board/Negotiating call yesterday, in informal conversations with the NHL this week, we have continued to explore how we can get back to the table and discussed with the NHL the issues we need to resolve, including the "make-whole" provision. We will continue to keep you updated and will let you know if anything concrete comes from these discussions. Meanwhile you should not read too much into media reports about informal phone calls.”

Gary Bettman first suggested NHL owners would make whole all current NHL contracts when he made the October 16 proposal to the NHLPA, but never suggested how that would be done. The NHL’s October 16 offer demanded NHL players give back 7% of the HRR they were receiving.

On the outside looking in, it appeared (on October 16) NHL owners were ready to honor the contracts they had agreed to with players as long as players paid by the players.

Where would the money come from to pay the 60% their contacts – from the 40% of current NHL players who didn’t have contracts and the players coming into the league (junior and college hockey players)?

QMI Agency’s Chris Stevenson may have best summed up what ownerships offer of “making-whole” to current NHL players is really all about. According to Stevenson “of course, the cost of the Make Whole provision is dropping day-by-day. The players are losing about a collective $9.3 million a day. Each passing day also brings the NHL a day closer to having those contracts that have to be honoured closer to completion.

“There are about 270 contracts that will expire after this season and another 215 that will be up after the 2013-14 season. That’s close to 500 contracts out of the mix in less than two years. That sounds well and good, but you have to also consider that the remaining longer-term contracts which will have to be honoured are those that belong to the stars like Ilya Kovalchuk, Sidney Crosby and Alex Ovechkin, guys who are making considerable money.

“One agent estimated the cost of the Make Whole provision for next season would have been about $230 million given a full season.”

Other than the statements Bill Daly and Steven Fehr released to the media early Sunday morning there isn’t a great deal being reported regarding Saturday’s meeting other than the two sides will meet again in the next day or two. That is actually good news – finally the NHL and the NHLPA are avoiding the media and focusing on what matters, negotiating a new CBA.

Saturday’s meeting did represent progress. Before Saturday the last time the NHL and the NHLPA were in the same room at the same time was on October 18, a meeting that lasted 10 minutes. A great deal has to be agreed upon before the two sides can reach an agreement and the NHL can begin what’s left of the 2012-13 NHL season. Expect the two sides to meet this week, hopefully with the two key figures in the CBA negotiations NHL commissioner Gary Bettman and NHLPA executive director Don Fehr in attendance.

Often progress comes in small steps; the problem with the NHL labor talks and small steps, there isn’t a great deal of time left before the NHL will start canceling additional games.

For Sports Business News this is Howard Bloom

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